This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Cramer's Action Alerts PLUS - See his portfolio and get alerts BEFORE every trade. Learn more NOW!

Fed May Join Banks in Unloading Bad Assets

The federal government's private sector partnership to dispose of toxic bank assets may also be the ideal way to clean up its own sagging balance sheet.

The Treasury Department on Monday extended the deadline for asset managers interested in participating in the Public-Private Investment Program two weeks to April 24, "to better accommodate increased participation."

The move comes two weeks after Treasury and the Federal Reserve said they were seeking to liquidate the so-called Maiden Lane facilities that were created to take on unwanted assets acquired in the rescues of Bear Stearns and American International Group (AIG - Get Report).

Maiden Lane, named after the New York Fed's street address, is the limited liability company formed to take on soured assets left after JPMorgan Chase (JPM - Get Report) acquired Bear in a government-assisted deal in March 2008.

Maiden Lane 2 was established to take on $18 billion in subprime mortgages from AIG, followed by Maiden Lane 3, which took on $24 billion of the insurer's bad collateralized debt obligations, or CDOs.

There is very little transparency for the roughly $70 billion Maiden Lane portfolios. Information is closely guarded, and representatives have resisted discussing it. BlackRock (BLK - Get Report), which manages the portfolios, would not comment on them.

The Federal Reserve, when it took on the Bear Stearns assets in the first Maiden Lane, initially said it did not anticipate a loss to taxpayers because the assets would either be held to maturity or sold at a profit. A year later, however, the portfolio appears to have dropped in value.

1 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Try it NOW
Only $9.95
Try it NOW
14-Days Free
Try it NOW

Check Out Our Best Services for Investors

Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
Try it NOW
Try it NOW
Try it NOW
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
SYM TRADE IT LAST %CHG
AIG $55.33 0.00%
BEN $53.83 0.00%
BLK $371.42 0.00%
GS $189.79 0.00%
JPM $61.28 0.00%

Markets

DOW 18,132.70 -81.72 -0.45%
S&P 500 2,104.50 -6.24 -0.30%
NASDAQ 4,963.5270 -24.3630 -0.49%

Partners Compare Online Brokers

Free Reports

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs