Obama bets bank fix won't be a political risk
Takeo Hoshi on President Obama's plan
03/25/2009
Carolyn Lochhead,
San Francisco Chronicle
(03-25) 04:00 PDT Washington -- President Obama is banking that Treasury Secretary Timothy Geithner's complicated new plan to fix big U.S. banks doesn't transform their toxic assets into toxic political risk.
The administration faced a Hobson's choice: fixing the banks is a prerequisite to economic recovery; populist rage sharply limits options. Large U.S. banks are believed to be holding $2 trillion in dubious assets, valued perhaps at 50 cents on the dollar. That means they could need $1 trillion in fresh capital to get them lending again.
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