Nuts and bolts of the bailout

[BradK]

Anyone know where I can get a copy of the nuts and bolts of the bailout package that was voted YES by the Senate today?

What are the points, and how have they changed from the legislation that was rejected by the House?

Also, this $700 Billion - is it going to be borrowed FROM the banks (and interest paid back to the banks by the taxpayer) to buy their own toxic debts? As Democrat Dennis Kucinich keeps saying? IF SO, if you cant beat 'em join 'em!



Brad

 

[white_goodman]

Re: Nuts and blots of the bailout

yeh there defineatly is some blots

 

[BradK]

Re: Nuts and blots of the bailout

From the BBC

What are the main changes in the new bail-out plan?

There are a number of changes to the original plan to make sure that the ordinary public gains more from the bail-out, and to limit the cost to the taxpayer.

In the Senate bill, these include not only an increase to depositor protection limits, but also some tax breaks to help small businesses and promote renewable energy, as well as an expansion of the child tax credit and help for the victims of the recent hurricanes.

In the House, some Democrats also want more help for homeowners who are facing foreclosure - although Senate Republicans are strongly opposed to any change in bankruptcy laws.

There are also proposals to limit the cost to the government of the bail-out, by changing the accounting rules for banks who are currently required to mark down the full value of their losses from their dodgy sub-prime loans.

What are the risks if no bill is passed?

After the initial bill was rejected by the House of Representatives, stock markets tumbled and global markets have remained volatile.

The Dow Jones index lost 770 points - its largest one-day points fall in its history - after the bill's rejection. The Nasdaq index fell 9.1% while markets in Asia and Europe also saw heavy losses.

There were large falls too in the price of oil and the value of the dollar - all of which is likely to cause an expensive headache for some investors.

Many investors say the main problem is continued uncertainty over how the financial sector will recover.

Credit markets are likely to remain almost frozen as banks remain reluctant to lend to each other.

Subsequently, individuals, small businesses and large firms will still find it tough to get the loans they need - and access to finance will be more expensive.

 

[BradK]

Re: Nuts and blots of the bailout

OK - you can go for me, but here is my bail out plan.

Any company that puts its hands out for the bailout money has to surrender its top 10 executives, who will be stripped of their assets (bankruptcy?) and thrown in f#*$&ing jail - I'm thinking Guantanamo Bay? :

Sell off those assets and take the net proceeds away from the $700 Billion. I reckon we can get a cool $100 billion from there.

Maybe then, maybe, the plan will be acceptable to those 85,000 out of 91,000 who rang and emailed that Californian Senator (I wish I got her name!) to register their opposition to the Senate bailout bill. I saw her on C-span this morning say that despite over 90% of her constituency REJECTING the bill, she was going for it anyway.

Brad

PS. And I also think we should get Mugabe to send some observers for their election in November, just to make sure that nothing dodgy goes down

 

[Doris]

Re: Nuts and blots of the bailout

The new bill is a much broader economic support package that goes well beyond the Treasury’s acquisition of Wall Street’s toxic assets. In an effort to win over a critical mass of Republicans in the House – who voted heavily against the first bill - It includes extensions of tax cuts for businesses that were set to expire in the next year, as well as some extra tax relief for middle-income earning individuals who would have paid a big increase in their tax burden.

But in classic Washington style it has also been loaded up with all kinds of extra fiscal sweeteners for doubtful constituents out in the country. These include everything from support for research into the woollen industry to an excise tax exemption for children’s toy wooden arrows.

An increase in the limit on deposits that are guaranteed in the event of a bank failure and changes to the way banks are required to value the bad assets on their books

One of the reasons the initial bill went down in the House was that members had been frightened by calls from constituents angry at what they saw as a bailout for rich bankers.

But yesterday a number of members reported that since that vote they had been deluged by calls from other voters, expressing outrage that their representatives’ opposition to the rescue plan might be leading the country into another Great Depression.

The betting in Washington on Wednesday night was that the House would finally agree to the bill in the next 48 hours.

http://www.timesonline.co.uk/tol/news/world/us_and_americas/article4864994.ece

 

[lusk]

Nuts and Bolts of the bailout:

Taking bad debt off the books of banks and allowing them to continue issuing more debt. So you fix a problem of too much debt with more debt.

If we were all taught basic economics at school people would accept that a recession is part of the cycle. Instead governments try their best at avoiding them but really just end up throwing more fuel on the fire.

In the US the government is about to unload a supertanker full of fuel onto the fire. Bye bye US :grenade:

 

[GreatPig]

So you fix a problem of too much debt with more debt.

Well if you can fight fire with fire...

GP

 

[wildkactus]

Anyone know where I can get a copy of the nuts and bolts of the bailout package that was voted YES by the Senate today?

You can see the bills on the us senate site, its a bit hard to follow but if you dig you can find all the info as it was voted on.
From what I can see they used bills that where already on the floor and placed amendments to them to make them the Bailout bills, this is quicker then creating a whole new bill i suspect.

the bills are (I think) H.R. 3997 from the house, changed to H.R. 1424 in the senate.

www.senate.gov/pagelayout/legislative/b_three_sections_with_teasers/active_leg_page.htm

happy reading.

 

[Julia]

I have a friend who is a devout Seventh Day Adventist. (She is otherwise a very normal and nice person.)

She says the Bible (Revelations) predicts the fall of the USA this decade.

She further says the Bible then goes on to predict the taking over of the world by The Papacy. She is not clear about how this will come to pass.

So there. Now we can all plan accordingly.

 

[stath]

I have a friend who is a devout Seventh Day Adventist. (She is otherwise a very normal and nice person.)

She says the Bible (Revelations) predicts the fall of the USA this decade.

She further says the Bible then goes on to predict the taking over of the world by The Papacy. She is not clear about how this will come to pass.

So there. Now we can all plan accordingly.

Ok, does the Vatican trade on the stockmarket?

 

[Julia]

Ok, does the Vatican trade on the stockmarket?

Damn! Should have asked her that.

 

[wayneL]

Holy Crap!

I better start brushing up on my Hail Marys then.

 

[BradK]

Is Kyosaki now a leftie???

Holy Crap... THIS from Kyosaki

As Capitalism Crumbles, U.S. Taxpayers Pick Up the Pieces

by Robert Kiyosaki

Posted on Tuesday, September 23, 2008, 12:00AM

As we all know, the world changed drastically on Sept. 11, 2001, when the twin towers of the World Trade Center fell.

This year, on the eve of Sept. 11, the twin towers of Fannie Mae and Freddie Mac crumbled. Then, on Sept. 15, Lehman Brothers and Merrill Lynch disappeared. Actually, that was a triple-tower collapse if you count AIG.

In a few years, the biggest pair of towers will collapse: Social Security and Medicare. Even today, they're looking shaky. How many ground zeros can we as people, a nation, and a world withstand before we admit something is very wrong with our global financial systems? What will it take to wake us up?

Government Can't Fix It

Personally, I believe the biggest it's a problem that so many Americans are looking to this year's presidential candidates, Barack Obama and John McCain, to save our financial system. How did we become so financially weak that we surrender our economic independence to politicians? Where does it say in the Constitution that the government should solve our financial problems?

And why have so many people throughout the world come to expect financial life-support from their political leaders? It seems most people will vote for anyone who promises a chicken in every pot and a guaranteed mortgage payment.

We're in the midst of a problem neither candidate can solve: A lack of comprehensive financial education in our school systems. What else explains the economic blunders committed by our political and financial leaders? Or why so many consumers are in debt up to their eyeballs? Or why millions of people expect a quick government fix of some kind?

Under Water

A few months ago, a friend of mine from Hawaii asked me if I wanted to buy his new powerboat with twin motors. Apparently, in late 2007, he purchased it brand new for approximately $85,000. His plan was to refinance his house when it appreciated in value and use the difference to pay for the boat.

Failing to obtain new financing, he called to ask me if I would buy the boat from him -- just take over the payments and it was mine. I passed, and the bank eventually repossessed his boat. Later, his wife called to tell me he's now having problems making his mortgage payments. Apparently, my friend planned to pay for his house the same way he planned on paying for the boat, by refinancing his debt.

I mention this story because it illustrates the problem Obama or McCain face: Limited financial education and diminished financial common sense. Apparently, my and the nation's business leaders all went to same school of finance.

A Cynical Aside

If you want to know why the towers of American capitalism are crumbling, I recommend reading "The Creature from Jekyll Island" by G. Edward Griffin. It's not an easy book to find, but once you start reading it's to put down. In fact, in many ways it's a murder mystery about the financial "murder" of the middle class.

A very important lesson in the book is how political leaders use financial spin to deceive the public. The very, very rich use the system to legally steal from the rest of us by appealing to our sense of patriotism. When our leaders say, "We're bailing out Fannie Mae and Freddie Mac because we want to protect the American people," they really mean "We're saving our rich friends."

All the bankers and politicians have to do is wave the red, white, and blue, play a few bars of "Yankee Doodle," and the masses get teary-eyed and pledge greater allegiance to legalized robbery. Yes, it's true that ignorance is bliss -- but ignorance is also expensive, and it cost us our freedom.

Freedom at Peril

A bailout can be different things. First, printing more money is a kind of bailout that leads to higher inflation. Rather than protecting people, it makes life for the poor and middle class more expensive. The other kind of bailout is protection for our rich and incompetent friends. If you or I fail at business, we fail. If we cheat and fail, we go to jail. But if you're rich and politically connected, your incompetence may be protected by a government bailout.

As a former Marine and a Vietnam War veteran, it saddens me to see some of the freedoms I thought I went to war to protect being stolen from us by bankers and politicians. Unfortunately, few Americans know the difference between the words "nationalize" and "socialize." Socialize means we turn more of our personal powers over to Big Brother, not free enterprise. It means we as a people grow weaker and need a higher power -- the same power that got us into this mess -- to protect us.

In short, when the towers of Fannie, Freddie, Merrill, Lehman, and AIG came crashing down, more came down than just money. What we're losing is the very freedom this country was founded on, and what most of the world yearns for.

 

[stath]

Damn! Should have asked her that.

Yeah, and if they are, I'll send in for my prospectus. Only hope that it's written in someting other than Latin. But judging by the Latin word "prospectus", I won't hold my breath.

 

[[t..o..m]]

If those stupid idiots don't pass this bill I think I will scream. Michael Pascoe made the perfect analogy, "It's like your mother-in-law driving over a cliff with your brand new BMW" Even though you might get rid of her, you have to save your new BMW

For god's sake just pass the freakin bill!

 

[Glen48]

Maybe buy shares in the printing factory who print the Bible or the Water co. who supplies the Holy (Holey) water.
I see there are 5 UK banks with there hands out for their cut of the $700 B
Keating tells us there is a 5B difference between what is owing on US houses and what they are worth.
Thinks are starting to look bad maybe time to stock up on Bake Beans but then you have a problem with Methane and GW.
Palin is involved with Witchcraft so we could look there?

 

[CAB SAV]

Maybe buy shares in the printing factory who print the Bible or the Water co. who supplies the Holy (Holey) water.
I see there are 5 UK banks with there hands out for their cut of the $700 B
Keating tells us there is a 5B difference between what is owing on US houses and what they are worth.
Thinks are starting to look bad maybe time to stock up on Bake Beans but then you have a problem with Methane and GW.
Palin is involved with Witchcraft so we could look there?

Keating said the diff is between $5-6 Trillion.
Increasing IMO. At least Warren Buffett admitted lastnight that $700b probably isn't enough.

 

[Kauri]

Reuters is reporting that US House Majority Whip Clyburn sees Democrat support for the Treasury bailout package growing and giving hope that the House of Reps won"t surprise/disappoint this time around. The House leaders are still deciding on whether or not the vote will go ahead on Friday.
Analysts feel that the market"s focus has shifted from being intensely on the fate of the bailout package to the state of the global economy. Fears that both the US and Europe are in or going into recession has impacted all asset markets over the past 24 hours. The credit markets remain locked up and will deteriorate further if the rescue bill fails to pass. If it does pass there will be some relief and hope that the credit markets stabilize, but it is not seen as the magic bullet to brighten global growth prospects.

Cheers
............Kauri