Bailout Bills

[Scriblerus the Philosophe]

Thought it being a separate thread from the one discussing the market direction.
All I can really say is "Oh my god."
Here's the text from last night, sent to Congress for this morning.
Dodd's plan. More (meaning some) congressional oversight and apparently more taxpayer protection.
Paulson's bill (the first link) is basically a power grab. (all italics are mine)

Sec. 2. Purchases of Mortgage-Related Assets.
(a) Authority to Purchase.--The Secretary is authorized to purchase, and to make and fund commitments to purchase, on such terms and conditions as determined by the Secretary, mortgage-related assets from any financial institution having its headquarters in the United States.
(b) Necessary Actions.--The Secretary is authorized to take such actions as the Secretary deems necessary to carry out the authorities in this Act, including, without limitation:
...
(2) entering into contracts, including contracts for services authorized by section 3109 of title 5, United States Code, without regard to any other provision of law regarding public contracts;
...
Sec. 3. Considerations.
In exercising the authorities granted in this Act, the Secretary shall take into consideration means for--
(1) providing stability or preventing disruption to the financial markets or banking system; and
(2) protecting the taxpayer.
Sec. 4. Reports to Congress.
Within three months of the first exercise of the authority granted in section 2(a), and semiannually thereafter, the Secretary shall report to the Committees on the Budget, Financial Services, and Ways and Means of the House of Representatives and the Committees on the Budget, Finance, and Banking, Housing, and Urban Affairs of the Senate with respect to the authorities exercised under this Act and the considerations required by section 3.
Sec. 5. Rights; Management; Sale of Mortgage-Related Assets.
(a) Exercise of Rights.--The Secretary may, at any time, exercise any rights received in connection with mortgage-related assets purchased under this Act.
...
(c) Sale of Mortgage-Related Assets.--The Secretary may, at any time, upon terms and conditions and at prices determined by the Secretary, sell, or enter into securities loans, repurchase transactions or other financial transactions in regard to, any mortgage-related asset purchased under this Act.
...
Sec. 8. Review.
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.
Sec. 9. Termination of Authority.
The authorities under this Act, with the exception of authorities granted in sections 2(b)(5), 5 and 7, shall terminate two years from the date of enactment of this Act.
Sec. 10. Increase in Statutory Limit on the Public Debt.
Subsection (b) of section 3101 of title 31, United States Code, is amended by striking out the dollar limitation contained in such subsection and inserting in lieu thereof $11,315,000,000,000.
Sec. 11. Credit Reform.
...
(1) Mortgage-Related Assets.--The term "mortgage-related assets" means residential or commercial mortgages and any securities, obligations, or other instruments that are based on or related to such mortgages, that in each case was originated or issued on or before September 17, 2008.

Ok, can't challenge it, no specifications as to what 'protect the taxpayer' means (among other things), includes commercial properties, leaves it for the next guy to clean up, and securities and so on can be sold for whatever the secretary chooses. Great.
All right, we've established Cheney and his cronies* are stagnant-lake scum, Bush is a lemur (no insult mean to them, but he's not really even a monkey), and

Dodd's Bill (again, italics are mine) has it's own problems, but it's a little better.

3 (1) AUTHORITY.—The Secretary is authorized
4 to establish a program to purchase, and to make and
5 fund commitments to purchase troubled assets from
6 any financial institution, on such terms and condi7
tions as are determined by the Secretary, and in ac8
cordance with policies and procedures developed by
9 the Secretary.
Opens the door for international banks with assets owned by their American units.
Section 2.2 doesn't actually change (still says without limitation) but in sect. 2c, there's a caveat:
Quote
23 (c) LIMITATION ON AUTHORITY.—
24 (1) IN GENERAL.—The Secretary may not pur
25    chase, or make any commitment to purchase, any (to page 4)
1      troubled asset unless the Secretary receives contin
2      gent shares in the financial institution from which
3      such assets are to be purchased equal in value to the
4      purchase price of the assets to be purchased.
5 (2) SHARES TO BE RECEIVED.—
6    (A) CONTINGENT SHARES.—
7       (i) IN GENERAL.—The contingent
8        shares to be received by the Secretary
9        under paragraph (1) may, at the deter
10      mination of the Secretary, include shares
11      of the financial institution, its parent com
12      pany, its holding company, any of its sub
13      sidiaries, or any other entity which is
14      owned, controlled, or managed by such in
15      stitution.

Not sure what that's supposed to do. Decide what shares of anything they own (including the most profitable sectors, assuming they have one)? Sorts sort of like a slap on the wrist.
Yup.

9 (B) MULTIPLE CLASS OF SHARES.—If the
10 financial institution from which troubled assets
11 are to be purchased has more than 1 class of
12 shares, the contingent shares to be received by
13 the Secretary shall be that class of shares with
14 the highest trading price during the 14 business
15 days prior to the date of the purchase of such
16 assets.

Ack! Editing, as I didn't post everything I wanted to! Will double post (sorry) when properly edited...which will be tomorrow, since the intarnets ate my post and it's really late and I want sleep.

*Do we want to insult scum, even? He's more like a virulent virus. Not really a living thing until he's in a host.

[Bob in a quantum-state-of-faith]

*Do we want to insult scum, even? He's more like a virulent virus. Not really a living thing until he's in a host.

Personally, I'm not convinced Cheney is even alive in the conventional sense.... I think he died years ago when his heart failed the first time, for lack of use.

They replaced it with something else*, and re-animated his dead corpse.


* what?  I dunno.  Something they found in an ancient tomb of evil?  A loose collection of internet porn and old worn-out computer chips?  Some form of one of those internet viruses gone all corporeal, maybe? Maybe a tangled nest of dead spiders...?  certainly nothing that is alive...

[Aggie]

Looks like Congress members are starting to raise some serious questions about Paulson's plan....  good on 'em. 

Hope they manage to keep this in the interests of the American public, to whatever degree possible.

[Swatopluk]

*Do we want to insult scum, even? He's more like a virulent virus. Not really a living thing until he's in a host.

Personally, I'm not convinced Cheney is even alive in the conventional sense.... I think he died years ago when his heart failed the first time, for lack of use.

They replaced it with something else*, and re-animated his dead corpse.


* what?  I dunno.  Something they found in an ancient tomb of evil?  A loose collection of internet porn and old worn-out computer chips?  Some form of one of those internet viruses gone all corporeal, maybe? Maybe a tangled nest of dead spiders...?  certainly nothing that is alive...

The Cold Heart as in the fairy tale of Wilhelm Hauff
http://books.google.de/books?id=zZ2drxxCzasC&pg=PA184&lpg=PA184&dq=wilhelm+hauff+%22the+cold+heart%22&source=web&ots=ejl5BnFH0u&sig=yjcpv4CIqO7xvK48F1lctYkqI14&hl=de&sa=X&oi=book_result&resnum=1&ct=result
For a synopsis look here
http://www.gymnasium-neuenbuerg.de/?q=node/135

[Scriblerus the Philosophe]

Almost done analyzing the Dodd bill. Looks pretty damn good so far, at least in comparison to Paulson's 'rescue plan.'

Dodd: Transparent, legal recourse if there's reason for it, limitations, assistance for homeowners, demands a systematic approach, excludes commercial properties, (still vague bout tax payer protections), any profits go to protecting homeowners [65%], capital magnet funds [35%] and the remainder goes to the Treasury. There's some decent putative measures against the guilty firms (basically the Treasury gets to decide where the shares/assets come from, anywhere in a firm's system regardless of failure or success of that group of assets) and incentives to executives are limited (yes!) and there's an incredible amount of oversight as well as internal watch-dogs. I'll post the sections later, if you all want.

Paulson: none of the above. 

[Sibling Zono (anon1mat0)]

I'm thinking on a letter to my congressman to not only demand more regulation in financial markets but criminalize the behaviors of the CEOs that got us in this mess, making sure they get at least 10 years of jail with no parole.

Perhaps making a nice letter, buying a domain and do the grassroots thing. Whaddaya think?

[Scriblerus the Philosophe]

Sounds like a plan, Zone. Gimme the link, if you do it, so I can throw that at various people.

[Sibling Zono (anon1mat0)]

It will take me a bit (both the letter and the site), in fact I accept ideas. 

Edit: how about makethebankerspay.org as a domain?

[Aggie]

Misread that to include the word 'spay'.

I think in most cases the right word would be 'neuter'.

[Sibling Zono (anon1mat0)]

Better without the S then (makethebankerpay.org)?

[beagle]

I'm thinking on a letter to my congressman to not only demand more regulation in financial markets but criminalize the behaviors of the CEOs that got us in this mess, making sure they get at least 10 years of jail with no parole.

Perhaps making a nice letter, buying a domain and do the grassroots thing. Whaddaya think?

Congresspersons of both parties helped with the mess, in the repeal of Glass-Steagall in the late 90s, after LTCM had already shown what derivative failures could do to a financial institution and how it could lock up the market.

[Aggie]

Article from NPR entitled "Why Congress Objects To The Bailout":
http://www.npr.org/templates/story/story.php?storyId=94950330

Jon Macey, a professor and deputy dean of Yale Law School, says the bill contains the largest transfer of power from Congress to the administration that he has ever seen. Macey says Congress is handing over more power than it did in granting the executive branch leeway in the Patriot Act, more than when authorizing combat through the War Powers clause. He says the move amounts to a sidelining of Congress.

[pieces o nine]

How about: forecloseonthebankers.org

[Sibling Chatty]

I say let Buffet and THAT class of investors salvage the salvageable, and let the crap ones fail.

Buffet's started.

http://news.yahoo.com/s/nm/20080923/bs_nm/us_goldmansachs_buffett5

Screw the rest. FDIC protects the small and medium guy, others can take the hit, because if they're unprotected they're probably also liable for something.

As the old saying goes, fuck 'em and feed 'em fish heads. Go back at least 15 years and take away ALL their ill-gotten gains. Wah for them. Wah for those that trusted them.

A bail-out will only press the crash into the next administration. Let Gates buy out a decent bank and have Microsoft Bank of America, or whatever...a no dead trees bank. Buffet's got his, he can afford another.

WaMu?? Tough, you bunch of wankers. Die a nice death, and I hope they take your Mercedes AND your Lexus as they foreclose on your house!!

[beagle]

I think Paulson has bigger fish to fry. He's desperately trying to retain America's AAA credit rating (against formidable odds) and have at least one World class American bank left at the end of the rescue. All the time not spooking the Chinese.

FDIC protects the small and medium guy

Only if the Chinese keep buying Treasury Bonds...