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Are the dems still trying to buy votes?
The Bush administration was resisting the equity-stake proposition.fify.Paulson's plan is largely a bail out for his silver spoon buddies on Wall Street. If they can't socialize the losses and keep any future profits, then this whole thing won't work out like they wanted. Accordingly Paulson is holding firm on this point. May he rot in and die a painful, slow death
Are the dems still trying to buy votes?
The Dems have been on the record for insisting on the mortgage assistance, loan assistance, etc.
They're all complicit. That said, Bush and Paulson can go themselves on resisting the equity stake thing.
That wasn't how I read it.
I thought the total debt they could be holding at any time would be $700 billion. some of it would have to be sold before they could buy any more. I could definitely be wrong, but isn't the whole point of this to avoid writing off this debt permanently and making it tradeable again?
Better.
http://www.bloomberg.com/apps/news?p...d=aZ5vL3rd6g5g
House Financial Services Committee Chairman Barney Frank said lawmakers and Treasury Secretary Henry Paulson narrowed their differences on a $700 billion plan to buy bad investments and agreed the U.S. should get equity in the participating companies.
Lawmakers ``made it clear'' the U.S. should get stock warrants ``so that if the company becomes profitable, we get more than the general share for taking these risks,'' and Paulson agreed, Frank told reporters today in Washington. Negotiators support letting Treasury use the authority while Congress writes oversight rules, Frank said in a Bloomberg Television interview.
I don't know, I think it's a little ambiguous, and I have to err on the side of thinking they'll do anything they can to cover the asses of their buds on Wall Street.
I hope you're right, because otherwise that provision seems pretty ty. They could write them off, or they could just have the Treasury print more money, devalue the dollar, and attempt to inflate their way out.
I think the limiting language was put in by the Democrats because Paulson and Bush were giving no indication that $700 B was going to be any kind of final number for a bailout amount. I heard it was a pretty arbitrary number between half a billion and a billion.
It's pretty astounding that the Bush plan could be so easily blown out of the water in terms that are fairly easily understood. Even I seem to get it.
If they want more than $700 Billion, they need to go back to Congress. Basically, Congress is the only one that can increase the government debt limit.
Jesus Christ, this is just getting worse...
I think CBF nailed it with the "this is how empires fall" comment.
What I have learned this week is that free markets exist only in theory.
We need to reestablish moral hazard. For example, whenever the taxpayers have to bail out a financial ins ution like this, any executives whose annual compensation exceeds one million dollars per year could be subject to life imprisonment or execution, with all of their personal and family assets immediately expropriated by the federal government and liquidated for distribution to the taxpayers.
Of course since those same people run the government and therefore control the means of coercive force, this is only possible through revolution.
I agree with many of the ideas proposed by the Democrats.
1. A big salary cut. I wish it was retroactive and that the government would prosecute any former execs who do not cooperate. If, as Paulson says, this would make companies reluctant to a government bailout, then the situation can't be that dire, and the government will spend less money.
2. Equity. If we, the taxpayers, bail you out, then we own you. See part 1 for reluctant companies.
3. Change bankruptcy laws. Mortgage and credit companies want a hand from the government for their debt, but treat their debtors like . Let bankruptcy courts have the flexibility to reorganize all the debt of people who go bankrupt, mortgages, credit card, student loans, car loans, whatever. If banks and corporations can get out their debts, why not ordinary folks as well? Also, the threat of a bankruptcy court eliminating the mortgage or other loans will make the companies negotiate for deals that people can handle.
I don't see any rational way for the government to deal with foreclosures on an individual basis. Some people were reckless, some were duped, and perhaps most are some combination of both. The government just gave away money to all of us a few months ago with not much of an effect. I think we mainly need debtors and creditors negotiating in good faith, but that won't happen if bankruptcy laws are too highly in favor of the creditor.
When and where.
I meant to put on that the number being floated isn't the cap. The longer this drags on the less I have confidence in the government fixing the problem. And even if they do its just more national debt that our generation will have to deal with at some point.
Yeah, thanks Baby Boomers. You've really left us with a storm.
Its bad. When I read about this this weekend and how close AIG nearly came to destroying us I was pretty amazed.
I'll post more later when I have time, but its not a pretty picture ATTM.
You know, I've been screaming that very thing for the last 10 years of my life. The Baby Boomers are the most worthless generation in the history of the world.
I agree with this.
The goverment owning businesses...2. Equity. If we, the taxpayers, bail you out, then we own you. See part 1 for reluctant companies.A loan at a fair rate of return say 10-15% should do.
hated the recent changes in the bankruptcy laws. These companies want the government to act as bill collectors when it comes to consumers, and now as guarantors of those same debts. NO!!!!!3. Change bankruptcy laws. Mortgage and credit companies want a hand from the government for their debt, but treat their debtors like . Let bankruptcy courts have the flexibility to reorganize all the debt of people who go bankrupt, mortgages, credit card, student loans, car loans, whatever. If banks and corporations can get out their debts, why not ordinary folks as well? Also, the threat of a bankruptcy court eliminating the mortgage or other loans will make the companies negotiate for deals that people can handle.
Reform the bankruptcy laws now!!!!
again I agree with this. government just needs to make collateralized loans to these ins utions at 15 to 20 cents on the dollar and let these ins uions work through their problems.I don't see any rational way for the government to deal with foreclosures on an individual basis. Some people were reckless, some were duped, and perhaps most are some combination of both. The government just gave away money to all of us a few months ago with not much of an effect. I think we mainly need debtors and creditors negotiating in good faith, but that won't happen if bankruptcy laws are too highly in favor of the creditor.
We'll get our revenge when we cancel their Medicare benefits.
Unfortunately, they will ALWAYS outnumber us.
Do away with the whole voting thing for a while and cancel the benefits by fiat.Unfortunately, they will ALWAYS outnumber us.
A wise person once said that democracy would fail once people figure out they can vote themselves money. We're at that point.
It was this guy:
Really.
I think that was in reference to a quote that was stated in another recent thread that went something like "...when the majority realizes they can vote themselves largesse from the treasury..." or some such.
In this particular bail-out case, it doesnt apply, IMO.
The majority isnt voting on this issue and the majority will not benefit from this either.
A very, very small minority just got the single greatest government intervention plan passed almost overnight. Corporations are realizing that if youre in the financial sector and your assets are dependant on the American people paying back the money you loaned them, you'll never fail. No matter the cir stance, no matter how much the executive took in windfall, no amount of bad policy or irresponsible behavior will allow you to fail.
They should call it "Corporate Point of No Return". To big to fail, to greedy to succeed.
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