Treasury Seeks Asset-Buying Power Unchecked by Courts

[Nambe]

Source: Bloomberg

The Bush administration sought unchecked power from Congress to buy $700 billion in bad mortgage investments from financial companies in what would be an unprecedented government intrusion into the markets.

Through his plan, Treasury Secretary Henry Paulson aims to avert a credit freeze that would bring the financial system and the world's largest economy to a standstill. The bill would prevent courts from reviewing actions taken under its authority.

``He's asking for a huge amount of power,'' said Nouriel Roubini, an economist at New York University. ``He's saying, `Trust me, I'm going to do it right if you give me absolute control.' This is not a monarchy.'' ...

Read more: http://news.yahoo.com/i/2840;_ylt=AivSn.McV_QI3qKazWpiakBZRbsB

[AzDar]

1. Hell no.

:nuke:

[Joe Chi Minh]

2. If the Democrats approve it, as is, it would be at least akin to their approving

the Iraq war, though without the mitigating factors.

This is from the article by Yves Smith, linked below:

"This puts the Treasury's actions beyond the rule of law. This is a financial coup d'etat, with the only limitation the $700 billion balance sheet figure. The measure already gives the Treasury the authority not simply to buy dud mortgage paper but other assets as it deems fit. There is no accountability beyond a report (contents undefined) to Congress three months into the program and semiannually thereafter. The Treasury could via incompetence or venality grossly overpay for assets and advisory services, and fail to exclude consultants with conflicts of interest, and there would be no recourse. Given the truly appalling track record of this Administration in its outsourcing, this is not an idle worry.

But far worse is the precedent it sets. This Administration has worked hard to escape any constraints on its actions, not to pursue noble causes, but to curtail civil liberties: Guantanamo, rendition, torture, warrantless wiretaps. It has used the threat of unseen terrorists and a seemingly perpetual war on radical Muslim to justify gutting the Constitution. The Supreme Court, which has been supine on many fronts, has finally started to push back, but would it challenge a bill that sweeps aside judicial review? Informed readers are encouraged to speak up.

Nouriel Roubini does not think it passes the smell test:

`He's asking for a huge amount of power,'' said Nouriel Roubini, an economist at New York University. ``He's saying, `Trust me, I'm going to do it right if you give me absolute control.' This is not a monarchy.''

It would be best if this provision were expunged, but failing that, the Treasury should articulate what scenario it is worried about and any shield against legal intervention should be made as narrow as possible."

http://www.nakedcapitalism.com/2008/09/why-you-should-hate-treasury-bailout.html

[msongs]

3. ONLY help for individuals, NONE for the business entities themselves nt

[bemildred]

4. Derivatives Trade Soars To Record $681 Trillion

posted on: December 11, 2007

The Bank for International Settlements is reporting Derivatives traded on exchanges surged 27 percent to a record $681 trillion in the third quarter.

The amounts are based on the notional amount underlying the contracts.

* Interest-rate futures, contracts designed to speculate on or hedge against moves in borrowing rates, led the increase with a 31 percent increase to $594 trillion.
* Trading in stock index futures and options rose 19 percent to a record $81 trillion in the third quarter, as investors speculated on whether the credit-market losses would spread to the equity markets.
* Trading in currency futures and options increased 18 percent to $6.4 trillion, the BIS said.

Investors may have shifted some trading to exchanges from the over-the-counter market to reduce the risk of counterparties defaulting on deals, the BIS said.

http://seekingalpha.com/article/56982-derivatives-trade-soars-to-record-681-trillion?source=from_friend

[newfie11]

6. Derivatives need to be banned!

[JuniorPlankton]

7. Dude, what are you saying?

Regulate better? Yes!
But ban? It's like closing down all airlines after a major disaster...

[droidamus2]

5. Be aware

The Republicans and their minions are trying to push this through way too fast. I just watched the Sunday talk shows and every Republican and Paulson were pushing the 'we must to it quickly' talking point, no time to consider reforms or control lets just do it. I feel a big scam coming. We must be aware that the Republicans are doing the same thing here that they did with the Iraq war buildup and the Patriot Act and that is 1) convince the American people that there is an imminent threat, 2) come up with a 'solution' 3) Push for quick passage of questionable legislation before the media or the political opposition has a chance to let the public know what is really involved. If you question or say let's slow down a little bit you are weak, on the terrorist's side or in this case you don't care about Joe six-packs money. If you haven't already you will be hearing how if they don't give Paulson this power to spend $700,000,000,000.00 with no oversight then John Q Public will suffer. Another thing Paulson brought up is that 'eventually' these mortgages and securities will be sold by the government. He made it sound like this would be in the future but what if it isn't. If Congress gives him power with no oversight what keeps him from using the Governments money to buy them up and then turning around and selling them off to the band of thieves that is the Bush government and their cronies. We, the Democrats and like thinking people must slow this process enough to make sure the solution is not worse than the problem. Obama and the Democrats will now have leverage to demand reforms and re-regulation of these (and later other) industries. I would throw in looking at CEO wages and 'golden parachutes' and looking into the credit markets as far as the practices of the credit card companies. Like Obama said 'this can't just be for Wall Street there should be something in it for Main Street'. Be aware and don't be fooled we are not being told the whole story and they are pushing way to hard to have this done quickly instead of correctly and completely.

[Frustratedlady]

8. Absolutely! We've been snowed too many times. It's like crying "Wolf!"

Be cautious. Be very, very cautious. They are up to no good.

[atreides1]

9. Just Another Grab for Power

This is just another grab for unchecked power by the Executive Branch!!!

That's all it is.

[barbtries]

10. no. fucking. way.

no one person should ever have so much power. why are we not hearing from obama about this? why is this even being considered by congress? fuck their doomsaying, they did the same thing to put us into a wrong war that apparently was never intended to end, and for what? to keep the money flowing to their friends. what else could possibly be the outcome of this?!

it sickens me. really.

[whistle]

11. The message ought to be made clear, "No bailout permitted!"

...Congress must move quickly, today or tonight at the latest, to freeze all the speculative paper for purposes of auditing.

...An unchecked bailout of any kind now will mean that Congress loses control over the situation.

...Congress must be ruthless with these swindlers and act on behalf of the American people and not go along with more taxpayer fleecing.

[greyghost]

12. Wake up call! This needs to be stopped NOW! It is the last money

grab of Bush Co NOTHING MORE!

[Piewhacket]

13. The looting continues......

they shoot looters, don't they?

[WillyT]

14. Big K & R !!!

:kick:

[Mesteryo]

15. this isn't unprecedented..

The Treasury buys and sells assets all the time. The Fed buys securities on a daily basis. Calling this unprecented is a bit deceptive.

[nichomachus]

21. Bullshit

And welcome to DU -- enjoy your stay

[nichomachus]

16. The proper word is "dictatorship" -- let's get that much straight

[Mesteryo]

17. not exactly..

Anymore of a dictatorship than the Social Security administration buying securities....

[nichomachus]

20. Exactly

When a government official can makes decisions about national policy and national security with no oversight -- that's a dictatorship.

[astral]

18. The Federal Reserve is the buyer

and we are the payor. The Federal Reserve prints the money. They are not a branch of our government. They are a group of private banks. They can yank the rug out from under everyone's feet at any moment they want to. They are taking over a bunch of debt that people owe who are buying a home who could not afford the loan in the first place. Property values are going to crash to half what they are now. People will owe way more than their property is worth. Do we think the Fed is going to be nice about it? They will force all these people to default on their home loans, they will own the people through debt and all the property besides. A bunch of free slave labor scattered all over the country, thrown on their asses out of their homes, desperate to survive and at that point willing to do anything -- and what will be in front of them to do? I should say "us," not "them." Jobs have already been exported over seas. Nothing is produced or manufactured in this country anymore, to speak of -- not even wooden dining furniture. We manufacture coffee drinks and hamburgers. How many of us can hang onto to our home loan with skyrocketing prices and changes in the terms of the loans?

We have been bought and sold, and I think it's too late to do anything about it at this point.

[Mesteryo]

19. the Fed is a public entity...

It's not a private bank. Secondly this deal involves the Treasury, not the Fed.

[astral]

22. The Federal Reserve is not a public entity

Where did you get that information?

I think you'll find "The Fed" is very much in the middle of this upon reading some more of the newspaper stories flying around on this.



Check this out:
http://www.apfn.org/apfn/reserve.htm
___________________________
Here is an excerpt from this link from that page.
http://www.apfn.org/apfn/reserve2.htm


Congressman Charles August Lindbergh, Sr., father of the historic aviator, said on the floor of the Congress:
"This Act establishes the most gigantic trust on Earth ... When the President signs this Act, the invisible government by the Money Power, proven to exist by the Money Trust investigation, will be legalized ... This is the Aldrich Bill in disguise ... The new law will create inflation whenever the Trusts want inflation ... From now on, depressions will be scientifically created ... The worst legislative crime of the ages is perpetrated by this banking and currency bill."

On June 10, 1932, Louis T. McFadden, said in an address to the Congress:
"We have in this country one of the most corrupt institutions the world has ever known. I refer to the Federal Reserve Board and the Federal Reserve Banks ... Some people think the Federal Reserve Banks are United States Government institutions. They are not Government institutions. They are private credit monopolies which prey upon the people of the United States for the benefit of themselves and their foreign customers ... The Federal Reserve Banks are the agents of the foreign central banks ... In that dark crew of financial pirates, there are those who would cut a man's throat to get a dollar out of his pocket ...

Every effort has been made by the Federal Reserve Board to conceal its powers, but the truth is the Fed has usurped the government. It controls everything here (in Congress) and controls all our foreign relations. It makes and breaks governments at will ... When the Fed was passed, the people of the United States did not perceive that a world system was being set up here ... A super-state controlled by international bankers, and international industrialists acting together to enslave the world for their own pleasure!"
___________________________

[Mesteryo]

23. you quoted some right-wing kooks..

The Fed is a quasi-public institution. That's not just opinion.