[ARCHIVED THREAD] - Bailout breakthrough (Page 1 of 3)
Posted: 9/27/2008 10:35:01 PM EDT
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Congress, White House reach financial bailout deal Sunday September 28, 2:32 am ET By Charles Babington and Alan Fram, Associated Press Writers Congress leaders, White House reach tentative deal on $700 billion financial bailout deal WASHINGTON (AP) -- Congressional leaders and the Bush administration reached a tentative deal early Sunday on a landmark bailout of imperiled financial markets whose collapse could plunge the nation into a deep recession. House Speaker Nancy Pelosi announced the $700 billion accord just after midnight but said it still has to be put on paper. "We've still got more to do to finalize it, but I think we're there," said Treasury Secretary Henry Paulson, who also participated in the negotiations in the Capitol. "We worked out everything," said Sen. Judd Gregg, R-N.H., the chief Senate Republican in the talks. Congressional leaders hope to have the House vote on the measure Monday. A Senate vote would come later. The plan calls for the Treasury Department to buy deeply distressed mortgage-backed securities and other bad debts held by banks and other investors. The money should help troubled lenders make new loans and keep credit lines open. The government would later try to sell the discounted loan packages at the best possible price. At the insistence of House Republicans, some money would be devoted to a program that would encourage holders of distressed mortgage-backed securities to keep them and buy government insurance to cover defaults. The legislation would place "reasonable" limits on severance packages for executives of companies that benefit from the rescue plan, said a senior administration official who was authorized to speak only on background. It would affect fired executives of financial firms, and executives of firms that go bankrupt. Some of the provisions would be retroactive and some prospective, the official said. Also, the government would receive stock warrants in return for the bailout relief, giving taxpayers a chance to share in financial companies' future profits. To help struggling homeowners, the plan would require the government to try renegotiating the bad mortgages it acquires with the aim of lowering borrowers' monthly payments so they can keep their homes. The measure's main elements were proposed a week ago by the Bush administration, with Paulson heading efforts to push it through the Democratic-controlled Congress. Democrats insisted on greater congressional oversight, more taxpayer protections, help for homeowners facing possible foreclosure, and restrictions on executives' compensation. To some degree, all those items were added. At the insistence of House Republicans, who threatened to sidetrack negotiations at midweek, the insurance provision was added as an alternative to having the government buy distressed securities. House Republicans say it will require less taxpayer spending for the bailout. But the Treasury Department has said the insurance provision would not pump enough money into the financial sector to make credit sufficiently available. The department would decide how to structure the insurance provisions, said Sen. Kent Conrad, D-N.D., one of the negotiators. Money for the rescue plan would be phased in, he said. The first $350 billion would be available as soon as the president requested it. Congress could try to block later amounts if it believed the program was not working. The president could veto such a move, however, requiring extra large margins in the House and Senate to override. Despite the changes made during an intense week of negotiations, the heart of the program remains Bush's original idea: To have the government spend billions of dollars to buy mortgage-backed securities whose value has plummeted as hundreds of thousands of Americans have defaulted on their home loans. Senate Majority leader Harry Reid, D-Nev., said Saturday that the goal was to come up with a final agreement before the Asian markets open Sunday night. "Everybody is waiting for this thing to tip a little bit too far," he said, so "we may not have another day." Hours later, when he and others told reporters of the plan in a post-midnight news conference, Reid referred to the sometimes testy nature of the negotiations. "We've had a lot of pleasant words," he said, "and some that haven't always been pleasant." "We're very pleased with the progress made tonight," said White House spokesman Tony Fratto. "We appreciate the bipartisan effort to deal with this urgent issue." It was not immediately clear how many House Republicans might vote for the measure. With the election five weeks away, Democrats have said they would not push a plan that appeared sharply partisan in nature. |
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The 'insurance' provision will be a disaster if implemented... It will do the same thing to the government that it did to AIG - and cost MORE taxpayer money than if we just stuck with Paulson's plan... A special kind of GOP stupid there.... Further, it's going to be damn hard to 're-negotiate' mortgages, when they are buying mortgage-backed securities, not individual loans.... A special kind of DEM stupid....  Proof Congress can fuck anything up - EVEN WHEN THEY ARE GIVEN THE PROPER SOLUTION ON A SILVER PLATTER.... |
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It doesn't address any of the problems, it merely band-aids the damage already done. No fix for: Sarbanes-Oxely Community Reinvestment Act Fannie Mae and Freddie Mac As long as attorneys can sue banks for not making crappy loans to crappy people who can't afford them in the first place, and Frannie and Freddy keep encouraging them to make said crappy loans, this problem will continue. |
Honestly.... What did you expect? This was supposed to be an 'immediate action' fix... Not a solution to what got us 'here'.... |
Actually, in this case, I expect them to listen to the pros (Bernake, Paulsen) over the ignorant 'let the rich bankers burn, bail me out instead' class warfare crap that undoubtably dominated the 'against' column.... One of the REASONS to have a REPUBLIC and not a DEMOCRACY, is that there are times when the politicians need to say 'Let's do what's right for the country, and if they're still pissed at us on election day they'll vote us out'.... Does the deal have some problems? Yes - especially the 'insurance' scheme, and the equity-stake crap... But 'no bailout' was never a realistic option, unless you want to ensure the GOP got completely wiped out in November.... |
That's how I feel, too. I'm about as pissed off as I've ever been. |
"Pros". Yeah, they were worth all of -700 billion to the American taxpayer (and that is just for starters). Fine work.  They certainly did work well with those MF'ers Pelosi, Reid and Barney Frank to ass rape the American taxpayer and dollar, I'll give you that. |
The fact is, the average American voter IS ignorant of economics... And most of those calls (I'd bet a paycheck on it) basically consisted of 'WAAAHHH, NOT FAIR!!! (or someting to that effect, you get my drift)' rather than anything close to an economically valid argument... Simple human nature, given the level of understanding that most of them have... |
Save us Dave. |
Here's a brief cut-n-paste quote of what karl denninger is proposing as a solution. More on what karl thinks can be found at this link and he also has a youtube video to accompany the text that is quoted below at this link. More of karls videos can also be found here.
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That's pretty good, except I think that the number of institutions that would have to go into receivership without adequate debtholder capital are much higher than he thinks. But I can't say for sure. Which is why it's a great solution once the bad securities are pulled out of the market by the bailout (less the insurance crap and the stake holding is hopefully removed.). |
In several of his videos, karl has also stated the bail out should be opposed not only because taxpayers shouldn't be forced to bail out risky, wall street, investments but also because he thinks the FDIC will need that 700 billion to cover checking accounts in banks that may eventually fail in the very near future. He doesn't believe the FDIC currently has enough money to cover all of the potential losses so, in light of that suspicion, he thinks the 700 billion should be reserved to help out the FDIC in the near future. |
Yupper. Gonna be real fun in the next couple weeks as the Euro-banks start failing  This just plain sucks .............. I want to see blood from the crooks!!! 
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Aren't these the same asses that got us in this? How can they find a solution? Nancy Pelosi should be hung from the nearest tree with a stout enough limb for treason many times over. Ever wonder how much of our Congress men and women millions will be going to the bailout???....Not a Dime. |
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Since it is the demoncraps doing this, no oil based products are allowed! We'll have this done with sand..... |
Here toy go. Please take note that paulsons original 3-page proposal that was released one week ago has now ballooned into a 102 page proposal from congress.  Also keep in mind that the above pdf is merely a draft proposal at this point. So far, nothing is really set in stone.
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So what would be wrong with what Dave Ramsey suggested? link Audio link |
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From FOX News: Draft Proposal of the Financial Rescue Bill
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Wait until it reaches the emerging markets.... it's going to be brutal. Currency collapses, small depressions, you name it. |
Paulsen has the "I'm sick of dealing with these kids" look on his face... |
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Have any of you seen this Congressman speak? www.youtube.com/watch?v=iSY8JYRqIOY&feature=user www.youtube.com/watch?v=7qA3cpYiz5k |
Should be at the top |
FedGov's NAFTA destroyed my business in 1994.... .....I didn't get a bailout!!!FUCK EM!! The stupid greedy Wall Streeters get a bailout..........FedGov fucks me and destroys my business and I have "0" to show for it. FUCK EM!!! |
I saw the second vid 2 days ago and I was sitting here in my den cheering McCotter on like he was playing in the Super Bowl. To use a baseball analogy, his speech on the House floor was a bonofied grand slam. |
Yes Dave; let the experts and those in power do what they say is best for us because the American People are ignorant. They always do what's best for us. All that's left is for us is to kneel down before them and thank them for, once again, ignoring the will of the people; for the children. 
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The scale of this disaster (the credit crunch) in the first place is criminal enough that there needs to be investigations and at a minimum jail time for the legislators that pushed deregulation through, and the CEOs that went along with it... This bailout is enough that I want to see some of these clowns lined up against a wall and shot.
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