Posted By Vicki McClure Davidson on April 9, 2009

By Vicki McClure Davidson * Frugal Café Blog Zone

Few, if any, investors are interested in putting their money into the toxic assets the government’s holding. The word “toxic” doesn’t build much confidence. So, the Obama administration, led by Treasury Secretary Tim “Tax Cheat” Geithner, is reaching out to America, carefully omitting the cursed “T” word, hoping that taxpayers will be encouraged to “invest” in them.

Oh, boy, you likely don’t want to do that. Not now, anyway.

If you and your family have been frugal, cut way back on expenses, and have scrimped and saved some money despite the doom and gloom in our economy, hold off investing that nest egg. Here’s a portion of an AP article:

Treasury seeks more partners for bad asset program * April 7, 2009
By Christopher S. Rugaber – Associated Press
WASHINGTON (AP) — The Treasury Department is making it easier for hedge funds and other private investors to participate in its plan for buying up banks’ bad assets, an acknowledgment that the interest level so far has been lackluster.

Analysts said the move shows the program hasn’t yet attracted enough large fund managers who may be wary of ending up on the wrong side of a congressional probe or public backlash. The program’s requirements also excluded too many smaller managers, they said.

The government is relying on private investors to purchase poorly performing real estate investments currently weighing on bank balance sheets.

Treasury on Monday relaxed a requirement that companies already manage at least $10 billion of the mortgage-backed securities to participate. A Treasury official said that only a few firms qualified under that criteria. The department also emphasized that the program is open to small and women- and minority-owned firms and said it will encourage such firms to partner with private asset managers.

“Clearly, they weren’t getting the participation they needed,” said Bernie McGinn, chief executive of McGinn Investment Management, a money manager based in Alexandria, Va.

Some fund managers are concerned about teaming up with the government in the aftermath of the firestorm over bonuses paid to executives at insurance giant American International Group Inc., which has received $182.5 billion in bailout funds. The House held hearings on the issue and approved legislation taxing the bonuses at 90 percent, though the measure hasn’t become law.

“Investors are leery about getting involved with any government program, because they don’t want to be very visible,” said Steven Persky, managing partner and co-founder of Dalton Investments, a 10-year-old hedge fund specializing in distressed debt. “You don’t want to be on the wrong side of a congressional investigation.”

Click here to read the rest of the article.

In Michelle Malkin’s blog today, she points out, “They are still plying the line that our trillions of dollars’ worth of taxpayer ‘investments’ are going to make money. And under the guise of democratizing the returns, they are trying to persuade Main Street ‘investors’ who have been forced to invest in failing banks, other financial institutions, auto companies, and life insurers to ‘invest’ again in trash. Behold the Obama Suckers Mutual Fund.”
Read more: Introducing the Obama Suckers Mutual Fund

A snippet from Vets on the Watch:

A new plan by Glorious Leader’s team has come to light. Since Europe won’t help us by spending more money, the administration has hatched a plan to entice private investors to buy the troubled assets that are pulling banks down into an economic abyss. Even though they have, as yet, been unsuccessful in garnering private industry support the administration feels that these new “mutual funds” will be a great investment.

‘But, as with any investment, there are risks. If, as some analysts suspect, the banks’ assets are worth even less than believed, the funds’ investors could suffer significant losses…’

Vets on the Watch: Make Millions By Bailing Out The Bailed-Out

Critics like Joseph E. Stiglitz, a Nobel Prize-winning economist, argue that the bailouts merely privatize profits and socialize losses.

From Malkin’s blog commenters:

On April 9th, 2009 at 9:23 am, backwoods conservative of ManlyRash.com wrote the following:
So the administration realizes that all of the money they’re extorting from us in the form of taxes still isn’t enough to pay for everything on the Democraps’ wish list, so they have come up with a scheme to sucker people into voluntarily parting with even more of their money. An alternative would be to play Paul Bunyan with wasteful and unnecessary spending programs, but liberals are morally and intellectually incapable of understanding the wisdom of such an approach.

And, a funnier-than-usual Malkin post (really love the photo!): Barack Obama: Refi pitchman; also, Washington’s recipe for more mortgage defaults

Good Time Politics has an interesting post: Barack Obama May Block Sun’s Rays To End Global Warming (Your Savior at Work)

Categories: Conservatism, Economy, Government, Social and Political Climate
Tags: America, bailout, citizens against government waste, economic depression, economic free-fall, frugal, Government, government waste, invest, investing your money, money, mutual fund, nest egg, Obama, recession, taxes, taxpayers, Tim Geithner, toxic assets