Jamie Dimon has been an Obama supporter.  This can't be good....

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http://finance.yahoo.com/news/US-defends-toxic-asset-plan-apf-
14951965.html?.v=1

US defends $1 trillion toxic asset plan after JPMorgan Chase CEO says 
won't participate 

Martin Crutsinger, AP Economics Writer 
Thursday April 16, 2009, 7:30 pm EDT 

WASHINGTON (AP) -- The Treasury Department on Thursday defended the 
viability of its $1 trillion plan to get soured mortgage investments off 
of banks' books after JPMorgan Chase's chief executive said the company 
won't participate in the program.

Some analysts said comments by JPMorgan Chase & Co. CEO Jamie Dimon 
could spell trouble for Treasury's program, which is aimed at what many 
view as the heart of the current financial crisis -- toxic assets that 
are weighing on banks' balance sheets and preventing them from resuming 
more normal lending to consumers and businesses.

Dimon said JPMorgan did not intend to participate in Treasury's Public-
Private Investment Program, or PPIP, because it did not need to. The 
program is designed to support purchases of as much as $1 trillion in 
toxic assets.

"We have no intent on using PPIP at all. We don't need it. We have our 
own assets. If we want to sell them, we'll sell them," he told analysts. 
"If we want to buy them, we'll buy them."

The Treasury Department played down the concerns. Spokeswoman Stephanie 
Cutter said the department is confident there will be significant 
interest from other banks who do want to participate and that the 
program will be launched "as soon as possible."

Still, some analysts said Dimon's comments could lead to other large 
banks remaining on the sidelines.

"If JPMorgan is not going to participate, chances are that other large 
institutions won't be participating either," said Sung Won Sohn, an 
economics professor at the Smith School of Business at California State 
University, Channel Islands.

Some large banks want to get away from doing business with the 
government over fears they will be subject to too many restrictions now 
or in the future, Sohn said.

Spokesmen for other major banks mostly had no immediate comment 
following Dimon's remarks. Like JPMorgan, which received $25 billion, 
several other recipients of government money under the bailout program -- 
Wells Fargo & Co., Goldman Sachs Group Inc. and Morgan Stanley -- have 
expressed interest in repaying it soon.

"We have said that we support the government's plan to help financial 
institutions to shed troubled assets," said Julia Tunis Bernard, a 
spokeswoman for Wells Fargo in San Francisco. However, she added, the 
bank also is evaluating its own plans for buying or selling assets.

Goldman Sachs spokesman Michael DuVally in New York said the company 
continues to evaluate the public-private investment program "and have 
discussions with government agencies about it."

Treasury Secretary Timothy Geithner unveiled the PPIP on March 23. The 
goal is to take the toxic assets, sour real estate loans and distressed 
securities backed by mortgages, off banks' books so that they can resume 
more normal lending to consumers and businesses and help combat the 
country's recession.

Treasury is employing the resources of the government's $700 billion 
bailout program along with support from the Federal Reserve and the 
Federal Deposit Insurance Corp. to attract private investors to buy the 
distressed assets.

Cutter said the department had been pleased by the interest shown since 
Geithner unveiled the proposal.

"We've been encouraged by the interest by both investors and financial 
institutions who wish to participate in creating a market for these 
legacy assets," she said in a statement. "We are working to launch the 
program as soon as possible."

Last week, Treasury announced that it was making it easier for hedge 
funds and other private investors to participate in the program of 
buying toxic assets, a move seen by analysts as an acknowledgment that 
the interest level on the part of investors had been somewhat 
lackluster.

Alois Pirker, an analyst for the Aite Group, said if JPMorgan holds on 
to the assets, it may be betting the economy will turn around and they 
will be worth more.

In his remarks to analysts, Dimon said he did not believe toxic assets 
were still depressing lending.

"We hear this endless chatter about it, but the banks who are in the 
business are lending ... are lending pretty much as they did in the 
past," he said.

However, private analysts took issue with this view. They said toxic 
assets remain at the heart of what is the country's worst financial 
crisis in seven decades because those troubled assets were lowering 
banks' cushion of reserves and making it harder for banks to raise 
additional capital to expand their loan businesses.

"As long as troubled assets are on banks' books, it creates a great deal 
of uncertainty," said Mark Zandi, chief economist at Moody's 
Economy.com. "The banks don't know how much capital they will need and 
neither do potential investors in the banks."

Sohn said that the failure to address the toxic asset problem in Japan 
contributed to that country's lost economic decade in the 1990s because 
banks kept a mountain of bad loans on their books, preventing them from 
resuming normal lending.

CMPQwk 1.42-21 9999 
Progressive taxation is economic slavery for those who succeed .....


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