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September 28, 2008
Details Have To Be Worked Out But Deal Reached On Financial Markets Bailout Minus ACORN
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 of the program's $700 billion 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.
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.
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 Bush adminstration in 4/2001 raised red flags, the 2002 budget requests decalres Fannie Mae and Freddie Mac "Potential problem.. and can cause strong repercussions in the financial markets"
In 2003 the White House upgraded the warning to a systemic risk that could spread beyond the housing sector.
John Snow Treasury Secretary called for Regulations & Supervision of GSE's.
Barney Frank (D-MA) denied there was any problem " Fannie Mac & Freddie Mare are not in Crisis"
Encouraging the government to do more to get low income families into homes, Ultimately blocking the regulation.
Allan Greenspan , 2/17/2005 spoke about the dangers of Fannie Mae & Freddie Mac "enabling these institutions to
increase in size -and they will once the crisis in their judgement passes-we are placing the total financial system of
the future at a substantial risk
Charles Schumer (D-NY) 4/6/2005 ..."I think Fannie & Freddie have done an incredibly good job, and are an intristic part of making america the best housed people in the world....if you look over the last 20 or whatever yrs. Theyve done a very, very good job.
McCain (R-AZ) 5/25/2006 For years I have been concerned about the regulatory structure that governs Fannie Mae & Freddie Mac... and there sheer magnitude of these companies and the role they play in the housing market...the GSE's need to be reformed without delay."
That bill ( FEDERAL HOUSING ENTERPRISE REGULATORY REFORM ACT) made it out of the senate banking committee with a party line vote all the democrats voted against it.
Senator Obama did not weigh in on the bill !!!! The Muslim communist, marxist, creep!
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Frank's fingerprints are all over the financial fiasco
Boston Globe ..for complete article
'THE PRIVATE SECTOR got us into this mess. The government has to get us out of it."
That's Barney Frank's story, and he's sticking to it. As the Massachusetts Democrat has explained it in recent days, the current financial crisis is the spawn of the free market run amok, with the political class guilty only of failing to rein the capitalists in. The Wall Street meltdown was caused by "bad decisions that were made by people in the private sector," Frank said; the country is in dire straits today "thanks to a conservative philosophy that says the market knows best." And that philosophy goes "back to Ronald Reagan, when at his inauguration he said, 'Government is not the answer to our problems; government is the problem.' "
In fact, that isn't what Reagan said. His actual words were: "In this present crisis, government is not the solution to our problem; government is the problem." Were he president today, he would be saying much the same thing.
Because while the mortgage crisis convulsing Wall Street has its share of private-sector culprits they weren't the ones who "got us into this mess." Barney Frank's talking points notwithstanding, mortgage lenders didn't wake up one fine day deciding to junk long-held standards of creditworthiness in order to make ill-advised loans to unqualified borrowers. It would be closer to the truth to say they woke up to find the government twisting their arms and demanding that they do so - or else.
The roots of this crisis go back to the Carter administration. That was when government officials, egged on by left-wing activists, began accusing mortgage lenders of racism and "redlining" because urban blacks were being denied mortgages at a higher rate than suburban whites.
But his fingerprints are all over this fiasco. Time and time again, Frank insisted that Fannie Mae and Freddie Mac were in good shape. Five years ago, for example, when the Bush administration proposed much tighter regulation of the two companies, Frank was adamant that "these two entities, Fannie Mae and Freddie Mac, are not facing any kind of financial crisis." When the White House warned of "systemic risk for our financial system" unless the mortgage giants were curbed, Frank complained that the administration was more concerned about financial safety than about housing.
Now that the bubble has burst and the "systemic risk" is apparent to all, Frank blithely declares: "The private sector got us into this mess." Well, give the congressman points for gall. Wall Street and private lenders have plenty to answer for, but it was Washington and the political class that derailed this train. If Frank is looking for a culprit to blame, he'll find one suspect in the nearest mirror.
Wild Thing's comment.............
I put a few buzzards flying over the democrats heads in the photo at the top of this post.
Posted by Wild Thing at September 28, 2008 07:55 AM
Comments
When I see a picture of Reid, Pelosi and Frank all grinning, I know it is time to watch my wallet.
There are plenty of guilty parties in this mortgage crisis but the main architects were politicians in Washington DC. Barney Frank has been a key figure almost from Day One, now he is going to claim to be one of our saviors while laying blame on others. Barney Frank is one of the examples of why America needs term limits on it's politicians.
I don't know what this bailout will eventually cost us taxpayers, but it will be more than the $700B admitted to. It will probably also give the government more control over the free market place which is something else we did not need. Socialism marches on.
Posted by: TomR at September 28, 2008 09:27 AM
Where's the skunk in the lead picture? At the mike.
Posted by: GM Cassel AMH1(AW) USN RETIRED at September 28, 2008 09:35 AM
I am no economics expert- but I really don't see how we are going to have a depression if we don't bail out these bad deals. Why are the CEO's getting to walk away with millions- and the taxpayers are going to pick up the tab-- sounds like BS to me--! Why is no one going to be held accountable- except George Bush-- I think the Dems in control have a lot to do with this- I have watched this on TV and everyone is whinning- - It seems like a bunch of people are getting screwed-- tax - payers- and a few people are getting rewarded for their mistakes- -who knows but their seems to be some really bad judgement being used- - glad I got rid of my stocks this summer- - did not have many but glad I don't have them any more!! Maybe I just don't get it!All they are going to do is pass around money and probably make more bad decisons with it- I see the suits in washington and they make me laugh- they are so desperate they are bowing- to crazy ass Pelosi__OMG!! HOW INSANE!!!!
Posted by: Cheryl Zee at September 28, 2008 10:13 AM
Once again, Congress screws us!
Posted by: Yatalli at September 28, 2008 10:33 AM
A few quotes by some very smart men...
Posted by: Duane at September 28, 2008 12:33 PM
I believe that Bush asked McCain and Obama to go easy on the Bailout in the debate. There's no way the Democrats will keep funding Iraq if the Republicsns don't go along with the Barney-Frank-Bailout.
This Latina moonbat shows the problem we have.
http://alisavaldesrodriguez.blogspot.com/2008/09/mortgage-crisis-demystified.html
Posted by: horace at September 28, 2008 01:48 PM
We bailed out Fannie and Freddie, AIG, Lehman,and one more and now this. Where is the money supposed to come form ?
This is all just dandy that we can run around the country Federalizing all these companies, which is what the democrats want but we can't afford this.
The President of Brazill Sula de Silva said, 'what about the poor'. I say screw the poor they aint paying for this piece of crap legislatoin.
Posted by: Mark at September 28, 2008 03:39 PM
"Welcome to the Ball Park of Socialism: Programs heeere, popcorn heeeere, free medication and breast implants heeere, universal dentistry heeeere, free nose jobs heeeere, free college tuition and books heeeere, free autos and houses heeeere...."
Karl Marx and the DNC 2008?
Posted by: darthcrUSAderworldtour07 at September 28, 2008 04:19 PM
THE PLAN
Step One: Let Congress pass a legislative financial bailout plan giving the government unprecedented and massive control of the private sector that doesn't fix the real problem and absolves themselves from their majority portion of creating the housing and financial crises.
Step Two: November 4, 2008 - Elect Barack Hussein Obama President
Step Three: January 20, 2009 - Inauguration of President Barack Hussein Obama
Also, the last day of our capitalistic democracy and USA.
Also, the first day of the new socialist U.S.S.R. (Union of Socialist State Republics). All 57 of them.
http://squawkboxnoise.com/wp-content/uploads/2008/06/obama-marx.jpg
http://i23.photobucket.com/albums/b363/coby90kg/obamaUSSR.jpg
http://www.freeulysses.com/uploaded_images/socialist-flag-barack-765885.jpg
http://www.freeulysses.com/uploaded_images/obama-speech-765496.jpg
Posted by: Les at September 28, 2008 06:20 PM
Time for a rolled up news paper to the noses of Uncle Ted and Lisa Murkowski.
Posted by: Yatalli at September 29, 2008 02:15 AM
Tom that is a good clue to go by I agree.
Posted by: Wild Thing at September 29, 2008 06:37 PM
GM Cassel AMH1(AW) USN RETIRED, hahaahahaa Good one.
Posted by: Wild Thing at September 29, 2008 06:38 PM
Cheryl me either, I think maybe down the line it might have a chain reaction I really don't get that part of it at all.
But when those that are at fault are the very ones pushing this so hard I have to wonder too why the rush.
Posted by: Wild Thing at September 29, 2008 06:41 PM
Yatalli, they sure are.
Posted by: Wild Thing at September 29, 2008 06:43 PM
Duane, thanks for the quotes.
Posted by: Wild Thing at September 29, 2008 06:46 PM
Horace thank you for that link and information.
Posted by: Wild Thing at September 29, 2008 06:47 PM
Mark, see that is what scares me, we keep bailing these various things out and what will the next dozen be, it will never end.
Posted by: Wild Thing at September 29, 2008 06:51 PM
Darth, good one, that could be a graphic for this.
Posted by: Wild Thing at September 29, 2008 06:53 PM
Les, thanks for the images.
Posted by: Wild Thing at September 29, 2008 06:57 PM
