Sometimes I think the technology industry is in a competition with the government on who can use the most confusing acronyms. The FDIC, that is the Federal Deposit Insurance Corporation, is going to focus the newest bailout program called the PPIP, or the Public-Private Investment Program, on commercial and residential real estate.

(I need to take a deep breath after that.)

What it essentially means is that the government is going to buy out the bad loans from banks and then sell them at a discount to other banks or hedge funds. You know, those evil bankers and financial folks like those at AIG.

The PPIP, introduced by the U.S. Treasury Department Monday, is designed to help banks to rid themselves of loans that hurt their operations and capital. The program will give guarantees and some leverage to private investors to buy such loans.

Real estate is where the biggest problem lies, the FDIC said during a conference call, and therefore the program will focus on those areas first, but could later include other consumer and commercial loans.  WSJ.com.

But what makes me wonder is how well this is going to work. The Congress and the Obama administration has just vilified anyone who is working for a bank that receives Federal funds with the whole AIG debacle. Why would any bank want to do business with the government now when the government has proved they are willing to attempt to tax them at 90% on any profits they think are unfair?

The system is turning into pure madness.

Related posts:

1. Senator Feinstein Offers Help To FDIC Who Then Awards Above Market Contract To Husband
2. Chinese To Buy 2 Billion in Mortgage Backed Securities
3. Alert The Media – Banks Are Making Commercial Real Estate Loans
4. Commercial Real Estate Downturn Creates New Call For Bailouts
5. Federal Reserve Offers TALF To Commercial Lending