Deal reached on financial markets bailout

[sportage]

MSNBC

WASHINGTON - 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.

Some disturbing unknowns...

Buying bad debt from banks
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.

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.

So, others WILL get our tax money to keep their swimming pools and Mercedes?

The proposed legislation also calls for the financial sector to help make up the difference if the government does not recoup its investment in five years, the official said, but details were unclear.

Help for homeowners
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.

To Try ??? TRY ???

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.

Some Degree ??? Doesnt sound like that will happen, knowing how congress works and what Bush doesn't want with this blank check...

 

[SleepWalkerX]

If you disagree with the bailouts then you should definitely speak to your representative and have your voice heard. Call them. Especially the ones whose seats are up for grabs this November. Let them know that they risk losing your vote. Lots of congressmen are spooked because they're getting flooded with calls, faxes, e-mails, and letters.

 

[Thump553]

I've seen a couple of similar articles. The only additional points I could gleem out of them were (1) apparently the bankruptcy reform aspect is dead-sorry homeowners and (2) they are still writing up the "final" version.

It's a maybe in my view.

 

[Craig234]

Originally posted by: SleepWalkerX
If you disagree with the bailouts then you should definitely speak to your representative and have your voice heard. Call them. Especially the ones whose seats are up for grabs this November. Let them know that they risk losing your vote. Lots of congressmen are spooked because they're getting flooded with calls, faxes, e-mails, and letters.

Quite a few seats in the House are up for grabs in a month, 435 out of 435.

My Congressman is Pete Stark - he founded a bank before joining Congress in the 70's.

Democratic Rep. Pete Stark of Fremont, a former banker, said he probably will not support it, calling dire warnings of a credit meltdown "grossly overrated."

"I think we are being railroaded in the same manner we were to vote for Iraq," Stark said. "The banks of the Bay Area are in good shape, and they're bailing out Wall Street for $700 billion. It's irresponsible and reckless."

Stark said he has been working to get a third of that sum for universal health care, and that with $15 billion, all Californians could have health insurance.

He attributed at least part of the credit tightening that businesses and consumers are feeling now to the recession that economists believe has begun and the unwinding of easy credit that fed the housing bubble.

"I think people will have more trouble getting a mortgage," Stark said. "Auto dealers are going to have more trouble shedding their inventory, which isn't worth much anyway if it's all SUVs. If we found the whole Bay Area seeing the kinds of foreclosures, say that they have in Stockton, we'd probably react to that. But it's not been that way in Fremont and it's not been that way in Burlingame, or San Francisco. I think that $700 billion would hurt the value of the dollar, which would raise oil prices even further, and probably increase inflation. I think we're rushing this through too quickly."

 

[SleepWalkerX]

Originally posted by: Craig234
Quite a few seats in the House are up for grabs in a month, 435 out of 435.

My Congressman is Pete Stark - he founded a bank before joining Congress in the 70's.

Democratic Rep. Pete Stark of Fremont, a former banker, said he probably will not support it, calling dire warnings of a credit meltdown "grossly overrated."

"I think we are being railroaded in the same manner we were to vote for Iraq," Stark said. "The banks of the Bay Area are in good shape, and they're bailing out Wall Street for $700 billion. It's irresponsible and reckless."

Stark said he has been working to get a third of that sum for universal health care, and that with $15 billion, all Californians could have health insurance.

He attributed at least part of the credit tightening that businesses and consumers are feeling now to the recession that economists believe has begun and the unwinding of easy credit that fed the housing bubble.

"I think people will have more trouble getting a mortgage," Stark said. "Auto dealers are going to have more trouble shedding their inventory, which isn't worth much anyway if it's all SUVs. If we found the whole Bay Area seeing the kinds of foreclosures, say that they have in Stockton, we'd probably react to that. But it's not been that way in Fremont and it's not been that way in Burlingame, or San Francisco. I think that $700 billion would hurt the value of the dollar, which would raise oil prices even further, and probably increase inflation. I think we're rushing this through too quickly."

Nice. The Representatives from two areas of my state (SC) that I frequent are both against the bailouts as well (Joe Wilson and Bob Inglis). However, when it comes to senators, one of them is against it (Jim DeMint), but the other is actually for it. None other than McCain's little neocon buddy, Lindsey Graham. I hope he gets the boot.

 

[Thump553]

Best article I've seen so far in setting forth the details

 

[smack Down]

Doesn't look like anything has really changed from palson first plan. Just added text to make it look like change. WTF does "reasonable" limits mean. Still comes down to giving palson a blank check, but now with even more power.

 

[jackace]

Here is one of my big problems with the whole "moral" part of this problem. Just a few years ago these banks and other lenders lobbied to get bankruptcy laws changed in their favor and now they are the ones with their hands out looking for help.

 

[retrospooty]

Originally posted by: jackace
Here is one of my big problems with the whole "moral" part of this problem. Just a few years ago these banks and other lenders lobbied to get bankruptcy laws changed in their favor and now they are the ones with their hands out looking for help.

If your sensing corruption you are right... Nothing new here, they just got extra greedy this time. Its not the banking system that is corrupt, its our govt. Lobby Lobby Lobby - corporations in bed with congress. its so intertwined that it will never get better. My guess is that if anyone starts to do anything major to change it, they will wind up pushing daisys.

 

[necine]

You know who's getting screwed here... young people that want to buy a house. These bailouts are artificially propping up the price of houses.

 

[WHAMPOM]

Originally posted by: sportage
MSNBC

WASHINGTON - 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.

Some disturbing unknowns...

Buying bad debt from banks
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.

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.

So, others WILL get our tax money to keep their swimming pools and Mercedes?

The proposed legislation also calls for the financial sector to help make up the difference if the government does not recoup its investment in five years, the official said, but details were unclear.

Help for homeowners
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.

To Try ??? TRY ???

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.

Some Degree ??? Doesnt sound like that will happen, knowing how congress works and what Bush doesn't want with this blank check...

And how much for the favored few(rich)? Still the question: Why not buy all the bad mortages (at bargain prices), restructure them for affordable payback, make the bailout make money?

 

[CADsortaGUY]

Lawmakers Reach Tentative Bailout Deal

Looks like after Pelosi and D's finally allowed the House Rs to join they actually got to negotiate.

Couple points I like coming out of this
*A lot of oversight from the looks of it and no immunity for the Treas dept.
*No potential "profit" to go to an "affordable housing fund" -which is really just a slush fund to hand out money to ACORN and LaRaza.
*Stripped out the idea that people could go to court to lower their interest or some such nonsense. Basically ended the idea of a big payoff to the trial lawyers...


These sorts of things were what I needed to see out of them to be able to hold my nose and support this "bailout". It was just a cluster of fraud waiting to happen with both the Bush/Treas dept plan and the Pelosi plan. Now hopefully something doesn't slip back in under cover of darkness....

 

[smack Down]

Wow, what doesn't take much for you to want to polish republicans knobs does it. So treas dept now has to write an extra report or two. Profits yeah that was a joke to try and sell the plan in the first place. Oh but they sure did keep the trial lawyers out of bankruptcy court (didn't know they where planning on invading).

Now they just need to understand and admit what the real problem is then try and explain how buying up old loans does anything to improve the finical system.

 

[CADsortaGUY]

Originally posted by: smack Down
Wow, what doesn't take much for you to want to polish republicans knobs does it. So treas dept now has to write an extra report or two. Profits yeah that was a joke to try and sell the plan in the first place. Oh but they sure did keep the trial lawyers out of bankruptcy court (didn't know they where planning on invading).

Now they just need to understand and admit what the real problem is then try and explain how buying up old loans does anything to improve the finical system.

"want"? Hell, I don't "want" this bailout, but if there is going to be a bailout then having one without the "pork"/paybacks is much better. Also having one with actual accountability instead of immunity is much better. Is it perfect? no, but since they are hell bent on bailing them out - lets get something that doesn't suck near as bad as the Bush or Pelosi proposals.

 

[Engineer]

Originally posted by: Thump553
Best article I've seen so far in setting forth the details

The measure would create a program that lets the government spend unprecedented sums of public money to prop up tottering financial institutions by buying their sagging mortgage-based investments and other devalued assets.

Well, looks like they are bailout out "other" bad debt and decisions (other than mortgages). Where can I sign up?

Fvckers! :|

 

[Thump553]

Originally posted by: CADsortaGUY
Lawmakers Reach Tentative Bailout Deal

Looks like after Pelosi and D's finally allowed the House Rs to join they actually got to negotiate.

Couple points I like coming out of this
*A lot of oversight from the looks of it and no immunity for the Treas dept.
*No potential "profit" to go to an "affordable housing fund" -which is really just a slush fund to hand out money to ACORN and LaRaza.
*Stripped out the idea that people could go to court to lower their interest or some such nonsense. Basically ended the idea of a big payoff to the trial lawyers...


These sorts of things were what I needed to see out of them to be able to hold my nose and support this "bailout". It was just a cluster of fraud waiting to happen with both the Bush/Treas dept plan and the Pelosi plan. Now hopefully something doesn't slip back in under cover of darkness....

CAD-the oversight has been in this since it reached the Dems hands. It was missing only in the travesty originally sent over by Paulson & The White House.

- think the profit (yeah, right) is going to the general fund now.

There is still a provision for renegotiation of mortgage rates on loans bought by the government. This is a good idea-keep people in the houses to stop depreciation and kickstart the housing market sooner. BTW, trial lawyers wouldn't touch these deals-no $ in it for them-just those of us do-gooders and doing pro bono work.

-One new additional point I saw on cable news-the financial industry will have to cover the losses after five years. If so, this is a great point and makes this travesty a whole lot easier to swallow.

There is going to be some sort of insurance provision like what the House GOP wanted. No idea of the details or whether this is at all feasible. My guess is it will be an option.

They also announced the full text for the proposed bill should hit the internet sometime today so citizens can read it and react to their Congressional reps before the vote-which now looks like possibly Monday for the House, later for the Senate.

 

[quest55720]

So basically both sides sold the tax payer out to give a trillion dollars away to billionare scum who could not control their greed. Screw both sides just proves how corrupt both parties are. They should of done nothing and let the market sort it out. Credit getting harder to get would be great IMO. To many people are up to their eyeballs in stupid debt.

 

[Engineer]

Originally posted by: Thump553

Originally posted by: CADsortaGUY
Lawmakers Reach Tentative Bailout Deal

Looks like after Pelosi and D's finally allowed the House Rs to join they actually got to negotiate.

Couple points I like coming out of this
*A lot of oversight from the looks of it and no immunity for the Treas dept.
*No potential "profit" to go to an "affordable housing fund" -which is really just a slush fund to hand out money to ACORN and LaRaza.
*Stripped out the idea that people could go to court to lower their interest or some such nonsense. Basically ended the idea of a big payoff to the trial lawyers...


These sorts of things were what I needed to see out of them to be able to hold my nose and support this "bailout". It was just a cluster of fraud waiting to happen with both the Bush/Treas dept plan and the Pelosi plan. Now hopefully something doesn't slip back in under cover of darkness....

CAD-the oversight has been in this since it reached the Dems hands. It was missing only in the travesty originally sent over by Paulson & The White House.

- think the profit (yeah, right) is going to the general fund now.

There is still a provision for renegotiation of mortgage rates on loans bought by the government. This is a good idea-keep people in the houses to stop depreciation and kickstart the housing market sooner. BTW, trial lawyers wouldn't touch these deals-no $ in it for them-just those of us do-gooders and doing pro bono work.

-One new additional point I saw on cable news-the financial industry will have to cover the losses after five years. If so, this is a great point and makes this travesty a whole lot easier to swallow.

There is going to be some sort of insurance provision like what the House GOP wanted. No idea of the details or whether this is at all feasible. My guess is it will be an option.

They also announced the full text for the proposed bill should hit the internet sometime today so citizens can read it and react to their Congressional reps before the vote-which now looks like possibly Monday for the House, later for the Senate.

I wonder if they got the Capital Gains tax cut that the GOP House members wanted in there? Oh the joys of giving billions of dollars of taxpayer money to Wallstreet rich and the cutting their taxes to boot....wow. Anyone?

 

[miketheidiot]

Originally posted by: quest55720
So basically both sides sold the tax payer out to give a trillion dollars away to billionare scum who could not control their greed. Screw both sides just proves how corrupt both parties are. They should of done nothing and let the market sort it out. Credit getting harder to get would be great IMO. To many people are up to their eyeballs in stupid debt.

i'm glad you aren't even remotely involved in running the country.

 

[ChunkiMunki]

No, for the last time....it's to SAVE the average American. We don't want our economy to fail, thus creating a depression, then we would have to borrow money to pay for needed infrastucture, so yeah.

 

[smack Down]

Originally posted by: ChunkiMunki
No, for the last time....it's to SAVE the average American. We don't want our economy to fail, thus creating a depression, then we would have to borrow money to pay for needed infrastucture, so yeah.

Except buying up paper will do nothing for the average American. The average American doesn't not have any debt to sell to the government. Please explain how this helps the average person.

 

[SleepWalkerX]

Everyone! Call your representatives right now! I just called every single representative in my state and most of their voice mails are full! I got through to a few of them and threatened that I was going to donate money and support to their opponent (which is true) if they don't completely vote against the bailout. One said she's not sure where they stand, but they would call me back. I'm going to go back through and call the other ones on Monday.

Find out who your representatives are and leave them your opinion!

http://www.visi.com/juan/congress/

 

[LegendKiller]

Originally posted by: smack Down

Originally posted by: ChunkiMunki
No, for the last time....it's to SAVE the average American. We don't want our economy to fail, thus creating a depression, then we would have to borrow money to pay for needed infrastucture, so yeah.

Except buying up paper will do nothing for the average American. The average American doesn't not have any debt to sell to the government. Please explain how this helps the average person.

Uhhh...the economy keeps working?

 

[LegendKiller]

Originally posted by: SleepWalkerX
Everyone! Call your representatives right now! I just called every single representative in my state and most of their voice mails are full! I got through to a few of them and threatened that I was going to donate money and support to their opponent (which is true) if they don't completely vote against the bailout. One said she's not sure where they stand, but they would call me back. I'm going to go back through and call the other ones on Monday.

Find out who your representatives are and leave them your opinion!

http://www.visi.com/juan/congress/

If this doesn't pass, and this economy crashes, I hope you die of starvation after getting the great depression you so want.

 

[sandmanwake]

Any news on what price the government is going to buy these debts from banks at? Last I heard Bernanke was pushing for the government to pay "full value" for these securities from banks rather than at a "discount".