But, it also:
1) gives the Secretary of Treasury nearly total discretion
2) accepts all kinds of securities, not merely mortgage related
3) accepts toxic assets from foreign firms as well as domestic

And it also appears somewhat misleadingly to do other things, like:
1) provides review of actions, but only to make recommendations – to the Secretary
2) provides for GAO audits – but lets the Secretary certify them as not relevant
3) makes vague mention of help to homeowners, but no real requirements
4) restricts the time to December 2009, but allows the Secretary to extend it to 2 years
5) applies restrictions to executive compensation, but only in the very loosest of terms
6) requires openess of books, but only loosely and only to shareholders (implying not the public)
7) involves GAO – but mainly for studies

What I wonder is what does all of this (the Paulson and the Dodd proposals) have to do with the root cause of today’s problem, which is declining home prices?

I also wonder where we have the confidence (the above notwithstanding) that pouring money into banks will necessarily cause them to loan money.

I wonder who (besides businesses) wants to borrow money right now? (IOW, maybe the banks problem is that, because of the housing price drop, the bottom has fallen out of their mortgage-related business).

And I wonder that, if this is all a mistake, can we affort a $1 trillion dollar mistake?

I’m also deeply suspicious about the urgency of this, given the timing of the elections and the Congress. Many economists predicted what would happen – where were the regulators and the rest of the Bush administration?

Terry Steichen
Publisher/Editor, TopicCentral.com

PS: If you want a bit more detail on the Dodd versus the Paulson proposals (with McCain’s and Obama’s thrown in), check out this page: http://www.topiccentral.com/Wiki.jsp?page=Bailout

All Nordic countries went through a depression in 1990-91, with Finland going so far as to see a systemic collapse of its banking system based on bad real estate lending. Norway had the best way, I think, of dealing with its mess. Everybody had to pay for the collapse to restart the system and everybody who paid in became a shareholder in the distressed companies. When the companies came back they were bought out and even got dividends.

Thus, any company wanting to be in the bailout has to surrender its shares to a government holding company. The repackaged shares would be reissued to every person who filed federal taxes in 2007. Every taxpayer would then pay in the bailout money as a subordinate loan to the asset management company, which would then deal with the debt. Over time, the investors would see part of their money returned as assets were realized. If Paulson needs $1 trillion, for example, then the average cost of a share per taxpayer would be about $7,000 or $14,000 per household. We know this is technically possible because we just saw Treasury implement the stimulus package.

We must be frugal to the nth degree.

Until that money changes hands we are in the drivers seat.

That’s not entirely true. There are mortgages out there already and banks are tightening credit and there are things happening. So, to sit and wait is to let the existing dynamic to play out. That’s where “the presentation” scared everybody silly and demands some kind of quick effective action.

If they want $15,000 from my family, they better tell me the full story.

“You want the Truth? You can’t handle the Truth.”
— Jack Nicholson in some dumb movie which just happened to be based
in Guantanamo Bay “Gitmo” where we now have problems related to the
movie’s story

OT Rachel says the bomb in Pakistan used Aluminium powder Rachel did not say the words fuel air bomb but if it was thats a nuclear level blast with no radiation.

Does anybody have that weapon besides us? If it was our guys, then it’s clearly an act of war against the Pakistani government and “we” were apparently trying to take out the head of government.

Lovely. sigh

it’s worse than anyone knew

Recommendation to Congress Not to Spread Financial Panic

Martin D. Weiss writes: The proposal before Congress for a $700 billion mega-bailout is far too little to repair the damaged debt and derivatives markets … and, at the same time, far too much for investors and taxpayers who must put up the money.

And this snippet:

“1,479 FDIC member banks are at risk of failure with total assets of $2.4 trillion.”

This is scarier than Nouriel Roubini!

Everyone else: Sunlight Foundation has posted Paulson’s bill along with Dodd’s for markup and comment. (Sunlight’s proposed Transparency in Govt Act was up for comment from April through July of this year, and their staff has met with numerous Members of Congress on it since. They’ll do the same thing with these two bills, and more as they are proposed).

The oversight sections of both bills have gotten the most comments so far.