New Plan for Toxic Assets

A problem still on Obama’s plate: How to manage the toxic assets plaguing the books of the banks? Sources say one solution being weighed is selling them off to a short list of investors—including hedge funds, private-equity firms, and Wall Street financiers—at a price high enough to help the banks and low enough to protect the government, which would still be on the hook to cap investor losses. The initiative, which would be announced in the coming weeks, could cost between—gulp—$500 billion to $1 trillion. “As expensive as it already has been, our effort to stabilize the financial system might cost more,” said Treasury Secretary Timothy Geithner.