Max Holmes is a hedge-fund manager from Connecticut who first outlined this plan in the New York Times in January. His plan is modeled on successful past bailouts of troubled regional banks.
The plan could be for America’s four mega-banks — Citigroup/Bank of America/JP Morgan/Wells Fargo – to each set up a "bad bank" for their toxic assets, which would have to be written off of the books of the "good bank" at December 2008 levels.
No final decision has been made.
But I’m wondering if this idea is gaining strength because hedge funds and other private investors aren’t ready to put enough cash into the "public-private partnership" approach that Geithner et al. appeared to have settled on last week.