Whats up with the bailout bill?

[SCcoug]

The current bailout bill went through the senate fairly quickly but may not be a good solution to the current crisis. It feels like the bill is being rushed through. There has been no debate on alternatives to expanding executive power, this case the Sec of Treasury, and authorizing him to throw money at the problem in whatever way he pleases. One of the more troubling parts of the bill is the definition of financial institution and troubled assets.

(5) FINANCIAL INSTITUTION.—The term ‘‘financial institution’’ means any institution, including, but not limited to, any bank, savings association, credit union, security broker or dealer, or insurance company, established and regulated under the laws of the United States or any State, territory, or possession of the United States, the District of Columbia, Commonwealth of Puerto Rico, Commonwealth of Northern Mariana Islands, Guam, American Samoa, or the United States Virgin Islands, and having significant operations in the United States, but excluding any central bank of, or institution owned by, a foreign government.

It seems to me that this opens the door to a bailout of not only US institutions but foreign ones as well. How likely is it that we will see foreign central banks or sovereignty funds sell assets to qualifying US or foreign financial institutions?

TROUBLED ASSETS.—The term ‘‘troubled assets’’ means—
(A) 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 March 14, 2008, the purchase of which the Secretary determines promotes financial market stability; and
(B) any other financial instrument that the Secretary, after consultation with the Chairman of the Board of Governors of the Federal Reserve System, determines the purchase of which
is necessary to promote financial market stability, but only upon transmittal of such determination, in writing, to the appropriate committees of Congress.

http://senateconservatives.files.wor...ailouttext.pdf

So basically Paulson can buy any mortgage or security based on mortgages that he wants or any financial product that he and Bernanke deem necessary.
Why can't Congress set up a model on the HOLC? Since the mortage backed securities are hard to value why couldn't we take care of the actual mortgages, preferable in a way that doesn't let either borrower or lender off the hook entirely, to avoid overpaying for mbs? If

It seems like the current solution is likely to be taken advantage of by well connected people.

[MikeWaters]

Originally Posted by SCcoug

It seems like the current solution is likely to be taken advantage of by well connected people.

thanks for stating the obvious.

[SCcoug]

You're welcome

[MikeWaters]

If the rich fat cats don't stay rich, you and me will starve to death. That's what we have been sold.

[il Padrino Ute]

Originally Posted by MikeWaters

If the rich fat cats don't stay rich, you and me will starve to death. That's what we have been sold.

It may be in the books that we were sold that, but did we really buy it?

Nobody really ever gets rich working for someone else.

[MikeWaters]

Originally Posted by il Padrino Ute

It may be in the books that we were sold that, but did we really buy it?

Nobody really ever gets rich working for someone else.

Since when did being rich matter? Are the richest people on Cb and CG the happiest?

[il Padrino Ute]

Originally Posted by MikeWaters

Since when did being rich matter? Are the richest people on Cb and CG the happiest?

That isn't my point.

I'm agreeing with you that if those on Wall Street fail, it doesn't mean the rest of us have no chance of being able to succeed. We don't need them in order to earn a living. There's always an opportunity to go out and make it without them.