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
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

Fed May Join Banks in Unloading Bad Assets

Stocks in this article: BLK AZM GS

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).

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) 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), 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

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

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
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

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

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, 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
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

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

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
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!

Markets

DOW 17,804.80 +26.65 0.15%
S&P 500 2,070.65 +9.42 0.46%
NASDAQ 4,765.38 +16.9840 0.36%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

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