Paulson, Bernanke Push Plan to Cleanse Balance Sheets

[Purveyor]

Source: Bloomberg

Sept. 18 (Bloomberg) -- U.S. Treasury Secretary Henry Paulson and Federal Reserve Chairman Ben S. Bernanke met with lawmakers to push a plan that would move troubled assets from the balance sheets of American financial companies into a new institution.

Congressional leaders meeting with Paulson and Bernanke late today in Washington said they will work to pass legislation soon. The initiative, which may also insure money-market funds, is aimed at removing the devalued mortgage-linked assets at the root of the worst credit crisis since the Great Depression.

``Absolutely, this is good news,'' said Marilyn Cohen, who manages $185 million in bonds as president and chief executive of Envision Capital Management in Los Angeles. ``Hopefully, this will give the trading desks the confidence to start making markets again.''

The Treasury and Fed chiefs, after months of trying to aid failing financial companies case by case, want to prevent the crisis that has led to $518 billion in global losses and writedowns from further weakening the U.S. economy.

``What we are working on now is an approach to deal with the systemic risk and the stresses in our capital markets,'' Paulson said after the meeting. ``We're coming together to work for an expeditious solution which is aimed right at the heart of this problem, which is illiquid assets on financial institutions' balance sheets.''

Read more: http://www.bloomberg.com/apps/news?pid=20601068&sid=auI5M5F3uYmE&refer=home

[whistle]

1. Cleanse or just the same old laundering function?

[DCKit]

28. RTC Redux

That's "Resolution Trust Corporation" for those who don't know.

"Teh Peoples" didn't receive any value from that boondoggle either.

[Nictuku]

2. Privatize the Profit, Socialize the Risk

[Drum]

5. Exactly, succinctly put.

It's a disgusting trend, but at least you have named it clearly. :thumbsup:

[DaLittle Kitty]

14. THIS TERM Should Be The New MANTRA Going Forward!

:)

[dysfunctional press]

19. republiconomics 101.

why haven't the people taken to the streets? :shrug:

because they're TOO FUCKING STUPID to know what's being done to their country or their future.

[eowyn_of_rohan]

30. They don't take time to educate themselves about anything important

too lazy, would rather shop, watch junky TV shows, party, etc.

[angstlessk]

3. in real world talk..that would be MONEY LAUNDERING...

or in this case DEBT LAUNDERING!!!

[Hestia]

4. They really are going to fuck us over before they leave aren't they? I cannot belive this

we are now to take on the debt of our masters. They fuck around for 28 years on our dime, tell us that isn't pee, it's gold raining down us - just wait, it'll come around to you for being such a good girl and boy, out there working day in, day out, for us. Now, we're going to take everything and leave the country, come 11 p.m. 11/4/08. In debt you say? Too bad, so sad. You do know that developed countries pay their debts, don't you? We have ways of making sure that you pay all the debt back to us.

[Tuesday Afternoon]

6. creative accounting for $518 billion, please Alex.

good grief :eyes:

[Hestia]

7. I've got a great idea - since they get all their money back for all the mortgages that they

predatorally push on people, I say everyone gets a free and clear mortgage. That should be fair, don't you think?

[TankLV]

9. Now you've nailed the gist if the whole thing - really...and not a bad idea at all...

If they want to "wipe the slate clean" - I have an idea: Cancel EVERYONE'S DEBT. Period.

NOBODY owes ANYTHING to ANYONE.

As of tomorrow - pick a date - everybody gets to start with at CLEAN SLATE...

Imagine what a world that would be - they already gave the RICH their "free pass" - now I'd like to see it involve the REST OF US...!!!

[pokercat999]

16. Yeah move the debt on to it's own ledger sheet over here

out of the way and we'll look at it when we recover and start making huge profits again. We had a saying for that when I was a kid "I'd rather owe it to ya then cheat ya outa it". In other words "screw you".

[Hestia]

27. Exactly - I figure there is going to some creative financing way for them

to take every last friggin' dollar and leave the country, but with their hands out saying that we owe. Nope, cut them off at the knee's, no more interest or fees or anything.

Tell everyone on 1/1/09 - all consumer debt cancelled, and all mortgages less than $150k, over that, we'll just have to talk. $250k way too much.

At the same time, everyone is going to have to cut up their credit cards. No more. Demand a real reality show - how to save money, how compounded interest works, who has the best interest rate. Repeat this until it sinks in.

Once we get everyone to have at least 6-9 months living expenses parked in a CD or whatever, then start saving for a down payment, after the price of real estate has been reset to the levels that housing used to be set at around 6% per decade in the rise of value. Go back to 1999, when this all start, annualize the 6%, get a realistic level (depending on wages), then go buy a house and realize that it is NOT an ATM, it is a yearly expense that has be saved for - taxes, insurance, 10 years for roof (solar of course), 10 years for HVAC system (energy efficient), possible plumbing, etc.

[underpants]

21. Yes imagine if we had used the $900B to clear up mortgages and THAT cleared the banks' books

but then who am I?

[CitizenPatriot]

8. the great irony here is that they accuse us of being

socialists....and yet, they have privatized corporations and banks now.

what kind of regime does that?


Yeah.....that's right. Neo-Fascism.

Fascism (a wee taste from wiki):

"The word fascism has come to mean any system of government resembling Mussolini's, that exalts nation and often race above the individual, and uses violence and modern techniques of propaganda and censorship to forcibly suppress political opposition, engages in severe economic and social regimentation, and espouses nationalism and sometimes racism (ethnic nationalism). Nazism is usually considered as a kind of fascism....

Fascism, in many respects, is an ideology of negativism: anti-liberal, anti-Communist, anti-democratic, anti-egalitarian, etc. As a political and economic system in Italy, it combined elements of corporatism, totalitarianism, nationalism, and anti-communism....

Fascism, now and always, believes in holiness and in heroism;.....

It is also possible, since fascism incorporates corporatism, that a fascist regime may de-facto nationalize certain key industries, simply by maintaining close personal and/or business relationships with the corporations' owners...."

"the first of these was the fundamental fascist opposition to both socialism and liberal capitalism...In terms of economic practice, this meant promoting the interests of successful businessmen while destroying trade unions and other organizations of the working class.<16> Historian Gaetano Salvemini argued in 1936 that fascism makes taxpayers responsible to private enterprise, because "the State pays for the blunders of private enterprise... Profit is private and individual. Loss is public and social."

[Ghost Dog]

10. The USA has indeed become a tinpot Fascist State,

with all the trimmings. Especially the propaganda machine. And the militarism.

[CitizenPatriot]

23. exactly. Our media is testimony to that fact. nt

[stubtoe]

24. Isn't that the truth!

Thanks for pointing that out.

[Eurobabe]

11. Rinse, lather, repeat. Throw these BUMS OUT!!

Good grief. :eyes:

[truthisfreedom]

12. You can't move a vacuum anywhere safe. It still sucks.

And sucks, and sucks, and sucks.

[conspirator]

13. I think I am going to withdraw all my money from the bank and spend it

With the bills they are going to print to rescue the finance mafia, the only loosers are people with savings that will loose value.

[fasttense]

15. So when do these financial firms, or Wall Street gamblers,

pay us back? We rescue them, launder their debt and what do we US citizens get for it? The current plans sounds like a big fat loss for the American people.

[aquart]

17. Fine. Forgive all student loans while they're at it.

[lelgt60]

18. Bush & Co abandon free market capitalism...institute old soviet style planning

This is truly incredible. By restricting short sales in their favorite 799 companies, they have just thrown a huge wrench into the whole system. Instead of having a clear set of rules for investing and hedging risk, this is now clearly subject to the whims and desires of a few people in our new Central Committee. They reward their buddies and screw their enemies as they see fit. Nothing to do with the performance of the comapnies - rational investing out the window.

Maybe it was manipulated before, but now, that manipulation is institutionalized. I'm not sure how people can make sound investment decisions going forward.

I would hope that conservatives now realize that their only real choice to have someone who supports fairly regulated and transparent free market capitalism is Obama, not the Soviet Socialist Republicans

[gizmo1979]

20. So we own some banks and an insurance co.

How do I get my free insurance and interest free loans?

[underpants]

22. Ooooh joy! let these wipes refigure accounting

What could POSSIBLY go wrong?

[Odin2005]

25. Now we just need to use this to force the Rich to accept tax increases

When Obama gets in he needs to force a bill through congress saying that this new agency must be accompanied by higher taxes on high incomes and on corporations in order to pay for this agency's functioning

[Zorra]

26. Ya gotta ask yerself: How badly will this end up ripping off the average American taxpayer?

Bernanke and Paulson are playing for the other team.

[4dsc]

29. Imagine if a liberal democratic president did this??

Would we be hearing shouts from the right or what?? This is pure BS and we should not bailout any of these wall street firms..