Yen, Dollar Decline as Stocks Advance on U.S. Toxic-Asset Plan

[peaceandlove]

Yen, Dollar Decline as Stocks Advance on U.S. Toxic-Asset Plan

By Yasuhiko Seki and Ron Harui

March 24 (Bloomberg) -- The yen dropped to a five-month low against the euro and the dollar declined on speculation U.S. plans to help banks dispose of toxic assets will spur investors to seek higher yields.

The dollar approached a two-month low versus the European currency after Treasury Secretary Timothy Geithner unveiled proposals to finance as much as $1 trillion in purchases of illiquid property assets, damping demand for the safety of the greenback. South Korea’s won, Australia’s dollar and the British pound strengthened for a third day against the yen as Asian stocks extended a worldwide rally on optimism the worst of the global financial turmoil may be over.

Article continues: http://www.bloomberg.com/apps/news?p...d=aVcF2xz0eZa0



Karl Deninger blog on "Toxic Assets":

3/24/2009

Now that the Treasury Plan to "cleanse" the market of "toxic assets" has been put forward, I have noted that The FDIC is the entity that will both guarantee the debt issued and vet the bidder list.

I also note the following quote from The FDIC:

The FDIC will provide oversight for the formation, funding, and operation of new public-private investment funds (“PPIFs”) that will purchase loans and other assets from depository institutions. The Legacy Loans Program will attract private capital through an FDIC debt guarantee and Treasury equity co-investment. Private market equity investors (“Private Investors’) are expected to include but are not limited to financial institutions, individuals, insurance companies, mutual funds, publicly managed investment funds, pension funds, foreign investors with a headquarters in the United States, private equity funds, and hedge funds. The participation of mutual funds, pension plans, insurance companies, and other long term investors is particularly encouraged.

There is a potential problem here.

Excerpt:

Be aware that I, along with many others, have figured this out. Also be aware that as taxpayers and your ultimate boss, we do not intend to sit still and allow the public treasury to be looted in such a fashion.

Blog continues: http://market-ticker.denninger.net/ 3/24/2009 blog