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The Biggest Bailout is Still to Come

September 18, 2008 - by Donny Shaw

New York Times:

>The head of the Treasury and the Federal Reserve began discussions on Thursday with Congressional leaders on what could become the biggest bailout in United States history.
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>While details remain to be worked out, the plan is likely to authorize the government to buy distressed mortgages at deep discounts from banks and other institutions. The proposal could result in the most direct commitment of taxpayer funds so far in the financial crisis that Fed and Treasury officials say is the worst they have ever seen.
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>Senior aides and lawmakers said the goal was to complete the legislation by the end of next week, when Congress is scheduled to adjourn. The legislation would grant new authority to the administration and require what several officials said would be a substantial appropriation of federal dollars, though no figures were disclosed in the meeting.

UPDATE: More details form inside Thursday’s meeting between Congress, Paulson and Bernanke.

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Comments

  • 58055249 09/19/2008 9:07pm

    INSANE! Where in the constitution does it allow them to do this?

  • Comm_reply
    Anonymous 09/25/2008 10:12am

    The constitution doesnt prevent them from doing this.
    To change the subject for a second.
    Lawmakers are proposing that the banking industry CURB the executive salary caps. When someone uses the word CURB, then means that they are suggesting they control it themselves or make a very minor adjustment to it.
    Lets see something in concrete. These snakes are gonna do it again. Right now, millions are being spent by the lobbyists hired by the banks to convice our lawmakers and representives to vote their way. SPEAK UP NOW!!!!!!!
    SAY NO WAY. TOO LAX OF A PLAN!~

  • cj5 09/20/2008 6:49pm

    It doesn’t. This government is raping it’s citizens because they know we won’t do anything about it, because the U.S. is full of political wussies!

  • Anonymous 09/20/2008 8:12pm

    NO NEW TRADING RULES, please.

    Simply reinstate the “Uptick Rule” and enforce the previously-existing SEC short sale rule.

    We’re killing capitalism! … and about the bury the taxpayers.

  • Anonymous 09/20/2008 8:20pm

    Since taxpayers will (inequitably) bail out the imprudent, grant them 1 ‘warrants’ for every additional dollar levied in taxes paid for the bailout, segregate the ‘bad debt’ repayment from General Revenues, at let the taxpayers redeem their "warrants’ (at least as tax credits). The Government shouldn’t have a revenue windfall without accountability and transparent appropriation.

  • Dem02020 09/21/2008 3:19pm

    In the final few months of the Bush administration, we’re about to have what must be the single largest transference of money from the U.S. Treasury to the private sector, than has ever happened in U.S. history… than has ever happened in the world!

    Has any government ever considered transferring $700 billion (possibly a trillion dollars) of public money to the private sector?

    No war or social program has ever cost this much, not in the history of the world… and yet in what is relative suddeness, the Bush administration is presenting a full-court press against Congress and the American People, to do just that, and transfer a truly mind-boggling sum of money to the private sector.

    There are two questions of enormous importance to consider here: one, to whom is this extraordinary amount of money going to, and two, what expense or loss is this money supposed to be covering?

    And what the answer to the first question seems to be, is NOT to me and you!

    We the American People are NOT the beneficiary of this extraordinary sum of money being drawn from the U.S. Treasury… it is by all accounts going to private companies (financial services and investment companies and banks, all privately-owned and operated), and NOT to the population at large, or to any significant fraction of it… WALL STREET is where this money is going, to put it in a single term: WALL STREET!

    And the other question’s answer, about why this money is going there, and exactly what losses are being covered by this extraordinary world-record-breaking amount of public money that is being siphoned off to the private sector?

    There is a widespread rumor (and who is spreading this rumor?) that all of this money is covering “bad home loans”…

    Are you kidding me?

    Does someone expect us to believe there are nearly a trillion dollars of non-performing mortgages as the exclusive reason behind these extraordinary losses of these financial service companies and investment funds and banks even?

    BULLCHIT!

    We need to talk about this!

    This needs to be an intense subject of public debate!

    We’re in no mad rush here… it’s not like a house is on fire, or a ship is sinking… we can be cautious, and take time, in making this step… a trillion dollars being siphoned out of the U.S. Treasury, in the name of WALL STREET?

    We need to look at the books of these companies… we need to know exactly what it is they’ve lost so much money on… I don’t believe for a minute, that it’s all or even mostly “bad home loans”

    STOP THE MADNESS, and take time to think: this looks like maybe the greatest looting of any public treasury in the world!

    Let’s look closely at the losses of these companies… let’s look at the books.

    And the not so funny thing is, that whatever true “bad home loans” there are in these losses that this public money is supposed to cover, the unfunny truth is that that money isn’t going to those homeowners, and isn’t going to save their homes… they already lost their homes, and none of this money goes to them!

  • serverdown 09/21/2008 4:01pm

    Decisions by the Secretary pursuant to the authority of this Act are non-reviewable and committed to agency discretion, and may not be reviewed by any court of law or any administrative agency.

    Am I reading this section right? Decisions made by the ‘Secretary’ can not be reviewed by any court of law.

    http://www.nytimes.com/2008/09/21/business/21draftcnd.html?_r=1&ref=business&oref=slogin

  • Dem02020 09/21/2008 4:45pm

    THIS IS INSANE!

    The so-called “fact sheet” that the Secretary of the Treasury has released, includes no specific description of the “troubled assets” that he and his co-conspirators in the Bush administration want to spend $700 billion of our money on…

    These “troubled assets” are also referred to in the so-called “fact sheet” as “distressed assets” and “illiquid mortgages”… that’s it, there’s no more specific description of what it is that’s supposedly so important that nearly a trillion dollars must be siphoned off from the U.S. Treasury NOW!

    And that’s the other thing here, of how unbelievably urgent these Bush administration officials are portraying this situation, as we and our Congress must get on board a trillion dollar’s worth NOW, IMMEDIATELY, THIS WEEK AND NO LATER!

    Why are they acting as though a house is suddenly on fire, or a ship is suddenly sinking?

    Hasn’t the losses of these financial companies and investment funds (hedge funds! We’re being told we need to bail out hedge funds, NOW!)… hasn’t all of this been happening as most things happen in finance, over time and gradually?

    Why is the Bush administration trying to convince us that the world is not turning gradually, but is about to tip over NOW!

    This is insane. The Secretary of the Treasury, a Bush administration official, in the last couple of months of the Bush administration, wants unrestricted unlimited powers to siphon off nearly a trillion dollars from the U.S. Treasury (NOW!), and his so-called “fact sheet” describes no specifics at all as to what exactly these “troubled assets” are…

    Like, where are all these supposedly “bad home loans” from: Texas?

    And what is the nature of these “bad home loans”: are they commercial real estate developement schemes?

    Hedge funds?

    This is crazy… this is way too much public money to give to the private sector, for reasons so vague and undescribed, as nothing more than “troubled assets”…

    And all of it NOW! As though a house were on fire, or a ship was sinking…

    People need to STOP, and take a breath, and start talking about what these specific “troubled assets” really are.

    I mean, if WALL STREET truly wants this money, then they can open up the books on these companies and investment funds (hedge funds!), and describe in detail for us, the locations and particular conditions (such as mortgage type, commercial or residential, and mortgage amount, not in total, but itemized: are there any million dollar mortages we’re talking about here? Multimillion dollar mortgages?)…

    Does anybody here at this late date, really trust the Bush administration and it’s officials this much, to give them a trillion dollars NOW, for WALL STREET, for something that they aren’t even describing in detail, let alone itemizing…

    THIS IS INSANE.

  • judithkratochvil 09/22/2008 7:07am

    ONE TRILLION DOLLARS! THEY MUST BE ABSOLUTELY INSANE!

    Nobody is talking about what this will eventually do to taxes and will require us to sacrifice in order to bail these irresponsible slugs out of the mess into which they got themselves.

    ABSOLUTELY INSANE!!!!!

  • Anonymous 09/23/2008 2:23am

    8 years of Republican management will cause 100 years of debt!

  • Anonymous 09/27/2008 1:06pm

    Should we suspend the Constitution 2 bail out banks?
    Sub-section 8 of the proposed bailout is the scariest language I have ever seen. READ IT CAREFULLY! What it specifies is that the Treas. Sec. will be allowed above and beyond the reach of the Constitution itself! What kind of mentality would even consider such a thing?

    HUH?

    Suspend the provisions of the judicial system & the US Constitution for one man? This is ABSURD, and should be considered cause for treason charges. NO SUCH AUTHORITY should EVER be granted in this country, for any reason. We have not/do not/will not recognize the powers of a “king!” That is our history, our responsibility and our legacy!

    Appalling, scary, illegal, absurd, disgraceful! THOSE are the key words of the bail-out “message,” and should be resisted!

    Folks, this is dangerous wording.

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