PPIP Participants Chosen 
(Neanderthal, 2714 
Points) on 7/9/09 at 11:24am
Today the Treasury announced the 9 firms that were chosen to manage the Public-Private Investment Program (PPIP), funded to buy toxic assets from the banks. The firms were chosen out of over 100 that expressed an interest.
http://www.google.com/hostednews/ap/article/ALeqM5jQEjHZVAndexfkl1FH7YX-...
The firms include BlackRock Inc, and TCW Group, as well as:
AllianceBernstein LP and its sub-advisers Greenfield Partners LLC and Rialto Capital Management LLC; Angelo, Gordon & Co. LP and GE Capital Real Estate; Invesco Ltd.; Marathon Asset Management LP; Oaktree Capital Management LP; RLJ Western Asset Management LP; and Wellington Management Co. LLP
Initially touted to buy up to $1 trillion in bad assets, the program has been scaled back considerably and will begin with the purchase of $40 billion in toxic assets.
Bidding
by yesmanI haven't been following this that closely since rumors of it's being scaled down - how are the clearing prices going to be determined?
I can't imagine this being an open market with the government putting up so much cash - anybody know of the approval process or who the government is tapping to opine on the valuation? I've heard rumors that Bill Gross is consulting the Treasury.
Also, what are the projected clearing prices? Last I heard, banks wanted in the upper 40s-mid 50%, but government was thinking low 30s at best.
Quote: I've heard rumors
by models_and_bottlesI've heard rumors that Bill Gross is consulting the Treasury
PIMCO has been consulting the government but very surprisingly decided not to participate in the PPIP. Bill Gross has been hyping up the PPIP for awhile so to me it indicates something is flawed with the plan or PIMCO doesn't see the program paying off for investors.
Conflict of Interest
by yesmanIf PIMCO was advising the government - actually laying the groundwork for the plan - they could've opted out over potential compliance and litigation issues.....or Bill Gross thinks the deal is even shittier than he'd have us believe (he's pretty skeptical in his monthly commentary)
I think they were advising
by models_and_bottlesI think they were advising the government on numerous issues in addition to the PPIP. I was reading somewhere (yahoo finance maybe?) that PIMCO submitted an application to participate in PPIP then later pulled it. I'm guessing the deal wasn't as sweet as Gross thought it would be.
Gross kept saying "shaking hands with the government" was the new way to make money in his monthly investment outlooks awhile back, guess something has changed since then.