generate $500 billion in purchasing power to buy legacy assets with the potential to expand to $1 trillion over time
Asuncion, Paraguay (PRWEB) April 3, 2009
The Obama administration has unveiled its much anticipated program, aimed at clearing toxic assets from the books of U.S. banks and to find a middle ground between nationalization and inaction. The government is hoping that its Public-Private Investment Program will revive the lending process while helping to jump-start the economy, by financing the purchase of up to $1 trillion in illiquid real estate assets.
Treasury Secretary Timothy Geithner has announced "This will allow banks to clean up their balance sheets. There is no doubt the government is taking risk. You can't solve a financial crisis without the government assuming risk." The plan entails using up to $100 billion in the Troubled Asset Relief Program funds along with additional capital from private investors to "generate $500 billion in purchasing power to buy legacy assets with the potential to expand to $1 trillion over time," according to a statement released by the Treasury. Due to the plan, the "Legacy Securities Program" would be instilled to protect private investors' or hedge funds' purchase of the assets by using money from half of the original funds. The Treasury will match any private capital that is raised for the purchases dollar for dollar. Also, the Federal Deposit Insurance Corporation would oversee a facet of the plan called the "Legacy Loans Program," which is expected to garner interest among many private investors. While the rest of the cash would come from private investors or hedge funds, the treasury would pony up half of the capital to purchase a bundle of loans with this program. The FDIC would then guarantee financing of up to six times the original price, then auction off the loans. The private-sector purchasers would determine the value of these assets so as to quell any fears that the government might be overpaying for the loans.
With a view to mentioned above, our company InvestmentForge has reconsidered the attitude towards the basic fund structure, rising up the interest rate starting from April 2009
The head manager of InvestmentForge, Peter Evans, on March 31 has commented on this event, "After investigations of hedge fund market future activity had been made, we took the decision to rise up the profit rate, hence ensuring high liquidity of our activity. During the period of existence http://www.InvestmentForge.com we used to make only deliberate decisions, today we can say for sure - this measure is totally acceptable. We are looking with confidence in the future!"