Time for bad banks

Bcc: Undisclosed bank CEOs From: Tim Geithner, Federal Reserve Bank of New York President Subject: Top secret Messrs I am sure you have seen what John Thain has just done. Effectively, the Merrill Lynch boss has created a “bad bank” for his pile of dodgy asset-backed securities – and sold it to a distressed debt investor. I would encourage you to seriously consider following suit. I know it will be painful. John has had to take a 40% hit on an already substantially discounted price. That’s w...