Bailout In Installments Is Still Nonsense
Mish Moved to MishTalk.Com Click to Visit.
Breaking Story: SHELBY SAYS `I DON'T THINK WE HAVE AN AGREEMENT'. Don't give up hope we can sink this.
Please keep reading and act!
The Wall Street Journal is reporting Agreement Reached on Bailout Ahead of High-Level Meeting.
Top House and Senate Democratic and Republican lawmakers have reached a tentative agreement on a $700 billion plan to bail out U.S. financial markets, with some predicting the measure would pass both chambers of Congress.Significant Changes Recap
After a three-hour meeting, lawmakers agreed to legislative principles that would approve Treasury's request for the funds, but would break it into installments, according to people familiar with the matter. Treasury would have access to $250 billion immediately, with another $100 billion to follow if needed. Congress would be able to block the last installment through a vote if it was unhappy with the program.
The agreement could require all companies participating in the program to agree to limits on executive pay—such as restrictions on "golden parachutes." It is also likely to give the government equity warrants in all participating companies.
Still unresolved is whether or not to include changes to bankruptcy law that would give judges the right to change the terms of mortgages. Democratic Sen. Dick Durbin of Illinois made a plea for it to be included, even though many lawmakers and the White House are hotly opposed.
Noticeably absent at the Thursday morning meeting in the Capitol was Sen. Richard Shelby of Alabama, the ranking Republican on the Senate Banking Committee. Mr. Shelby has said he opposes the idea of bailing out Wall Street and was replaced in negotiations by Mr. Bennett, the number two GOP senator on the Banking panel.
- Initial size of the boondoggle reduced to $250 billion. Paulson was adamant against that provision as was Bernanke.
- The government (taxpayer) will get warrants in participating companies. This is likely to be symbolic, but perhaps not. It depends on how it is structured. Paulson was adamant against this provision as well.
- The agreement could require all companies participating in the program to agree to limits on executive pay—such as restrictions on "golden parachutes." The article says could. My translation is "will". Paulson was adamant against this provision as well. It seems that everything Paulson has been adamant against is failing. His score is -5 and counting, starting with Fannie Mae.
I am curious about how this can happen. "Mr. Shelby has said he opposes the idea of bailing out Wall Street and was replaced in negotiations by Mr. Bennett, the number two GOP senator on the Banking panel."
I have a call into Shelby's office and senator Shelby is still opposed to this deal.
I salute Senator Shelby.
I also salute all of you who phoned, wrote, or faxed Congress. The changes we have seen so far only happened because you took the time to do so.
190+ Economists Slam Bailout
Over 190 top economists in the country have slammed this bailout on grounds of fairness, ambiguity, and long term effects.
Click here to see the Letter From Economists to the Speaker of the House of Representatives and the President pro tempore of the Senate. http://faculty.chicagogsb.edu/john.cochrane/research/Papers/mortgage_protest.htm
What is it that Paulson knows that 190+ economists don't? After all Paulson was telling us all how safe the US Banking system was just a few weeks ago.
House Republicans Balk
This story is AFTER the alleged agreement: More Republicans Balking At Wall Street Bailout Plan.
Still Work To Do
This modified bill is going to pass the house. There is still a chance for a filibuster in the U.S. Senate. I would like all of you to Fax Senator Shelby thanking him for his courageous stance so far and asking him to please continue the fight, and to block this bill by filibuster if he has to.
Another Fax Needed
Fax Title "Senator Shelby, Installments Won't Help. Block This Bill"
Senator ShelbyFax For Bunning, Grassley, DeMint, Ensign, Reid
I salute you for the courageous stance you have taken so far.
However, there is still work to be done. Installments will not help and you know it.
You are correct when you state "There are no credible assurances that this plan will work. We could very well spend $700 billion and not resolve the crisis."
Senator, the odds of failure are 100%. The Paulson plan will not create any jobs or help homeowners pay their bills. Instead it diverts $700 billion of taxpayer funds to failed banks that took excessive risks. The sheer size of the bailout will cause interest rates to rise, further adding to taxpayer woes.
Long term interest rates are already up a half point on news of this bill. They will rise more if it passes. How is that supposed to help homeowners?
Robbing taxpayers to pay failed banks cannot possibly work!
Installments are a trap.
Printing money and giving it away cannot work either. If it did work, Zimbabwe would be the most prosperous nation in the world.
190+ Economists Slam Bailout
Over 190 top economists in the country have slammed this bailout on grounds of fairness, ambiguity, and long term effects.
http://faculty.chicagogsb.edu/john.cochrane/research/Papers/mortgage_protest.htm
What is it that Paulson knows that 190+ economists don't? After all Paulson was telling us all how safe the US Banking system was just a few weeks ago.
Senator Shelby, our prayers are with you that you have the courage to stand up for what you know you must do: Block This Bill.
I ask that you approach fellow Senators Jim Bunning, Chuck Grassley, and Jim DeMint in hope that one or more will have the courage to join you to in preventing what is still a preventable disaster.
Your Name
Your Phone Number
Dear SenatorSen. Richard Shelby (R) 202-224-3416 or 202-224-5137 (both seem to work, I fax both)
Earlier today I asked Senator Richard Shelby to have the courage to stand alone, if necessary, block the Paulson proposal.
Senator, the odds of failure are 100%. The Paulson plan will not create any jobs or help homeowners pay their bills. Instead it diverts $700 billion of taxpayer funds to failed banks that took excessive risks. The sheer size of the bailout will cause interest rates to rise, further adding to taxpayer woes.
Long term interest rates are already up a half point on news of this bill. They will rise more if it passes. How is that supposed to help homeowners?
Robbing taxpayers to pay failed banks cannot possibly work!
Printing money and giving it away cannot work either. If it did work, Zimbabwe would be the most prosperous nation in the world.
190+ Economists Slam Bailout
Over 190 top economists in the country have slammed this bailout on grounds of fairness, ambiguity, and long term effects.
http://faculty.chicagogsb.edu/john.cochrane/research/Papers/mortgage_protest.htm
What is it that Paulson knows that 190+ economists don't? After all Paulson was telling us all how safe the US Banking system was just a few weeks ago.
Senator, our prayers are with you that you have the courage to stand up with Senator Shelby and do what you know you must do: Block This Bill.
Your Name
Your Phone Number
Sen. John Ensign (R) 202-228-2193
Jim DeMint (R) 202-228-5143
Sen. Jim Bunning (R) 202-228-1373
Sen. Chuck Grassley (R) 202-224-6020
Sen. Harry Reid (D) 202-224-7327
The Odds Of Success Improve With Every Fax!
Your Fax Counts.
This is a critical Juncture, please act now.
Pass this email to 10 others and have them do the same.
Once More.
We are almost there.
One more round of faxes.
If agreement in the Senate is not reached over the weekend, this bill is dead.
Thanks For Your Help!
Addendum:
Barbara Boxer was on TV 30 minutes ago saying she hasn't decided how to vote! Call her up whether she is your senator or not! There's only 100 Senators, everyone counts! Senator Boxer Phone: (202) 224-3553
Fax: (202) 224-0454
Please phone AND fax Senator Boxer whether she is your senator or not.
Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com
Click Here To Scroll Thru My Recent Post List
