Congressional Leaders Announce Breakthrough in Bailout Bill Negotiations

[Newsjock]

Source: Washington Post

Congressional leaders and the Bush administration last night struck a historic accord to insert the government deeply into the nation's financial markets, agreeing to spend up to $700 billion to relieve Wall Street of troubled assets backed by faltering home mortgages.

Negotiators emerged from a marathon session in the Capitol about 12:30 a.m. to announce that they had reached agreement on a proposal to give Treasury Secretary Henry M. Paulson Jr. broad authority to organize one of the biggest government interventions in the private sector since the Great Depression.

Under the plan, first put forward by the Bush administration in a late-night meeting with lawmakers just 10 days ago, Paulson would be authorized to purchase mortgage-backed assets from struggling firms in hopes of easing a credit crunch that has pushed global markets to the brink of collapse.

With home prices plummeting, many of those assets are now almost worthless, and investors have lost confidence in many of the firms that hold them. That has undermined some of the biggest names on Wall Street and caused banks to stop lending money, sparking a credit crisis that threatens to deliver a devastating blow to businesses, consumers and the broader economy.

Read more: http://www.washingtonpost.com/wp-dyn/content/article/2008/09/28/AR2008092800064.html

[Fluffdaddy]

1. The proof is in the details

[denem]

5. The proof is how many (R) votes they get.

[IndianaGreen]

7. And details is what is sorely lacking!

We know of one detail, Pelosi surrendered to the bankers' demands that bankruptcy judges not be allowed to lower the mortgage payments for people in trouble. That alone is enough reason for me to oppose this agreement. Screw the greedy bankers!

[glinda]

2. I THOUGHT I WAS WATCHING AN ACADEMY AWARDS ACCEPTANCE SPEECH

So much praise heaped on each other for such a bad movie.

[Bicoastal]

3. How did they ever manage to do it without the help of the Mighty Maverick?

...and his sidekick, the Mooseburger Kid?

[Baltoman991]

8. Well

it won't matter that he had squat to do with it. The Republicans will be lining up to tell America that John McCain rallied the troops and that's all the proof we should need that he's ready to run America.

[Hawkeye-X]

4. I hope we, the taxpayers get 100 for 1 in stock options for those we are bailing out

and paying us on time EVERY quarter until they either 1) go bankrupt for good, or 2) buy back our stocks at a hefty price.

[Eric J in MN]

12. In Chris Dodd's bill, Henry Paulson is supposed to buy a "reasonable"

...amount of shares, under certain conditions.

[mbperrin]

21. If we get anything but a stick up the ass, I'll be amazed.

And I'm making sure I'm not tightened up.

[Pale Blue Dot]

6. I want to see the details.

But I'm highly skeptical.

[Newsjock]

9. And I don't want to see a single Wall Street CEO 'comfortable'

Which, of course, is exactly what will happen, because if they're not "comfortable," then they won't "rescue" their firms.

Paying millions to fat cats who evade taxes every way they can. Watching our retirements go down the crapper. Destroying the value of the U.S. dollar in order to save it.

I'm damn angry. "Oh, but we have to save them to save us!" Bullshit. We're screwed anyway, and if we're going down, they damn well better go down with us.

[Eric J in MN]

10. "Pelosi said she hoped to publish the legislation on the Internet for almost an entire day"

"...before voting, meaning a vote could come tonight or tomorrow morning."

She's giving House members almost a day to read a bill involving $700 billion.

This is ridiculous.

John Edwards in 2004 proposed a 7 day waiting period between when a bill is posted and a vote. He was right.

[stillcool]

13. thanks for that..

sounds like a good move. I'll read it and then ask DU'ers what it says.

[Hugin]

19. I wonder if they'll include a detailed explanation of how this hocus-pocus bailout is going to work

Would be nice to know. As, I have yet to hear an objective discussion.

[earthside]

82. Debate!

If there isn't at least a full day of debate on this legislation in both the Senate and the House -- then we have all been RAILROADED!

Gosh darn it!

Why does the House and Senate Democratic leadership line-up with Bush and Wall Street?

Why do the American taxpayers have to pay billions of dollars do pay-off bad derivatives gambling?

Why?

[cal04]

11. Negotiators reach tentative deal on rescue plan

http://www.politico.com/news/stories/0908/14015.html
(snip)
“We have something verbal,” said Rep. Rahm Emanuel (D-Ill.).

Republican Whip Roy Blunt, the chief negotiator for House Republicans, said he was “looking forward to what we’re going to see on paper” and was optimistic that it would be something House Republicans could support.

Said Treasury Secretary Henry Paulson: “We’ve been working very hard on this and we’ve made great progress toward a deal which will work and will be effective in the marketplace and effective for all Americans . . . .We’ve still got a lot to do to finalize it, but I think we’re there.”


The plan would likely give Paulson a relatively free hand accessing the first $350 billion of the $700 billion he sought. It was not clear when the remaining $350 billion would become available, but Treasury apparently agreed that a future Congress could block its release though a joint resolution signed by the president.

The agreement would also include much greater oversight than the Bush administration had initially proposed; an opportunity for the government to take an equity share in the companies it helps, either through warrants or options to buy stock; and a provision limiting the compensation paid to executives of those companies.

To help win the support of House Republicans, the agreement also would likely include an option under which Paulson and future Treasury secretaries could choose to sell companies government-backed insurance to cover securities – thereby improving their value – rather than buy the assets as initially proposed.

A vote in the House could come as early as Monday seemed, Emanuel said.

[Jawja]

73. "Something House Republicans could Support????"

Isn't it BUSH begging for the $$$$$?

I am enraged that this is bailout is being successfully presented as a Democratic initiative. This should be turned all the away around to "Republicans need to give us something Democrats can support." :banghead:

[shraby]

14. I can't get the link to come up.

Got it now.

[bertman]

15. Why do I have this sick feeling in my stomach while I'm watching two people I despise sell us out?

Reid and Pelosi.

Go to Bernie Sanders' website and read what he has to say about this bailout.

[greyghost]

23. Because that is exactly what's happening! BTW, you don't...

despise them anymore then I do!:evilfrown:

[cal04]

16. more from ABC

http://abcnews.go.com/Business/wireStory?id=5902159

The plan calls for the Treasury Department to buy deeply distressed mortgage-backed securities and other bad debts held by banks and other investors. The money should help troubled lenders make new loans and keep credit lines open. The government would later try to sell the discounted loan packages at the best possible price.

At the insistence of House Republicans, some money would be devoted to a program that would encourage holders of distressed mortgage-backed securities to keep them and buy government insurance to cover defaults.

The legislation would place limits on severance packages for executives of companies that benefit from the rescue plan, but details were sketchy.

Also, the government would receive stock warrants in return for the bailout relief, giving taxpayers a chance to share in financial companies' future profits.

To help struggling homeowners, the plan requires the government to try renegotiating the bad mortgages it acquires with the aim of lowering borrowers' monthly payments so they can keep their homes.

[pfitz59]

27. This is just a scam...

Sell bad debt to the gov, and then re-buy thru a front company when Feds have a firesale! This is what they did with RTC! A frigging con job....

[anitar1]

17. Are we screwn yet ? I have a feeling that the cast of

characters in this production does not include us. Never mind--the actors will be very pleased with their performances.

[Hugin]

20. A 'crisis' including us would involve Single-payer health insurance for the millions who lack any...

So, I doubt we're involved other than to be fleeced.

[bertman]

24. We are screwn. Indeed we are royally screwn.

[amandabeech]

18. Fluffdaddy is right. The details are where the damage will be done.

However, there's a lot of money floating around, and that brings out the crooks.

My bullshitometer is going nuts.

[wundermaus]

22. mine, too...

[amandabeech]

25. Keep that battery charged! n/t

[struggle4progress]

26. Another week of outraged calls to the hill looms

[tom_paine]

28. Which will do as much good as the Chinese comlpaining to THEIR "reprersentatives"

:rofl:

Good luck with that, even though I will likely foolishly and fruitlessly join you in complaining to the People's Congress of Amerika.

But I have no illusions. None.

[struggle4progress]

30. Youse prolly rite. Still I kinda likes th'idear o'jerkin thems legs

Plus th'exercise may edify some folk

[lostnotforgotten]

29. Naomi Klein "The Shock Doctrine"

eom

[SahaleArm]

31. Paulson Putsch is a success

Democrats seen at beer hall toasting.

[maseman]

32. 'Breakthrough' reported on bailout deal

Source: MSNBC

WASHINGTON - Key lawmakers in both parties and Treasury Secretary Henry Paulson made a "breakthrough" on a tentative deal for the multibillion-dollar government bailout of distressed financial companies, they said early Sunday.

In a dramatic press conference at the Capitol after midnight, Senate Majority leader Harry Reid, D-Nev., said there had been a "breakthrough" in the negotiations, and Paulson said that "I think we're there," although details remained to be worked out overnight. Reid said there would be an announcement later Sunday.



Read more: http://www.msnbc.msn.com/id/26884523/

[Prisoner_Number_Six]

33. Once again I'm forced to go with the "They caved" theory.

I haven't been proven wrong yet... :shrug:

[leftofcool]

35. You are awfully nice about it........

I prefer the "they licked ass again" theory.

[enlightenment]

34. Oh, yay.

Let me get the champers on ice now. Wouldn't want to miss the celebration.

:sarcasm:

[Beregond2]

36. They are saying Pelosi came up with an idea to protect

the taxpayers that led to a breakthrough.

[greyghost]

37. What? Tossing Chimp's salad?

[tom_paine]

40. Followed by a blumpkin...

Hey, it's worked for Nancy, so far. She won her primary and is going to get to keep her limo, her fame, and her connections so her descendants can fart through silk while ours are living Mad Max outside the walls of the family compound.

[greyghost]

84. AMEN

[Hugin]

38. Why don't they negotiate in the open? There's nothing else on TeeVee these days.

We could all experience the euphoria of 'breakthrough' first person.

Wouldn't that be grand!

[struggle4progress]

39. remember to call and scream when you learn what they're up to -- or when they won't tell you

[lostnotforgotten]

41. Naomi Klein "The Shock Doctrine"

eom

[Amerigo Vespucci]

42. Congress, White House reach financial bailout deal

Source: Yahoo News

WASHINGTON - Congressional leaders and the Bush administration reached a tentative deal early Sunday on a landmark bailout of imperiled financial markets whose collapse could plunge the nation into a deep recession.

House Speaker Nancy Pelosi announced the $700 billion accord just after midnight Saturday but said it still has to be put on paper.

"We've still got more to do to finalize it, but I think we're there," said Treasury Secretary Henry Paulson, who also participated in the negotiations in the Capitol.

"We worked out everything," said Sen. Judd Gregg, R-N.H., the chief Senate Republican in the talks. He said the House should be able to vote on it Sunday, and the Senate could take it up Monday.

Read more: http://news.yahoo.com/s/ap/financial_meltdown;_ylt=Ai9fBNwlgv5.I4hBkYYWhO5paP0E

[OwnedByFerrets]

43. Waiting with bated breath....NOT!!

[MrToby]

44. Why Do I Feel My Ass Burning?

[tblue37]

63. Maybe someone is talking about your ass?

No, no, wait--that's your ears burning--when someone is talking about you. Sorry. I got confused for a minute there.

Carry on.

[enpassant]

45. Details sketchy at this point, but the Dems could be screwed

The Dems are going to be screwed unless there's is solid Republican backing and this includes John McCain's vote. It doesn't matter what kind deals Nanci Pelosi may have secured to protect the tax payers. Americans are solidly against this bill and, extra demands don't matter so much.

If this thing passes with only 40 or 50 R's in the house voting for it the Dems will pay for it, possibly for many years. Expect the Republicans to campaign against the Bush administration and the Democratic party for funneling tax money to Wall Street royalty.

Note: Details are sketchy at this point and I haven't seen any reports as to whether or not there's R backing.

[Hugin]

46. Yep, this legislation is poisoned from the word 'go'.

After it's law, I'm going to have some serious soul searching to do.

They don't listen and they don't represent.

[greyghost]

50. "They don't listen and they don't represent." Sad, and VERY

TRUE.

Nany Pelosi answered my e-mails by saying she couldn't answer my e-mails because I'm not from the 8th. Congressional district in CA.
I guess it's useless to even approach her.

Harry Reid, freely admits that he's CLUELESS.

THEY ARE GOING TO PAY DEARLY.

[Hugin]

56. I would think being Speaker would make Pelosi responsible to more than only the 8th CA.

But, if the response is as uniformly negative there as it is everywhere else, the message to skip this bill
is clear.

I have nothing in common with any of them.

Keep sending those emails, though.

[greyghost]

58. I thought so too, but apparently that's not the case.

[truedelphi]

57. Welcome to the Du board.

Hopefully this won't come to a vote til after the election.

What are our precious Democratic leaders thinking??

[cloudythescribbler]

47. Anyone got news of what the particulars of the deal are?

[sam sarrha]

48. Did Bu$h get the $1,000,000 taxpayer dollars a month wages for his Fascist Crony CEO's

[western mass]

49. Greatest swindle in history...

and the corporate Dems not only helped but *made sure* that it happened.

[greyghost]

51. No doubt about it.

[girl gone mad]

65. Every last one of them will be voted out.

I've never seen the level of outrage I'm seeing over this bill.

I believe that even the "safe" reps. will be in danger of losing their seats if they vote for this turkey.

[lenegal]

52. And no Economic Stimulus

How nice.

[chimpymustgo]

53. Thanks, Barack!

[greyghost]

54. We've reached the tipping point where a third party is a necessity!

[McCamy Taylor]

55. Need more details. The part about renegotiating mortgages could be good if

it is carved in stone. Also there needs to be specifics about how long they have to keep the properties that have defaulted to make sure that they do not give them away to cronies of Cheney. If the feds hold onto the properties, in a few years they can sell them for what they are worth and we will get our money back.

The details will matter. If the law is written right, it could help people stay in their homes.

[livelongandprosper]

59. The only thing that matters is how many Rep will vote for it

McCain will vote for it but he doesn't matter in congressional races.

I'd like to know what the House Repubs got in exchange for their vote -- or whether most will vote for it at all.

[4dsc]

75. So what if they(democrats) VOTE THIS DOWN??

As we all know, email's and calls to congress are running 90/100 to 1 AGAINST this legislation.. One could hope they vote it down... Could they??

[RUMMYisFROSTED]

83. Could they? Yes.

Will they? No.

[struggle4progress]

60. Time for another round of irate emails and phone calls

[rontun]

62. Help send a message to my congressional delegation!

I've posted a poll on my Local Democratic Party website that asks the question, "Are you satisfied with the changes made in the $700 billion bailout?" Three answers offered as options. Yes, No, Undecided.

The website is read by New Hampshire's congressional delegation and its staffs daily, as well as by the state's Democratic Party leaders. This is one way to let one delegation know how you feel.

[northernlights]

61. all of us screwed

reasonable limits on golden parachutes? what happened to no parachute?

no mention of oversight
no mention of re-regulation
no real consequences

fuck them. fuck them all. may they all burn in fucking hell for eternity.

[midnight]

64. Why am I concerned that it took these guys a few days to

bail out the rich, but a man down on his luck has to give away his family?

[Chulanowa]

66. I guess it's time to buy stock in Johnson & Johnson

Lots of people are gonna be reaching for the ol' tube of K-Y on this one.

[Duppers]

67. How in the hell can they determine how to best fix this mess in such a SHORT time???

These idiots did not even see this coming...how in the hell can they determine how to fix it.

They need hearings and the best economists from the best universities to chime in here.

This is a complicated thing, damn it, and the fix should be very nuanced, not some 4 page document.

How can we trust them?!

[llmart]

80. Perfect response....

They didn't see it coming yet they think they can fix it in a week. Honestly, I'm speechless.

[Meeker Morgan]

68. Congress, White House reach financial bailout deal

Source: Associated Press

WASHINGTON (AP) - Congressional leaders and the Bush administration reached a tentative deal early Sunday on a landmark bailout of imperiled financial markets whose collapse could plunge the nation into a deep recession.

House Speaker Nancy Pelosi announced the $700 billion accord just after midnight but said it still has to be put on paper.

"We've still got more to do to finalize it, but I think we're there," said Treasury Secretary Henry Paulson, who also participated in the negotiations in the Capitol.

"We worked out everything," said Sen. Judd Gregg, R-N.H., the chief Senate Republican in the talks.


Read more: http://apnews.myway.com//article/20080928/D93FKLH00.html

---

Was there ever any doubt?

[Uben]

69. Hooray! A chicken for every pot!

...and for good measure, a turkey for Christmas!

[European Socialist]

70. If Judd Gregg is happy, you know it must suck.

[eridani]

71. This will probably cost us the election

Maybe we can salvage something if we have some equity and oversight and can explain that.

[ixion]

72. ah yes... they've agreed on terms for their heist

time to get out the lubricant America! You're about to feel the love of the US government. :grr:

[Warren Stupidity]

74. So will McCain make his play here with the Free Market Fundies in the House?

And will our party allow itself to get tagged with this wildly unpopular piece of shit?

[Democat]

78. Obama has been going up in the polls

Time for Pelosi and Reid to screw him and help McCain!

[whistle]

76. Is the average American supposed to think this is such a great idea?

...And with home prices plummeting and investors losing confidence in investment banks holding worthless gambling debts called credit based derivatives, why should the taxpayer bailout these folks and encourage them to go right back and continue the very same practices?

<snip>
Thursday, May 29, 2008
Credit Derivatives Clearing House Planned For September


There's an odd little story on the home page of the Financial Times website, odd in three respects.

First, it discusses a development, namely, the launch of a credit derivatives clearinghouse that is important enough that it ought to be reported more broadly, yet several searches on Google News came up empty-handed. Readers no doubt know that credit default swaps, a type of credit derivative, are believed to be the product that led the Fed to sponsor the bail-out of Bear Stearns. Its exposures were large enough to run the risk of creating a cascade of counterparty defaults. A central clearing house would have made that impossible.

Second, the story is remarkably vague as to what kind of "credit derivatives" we are talking about here. The intent of proposals like this is to get the $62 trillion credit default swaps market out of its current, opaque, bi-lateral trading configuration. Many have proposed trading CDS on an exchange (centralized clearing would be part of that structure). But it isn't clear whether all CDS will be included (many are written on "single names" meaning individual companies) or perhaps a subset, say some of the big baskets. Also noteworthy is that this proposal merely involves clearing, not making prices more transparent to customers.

Third, and the most revealing, is that the FT raises the notion that this move may be cosmetic, designed to forestall regulation.

From the Financial Times:

Efforts to tackle the risk surrounding privately negotiated credit derivatives will take a step forward on Thursday when 11 of the world’s biggest investment banks announce the creation of the first central clearer for the opaque contracts by September.

The absence of a central clearer has made such contracts risky because there is no guarantee that parties will pay out.

This systemic risk has fuelled the global credit crunch, prompting regulators to step up pressure on banks to show they are trying to make the system more dependable.

Credit derivatives allow investors to make bets on the creditworthiness of baskets of corporate debt. Global growth in the notional value of such contracts grew by 81 per cent last year to a value of $62,200bn.

Credit derivatives contracts are predominantly negotiated privately between traders who rely on their assessments of each other’s ability to pay under the terms of the contract. A clearer uses funds contributed by traders to guarantee against default.

“The credit crisis has definitely heightened interest in this kind of solution among the regulators,” said Kevin McClear, chief operating officer of The Clearing Corporation, the Chicago-based institution backed by the banks that will act as the new clearer. “We don’t think there’s a better approach to reducing systemic risk.”

The need to act fast to pre-empt stiffer regulation in the wake of the credit crisis has given impetus to a proposal that has been 18 months in the making. It has also been accelerated by attempts by other clearers, such as LCH.Clearnet, Europe’s largest independent clearer, and the CME Group, the Chicago-based derivatives exchange, to muscle in on the business potential of clearing such over-the-counter derivatives.

Thursday’s proposal is the result of an agreement between The Clearing Corporation (also known as CCorp) and the Depository Trust and Clearing Corporation (DTCC), the New York-based clearing group.

CCorp’s backers – including Goldman Sachs, Citigroup, JPMorgan, Bear Stearns and Morgan Stanley – will establish a guarantee fund to cover losses if any firm should fail.

While Thursday’s announcement is sure to be welcomed, questions remain about whether the proposal will raise industry standards or if it is largely cosmetic.

http://www.nakedcapitalism.com/2008/05/credit-derivatives-clearing-house.html

[boilinmad]

77. So, St. Ronnies....

....nine most frightening words, "I'm from the government and i'm here to help " doesn't mean so much to the repugs anymore, i take it.

[natrat]

79. what a fucking scam

[Zenlitened]

81. Where do I line up for my cut of the handout?

I saw a sign, several dingy blocks away from the Capitol, that said "Nobodies, Little People & Other Ordinary Taxpayers - Line Forms Here."

But surely, they didn't mean ME, did they? I mean, I'm an American CONSUMER. I'm SOMEBODY, aren't I?

(Cut to: wide shot. Sound of the words "Aren't I? Aren't I? Aren't I?" echoes and fades into the distance.)