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The Bailout Hearing Live Blog

By Big Tent Democrat, Section Legislation
Posted on Tue Sep 23, 2008 at 08:01:22 AM EST
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The Senate Banking Committee (Sen. Chris Dodd (D-CT), Chairman) hearing on the proposed Wall Street Bailout begins around 9:30 am ET this morning. I believe all the cable news channels will be broadcasting the hearing. C-Span certainly will have them. You can find the C-Span Live stream here. Here is Fed Chair Bernanke's opening statement.

Below the fold, I will point out issues that catch my interest. Please provide your own thoughts in the comments.

This is an Open Thread.

From Bernanke's statement:

At this juncture, in light of the fast-moving developments in financial markets, it is essential to deal with the crisis at hand. Certainly, the shortcomings and weaknesses of our financial markets and regulatory system must be addressed if we are to avoid a repetition of what has transpired in our financial markets over the past year. However, the development of a comprehensive proposal for reform would require careful and extensive analysis that would be difficult to compress into a short legislative timeframe now available. Looking forward, the Federal Reserve is committed to working closely with the Congress, the Administration, other federal regulators, and other stakeholders in developing a stronger, more resilient, and better regulated financial system.

This is an argument against a comprehensive regulatory overhaul being a part of this bill due to the exigency of the circumstances. I personally can accept that point. What I can not accept and what I hope Democrats and Republicans do not accept is that that means that Treasury Secretary Paulson's ludicrous proposal must be accepted. Knowing nothing else, I know that Dodd's proposal is vastly superior to Paulsen's.

If we must rush through passage of a proposal, then we should pass the Dodd bill.

Hearings start, pols will bloviate at the top.

Dodd blasts Paulson proposal - if he is to be believed - then the Paulson proposal is DOA.

Shelby, the ranking GOP member, sounds like he is going to try and blame the CRA and Bill Clinton. Shelby rips Alan Greenspan. Good for him. Shelby is killing the Bush Administration, from top to bottom.

Shelby now ripping the Paulson proposal. I do not see how the Paulson proposal has a chance to even get out of committee now.

GOP Senator Enzi of Wyoming is ripping the Paulson proposal. No one in favor of the Paulson proposal.

Schumer blathers. Not impressive imo.

Now Hagel. Blah.

Crapo, GOP Senator of Idaho, skeptical of Paulson proposal but in the end, he sounds like he will be a Bush lackey, imo.

Sherrod Brown, populist Dem Senator of Ohio, likely to be blasting BushCo and the Paulson proposal.

Elizabeth Dole wants to talk about Fannie Mae and Freddie Mac. Which have NOTHING to do with this immediate crisis. Incredible attempt at distraction. She says "this problem could have been resolved years ago." Sure, by not electing Republicans. What a hack. A complete hack. I bet she will vote for the Paulson proposal.

Mel Martinez's use of the Fannie/Freddie talking point is conclusive evidence that this will be the GOP talking point. And that Martinez will vote for the Paulson proposal of course.

Corker of Tennessee seems to not like the Paulson proposal. Also does not like the rush to judgment. Says Bernanke and Paulson look like "deer in the headlights."

Akaka, Dem from Hawaii, typically unimpressive and rather incoherent to me. Seems like a yes vote for the Paulson proposal to me.

Allard, GOP Senator from Colorado, seemed to be against Paulson proposal.

Now comes Paulson. Seems open to the Dodd proposals to me. Let's see what else he says.

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    The Bailout Hearing Live Blog | 179 comments (179 topical)

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    The worst parts. . . (5.00 / 5) (#2)
    by LarryInNYC on Tue Sep 23, 2008 at 08:22:07 AM EST
    of the minimalist proposal that the Admin is circulating concern the ability of treasury to essentially assign control of the assets the government takes over to private concerns with neither oversight nor judicial review.

    Preferably many of the assets will be controlled and management directly by the government with the goal of preparing them for sale at or above the cost that we paid for them.  If we need to hire people to do this, I know where they can find plenty of folks looking for work in the financial sector.

    Any use of private contractors must be strictly controlled -- specifically with regard to what can and can't be done with the assets and how the contractors will be remunerated.  It must contain safeguards to ensure that any actions taken with respect to the assets will be to benefit the public good rather than the contractors.  And it must be subject to a degree of transparency and oversight above what is normally expected in even the regulated sectors of the banking industry.

    Otherwise, we're simply establishing the ability of the government to create an entirely new private financial sector favoring their personal friends and allies.

    Yeah (5.00 / 1) (#13)
    by Steve M on Tue Sep 23, 2008 at 08:49:06 AM EST
    I was talking with some financially savvy colleagues who seemed pretty unconcerned at the bailout proposal, noting that it basically just turns the government into a market maker.

    To simplify the concept a little, a market maker facilitates liquidity in a particular security by buying and selling even when there isn't a buyer and seller handy who can agree on the price.  They do this by quoting a bid price and an ask price, but also - and this is the key part - they'll buy the securities from you at the ask price, even if they don't have a seller at hand to pay the bid price.  In other words, they're a middleman, but they're actually willing to hold onto the goods for a time.

    The reaction I had to my colleagues is that you simply cannot have a market maker without a profit motive.  The whole point of the exercise is that the market maker wants to create the largest spread possible for himself.  So if you just give $700 billion to the Treasury Department and tell them to go nuts, who knows how they're going to set the prices.  They have no incentive to set commercially reasonable prices because it's not like they get to keep the profits anyway.

    Instead, as Larry suggests, the only real option is to empower private entities to serve as the market maker, letting them keep a percentage of the profits they generate.  But of course we have to keep a really close eye on them to make sure they don't do anything inappropriate with all the Treasury funds we're giving them.

    So the vague framework for a solution looks something like this:

    1. the government enters into contracts with a number of firms with experience in market making;

    2. the firms are authorized to draw down funds from the $700 billion in order to facilitate transactions in the securities at the heart of this mess, with a requirement that they use at least a little of their own capital to ensure they remain appropriately risk-averse (in other words, the government is providing "matching funds");

    3. once the firm has executed a buy and sell, and realized a profit out of the deal, it remits a big chunk of that profit to the Treasury and keeps the rest as its payment under the contract.

    This is a classic market-based solution in that competition among the various government contractors is what creates a market price.  They all want to make a profit, so they all want to outbid each other or they won't get any of the action.  It just becomes a matter of tweaking the details to ensure that the incentives are in the right place.

    Parent
    But doesn't that assume that (5.00 / 2) (#27)
    by ruffian on Tue Sep 23, 2008 at 09:09:32 AM EST
    the securities are worth something? My problem with this deal is that I suspect they are not.

    Parent
    But no one knows HOW to value them (5.00 / 1) (#81)
    by litigatormom on Tue Sep 23, 2008 at 10:22:30 AM EST
    These securities were considered, unencumbered by due diligence, to be virtually riskless because of the assumption that only a teeny tiny fraction of the underlying mortgages would default. Wrong assumption. Now, given the current economic circumstances, no one knows what assumptions to make about the viability of the underlying mortgages. Further, because the Paulson proposal does not contemplate assistance to homeowners in the form of debt restructuring, etc., there is no reason to believe that foreclosures will not continue to drive the housing market down.

    I don't know how Paulson came up with $700 billion figure, but we have no assurance that this is all that will be "needed," or what the reasonable prospects are for less than that amount being used.

    Parent

    It's a Revolver with a cap of (none / 0) (#93)
    by santarita on Tue Sep 23, 2008 at 10:43:24 AM EST
    $700B.  Presumably there will be pay downs and redraws.

    Parent
    I hadn't heard it was a revolver (none / 0) (#118)
    by litigatormom on Tue Sep 23, 2008 at 11:20:50 AM EST
    but even if there is, there is not ability to review or challenge Commissar's use of the funds, including the prices at which he buys or sells the crap securities. So we have no idea whether $700 billion will really fix the problem.

    Can you imagine what happens if McCain wins and Phil Gramm takes over this function?

    Parent

    McCain and Gramm would be like (none / 0) (#130)
    by santarita on Tue Sep 23, 2008 at 11:54:40 AM EST
    Bush and Cheney.

    The funding  should require reauthorization after the election.

    Parent

    They are worth something (none / 0) (#48)
    by Steve M on Tue Sep 23, 2008 at 09:36:28 AM EST
    it's not like every single one of the underlying mortgages is going to default without a dollar more being paid.


    Parent
    True, but we , the tax payer, (none / 0) (#114)
    by Radix on Tue Sep 23, 2008 at 11:11:02 AM EST
    don't wanna pay 3 dollars for something that's worth 1. Also, the problem these folks are having is described as a "liquidity" issue, they have assets, it's just know one want's to buy them. Since the players that already exist in the market don't want this stuff, why should we?

    Parent
    3) (none / 0) (#23)
    by Jlvngstn on Tue Sep 23, 2008 at 09:06:30 AM EST
    That is assuming they make a profit out of the buy.

    So you are buying dead paper at 20 cents on the dollar and turning a profit because you bought it so cheaply.  you collect 40 cents on the dollar for the paper you have made a nice profit.  

    So, if you bought the paper valued at 800 billion for 160 billion and collected on the paper at 320 billion you are doing swell.

    Of course, since we the taxpayers paid 800 billion minus your 160 billion and you give us hell, 50% of your profit that takes us to 560 billion in losses.  

    And the "market managers" make 80 billion while the taxpayers lose 560 billion.

    Of course I am dumbing this down but you cannot use "big chunk"  of that profit as if we are poised to make money on this deal.

    Parent

    I am missing (none / 0) (#32)
    by Steve M on Tue Sep 23, 2008 at 09:19:00 AM EST
    where the taxpayers have to pay $800 billion in the process I described.  The market makers are going to buy up the illiquid securities at whatever price the market will bear, and sell them at whatever price the market will bear.  At no point does anyone pay full value.

    Parent
    so under your system (none / 0) (#35)
    by Jlvngstn on Tue Sep 23, 2008 at 09:22:52 AM EST
    we only pay the 20 cents on the dollar for the securities and the banks eat the 600 billion?

    Great, let's change the bailout to 200 billion and have the banks eat the 600 billion.  

    Perhaps I missed the numbers in your post.

    Parent

    No wait, there it is (none / 0) (#38)
    by Jlvngstn on Tue Sep 23, 2008 at 09:24:42 AM EST
    700 billion.  Of that 700 billion is that buying the debt at a fraction and no loss for the taxpayer?  Because frankly, no plan has detailed or stated in any form that the banks will assume the losses and the taxpayer will reap the benefits.

    Parent
    Well gosh (none / 0) (#46)
    by Steve M on Tue Sep 23, 2008 at 09:35:39 AM EST
    we're certainly not going to buy up all these impaired securities for 100% of their face value!

    The current problem is that the securities are significantly undervalued in the mark-to-market system because there is no liquid market for them.  By effectively subsidizing the market-making role, we can change that.

    Parent

    you are assuming (5.00 / 2) (#59)
    by Jlvngstn on Tue Sep 23, 2008 at 09:48:59 AM EST
    that we are not going to overpay for the securities, I am not.  You do not address what we pay for the bad debt only that we spend 700 billion.

    In this comment it makes more sense from a taxpayer standing but it does not address the fundamental problem facing the financial system which is that they are undercapitalized.

    So dumping bad paper and eating the majority of the losses does not correct the problem from the banks perspective.  It is in their interest to secure as much capitalization as possible and selling the debts at 20 cents on the dollar is what they can get on the market anyway, which is probably what they are worth at this point.

    Paulson knows this and that is why he is asking for a blank check so to speak so that he can address the under capitalization.  Problem is that the retail and auto are going to tank in 30-60 days and the banks are going to have another run on liquidity because the notes they have had with those sectors will start to move to slow pay and in many cases default.

    The liquidity problem is much larger than the forclosure problem.  This bailout cannot address the liquidity crisis unless the banks receive a much higher premium on the bad paper than the general market is willing to pay.  

    Parent

    Bingo, we have a winner. (none / 0) (#120)
    by Radix on Tue Sep 23, 2008 at 11:22:18 AM EST


    Parent
    Program Makes Sense as a ... (none / 0) (#116)
    by santarita on Tue Sep 23, 2008 at 11:13:31 AM EST
    market-based solution.  But is a market-based solution the only palatable way to proceed?

    Parent
    Now you're making sense (none / 0) (#4)
    by Big Tent Democrat on Tue Sep 23, 2008 at 08:26:57 AM EST


    Parent
    Dodd as usual is amazing (5.00 / 2) (#10)
    by Militarytracy on Tue Sep 23, 2008 at 08:44:52 AM EST


    Shelby too (5.00 / 2) (#14)
    by Militarytracy on Tue Sep 23, 2008 at 08:52:32 AM EST
    and I don't care for him much.

    Parent
    He is killing the Bush Administration (none / 0) (#17)
    by Big Tent Democrat on Tue Sep 23, 2008 at 08:58:33 AM EST


    Parent
    I know and I can't believe it but I can (none / 0) (#21)
    by Militarytracy on Tue Sep 23, 2008 at 09:04:28 AM EST
    I smelled it coming with a few things he had said earlier last week.  Feeling proud of a Republican Senator wasn't something I anticipated happening again in this lifetime. Eeeew Mr. Sheridan WY NZ's shoes up now.  Made a really good living on the backs of single mothers paying them minimum wage.  My stepmom used to slave for him.

    Parent
    In a former life, he was a Boll weevil (none / 0) (#25)
    by andgarden on Tue Sep 23, 2008 at 09:07:31 AM EST
    and first elected to the Senate as a Democrat.

    Parent
    Who knew? (none / 0) (#26)
    by Militarytracy on Tue Sep 23, 2008 at 09:08:59 AM EST


    Parent
    I did :-p (5.00 / 1) (#28)
    by andgarden on Tue Sep 23, 2008 at 09:09:57 AM EST


    Parent
    Me too (none / 0) (#39)
    by Big Tent Democrat on Tue Sep 23, 2008 at 09:26:32 AM EST


    Parent
    heh (none / 0) (#40)
    by andgarden on Tue Sep 23, 2008 at 09:29:40 AM EST


    Parent
    junkies (5.00 / 2) (#49)
    by Militarytracy on Tue Sep 23, 2008 at 09:38:19 AM EST


    Parent
    He has earned my trust over time (5.00 / 1) (#20)
    by ruffian on Tue Sep 23, 2008 at 09:01:23 AM EST
    though he did freak me out a little over the weekend when he seemed to be going along with the administration too much.  If he says we have to do something now, then I'm inclined to beleive it.

    But I still have my doubts.  This has been a slow motion train wreck for over two years - it did not just happen last week.  Why didn't the presidential candidates have anything remotely like this in their plans?  Did they really not see it coming?  

    I think the Dem plan of heavy investment in infrastructure projects should be beefed up with at least half of this 700 billion. That would shore up the wages and wealth of homeowners and others, making them better able to pay their mortgages and other debts.  Beyond that, a credit crunch in general is not necessarily a bad thing until we all get our debt paid off.

    Parent

    Credit crunch (none / 0) (#136)
    by gyrfalcon on Tue Sep 23, 2008 at 12:13:07 PM EST
    Isn't just about your and my credit cards, it's about business credit.  The whole economy runs on credit, short-term and long-term.  Think of your local fuel oil company, most of them small independent businesses.  They don't have the cash to buy their oil supply, especially at today's prices, they have to get it on credit and pay it back as their customers pay them.  Same with most businesses large and small.

    Think about what happens all over the country if businesses can't get credit, or can't get it at a price they can afford.

    Parent

    That's a different kind of credit.... (none / 0) (#141)
    by kdog on Tue Sep 23, 2008 at 12:20:16 PM EST
    I see no reason why the mismanagement and greed problem with the banks and investment houses will effect the credit businesses give to each other to any large degree.  When my company sells plumbing supplies to our customers, we give them 30 days to pay...our customers don't go to the bank to get a loan everytime they place a stock order.

    Parent
    True about your plumbing company (none / 0) (#154)
    by gyrfalcon on Tue Sep 23, 2008 at 12:58:23 PM EST
    and its customers.  But how does your plumbing company get the plumbing supplies to sell in the first place?  If it's like most businesses, it doesn't pay with cash on hand, it needs credit.

    And when I say the credit market is close to frozen, that's not an opinion, it's a fact.  Browse around a bit on some of the financial sites reporting on what's going on, not the opinion pages.

    Paulson et al are not making this up.

    Parent

    One presidential candidate did (none / 0) (#176)
    by Cream City on Tue Sep 23, 2008 at 05:31:06 PM EST
    deal with this and sponsored a bill about it and . . . oh, nevermind.  Donna Brazile decided it for us.

    Parent
    What happens... (5.00 / 1) (#15)
    by Dadler on Tue Sep 23, 2008 at 08:55:33 AM EST
    ...if the financial markets, which are only people in reality, actually have a week or two to figure out how NOT to panic?  There is no leadership right now, from either side, providing the context in which money exists in the first place -- as a thought, held up by nothing more than our belief in it.  The truly sad part is that no panic or meltdown need occur if we simply, as adults teach us when we are children, could learn to share.  It is genuinely bizarre the things we create, largely illusions, to keep us from the bare truths of life.

    Sharing isn't even required (5.00 / 1) (#60)
    by Faust on Tue Sep 23, 2008 at 09:49:31 AM EST
    Lets all just be totally honest for a year and see what happens.

    Parent
    I'm not so worried about this deflation thing (none / 0) (#18)
    by Militarytracy on Tue Sep 23, 2008 at 08:59:29 AM EST
    I have to deal with large scale life changers on a much greater level than most people though.  The deflation thing is going to freak out a whole bunch of folks though and the world too.

    Parent
    Do not accept any deal (5.00 / 1) (#16)
    by Jlvngstn on Tue Sep 23, 2008 at 08:56:46 AM EST
    without a commitment to infrastructure spending.  Either bill as they stand do not address foreclosures next year or the year after.  They do not address the upcoming spike in unemployment which will stall a sputtering economy and in 6 months to 9 months you will have a brand new crop of foreclosures due to lack of work.  If you try to address it under the next administration months will go by before any investments can be voted on let alone implemented.  

    When HOLC was created we had 25% unemployment and nearly half of all mortgages in crisis.  We have 6% unemployment and 4% of mortgages in crisis.

    Why on earth would we bail out banks in a similar fashion when the numbers are so decidedly apart? It is an embarassment really.

    Historically speaking we have had one jobless recovery from a recession. Unless we want a protracted recession (18 months) either plan is a mistake.

    This is a bank bailout not a market bailout and the market is going to go through another major correction in 60 days due to the stagnation of the economy, bailout or not.

    This price tag is also bs.  We are not looking at 700 Billion, we are looking at 2x that, nearly 1.4 trillion.  We have the numbers arse-backwards.

    We should be spending 350 Billion on infrastructure, 300 Billion on alternative energy, 200 billion on school construction and 200 billion on a bailout.

    The investments in infrastructure, alt energy and construction will pump cash back into the banking system, into employment and into state gov'ts. We also will recoup some of the money via taxes on wages, personal and corporate.  In the bailout, what do we recoup?  

    We can put a band aid on this and exploit it politically or we can actually get something out of our debt unlike useless, worthless paper.

    Also, I saw today that OBama is running an ad about offshoring corp to avoid taxes as I mentioned here 1 year ago and 4 weeks ago.  

    Very good (5.00 / 2) (#22)
    by ruffian on Tue Sep 23, 2008 at 09:04:58 AM EST
    You said it much better than I did above.  The investment in infrastructure is part of what Japan did to get out of its problems.  Bottom line is that we have to have the investment be in tangible things that actually help the economy - not just buying up paper debt.

    Parent
    Sherrod Brown (5.00 / 3) (#43)
    by themomcat on Tue Sep 23, 2008 at 09:31:35 AM EST
    Cuts to the hypocrisy of the Bush administration regarding bailing out communities devastated by mortgage foreclosures and now wants to bail out those who caused the mess. I get the feeling that there is not a lot of support for Paulson's 2 and a half page proposal.
    Paulson ALWAYS wanted oversight? (5.00 / 1) (#71)
    by SteveSyracuse on Tue Sep 23, 2008 at 10:08:43 AM EST
    Paulson just said that his proposal didnt include oversight provisions because he knew that Congress is the one to add oversight provisions.

    "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."

    Where in those words is there any room for Congressional oversight?

    Kind of OT Question (5.00 / 1) (#77)
    by befuddledvoter on Tue Sep 23, 2008 at 10:16:04 AM EST
    Let's say the 700 bailout is approved and thatit does not fix the troubled economy.  If banks fail, would our federal government still have enough money to cover FDIC guaranteed loans??  I think the ordinary citizen, with less than 100K in savings as most Americans have, has always depended on FDIC assurance. I also know that people are leaving their money in FDIC covered repositories because of this assurance.

    Errata (none / 0) (#78)
    by befuddledvoter on Tue Sep 23, 2008 at 10:16:55 AM EST
    not FDIC loans; FDIC deposits.

    Parent
    Our Government (none / 0) (#82)
    by SteveSyracuse on Tue Sep 23, 2008 at 10:22:48 AM EST
    doesn't actually have the money for anything, does it? Won't the $700 billion will magically appear, backed by the American taxpapers' future tax payments? Isn't it a case where the Govt borrows the money that these investment banks can't raise themselves?

    I hate it when the Administration folks add "Main Street" examples of why this bailout is needed. They make it sound as if this bailout is meant to strengthen my local bank and credit union. The PRIMARY function is to protect the folks who bought mortgage-based securities. It's all for the Wall Street firms. Please correct me if I'm wrong.

    Parent

    If things get alot worse, then your local (none / 0) (#84)
    by tigercourse on Tue Sep 23, 2008 at 10:29:20 AM EST
    bank could go under as well. That's the main fear. Right now, it's Lehman and Bear Sterns. In the long run, they don't really matter. But if the failures spread, banks that aren't centered around investment could go under as well.

    Parent
    I understand (5.00 / 1) (#89)
    by SteveSyracuse on Tue Sep 23, 2008 at 10:32:54 AM EST
    but my local bank doesn't need for a bill to go thru in 3 days, without proper discussion. That seems to be clear from the hemming and hawing I am hearing from the witnesses.

    Parent
    You're wrong :-) (none / 0) (#145)
    by gyrfalcon on Tue Sep 23, 2008 at 12:30:43 PM EST
    Paulson's plan simply removes the toxic waste of this now un-valuable and therefore what's called "illiquid" crap ("mortgage-backed securities") out of the system in return for some amount of cash per share, whatever the holders are willing to settle for to get it off their books.

    Then the institutions that were holding the crap are on their own.  If they otherwise have good assets and a good balance sheet, they will survive.  The ones that got way too deep into the crap with little equity of their own to back it up will fail, as they should.

    Once Paulson starts buying up the worst of the crap, the price paid will set a de facto "market value" on it and the expectation is that other institutions will then step in to buy up the least bad crap.

    What you haven't figured into your thinking is that the flow of money and credit in our financial system is very close to freezing up completely because of the uncertainty created by infiltration of these un-valuable and illiquid "assets" throughout the system.  Paulson's idea, which seems like it should work, would unfreeze the system by establishing some kind of value, artificially, for these securities.

    Parent

    "simply"? (none / 0) (#147)
    by SteveSyracuse on Tue Sep 23, 2008 at 12:35:04 PM EST
    Paulson's plan doesn't not simply do that. If it did, it would SAY that. It's what Paulson SAYS it will do, but he would have complete control over doing whatever he wants.

    If the Administration had a history of being straight-shooters, or at least competent, then his approach might be more acceptable.

    Given the history, there is NO WAY we should "trust him".

    Parent

    And what in Paulson's history (none / 0) (#157)
    by gyrfalcon on Tue Sep 23, 2008 at 01:02:49 PM EST
    is untrustworthy?

    Listen, Paulson is not Dick Cheney and it's a mistake to pretend he is.

    In any case, Congress is busy working out various restrictions and limitations and transparency provisions that Paulson has been entirely agreeable to, and that's the kind of bill that will eventually come out of this.

    Parent

    Considering the treasury is empty... (none / 0) (#97)
    by kdog on Tue Sep 23, 2008 at 10:46:38 AM EST
    and any new spending is "on the arm", I wouldn't count on any kind of FDIC coverage of your deposits unless China or others are interested in buying more junk US Treasury bonds.

    Talk about useless paper...I used to think China was getting over on us, but maybe its the other way around.


    Parent

    I read coverage last night on Europeans and others (none / 0) (#121)
    by befuddledvoter on Tue Sep 23, 2008 at 11:23:40 AM EST
    They are sympathetic but will not contribute one penny, and that includes the Asian countries.  Paulson is trying to get them on board but they see this as a US made crisis.

    Parent
    Favorite moment: Paulson (5.00 / 2) (#79)
    by Stellaaa on Tue Sep 23, 2008 at 10:18:08 AM EST
    Dudes, I am all for oversight, but I respect you guys that is why I sent you a three page document.  Yeah...right that's the ticket, I thought you would not get it---oops, that yes, you would want to do that part.  Forget what I said about wanting a "clean and quick bill".  

    Bernacke on why the need for speed (5.00 / 1) (#87)
    by SteveSyracuse on Tue Sep 23, 2008 at 10:30:53 AM EST
    Dodd asks him why this bailout must go thru in a week. Bernacke says the credit crunch affects everyone....and again adds the little guy by saying their investments will suffer.  Well DUH. In other words, the bailout is meant to stablize the Wall Street companies...the ones whose malfeasance caused the problem.

    He says that the bailout is needed to stop job loss and mortgage foreclosures...but these happen during ANY market downturn. It is starting to smell like old fish to me.

    Want to bet (5.00 / 1) (#91)
    by Jlvngstn on Tue Sep 23, 2008 at 10:38:34 AM EST
    that the bailout will occur and unemployment will be at almost 8% in two months?

    Unemployment is going to skyrocket in the next 30 days through the end of the year, bailout or no.

    Silliest argument in the world.  What is important to note is that the bailout prevents us from spending on ANY initiatives that creates jobs.  

    Which of course is the republican answer for everything, "private industry will figure it out".  

    All that money being earned on Wall street and we need to bail them out.  Makes sense though.  Millionaires run for president all the time and we americans give them money to do it.  

    "The greatest trick the devil ever played was convincing the world that he didn't exist."

    Parent

    People seem to forget... (none / 0) (#100)
    by kdog on Tue Sep 23, 2008 at 10:50:17 AM EST
    that it is gambling, and nobody always wins.  Wall St. wins more than your average gambler, but this time they gambled and lost...and are trying to welch.

    Parent
    even worse (none / 0) (#104)
    by Jlvngstn on Tue Sep 23, 2008 at 10:58:59 AM EST
    threatening depression if we do not provide liquidity.  What is worse is that we are getting half the story.  

    Where are all the finance experts on this site?  I have seen you here before and have asked for predictions and of course you run and hide when you are actually asked to tell us how something you support is going to affect us.  Tell us please what to expect after the bailout.

    1. A healed market?
    2. More borrowing for small and large businesses?
    3. Stabilization of the housing market?
    4. Job creation?
    5. Foreclosures more or less
    6. Retail and auto, will the banks have capital to lend to help them ride out the storm?  Or will the banks thank Mohammed for their good fortune and hold on to the money except at 8-9%?

    This bailout will not loosen lending constraints, will not help a majority of homeowners, will not help create employment and will not allow the US to address the impending problem of a severely stagnant economy.

    I can call you out by name, but let's see if you are pontificators repeating talking points or if you actually have a clue as to what the net out for the bailout is....

    Parent

    Not a financial expert (none / 0) (#148)
    by gyrfalcon on Tue Sep 23, 2008 at 12:39:28 PM EST
    but I think I can answer your questions.

    1-- temporarily
    2-- yes
    3-- no
    4-- no
    5-- no
    6-- yes

    At least as I understand it.  The Paulson bail-out is not intended as a broad-based fix-it for the economy.  It's an emergency measure to loosen up the credit market (which is close to frozen) and the flow of money throughout the entire economic/financial system, which is also close to frozen.

    It's not a matter of bailing out fat cats, it's about preventing a broad-based collapse of the economy, which is perilously close.  No credit, no money, no business, no jobs.  Some fat cats may do well out of this, I suspect more are going to take big hits.

    Congress has to come up with some additional plans and ideas to deal with the broader issues, but that can't be done overnight.

    Parent

    ok (none / 0) (#152)
    by Jlvngstn on Tue Sep 23, 2008 at 12:53:51 PM EST
    will it free up the credit market?

    Parent
    stop gap (none / 0) (#156)
    by Jlvngstn on Tue Sep 23, 2008 at 01:01:42 PM EST
    the last question was rhetorical because it will not free up credit to any degree of sufficiency to address the larger economic woes.  The finance system is  but a cog in the wheel and a "diversified portfolio" of solutions to the problem is a necessity.

    They cannot free up enough capital for the banks at this point.  Remember that 250 billion was injected into the market earlier and 80 billion a week or so ago.  That is 300 billion to maintain existing wall street conditions.  

    So if another 700 billion is infused into the banking system the market should respond in a very bullish manner going up 500-1000 points and holding.  Problem is once the banks have that money they are only going to loan to the highest collateralled people.  Which does virtually nothing for the housing market, in fact it hurts it.  Much higher lending standards and strict review of appraisals will take a few years to settle into.  (still the right thing to do)  Businesses in trouble or in need of a short term (6-9 months) note to keep the business running until the market turns will simply not be available.

    So tons of small businesses will go bankrupt or simply out of business.  Second round of foreclosure will smack us in the face this time next year.  Big businesses with good collateral may borrow but most likely will not have to with the smaller companies going out of business pushing that busines their way.

    Either bailout does a lot more harm than good.  

    Parent

    Agreed, partially (none / 0) (#161)
    by gyrfalcon on Tue Sep 23, 2008 at 01:13:10 PM EST
    it will not address the larger economic woes.  It's not designed to do that.  Nobody has a quick solution to that.  What it's intended to do is to prevent a looming complete collapse.  Even if it succeeds at that limited but crucial objective, nobody thinks, not even Paulson, that it will prevent a recession.

    The second round of foreclosures coming up, you're totally right, has to be dealt with.  But that's not in the compass of this bill, nor should it be.  There are lots of things that can and should be done to try to deal with the broader economic issues, and I have some hope that just grappling with the immediate crisis and the Paulson proposal may have broken the logjam in Congress on getting serious about doing those things.

    Your last sentence doesn't seem to flow from the rest of your post, though.  Can you explain why you think it does more harm than good?

    I've heard very little opposition to this bill, or some modification of it, that isn't based on ideology/partisanship and scare tactics about dictatorship and power grabs, so I'm eager to hear what you have to say about it.

    Parent

    which is exactly (none / 0) (#163)
    by Jlvngstn on Tue Sep 23, 2008 at 01:30:46 PM EST
    why you have a "diverse portfolio" of solutions.  It does more harm than good for the following reasons:

    1. Too much capital into the market with little or no return (short term definitely and long term most probable)
    2. It does not address the most historically consistent recession killer which is jobs creation.  If you have 700 billion to throw at bad paper, you can certainly split that into immediate distribution for infrastructure.
    3. The banks can shovel as much of their garbage to the fed, and still not resume lending at any sufficient level.
    4. The fed and int'l banks have pumped in 330 billion into the market to maintain liquidity and just a few days later they are asking for 700 billion.  700 billion is not going to fix anything.
    5. Small businesses, which employ nearly a third of all americans will suffer the greatest in the down turn of the economy pushing orders up the chain to bigger companies who will increase employee productivity without hiring those displaced at small businesses.  Small businesses notoriously are under-collateralized and  historically have much more difficulty securing credit in unstable economies.
    6. There is an inequitable distribution of loss at the expense of the taxpayer.  The taxpayer is now stuck with incredible debt, high unemployment and strict lending guidelines. which leads to foreclosure and bankruptcy and after this bailout they will receive no sympathy.  Everyone in round two takes the venom and "serves you right" mentality from the general public and are screwed.

    To get and keep the economy moving they MUST address the employment situation.  That money will be circulated quite quickly via job distribution and a smaller bailout tides the banks over while the american worker does what they have done for decades:  take another job and pay down their bills....

    Parent
    Aren't you assuming nothing (none / 0) (#165)
    by gyrfalcon on Tue Sep 23, 2008 at 01:52:10 PM EST
    more will be done other than this one proposal?

    If your thought is that doing the Paulson bail-out will foreclose (heh) any other remedies for the broader problems, I don't agree with that.

    And in any case, what's your alternative suggestion for dealing with the immediately impending financial meltdown?

    The thing about this $700 billion as opposed the previous $330 (gah, what numbers!) is that this is targeted very precisely at a class of assets that's broadly held all across the financial system and poisoning the well, so to speak.  It's not one or two big institutions, it's all up and down the map.

    And I'm not sure you're right about the return, if you mean return to the federal treasury.  Seems to me once a reasonable price gets set on the "toxic waste" and the salvageable stuff gets sorted out from the utter garbage, there will be buyers for the non-garbage and the treasury should ultimately get a good chunk of its money back.  It won't make a profit, for sure, but the ultimate cost isn't going to be $700 billion, either.

    The banks actually want to lend.  That's what they do and how they make money.  I don't think it's at all likely that they're going to continue to refuse to lend money.

    Yes, the taxpayer is stuck.  Again, what's the alternative for the short-term crisis situation?

    FWIW, my leanings are strongly socialist.  I would have wanted all kinds of stuff done a long time ago to aid the little guy and rein in the fat cats.  So I'm totally in favor of doing as much of that as possible, but I don't expect them to really rework the uber-capitalist U.S. economic situation.

    But I would like to prevent, if it's possible, the kind of economic collapse we appear to be on the verge of because it's us "little guys" who will suffer the most if that happens.  There's bad, and then there's worse.

    Parent

    foreclose - great usage (none / 0) (#167)
    by Jlvngstn on Tue Sep 23, 2008 at 02:06:55 PM EST
    The 700 billion they invest will put the US in a position to not spend as the deficit is too big.

    I know banks want to lend, I get calls all the time to up my line of credit.  That said, I am collateralized and have excellent ratings from a credit perspective.  Doesn't mean I can pay em back better than any other small biz at this point as I expect full gloom and doom over the next few months for my biz.

    I think you and I agree on most of the fundamentals but I do not think the bailout will increase the lending by banks worth noting.  To me, therein lies the problem.  And of course is the crux of our disagreement.

    I may not be right about the return, but the short term benefits of buying bad paper are almost nil and the longterm benefits are suspect at best.  

    I do agree that what I am suggesting is not what Paulson has been asked to do.  He has been asked to solve this crisis, not the underlying diseases infecting our economy.  Which is why I think we need a broader more comprehensive approach to a bailout/prosperity package toward job creation.

    I sure as hell do not want an econ armageddon but I also know a band-aid when I see it.  I also know that appropriations of this size are next to impossible to come by.  

    By diversifying the funds into job creation and assistance to homeowners and banks, it makes everyone tighten their belts while still allowing cash to move through the economy that would not be there otherwise.

    A bailout that whets the whistle on both sides and provides jobs and of equal importance much needed infrastructure repair, we do not put all of the pressure on the banks to liquify wall street entirely.  We spread the cash distribution to a variety of industries and it trickles back into the banks, the fed, the states and retail.

    Does that make more sense?

    Parent

    example (none / 0) (#172)
    by Jlvngstn on Tue Sep 23, 2008 at 03:13:13 PM EST
    what is the root of the problem?

    "MIAMI, Florida (AP) -- Al Ray is so strapped for cash, the only time he eats out is on Wednesday or Sunday, when the local McDonald's sells hamburgers for 49 cents.

    Missing just one payment can put a homeowner into foreclosure.

     Ray lost his engineering job last November, and has been working as high school tutor, scratching out about $1,000 a month -- if he's lucky. He struggled to make his $1,400 monthly mortgage payment and $330 monthly homeowners' association fee until May, when he stopped paying."

    He is not working.  Others are underemployed, forced to take a lower paying job when the housing boom ended.  Completely employable, hard working, but no jobs in their fields.

    Want to fix the mortgage crisis?  Create more jobs.  Spend 500 billion or 750 billion on energy, infrastructure etc IMMEDIATELY.  

    The stimulus package of 150 billion helped us hang on for 3.5 months with NO new jobs.  Give us the jobs and the economy will stabilize (at a much slower growth rate and with a downturn not a spiral in retail spending).

    We are removing a corn on a foot that has untreatable gangrene.


    Parent

    The credit market.... (none / 0) (#159)
    by kdog on Tue Sep 23, 2008 at 01:08:55 PM EST
    is nowhere near frozen in this laymen's opinion.

    Credit cards are still being swiped, my boss is still giving his customers the same standard credit terms he has used for years, and my reefer man gave me a sack on the arm last night till I get my check tomorrow.

    Mortgage credit and big bank loans might be harder to come by, but is that necessarily a bad thing?  I mean, apparently they were giving out way too much credit, hence the failures. That can not and should not continue.

    Parent

    You do not understand (none / 0) (#162)
    by gyrfalcon on Tue Sep 23, 2008 at 01:19:02 PM EST
    how the financial/economic system in this country actually works or what the term "credit crunch" means in terms larger than your own pocketbook, but you're certainly not the only one.  Please go read up on what's actually going on and how the availability of business credit, not consumer credit, functions in the economy.

    Parent
    Here's a start (none / 0) (#164)
    by gyrfalcon on Tue Sep 23, 2008 at 01:32:09 PM EST
    Kevin Drum lays out succinctly what happened over the last week that made this an emergency.

    http://www.motherjones.com/kevin-drum

    Scroll down to a post titled "Lehman and the Bail-out"

    Parent

    Thanks G.... (none / 0) (#166)
    by kdog on Tue Sep 23, 2008 at 02:03:44 PM EST
    It seems the banks made a decision to hoard cash instead of offering credit, 200 billion hoarded according to your link.  

    But I believe that was a temporary move...the only product the banks have to sell is credit.  If they wanna make money, they would have to move the 200 billion back into the market, or else they have nothing to sell and no money to make.  They just have to be more prudent in who they lend money to...as it should be.

    Parent

    You hit it exactly right (none / 0) (#174)
    by gyrfalcon on Tue Sep 23, 2008 at 04:42:04 PM EST
    The problem is that since what's being called the "toxic waste" of various mortgage derivatives (particularly mortgage-based securities) are owned in huge numbers by virtually all financial institutions, and nobody has any way of figuring out what they're actually worth anymore, nobody can figure out who's a good risk and who isn't.

    Plus, fear of panic withdrawals, which had already started to happen with money market funds, has caused the financial institutions to hoard cash against the possibility of having to pay out all those panicky investors, institutional and individual.

    You're right that they can't hold onto it forever, but they sure as heck can hold onto it, or put it into Treasury bonds, which is what many of them are doing, for long enough for stuff to start to come crashing down for lack of capital, which is only a matter of weeks, at best, and maybe less than that.

    Once that would start to happen, there's nothing that could stop it and the consequences are unpredictable in detail but the overall rapidly cascading effect would be what's being called "armageddon" in financial circles.

    This is no joke, kdog, and it isn't some smokescreen ginned up by the Bush administration to justify a power grab or any of the other conspiracy theories floating around out there.

    Parent

    I hear you man... (none / 0) (#178)
    by kdog on Tue Sep 23, 2008 at 10:06:30 PM EST
    I'm learning more than I really care to know about the game of life right now.  I don't wanna play:)

    I guess I'm more in line with Jlv's position...if the govt. has all this dough to throw around to prevent us from living in Thunderdome, why not spend it on jobs and energy development...sh*t, why not just lend it to homebuyers/small business and cut out the middle man, who obviously can't handle the task?

    Maybe I'm the fool, but I see 3 cops cars (again) ticketing motorists on the way home, blood spilled and billions spent occupying foreign lands, millions spent on prisons...and now billions for Wall St.?  It's just so shady.

    Parent

    Hey, I'm with you on all that (none / 0) (#179)
    by gyrfalcon on Tue Sep 23, 2008 at 11:31:02 PM EST
    I'm just arguing for aiming the rage at the right place.

    Yes, if they can find $700 billion for this, they could have found it for all that other stuff so that this would never have happened.  But every single fershluggineh one of them, administration and Congress -- and very much including both presidential candidates, but not apparently Hillary-- was asleep at the switch, at best.

    The sad fact is that putting the money right now into home buyers and job development and small business won't solve the immediate problem, even if it could all be done next week.  And it can't be done next week.  (Oh, man, just imagine the bureaucracy and paperwork involved in just helping out individual home owners in trouble!)

    If it makes you feel any better, though, it's not Wall Street that's getting bailed out here, it's large and small financial institutions of every stripe all over the country, including your bank down the street almost certainly.

    This is absolutely not aimed at the stock market, although the stock market will rebound at least temporarily when it passes. (And the longer it takes to get it done, the further down the stock market is going to go, btw, so bear that in mind if you have any retirement or college funds or anything else invested.)

    Your mileage may vary, but personally, I find it's a lot less frustrating to be clear about what's actually going on with stuff like this and to have a better idea of who my real enemies are, which at the moment includes every single Dem. on the House and Senate Banking committees, who are supposed to be protecting us but weren't paying attention and didn't see this coming when the info was all out there if they'd only bothered to look.

    Instead, they're all running around posturing like crazy and yelling and fulminating, when you know darn well they have no intention of not passing this but want to make you and me think they're "standing up" to the Bush admin.  Feh.  They should do their jobs for a change.

    Parent

    Bailout doesn't stop mortgage (5.00 / 2) (#123)
    by litigatormom on Tue Sep 23, 2008 at 11:32:05 AM EST
    foreclosures -- at least not the 3 page plan that Paulson put forward. Dodd plan has a provision that permits bankruptcy judge's to force restructuring of mortgage loans so that homeowners' can stay in their homes and continue to pay the mortgage.  No one has explained to me how the "clean" bill does anything to stop foreclosures -- indeed, it may create incentives for foreclosures to go up, since the holders of the mortgage backed securities are protected if they do.

    Parent
    Stopping foreclosures (5.00 / 1) (#127)
    by themomcat on Tue Sep 23, 2008 at 11:39:22 AM EST
    is not what they want. They want to bail out their friends in the failing market. Republicans couldn't care less about the little guy/gal. They see tax payers as the "Piggy Bank".


    Parent
    Yes (none / 0) (#132)
    by litigatormom on Tue Sep 23, 2008 at 12:07:27 PM EST
    As long as Wall Street is protected from further losses, Main Street must continue to be subject to the invisible hand of pure capitalism.

    Parent
    You're right, the "clean bill" (none / 0) (#150)
    by gyrfalcon on Tue Sep 23, 2008 at 12:45:15 PM EST
    wouldn't do that at all.  But Paulson by all reports I've read is completely agreeable to have that kind of thing tacked onto the bill, as long as wrangling over the extras doesn't mean a delay in getting the core part under way.

    What Paulson did, and I think it's pretty smart, actually, is just give Congress a proposal for what he wants and leave it up to them add whatever provisions for oversight, restrictions and extras like the bankruptcy judge provision they can agree on quickly.

    Parent

    Shelby wants details (5.00 / 1) (#90)
    by themomcat on Tue Sep 23, 2008 at 10:37:16 AM EST
    of other proposals and why they were rejected. When he asked Paulson whether they considered other proposals, I didn't hear a whole lot of response. And now Paulson is babbling and not answering Shelby's question.


    Great Question by Shelby (none / 0) (#92)
    by SteveSyracuse on Tue Sep 23, 2008 at 10:40:40 AM EST
    He is my hero right now.

    Parent
    Shelby is not on board, clearly. (none / 0) (#98)
    by themomcat on Tue Sep 23, 2008 at 10:47:16 AM EST


    Parent
    Pualson says (5.00 / 1) (#107)
    by themomcat on Tue Sep 23, 2008 at 11:00:46 AM EST
    Just give us what we want and we'll find the experts to help figure it out later. This is the sense of what I am hearing. Am I wrong?
    Yes, the same experts (5.00 / 1) (#112)
    by Stellaaa on Tue Sep 23, 2008 at 11:09:14 AM EST
    that did this.  The experts that have clients in the people that will benefit.  

    Parent
    Bingo! (none / 0) (#131)
    by santarita on Tue Sep 23, 2008 at 11:56:30 AM EST
    The potential for conflicts of interest are enormous.

    Parent
    Whenever he is asked for specifics (5.00 / 2) (#113)
    by SteveSyracuse on Tue Sep 23, 2008 at 11:10:08 AM EST
    he almost agrees with the questioner, but then goes back to having his flexibility (eg. Blank check to do whatever her wants, despite what he says to the committee).

    I have NO confidence in his leadership of this issue.

    Parent

    Some jewels (5.00 / 5) (#115)
    by Stellaaa on Tue Sep 23, 2008 at 11:11:40 AM EST
    1.  If you are a homeowner and cannot afford your house you lose it.  Tough luck.
    2.  If you are an Investment Bank and cannot afford your assets, we, the taxpayers will buy it, and you can take the money and go do things--some things could be good for us the taxpayers.  But don't worry, just go do what you do, we will ask no questions and we don't want anything in return, just give us your bad assets and we will eat the loss.  


    Schumer (5.00 / 1) (#119)
    by themomcat on Tue Sep 23, 2008 at 11:21:37 AM EST
    wants to know if Paulson could live with less. Paulson says no they need it all now, even though it will not be spent all at once. Paulson keeps saying that the tax payer is already on the hook but clearly does not want to be accountable to the tax payers.
    Hagel is up (5.00 / 1) (#122)
    by themomcat on Tue Sep 23, 2008 at 11:27:30 AM EST
    Paulson is still evading answering very specific questions about oversight. Hagel wants to know if the Treasury department can handle something this big. Paulson sounds like he really has no clue about how to handle this mess except that he wants the money. Paulson says thew will be clear about what they have done but doesn't know what to do. This is an experiment, I blew up the attic with one of my experiments.
    Q poll says (none / 0) (#1)
    by andgarden on Tue Sep 23, 2008 at 08:05:45 AM EST
    Obama is up in CO, MI, MN, WI, and there's supposedly a Mason-Dixon showing him up 47/45 in Florida.

    umm woha. (none / 0) (#54)
    by Faust on Tue Sep 23, 2008 at 09:43:10 AM EST


    Parent
    Yeah, I saw something this morning (none / 0) (#83)
    by litigatormom on Tue Sep 23, 2008 at 10:27:09 AM EST
    that had Obama leading in FLA.  That would be amazing, but I don't that the numbers will stick.

    Went to an Obama fundraiser last night. There was talk of plans to GOTV in NM, CO, NEV,PA and FLA, but they were curiously silent about Ohio.

    Fear grips the heart.

    Parent

    Ohio is a demographic nightmare for Obama (5.00 / 1) (#102)
    by andgarden on Tue Sep 23, 2008 at 10:53:28 AM EST
    and honestly, PA isn't too far behind.

    Making McCain spend big cash in Florida would be good.

    Parent

    Feeling slightly better (none / 0) (#106)
    by CST on Tue Sep 23, 2008 at 11:00:40 AM EST
    about PA.  When Kerry was running I heard a lot of "doesn't matter, no difference between them, why should I even bother?"

    This weekend in Pittsburgh I didn't hear that once.  Granted, I know the younger voters and all that, but a lot of them didn't bother to vote for Kerry, and will definitely vote this time around.

    In PA (at least western) it is definitely "the economy stupid".

    Parent

    Absolutely (none / 0) (#110)
    by andgarden on Tue Sep 23, 2008 at 11:07:48 AM EST
    The bellwethers will be Allegheny and Erie counties in the West and Lackawanna and Bucks in the east.  

    Parent
    Things are looking alot better now then (none / 0) (#86)
    by tigercourse on Tue Sep 23, 2008 at 10:30:46 AM EST
    they did last week. Obama just needs to maintain, not screw up, not knock over any nuns, and he will win this election.

    Parent
    If Obama _were_ to. . . (none / 0) (#95)
    by LarryInNYC on Tue Sep 23, 2008 at 10:45:01 AM EST
    knock over any nuns I'll bet dollars to donuts the next day it will come out that McCain knocked over twice as many, and cursed them out, to boot.

    Parent
    A quick fix will not fix much at all. (none / 0) (#3)
    by lizpolaris on Tue Sep 23, 2008 at 08:23:52 AM EST
    If we must rush through passage of a proposal, then we should pass the Dodd bill.

    Why must anything be rushed through?  This crisis didn't suddenly jump up overnight but was initially seen from far off as an approaching buffalo stampede thundering closer and closer.

    Thoughtful, needed regulatory reform isn't going to be part of a bailout bill thrown hastily together in a few days, as part of a rush to stuff money in the pockets of execs being thrown out the doors of failing companies.

    Bernanke would argue (none / 0) (#5)
    by Big Tent Democrat on Tue Sep 23, 2008 at 08:28:39 AM EST
    "Despite the efforts of the Federal Reserve, the Treasury, and other agencies, global financial markets remain under extraordinary stress.  Action by the Congress is urgently required to stabilize the situation and avert what otherwise could be very serious consequences for our financial markets and for our economy.  In this regard, the Federal Reserve supports the Treasury's proposal to buy illiquid assets from financial institutions.  Purchasing impaired assets will create liquidity and promote price discovery in the markets for these assets, while reducing investor uncertainty about the current value and prospects of financial institutions.  More generally, removing these assets from institutions' balance sheets will help to restore confidence in our financial markets and enable banks and other institutions to raise capital and to expand credit to support economic growth."

    I am not an economist nor do I have the information to refute these statements.

    My point is that if Bernanke is right, the Dodd bill does the job in a much better way than the Paulsen proposal.

    Parent

    Here again the Dems have the opportunity to say (none / 0) (#7)
    by andgarden on Tue Sep 23, 2008 at 08:32:00 AM EST
    "it's our bill or no bill."

    Yeah, yeah, I know. . .

    Parent

    My question is (none / 0) (#8)
    by lizpolaris on Tue Sep 23, 2008 at 08:40:41 AM EST
    are either the Paulson or Dodd proposals the right thing to do now?  That is, why is massive taxpayer bailout the only option being discussed?

    The short term need to do something may not require such a huge, ill-considered response.

    And why does the scary rhetoric being used now to describe financial crisis sound so much like Bush admin scary rhetoric we've heard before applied to other crises?  Sounds like the boy who cried wolf, to me.  The administration needs this huge dramatic taxpayer fleecing right now!  No, don't stop to think about it!

    Parent

    A crisis (5.00 / 3) (#33)
    by CST on Tue Sep 23, 2008 at 09:19:42 AM EST
    it is, but that doean't mean we should buy the "scary rhetoric" and give Bush a blank check like we did after sept. 11th (which was also a crisis).

    The fact that it is a crisis probably means we should be more sceptical of anything coming out of the Bush admin, given how they took advantage last time.

    If Congress has to hurry up and pass something, I would much rather it came from Dodd.

    Parent

    Wasn't the bailout of the (5.00 / 1) (#42)
    by JavaCityPal on Tue Sep 23, 2008 at 09:31:24 AM EST
    S&L collapse during the first Bush administration?

    It appears at least the Bush's learned something from that.


    Parent

    1989 (none / 0) (#66)
    by CST on Tue Sep 23, 2008 at 09:59:31 AM EST
    So yes.  My dad mentioned last night that the feds actually made money off the S&L bailout.
    I don't know if he's right or not, but he kinda pays attention to these things.

    To be honest, I barely remember 1989...

    This headline doesn't make me feel confident about our current situation though:
    "This Crisis Makes S&L Bailout Look Easy" from CNBC

    I do find it ironic that the last major bailout happened after years of republican rule under a republican president.  Aren't they supposed to be the party of small government?

    What I want to know, how do they plan on explaining the tax cuts that were supposed to save the economy?  Oh wait, they don't, they're gonna pretend that it's all Clinton's fault...

    Parent

    Not ironic (none / 0) (#85)
    by litigatormom on Tue Sep 23, 2008 at 10:30:23 AM EST
    Standard Operating Procedure. The Republicans had de-regulated the S&Ls.

    Those who do not remember history are doomed to repeat it.

    Now McCain wants to de-regulate health care companies.  Yeah, that's the ticket.  When will people realize that the Republicans always empty the piggy bank to clean up the mess that their de-regulated constituencies create, leaving the succeeding Democratic administration to dig us out of the hole instead of embarking on new spending programs that would, like, actually benefit middle class taxpayers?

    Parent

    Yes, watch the Dow (none / 0) (#128)
    by KeysDan on Tue Sep 23, 2008 at 11:40:38 AM EST
    along with the comments.  It seems like with criticism of Paulson's plan the arrows go down, with talk of acting now, as is, it goes up.  Sort of a Wall Street applause meter.   Somehow, get the oil prices to go up and then watch the stocks go down, until Bush et. al., get their way.

    Parent
    Why not just promise.... (none / 0) (#135)
    by kdog on Tue Sep 23, 2008 at 12:11:50 PM EST
    Wall St. a big fat handout today, payable next week.  Stocks go up, oil goes down.

    Then..when next week rolls around, say the hand out won't be ready for another week, but increase the amount.  Keep delaying and increasing, keep delaying and increasing the promise we will never keep.  

    It's a band aid, but so is the bailout, and this one is cheaper.

    Parent

    Scary rhetoric.... (5.00 / 2) (#34)
    by kdog on Tue Sep 23, 2008 at 09:21:04 AM EST
    Excellent point...I too have the feeling the fed is using fear tactics to rush this massive bailout through without proper debate or enough long term thinking.

    There need be no rush...people aren't making a run on the banks to clear out their accounts a la the great depression.  The market is hurting, investors are hurting...but the working slob has been hurting for far longer and we didn't rush through the stimulus package in a week for Joe and Jane Blow.

    Parent

    I do not know (none / 0) (#9)
    by Big Tent Democrat on Tue Sep 23, 2008 at 08:43:59 AM EST
    Do you? I said I do not know. IF Bernanke is to be believed, it is.

    Then the question is what do you do.

    Parent

    This really is a crisis (none / 0) (#12)
    by Militarytracy on Tue Sep 23, 2008 at 08:48:52 AM EST
    Perhaps the Bushies are using the "crisis" to get what they want but........we really do face serious deflation of assets that will cause total upheaval for everyone.  We are now all New Orleans.

    Parent
    Well, maybe my skepticism meter (none / 0) (#19)
    by lizpolaris on Tue Sep 23, 2008 at 09:00:51 AM EST
    has just been pegged for too long, but I'm not rushing out to buy duct tape this time.

    Parent
    Fabulous (5.00 / 1) (#24)
    by Militarytracy on Tue Sep 23, 2008 at 09:06:35 AM EST
    I think we'll survive this.  Not sure the fatcats will though :)  I intend to survive it.

    Parent
    Under any Bush Proposal... (5.00 / 1) (#50)
    by CoralGables on Tue Sep 23, 2008 at 09:39:37 AM EST
    you can bank on the fat cats coming out way ahead. Always look at past performance when predicting future events. Under any Bush proposal, especially when "we have to act now", count on the little guy footing the bill and the fat cat turning a hefty profit.

    Parent
    In my opinion (none / 0) (#6)
    by Steve M on Tue Sep 23, 2008 at 08:31:21 AM EST
    if a solid deal isn't in place by the time the financial industry reports its 3Q numbers (at the end of September) there could very well be a panic.

    Parent
    3rd qtr (none / 0) (#175)
    by Jlvngstn on Tue Sep 23, 2008 at 04:48:42 PM EST
    numbers are going to be pathetic, and that is news to who?  4th qtr numbers will be worse and that is news to who?

    They are propping the bailout against the numbers to heighten the fear of the situation.  For months many people have been calling the crash and the administration have fed us the same line.  

    Now that the stimulus is gone, (which i believe you said it had zero impact on the issue) and people cannot pay their debts and have slowed shopping down to a minimum, wall street needs their lifestyles protected and in comes the US govt to help out again.  I am sure the US govt will give them plenty of tax breaks on their losses.

    If we have 700 billion to "rescue" wall street, I am sure we can spare a few hundred billion to address the crisis at the root of the problem.

    People cannot pay their mortgages and HELOCS because they are underpaid, under-employed or unemployed.  Perhaps some were untruthful when they secured their loans but many or most I would argue are caught in the job losses and wage reductions over the past year.  

    Sure some folks used their HELOCS to shop and some folks took mortgages they could not afford, but the banks gave it to them too.  The banks gave lots of loans to people who could afford it at the time and when they lost their job or took less hours and their rates went up simultaneously the numbers no longer added up.

    How many jobs will we lose this month?  Next month and the month after that?  How many of those unemployed people will be able to pay their mortgage considering average time off is at 9 months?

    9 months will unemp sec is not enough to pay the bills and a substantial portion of these layoffs who are not hitting the books currently will be on the books in the next 18 months.

    Doing this before earnings leverages the panic and concern over the market quite well.  It does a complete disservice in identifying or addressing one of the most important fundamental protections we can provide.


    Parent

    There needs to be a comprehensive (none / 0) (#11)
    by Exeter on Tue Sep 23, 2008 at 08:48:47 AM EST
    consumer credit overhaul that encompasses credit cards, pay day loans, home mortgages, and all the other predatory lenders. They are all interconnected. Yes, people should be smarter, but they are not.

    Pay day loans are the worst. (none / 0) (#47)
    by liminal on Tue Sep 23, 2008 at 09:36:16 AM EST
    Ohio passed legislation restricting interest rates on pay day loans to 28% this year.  The pay day loan people, of course, are fighting hard to get enough signatures to have the issues added to the November ballot.  

    Parent
    Just don't try to be him (none / 0) (#29)
    by Militarytracy on Tue Sep 23, 2008 at 09:10:07 AM EST
    Schumer is THOR.

    Not to be a nitpicker but that Enzi dude (none / 0) (#30)
    by Militarytracy on Tue Sep 23, 2008 at 09:13:22 AM EST
    He's from Wyoming, now that is one dude that I have already survived.  I took some leadership courses with his daughter too, very nice person.  Can't say I care for her dad much though.

    Thanks (none / 0) (#36)
    by Big Tent Democrat on Tue Sep 23, 2008 at 09:23:18 AM EST


    Parent
    competely unfamiliar wiht Enzi, but (none / 0) (#37)
    by befuddledvoter on Tue Sep 23, 2008 at 09:24:13 AM EST
    man I liked what he was saying!!!  

    Parent
    Even Bunning is tough (none / 0) (#31)
    by Militarytracy on Tue Sep 23, 2008 at 09:18:30 AM EST
    The Bush Administration has no friends to "F" the little guy with any longer.  WHEW, he said socialism and unAmerican as a response to Bush's bailout.....

    It's a horrible crisis and it happened (none / 0) (#41)
    by Militarytracy on Tue Sep 23, 2008 at 09:31:01 AM EST
    because of Fannie and Freddie. In spite of the crisis though Elizabeth Dole had enough time this morning to get that makeup perfect.

    Worst performance of the morning (5.00 / 3) (#44)
    by Big Tent Democrat on Tue Sep 23, 2008 at 09:32:25 AM EST
    Easily. What a hack. Hope Hagen can beat her.

    Parent
    Hagan is up six (5.00 / 2) (#53)
    by tootired on Tue Sep 23, 2008 at 09:42:10 AM EST
    in the current Ras poll. She's getting both $$ and on the ground help from Hillary's crowd.

    Parent
    Liddy is headed for defeat, methinks (none / 0) (#74)
    by andgarden on Tue Sep 23, 2008 at 10:12:38 AM EST
    She is just a horrendous campaigner. You could argue that she's already lost to Chuck Schumer before.

    Parent
    Paulson looks very uncomfortable. (none / 0) (#45)
    by themomcat on Tue Sep 23, 2008 at 09:33:41 AM EST
    C-Span keeps cutting to his face during the Senators' statements.


    As he should.... (5.00 / 2) (#52)
    by kdog on Tue Sep 23, 2008 at 09:41:50 AM EST
    attempted thievery of this magnitude better make his arse uncomfortable!

    Parent
    Verses mine..........yes (none / 0) (#57)
    by Militarytracy on Tue Sep 23, 2008 at 09:46:27 AM EST


    Parent
    I'm a simple voter. (none / 0) (#62)
    by lizpolaris on Tue Sep 23, 2008 at 09:52:47 AM EST
    Can't we find some reason to throw Paulson in jail for putting forward to Congress a proposal to undermine the Constitution and give him personally $700B?  Could we call him a thief and a charlatan?

    Outrage is dead.

    Parent

    He does look strange (5.00 / 1) (#56)
    by befuddledvoter on Tue Sep 23, 2008 at 09:45:46 AM EST
    At one point I did not even recognize him.  I thought he was a "court reporter," typing minutes as his fingers were fidgeting so much!  

    Parent
    Mel Martinez says (none / 0) (#51)
    by Militarytracy on Tue Sep 23, 2008 at 09:41:17 AM EST
    Poor Bush Administration, it is fashionable to beat up on them and blame them for everything.  Fannie and Freddie did all of this, we just need to drill down a little deeper to find that evidence.

    Evan Bayh speaks for me (none / 0) (#55)
    by Militarytracy on Tue Sep 23, 2008 at 09:45:00 AM EST


    Update? (none / 0) (#58)
    by Realleft on Tue Sep 23, 2008 at 09:47:50 AM EST
    I'm swamped today and can't keep up.

    Evan Bayh seems to be for (5.00 / 3) (#61)
    by Militarytracy on Tue Sep 23, 2008 at 09:51:07 AM EST
    allowing the markets to take some correction on their own so that people who did play by the OLD rules (sort of like Old Europe) and paid attention aren't penalized for being accountable for their own actions.  He thinks making this giant Bush inspired bailout will fix nothing long term.

    Parent
    Wayne Allard seems on board (none / 0) (#63)
    by Militarytracy on Tue Sep 23, 2008 at 09:54:40 AM EST
    for long term solutions, not so interested in short term bailouts.

    Parent
    after so much whupping (none / 0) (#64)
    by Militarytracy on Tue Sep 23, 2008 at 09:55:58 AM EST
    during opening commets, Dodd is now reassuring Paulson that they do have respect for him.

    Parent
    And now Paulson blames Fannie and Freddie (none / 0) (#65)
    by Militarytracy on Tue Sep 23, 2008 at 09:58:32 AM EST
    and makes the pitch we all knew he would.  It's embarrassing.

    Parent
    I heard it differently (none / 0) (#67)
    by Big Tent Democrat on Tue Sep 23, 2008 at 09:59:37 AM EST


    Parent
    How did you hear it? (none / 0) (#68)
    by CST on Tue Sep 23, 2008 at 10:03:09 AM EST


    Parent
    Fannie CEO was fired (none / 0) (#69)
    by Big Tent Democrat on Tue Sep 23, 2008 at 10:05:02 AM EST
    no golden parachutes, no windfalls.

    Parent
    I'm betting (5.00 / 2) (#75)
    by lilburro on Tue Sep 23, 2008 at 10:13:18 AM EST
    he/she can afford to retire...

    Parent
    Bernanke up (none / 0) (#70)
    by Militarytracy on Tue Sep 23, 2008 at 10:08:06 AM EST
    Talking about spiraling fire sale prices.

    Parent
    Ugh, we are supposed to buy (none / 0) (#72)
    by Militarytracy on Tue Sep 23, 2008 at 10:10:23 AM EST
    toxic assets as close to maturity prices as possible......and then credit will "unfreeze" as confidence in the market is grows.

    Parent
    oops, just grows (none / 0) (#73)
    by Militarytracy on Tue Sep 23, 2008 at 10:12:09 AM EST
    no "is" in there

    Parent
    Cox talking about where regulation will (none / 0) (#76)
    by Militarytracy on Tue Sep 23, 2008 at 10:14:04 AM EST
    be added, explaining a few things that have happened that would set anyone's hair on fire that it was even possible to do.

    Parent
    Cox talking about providing regulation (none / 0) (#80)
    by Militarytracy on Tue Sep 23, 2008 at 10:20:20 AM EST
    of the CDS market that currently has zero regulation or transparency.

    Parent
    If they regulate CDS (5.00 / 2) (#109)
    by Steve M on Tue Sep 23, 2008 at 11:02:45 AM EST
    does that mean Americablog has to shut down?

    Parent
    cds is next (none / 0) (#88)
    by Jlvngstn on Tue Sep 23, 2008 at 10:32:06 AM EST
    so he is prepping you for what is to come.  Very gentlemanly of him.

    Parent
    Would it be easier to help (none / 0) (#94)
    by themomcat on Tue Sep 23, 2008 at 10:44:16 AM EST
    the people who are in foreclosure? Wouldn't that also help the banks/investment institutions that hold those mortgages?
    This current proposals doesn't sound very viable and may not even solve the problem.
    Shelby finally asks THE question (none / 0) (#96)
    by themomcat on Tue Sep 23, 2008 at 10:46:08 AM EST
    What about the homeowner in foreclosure? Paulson's answer isn't very satisfying, IMO.
    OMG (5.00 / 1) (#99)
    by SteveSyracuse on Tue Sep 23, 2008 at 10:50:04 AM EST
    Does Paulson even KNOW what he is talking about? He is just droning on and on without saying anything. We should trust HIM to spend $700 billion on his friends?  And all before he gets replaced? The more I listen, the less I think Congress should do ANYTHING.

    Parent
    Different asset classes (5.00 / 1) (#105)
    by Militarytracy on Tue Sep 23, 2008 at 11:00:12 AM EST
    Wonder what class I am?

    Parent
    Are you an asset? (5.00 / 1) (#151)
    by gyrfalcon on Tue Sep 23, 2008 at 12:47:54 PM EST
    He's talking about mortgage-backed securities versus  credit default swaps and other mind-bendingly crazy derivatives.

    Parent
    I'm a classless asset (5.00 / 1) (#168)
    by Militarytracy on Tue Sep 23, 2008 at 02:08:47 PM EST


    Parent
    Hah! (none / 0) (#177)
    by gyrfalcon on Tue Sep 23, 2008 at 09:56:51 PM EST
    ROFLMAO!!

    Good one!

    Parent

    Paulson is doing (none / 0) (#103)
    by themomcat on Tue Sep 23, 2008 at 10:58:54 AM EST
    what he was hired to do. Stonewall. Just like the Justice department, Alberto Gonzalez and The current AG, baffle them with your BS and dazzle them with your footwork.
    I don't think there will be anything really productive coming out of today's hearing. The only thing that is clear is that they want what they want and they want it now with no explanation. It would be nice if Congress says, NO.


    Parent
    You Have To Hope (5.00 / 4) (#108)
    by SteveSyracuse on Tue Sep 23, 2008 at 11:02:21 AM EST
    that the Democrats have learned something from the Iraq War debacle...that rushing to agreement with this Administration is not a good idea.

    Parent
    What if the Dems are in on it? (5.00 / 1) (#117)
    by kdog on Tue Sep 23, 2008 at 11:17:01 AM EST
    Thats always been my suspicion, any opposition is a ruse for the voters.

    You're right about one thing, whenever the admin. says "we must act now, no time to think"...you know the money grab is in play.

    Parent

    Did I dream it? (none / 0) (#169)
    by JavaCityPal on Tue Sep 23, 2008 at 02:29:26 PM EST
    I thought we just gave something like $80B to correct the problem for the homeowners who were facing foreclosure.

    Parent
    Root Cause, according to the Treasury is (none / 0) (#101)
    by santarita on Tue Sep 23, 2008 at 10:53:06 AM EST
    the poor mortgage lending and poor borrowing practices?  Good explanation?

    Or was this an accident waiting to happen?

    "Poor borrowing practices" (5.00 / 3) (#124)
    by litigatormom on Tue Sep 23, 2008 at 11:35:39 AM EST
    It's the fault of the homeowners. People should have known that they couldn't really afford to borrow the money the banks offered them. The bankers who decided to underwrite those loans apparently bear no responsibility for determining that the borrowers couldn't really afford the loans.

    In addition, although I don't hear Paulson saying it, a few Republicans have suggested that the feds "forced" Fannie and Freddie to lend money to "minorities" and "poor folks," whom everyone should have known were poor credit risks.

    Parent

    In response to Sherrod Brown... (5.00 / 1) (#133)
    by santarita on Tue Sep 23, 2008 at 12:07:51 PM EST
    Paulson and Bernanke gave a much better response regarding the root causes: poor regulations, poor supervision, too much complexity, too little understanding, etc.

    Parent
    The Root Cause (none / 0) (#140)
    by SteveSyracuse on Tue Sep 23, 2008 at 12:19:02 PM EST
    was probably allowing financial companies to transform mortgages into securities which could be sold as packages. This disconnected the mortgage vs. home equity risk from the sellers and buyers. Why not give a mortgage to someone and get your fee when you know you will soon hold no risk for it?

    The musical chair analogy works for me. Someone has to lose that game...why should it be the taxpayer, who wasn't even invited to play?

    Parent

    I disagree... (none / 0) (#160)
    by santarita on Tue Sep 23, 2008 at 01:11:33 PM EST
    securitization allows lenders to provide loans.  Securitization is a tool.  The tool must be a well-crafted tool that is used properly by people who know what they are doing.

    This tool was initially well-crafted but people added innovations which weakened the tool and then people started using it without knowing how to use it.

    Parent

    The White party rears its ugly head (none / 0) (#126)
    by Militarytracy on Tue Sep 23, 2008 at 11:37:37 AM EST


    Parent
    Paulson: the more I watch him (none / 0) (#111)
    by Stellaaa on Tue Sep 23, 2008 at 11:07:58 AM EST
    the less confidence I get.  The guys still believes the mythology wall street spews.  

    Sen. Carper (none / 0) (#125)
    by themomcat on Tue Sep 23, 2008 at 11:36:00 AM EST
    Asking about short selling. Cox explaining that limiting short selling was put n place to protect some institutions and they did not want trading to be based on "fear".
    Carper asks about oversight in the form of an OIG. All agree but.............just not today. LOL
    Paulson states we need to go "quickly and get up and running" He seems to be saying that oversight would slow his "Plan to have a Plan".
    Carper asks about Resolution Trust Fund. he says e need that kind of thinking to recovery as much money as possible and not reward the bad players.
    Dodd wants Paulson to be flexible. If there is a better plan he should implement it.
    "You can't deal with this immediately" (none / 0) (#129)
    by themomcat on Tue Sep 23, 2008 at 11:44:32 AM EST
    Paulson clearly is opposed to any oversight. His empty words about "transparency" and 'discipline" are hollow. They don't want anything in their way.

    Transparency? (none / 0) (#134)
    by litigatormom on Tue Sep 23, 2008 at 12:09:40 PM EST
    How does putting Paulson in a black box, with absolute and final discretion on how much of the crap to buy and from whom, encourage transparency?

    How do these people say these things without their noses getting longer?

    Parent

    Maybe the Senators should (none / 0) (#138)
    by santarita on Tue Sep 23, 2008 at 12:18:34 PM EST
    require that the Oversight Committee sign off on the deals before the Fed/Treasury sets accepts bids or sets prices.

    Parent
    They are going to buy (none / 0) (#139)
    by themomcat on Tue Sep 23, 2008 at 12:18:56 PM EST
    these "derivatives" without knowing what they are worth and, to add insult to injury, they are letting the seller set the price. This is insane.
    And there are still going to be foreclosures and a continued fall in the housing market. They are not addressing the root problem.
    I also get the sense that they are timing this to affect the elections.

    Parent
    Not to effect the elections.... (none / 0) (#144)
    by kdog on Tue Sep 23, 2008 at 12:25:53 PM EST
    politically this can only help Democrats, Wall St. prefers Republicans.

    More likely, the timing of it is to get one last money grab in before Bush leaves office, the next guy might not be as willing to play ball.  Don't get me wrong, the next guy will more than likely play ball too, but Bush is a lock to sign whatever Wall St. wants that can slip through Congress.  Nothing beats a lock.

    Parent

    Paulson and Bernanke are... (none / 0) (#137)
    by santarita on Tue Sep 23, 2008 at 12:14:22 PM EST
    making a good faith effort here, I think.  For their plan to have any chance of succeeding, they need to have flexibility.  And the Senators need to exercise intelligent oversight.  For a change.

    From their perspective this is the cheapest and quickest thing that they can do that has a chance of succeeding.  

    Parent

    Flexibility (5.00 / 1) (#143)
    by SteveSyracuse on Tue Sep 23, 2008 at 12:23:30 PM EST
    to me means "we have no idea what to do, but committing $700 billion taxpayer dollars will make the markets feel better".

    That is not a plan, it's a Hail Mary pass.

    Regarding timing this as an election issue, I wouldn't put it past the Administration, but I see it more like rushing a blank check FISA bill thru to deal with terrorism, and then allowing the Bush Administration to write their own rules...Constitution be damned.

    I just have no confidence in any Bush official as soon as they open their mouths. Bernacke seems reluctantly accepting of the Treasury proposal. Paulson seems to be throwing BS around.

    Parent

    Sen. Casey (none / 0) (#142)
    by themomcat on Tue Sep 23, 2008 at 12:23:05 PM EST
    is asking about using bankruptcy modifications. Paulson is opposed. Bernanke is noncommittal.
    Sen. Bunning (none / 0) (#146)
    by themomcat on Tue Sep 23, 2008 at 12:34:08 PM EST
    asking about the inclusion of credit debt and student loans and doesn't sound very happy about it. He Wants an answer from Paulson if it is true. Paulson is babbling and Bunning is pushing for specifics. Bunning asking about how long Paulson was CEO of Goldman Sacks. Bunning is asking why he doesn't know that this was going on.
    Bunning now asking about foreign investors going along with this plan. Paulson says that central foreign bankers had a positive reaction to the plan.
    Bunning says that he is almost in a "panic" because he does not see a solution in the "plan".
    Bunning asking about the final cost and what happens if $700b is insufficient. Bernanke says that he cannot predict the future.
    Paulson says NO to equity stakes (none / 0) (#149)
    by SteveSyracuse on Tue Sep 23, 2008 at 12:39:39 PM EST
    He just said the plan would not work if equity stakes were involved. Sounds like a real sticking point.

    Quick Action (none / 0) (#153)
    by SteveSyracuse on Tue Sep 23, 2008 at 12:57:00 PM EST
    One of the Senators (Corker?) pointed out that, even if passed today, Treasury still couldn't actually do anything for weeks or months while they were figuring out the rules. He asked why Congress couldn't just pass a resolution saying they intend to provide $700 billion, but then wait until Treasury comes up with specifics before actually appropriating the money. Dodd just said they could appropriate the money, but hold it until the legislation is worked out in detail.

    Paulson said that he needs the money RIGHT NOW without any details or else bad things will happen.

    P.S. Who is that Senator from Hawaii?  He seems clueless.

    Competitive Bidding wont work (none / 0) (#155)
    by SteveSyracuse on Tue Sep 23, 2008 at 12:58:40 PM EST
    Paulson also says that competitive bidding will not work and bad things will happen if they have to do that. Again....we should trust the Treasury Dept to do the right thing

    Parent
    I had to stop watching (none / 0) (#158)
    by themomcat on Tue Sep 23, 2008 at 01:03:17 PM EST
    but that sounds like a typical Bush/Cheney response to every crisis, real or imagined. And that most likely was Sen. Akaka.


    Parent
    Have any of the Senators (none / 0) (#170)
    by themomcat on Tue Sep 23, 2008 at 02:41:00 PM EST
    asked about this?

    Fratto insisted that the plan was not slapped together and had been drawn up as a contingency over previous months and weeks by administration officials. He acknowledged lawmakers were getting only days to peruse it, but he said this should be enough.

    If I were a congress critter I would be exploding and shutting down this fiasco.

    http://www.rollcall.com/news/28599-1.html?type=printer_friendly

    H/T to Emptywheel (none / 0) (#171)
    by themomcat on Tue Sep 23, 2008 at 02:44:35 PM EST


    Parent
    Interesting article (none / 0) (#173)
    by Faust on Tue Sep 23, 2008 at 04:03:15 PM EST
    I make no claims about the following other than I found it interesting:

    link

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