Bailout Honchos Weigh Toxic-Asset 'War Bonds'

Responding to charges the bank bailout privatizes profits while socializing losses, the Obama administration is exploring creating mutual-fund-type instruments that would allow private citizens to invest in toxic assets. The bailout funds, akin to war bonds, would allow the taxpayers who funded the bailout to profit along with Wall Street, the New York Times reports. "It’s giving the guy on Main Street an equal seat at the table next to the big guys," said a money manager.

The idea is fraught with risk. If the assets appreciate, that would quiet accusations that the bailouts benefited only the gilded few, including many who contributed to the economic crisis. But if the funds lose value, both the economic and political ramifications would be dire. The Treasury is seeking about five fund managers initially, and investors could participate for as little as a few hundred dollars.
(More Timothy Geithner stories.)