> Under one of the plans discussed, toxic assets would be
> valued by an independent party. Where assets are purchased
> at prices below their book values, the government might
> then inject common equity into the banks to make up for
> capital wiped out by the sales.
I thik that Michael is up to something.
>From the viewpoint of the Treasury (and Fed), the toxicity of these
assets is an endogenous variable. These assets are "toxic" under some
assumed default rates. But targeted policy action can lower those
default rates and turn those assets around. The issue is whether
Obama et alia will push that approach sufficiently.