Making the rounds is a purported draft of the bailout proposal wherein We The People cough up $700 billion to keep the markets stable after The Wizards of Wall Street worked their magic.
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.
. . .
The Secretary may, at any time, exercise any rights received in connection with mortgage-related assets purchased under this Act.
. . .
The Secretary shall have authority to manage mortgage-related assets purchased under this Act, including revenues and portfolio risks therefrom.
. . .
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.
. . .
The Secretary’s authority to purchase mortgage-related assets under this Act shall be limited to $700,000,000,000 outstanding at any one time
. . .
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.
. . .
[The debt ceiling is increased to] $11,315,000,000,000.
Sounds like a great time to be buddies with the Secretary of the Treasury who has unfettered discretion to buy high up to $700 billion and sell as low as he wants with no review. But, if you’re not close to Mr. Paulsen, I’d say torches and pitchforks are hot investment sectors.
Update From Jim Henley (breat post title — Liberaltarianism’s New Groove): “This loathsome bailout plan is a slap in the face to anyone who believes in either free-market principles or social justice.” Scott Lemieux adds: “$700 billion of taxpayer money for your own piece of Big Shitpile should bring out the libertarian in anyone…”
This thing could well be expected to bring the blogosphere into a full-throated frothing rage. Seems like the blogosphere is dominated by lefties and libertarians. Plenty for either to be grumpy about with the current proposal.
Let’s not blame Wall Street.
Wrote Neal Boortz, “Political correctness won the day. Washington made it clear to banks and other lending institutions that if they did not do something .. and fast .. to bring more minorities and low-income Americans into the world of home ownership there would be a heavy price to pay. Congress set up processes (Research the Community Redevelopment Act) whereby community activist groups and organizers could effectively stop a bank’s efforts to grow if that bank didn’t make loans to unqualified borrowers. Enter, stage left, the ‘subprime’ mortgage.”
Driven by the zeal of religious, uh, zealots, the socialist Democrats who peddle their political nonsense on Capitol Hill have never budged from their moral code; a code that sees social injustice in every aspect of the American capitalist culture.
There were the Ken Lay shenanigans. There were the Tom Foley shenanigans. There is a difference: Lay went to jail.
“They made us sell to poor people; look the other way when assessments were unrealistic; market second and third mortgages to them; and then bundle them into opaque financial instruments, highly leveraged and poorly understood.”
I’m not buying it. Greed drove this bus into the ditch.
The people cashing out “equity” from their million dollar homes that later forclosed weren’t low-income minorities. Boortz, and Kenn, are seeing something no one else is seeing, where in some alternate universe it was the traditionally powerless who were able to thwart regulation in order to have some kind of orgy of financial benefit rain down on them. Wall Street? Upper middle class McMansion dwellers? Blameless victims of the powerful American underclass.
And dude– who are the socialists? I think we just saw above that a Bush appointee gets to own a lot of our real estate for us. I would wager that a majority of those benefitting are fair-skinned, and probably more than a few are Republican. Project much?
Meanwhile, I think having decisions under the new act be non-reviewable by anyone including courts is a great idea. It’s not like I’ve heard of any negative consequences this week to having lack of oversight in the banking system. It must have been quite a trick to find people in government to craft this who had heard nothing about deregulation’s role in the meltdown. What could be more deregulated than giving one dude $700 billion, saying, “As you please”, and walking away? Just a touch of hair of the dog that mauled us should do the trick, right?
Bush said the risk of doing nothing is far greater than the risk of doing this plan, and besides we’ll probably get a lot of the money back.
Knowing he said the same shit before Iraq is comforting.
Meanwhile the hypocrits on the hill — Democrat socialists who indulge their own wealth in the capitalist market — are getting a backlack whooping.
Bloomberg reports that Peolosi’s husband had $250,000 and $500,000 of stock in AIG. No wonder she gave ’em in $85 billion in loans.
Socialist kisman John Kerry owned $2 million of AIG stock at the end of 2007. Doing the math, the stock dropped 95 percent costing Kerry about $1.9 million, assuming he held the stock. (Had he shorted AIG during that time, he would have $43.34 million in his piggy bank. Who knows? Maybe he did!)
“Altogether, 56 senators and representatives had stakes in AIG, Lehman, Fannie Mae, Freddie Mac, Bear Stearns Cos. or IndyMac Bancorp Inc. — some of the biggest casualties of the market bloodbath — according to the Center for Responsive Politics.”
Now, pardon me while I quote myself, but…
Real Estate agents would draw red lines on maps around ghetto-ized neighborhoods. Neighborhoods inside the red line were doomed to be black only. Neighborhoods outside the line were deemed white only.
Somebody, somewhere may have actually drawn a red line on a map with the intent of using racial criteria to sell real estate. Somebody, somewhere may have actually installed a glass ceiling with the intent of keeping incompetent women out of the executive bathrooms. (Dunlap: “Hillary Clinton broke that glass ceiling into a million pieces.” Jackie Broyles: “What’d she do? Look at it?”)
shorter kenn gividen: i know who’s really to blame for the mortgage crisis: black people!
Not black people.
Black person.
Franklin Delano Raines totally destroyed Fannie Mae, and walked away with about $100,000,000.00.
2004 – The Office of Federal Housing Enterprise Oversight (OFHEO) accused Raines widespread accounting errors that included the shifting of losses so top executives, himself included, could earn large bonuses.
How much?
In just one year, 2003, Raines’s compensation was exceded $20 million.
In 2006 the OFHEO sued Raines to recover some or all of the $50 million in payments made to Raines based on the overstated earnings of $6.3 billion.
Charges were filed against Raines by the OFHEO seeking $110 million in penalties and $115 million in returned bonuses from Raines and two other executives.
In April of this year the government settled with Raines, J. Timothy Howard, Fannie’s former chief financial officer, and Leanne G. Spencer, Fannie’s former controller. Their fines totalled about $3 million, covered by Fannie’s insurance. Raines also gave up his worthless stock options and an estimated $5.3 million of “other benefits.”
Fannie, on the other hand, paid a record $400 million civil fine when it settled with OFHEO and the Securities and Exchange Commission.
Or, you can just say I blame black people.
wait, first you said the problem was that big bad democrats forced the mortgage companies to sell houses to poor minorities who couldn’t afford them. now you’re saying it’s all raines’s fault? make up your mind!
Agreed.
But stupidity handed them the keys, paid for their gas, AND gave them comprehensive collision insurance.
Stupidity may have bought them a few drinks, too, judging by the results…
Roofies may or may not have been involved.
Okay, I’ve made up my mind.
The same liberal Democrats who forced mortgage companies to address “social justice inequities” by forcing poor folks into foreclosures and bankruptcies also gave Frank Raines the keys to the bus that drove them over the clift. Before he bailed out.
You think a socialist-dominated congress is destructive…
Somewhere in top drawer of the Oval Office is a cigar and big rubber VETO stamp. Clinton used the first too often; Bush used the latter too seldom. Obama will use neither.
First of all, you don’t have much credibility coming around here saying “socialist Democrat” all the damn time. Other than that, we’re still not buying your argument.
The word “fascist” has probably been said around here less in four years than you’ve said “socialist” just on this thread. Yet, as has been discussed, the current administration is arguably as “socialist” as the Democrats–if not more so. The current administration is doing what many do–trying to be all things to all people. Except in the case of this administration it has come off looking at turns both socialist AND fascist.
Yet all you can talk about is one (black) guy, other (black) people, and Democrats who had investments, probably at least in name in blind trusts. These people had money in insurance companies and bonds precisely because they were unsexy, “safe” investments. The congresscritters you named didn’t buy AIG to get rich quick. You’re talking about $2 million for Kerry? You’re kidding, right? That would probably be a 1% loss for him. It would be like if McCain lost a house.
Obama. There’s another black guy.
But who’s counting and they all look alike anyway, right?
Fellas, The whole process wasn’t exactly rocket science. Take a drive around Steuben County (or a host of others in Indiana) and you’ll see a slew of doublewide manufactured homes on an acre that we sold to 1st time buyers on FHA loans with 0% down and all the fees rolled into their loan. Day one, the poor bastards owed $115k on a $100k home. For years I have “suggested” (can’t say steered, the feds will cook my ass) NOT using an FHA product to purchase a home as the fees are borderline userious (sp?) and it’s simply an awful way to start off your homeowner/financial journey, so to speak.
So the lender has a loan of $115k on a $100k (barely) property and what’s he to do? Off it to Fannie & Freddie, who then turn around and add even more fees to the balance, bundle it up in $300 million packages and sell ’em to pension funds and reits and a host of other unsuspecting schlubs, all the way through middleman after middleman is getting a commission adding to the balance.
I hate the idea of ANY kind of bailout, but the feds have no choice in this one, they created it, both republicans and democrats right down the line…
I saw this coming 10 years ago, and so did the New York Times of all people. We’ll survive this, the important thing is we don’t allow congress & the feds to do it again, mostly congress…May I suggest no matter what your political stripes, this is a great case for TERM LIMITS???????
But Kenn doesn’t see black or white.
He just sees black.
When we’re talking about highly leveraged Wall Street investments, centered around mortgages, we’re talking about a pretty white problem. Andy McCain white. Phil Gramm white. Jeb Bush white. And all those guys on the trading floor waving their hands and yelling. No, not just the two or three black ones.
Oh, and also Kenn’s black guy he wants to talk about. The one who actually faced some penalties (Fannie stock options weren’t worthless in April). He probably deserved worse, but enforcement of the law isn’t the Bush Administration’s strong suit. I wonder why we don’t round up Phil Gramm? Hell, he may be our next treasury secretary.
So Cavuto’s pushing the why-did-they-give-money-to-black-people? line.
Is it too much to hope for this country that they don’t trot out the “they want to have sex with our women” approach before all is said and done?
T…”So Cavuto’s pushing the why-did-they-give-money-to-black-people? line.”
Just exactly when did Cavuto say anything remotely close to this?
He did it on the 16th and on the 18th
T & Brian W.
It doesn’t give you any great deal of credibility to take a perfectly factual statement and twist it to say “Why did we give black people loans”.
Cavuto meant and inferred NO RACISM in that comment, he simply pointed out a fact. Loans made to minority customers are in much higher default rates, are we to ignore that??? Quit fanning the race card flames when none are there.
I was unaware that minority loans in default could significantly lead to the insolvency of the entire financial market.
How could I not conflate that fact? Silly me.
NY Real Estate magazine “The Real Deal” had an article back in December about reverse redlining (i.e., *granting* loans in minority areas vs. “redlining” – the age-old practice of *denying* loans to those areas regardless of credit-worthiness).
An interesting comment (albeit without backup documentation or statistics):
hmm.. my font color=”red” html didn’t come through (although it worked fine in the comment preview). I was focussing in on the line:
Cavuto meant and inferred NO RACISM in that comment, he simply pointed out a fact. Loans made to minority customers are in much higher default rates, are we to ignore that???
cite a source for this “fact”, because i’m pretty sure it’s false. indeed, i think i need to repost the link to the study that found that the CRA (the loan program cavuto and kenn gividen have been complaining about) actually “may have deterred banks from engaging, at least in their local communities, in lending practices that fuel foreclosures.”
I have to admit, when this all started hitting the fan, my thought was “borrowers equally to blame” but there is more and more evidence all the time of predatory lending practices, which has little to do with well-meaning initiatives to get minorities into home-ownership and everything to do with corporate greed. I say “little to do” (vs. “nothing to do”) with it, because lenders were able to get away with it do to the existance of those (criminally unregulated) initiatives.
From the Wall Street Journal (December ’07):