Corzine talks toxic assets on NPR

by: Jason Springer

Wed Mar 25, 2009 at 02:45:00 PM EDT

The governor, a former chief executive of Goldman Sachs, the Wall Street investment giant, said Monday's nearly 500-point stock rally showed the markets think the plan unveiled by Treasury Secretary Tim Geithner "may very well work." He said its combination of public and private financing "minimizes risk" and takes the "worst case off the table," so investors would not lose everything.

If banks are willing to sell the bad assets at "rough market prices," ranging from 80 cents on the dollar to 20 cents on the dollar to other values, "I think we could see a positive turnaround with regard to our financial system," and in turn the economy, when lending perks up, Corzine said.

If banks won't do that and private investors don't bite, "We will continue to have a clogged up financial system" weighed down by the risky real estate assets, the governor said.

Corzine said the debts could be a good investment for pension funds, including those run by states, if the fund managers price the assets realistically.