House Passes Bailout Bill

[DuncanK]

http://online.wsj.com/article/SB122304922742602533.html

[Ramza]

http://img256.imageshack.us/img256/5504/aybabtucq4.jpg

[statepkt]

^ LOL

ALL YOUR MBS BELONG TO US

and then everything crashes for some reason.:confused2:

[freakscene]

http://news.cnet.com/8301-13578_3-10057618-38.html?tag=nl.e433

IRS undercover operations: Privacy invasion?

The bailout bill also gives the Internal Revenue Service new authority to conduct undercover operations. It would immunize the IRS from a passel of federal laws, including permitting IRS agents to run businesses for an extended sting operation, to open their own personal bank accounts with U.S. tax dollars, and so on. (Think IRS agents posing as accountants or tax preparers and saying, "I'm not sure if that deduction is entirely legal, but it'll save you $1,000. Want to take it?") That section had expired as of January 1, 2008, and would now be renewed.

What's a little odd is that there's been little to no discussion of the IRS sections of the bailout bill, even though they raise privacy concerns. Treasury Secretary Henry Paulson said this week: "I will continue to work with congressional leaders to find a way forward to pass a comprehensive plan to stabilize our financial system and protect the American people by limiting the prospects of further deterioration in our economy." He never mentioned the necessity of additional IRS undercover operations.

The TARP program permits the Treasury to purchase mortgage-backed bonds or any other "troubled assets" from financial institutions. The idea is that because banks have become so hesitant to lend to each other, this law will help unstick the gears of the modern financial economy.

Some loopholes exist. It's possible for a bank to buy $100 billion of bad debt--perhaps in the form of subprime mortgages that are becoming quickly worthless-- declare bankruptcy, and sell it to the Treasury Department for $120 billion, or $200 billion. In other words, although the Treasury Department is supposed to look out for the best interests of taxpayers, there's no law forbidding such profits in the case of firms involved in bankruptcy, receivership, or mergers.

The Treasury Department is authorized to "guarantee" home mortgages, essentially becoming a kind of co-signer, to reduce the number of foreclosures. If the home owner stops paying his or her mortgage, taxpayers would be on the hook. The Treasury Department can also eliminate a "reasonable" amount of a home owner's mortgage debt, under section 109 of the new law, which would likely delay the process of house prices falling.

In response to grassroots pressure from Americans upset about Wall Street executives cashing in, Section 111 is titled "Executive Compensation and Corporate Governance."

It does not include, however, any statutory dollar limit on how high executive salaries of TARP bailout recipients can be. Instead, it lets Treasury Secretary Henry Paulson, the former CEO of Goldman Sachs, come up with "appropriate standards." In addition, only the top five executives will have their golden parachutes limited; all the rest will remain untouched, even if their second-tier salaries and bonuses happen to be in the millions or tens of millions of dollars.

Section 115 of the law says that the administration can, after notifying Congress and waiting 15 days, purchase and hold $700 billion of assets "at any one time." (It can buy and hold $350 billion without waiting.)

This, too, is a potential loophole. It permits the Treasury Department to buy up, say, $700 billion in 2008, sell those assets off gradually over the next year at a (probable) loss, and repeat the same process in 2009. Losses to taxpayers, in other words, could exceed $700 billion. Although the Treasury Department is instructed to try to avoid losses, the text of the law does not forbid that scenario.



what a mistake

[aiki14]

I am not sure what to make of the rescue in it's final form, or where to be positioned for mondays trading as I have been off for two weeks, but here is a piece from the IBD:

A Flawed But Necessary Rescue

INVESTOR'S BUSINESS DAILY
Posted 10/3/2008
Like the metastasizing federal tax code, the rescue bill swelled from three pages and $700 billion in its first incarnation to more than $800 billion and 451 pages in just a matter of days.
Special interests that have nothing to do with the rescuing of the financial system are today's happy beneficiaries of more than $100 billion in tax breaks — or "sweeteners," as the plan's negotiators called them.
But, in the end, we agreed even with House Democratic Rep. John Lewis of Georgia, who decided that "the cost of doing nothing is greater than the cost of doing something."
And just what did this rescue package contain — in addition to money for our distressed financial system, that is?
Well, the makers of wooden arrows for children came out as big winners in the larger package, as that small industry got $2 million in tax benefits.
Meanwhile, auto racetrack owners sucked a $100 million tax break into their intake manifold and domestic wool fabric producers spun $148 million in tax relief.
As should be expected, companies developing politically correct solar and wind power were heavy favorites. They will get roughly $15 billion in tax breaks, 10 times as much as businesses dealing in fossil fuels — even though the simplest way to ease our current energy crisis is by drilling for the billions of barrels of oil we have here in the U.S. but which Congress has kept out of bounds.
An additional $8 billion in relief will go to the victims of natural disasters.
It's a shame that the recovery legislation was weighted down with extras, particularly that $10 million credit that is intended to help businesses defray the costs of storing the bicycles their employees pedal to work, and the nearly $500 million in tax breaks for movie companies that produce films here in the U.S.
Congress should have had the courage to pass a quick and clean package, not a bill that includes an obscure and unnecessary provision for controlling carbon emissions.
It essentially required bribery to get some House members turned around (though others no doubt changed their votes to "yea" because they felt it was better to approve it before Capitol Hill "leaders" came back with an even worse bill laden with more pork).
The disgraceful way this legislation weaved its way through the process is a measure of how corrupt U.S. lawmakers have become. This Congress has earned its all-time low approval rating.
All that said, in the end Congress did what it had to do in the main part of the plan. The Senate approved the regrettably imperfect bill by a 74-25 vote Wednesday night, with the House following Friday afternoon, 263-171. Americans' confidence in the financial system needed to be restored, and this is where that starts.
It would have been dangerous for Washington to allow the flow of capital, threatened by the troubles of America's financial giants, to shut down and slam the brakes on the U.S. economy.
There's roughly $70 trillion or so in total global investment capital available, by some estimates, but it does nothing if it is not put to use and simply sits idly. If global capital markets had frozen up, we would, at best, have been trapped in economic stagnation; at worst, we would have been consumed by a deep downturn.
Sclerotic capital markets send negative waves across an economy like water ripples away from a rock tossed into a lake.
Companies across the land, many of them large enterprises with thousands of employees, would wither without access to the money market, where they go to finance their daily operations, including inventories and payrolls.
Lenders needed to be assured that the market they operate in isn't collapsing — and that the loans they routinely make wouldn't go bad.
Sometimes in policymaking, a half loaf is better than none. That may be the case now. Americans got the half loaf they needed but with a lot of moldy rolls thrown in that will be hard to chew.
We're grateful the rescue package was passed on Friday — before Congress could come back for another vote cluttered with even more rubbish.

[aiki14]

Always interesting to hear the take on things from various sources, this is a link to the "your views" page of the english language version of Al Jazeera which appears under this headline:

YOUR VIEWS
How can the global financial market be rescued?

http://english.aljazeera.net/your_views/americas/20089308725283882.html


I think this is a very interesting topic, in that the bailout brings together very strange bedfellows in support or against .

[freakscene]

I am not sure what to make of the rescue in it's final form, or where to be positioned for mondays trading as I have been off for two weeks, but here is a piece from the IBD:


that would be the same IBD that is warning America about the dangers of Obamas social and economic socialism?

i beleive theyve compared him to Hugo Chavez, and Karl Marx. (or was that the Financial Times and WSJ) ?

[concrete]

^^
nitpicker
http://i246.photobucket.com/albums/gg85/concretisttexas/Matriarch_youngster_Gombe-1.jpg

[freakscene]

^^
truth sayer


fixed it for you

i didnt write them. but i did link them. :)

still waiting for aiki to answer whether or not he will be canceling his subscription to these obvious right wing hate machines.

of course he never will.