Student, car debt quietly added to bailout plan.

[ingac70]

<In the dark of night over the weekend when most people were snoozing, the Treasury dramatically expanded its bailout plan to include buying student loans, car loans, credit card debt and any other "troubled" assets held by banks.

The changes, which were included in draft language that also opened the bailout program to foreign banks with extensive loan operations in the United States, potentially added tens of billions of dollars to the cost of the program.

Although it was a major addition to what was already the nation's largest-ever bailout, it did not become part of the debate between Democrats and the Treasury over details of the program. A Monday counterproposal by Senate Banking Committee Chairman Christopher J. Dodd included such consumer loans as well as mortgages, just as the Treasury's draft did Saturday night.

"The costs of the bailout will be significantly higher than originally considered or acknowledged," said Joshua Rosner, managing director of Graham Fisher & Co., who charged that the Treasury and Federal Reserve have not been "forthright" about the ultimate cost to the public. The plan gives Treasury the discretion to buy the non-mortgage loans and securities in consultation with the Fed.>

more at...

http://www.washingtontimes.com/news/2008/sep/23/student-car-debt-quietly-added/

[liberal N proud]

1. It is still just a corporate welfare scam

[MadHound]

2. Can you say two trillion?

This damn bailout is a disaster. Better to let Wall St. crash.

[LSK]

3. washington times?????????????

Why not just use newsmax as a source?

[ingac70]

4. Other sources saying the same thing...

http://www.livenews.com.au/Articles/2008/09/22/US_BailoutUS_Economy

http://www.financialpost.com/news/story.html?id=812851

[hedgehog]

5. How can student loans fall under the rubric of "troubled debt"?

My understanding is that not even bankruptcy can wipe out that obligation; you pay until you die, and then your estate pays! They're the safest loans around which makes the interest rates robbery!

[TwixVoy]

25. Partly correct

it depends if the loan you got was backed by the feds. IF the student loan is backed by the feds you have to prove some incredible hardship to be released from it. (something along the lines of being unable to move from the neck down...)

However, if it is a 100% private loan you can get away from it in bankruptcy.

[Jane Eyre]

6. Goldman Sachs recently bought 20% share in student loan company

http://www.marketwatch.com/news/story/first-marblehead-shares-rise-goldman/story.aspx?guid={09A67F09-6C17-4DCA-9DF6-13327C653226}&siteid=rss

First Marblehead shares rise on Goldman investment

By MarketWatch


First Marblehead Corp.'s shares surged 41% after the troubled company received an investment commitment from Goldman Sachs Group Inc. of up to $260.5 million, which would represent 20% of the firm's shares.

The also includes a Goldman commitment to offer First Marblehead a $1 billion warehouse facility that will allow the company to access a new source of funding for its business.

<snip>

Goldman Sachs Managing Director Henry Cornell said: "Our investment in First Marblehead represents a long-term commitment and is consistent with our strategy of investing in market leaders with strong business models that should benefit from strategic relationships with Goldman Sachs."

<more>

[Jane Eyre]

9. First Marblehead shares up about 6.5% so far today

Closed at 3.10 yesterday, up 20 cents as of a few minutes ago.

"First Marblehead helps banks such as JPMorgan Chase & Co. (JPM) and Bank of America Corp. (BAC) group together private student loans into trusts, which issue the notes to investors. It has securitized more than $17 billion in loans since the company was founded in 1991, with most of its activity coming in the last three years."

Read the rest of the article. These private loans are defaulting at a higher rate than loans that originate through student aid offices. The guarantor of the student loans made by First Marblehead, Educational Resources Institute Inc. (TERI) is being considered for a credit-rating downgrade by Moody's.

[kentuck]

7. How about my bar tab up at Murphy's Bar?

Can we get that covered also???

[Cronus Protagonist]

8. Oh, it's now a "program"??

I guess it's going to be "regularly scheduled" as well?

FASCISTS

[leftofcool]

10. Great! Not only will I be paying for someone's house

that isn't mine, I get to pay for their damn cars too?

[ingac70]

11. And the golden parachutes of the CEOs...

fun, fun fun! :sarcasm:

[dysfunctional press]

13. and don't forget their credit card debt too...

what a fucking load of crap. are they TRYING to foment a public rebellion so that they can impose martial law and cancel the selections?

[ColbertWatcher]

19. No, they're trying to do for corporations ...

... what they wouldn't allow for citizens: forgive debt.

Also, it is a way tyo force the other side to vote against people in debt.

[dysfunctional press]

12. FUCK. THAT. BULLSHIT.

ANY representative that votes FOR that kind of package might as well start cleaning out their office now.

[SoCalDem]

14. Why not just "erase" the debt of the debtors..rescind ALL credit cards

and make people RE-apply...with old-school requirements to be met..

The people whose debt has been erased, and who cannot qualify under the new rules, would be better off and would have a LOT more money available to them by not having to pay credit card bills...and the ones who ARE creditworthy, would have a fresh start, and may choose to NOT use credit cards again..

When people have CASH to spend, they "feel" rich..and when they do not have a pile of unpaid bills on their table at home, they might actually start spending money again..

Let's just start the whole thing all over again.. wipe the slate clean...but NOT by giving the predators an assist, and just tacking the extra debt onto the backs of people who are already drowning in debt..

Start making colleges USE some of their "endowment" money to offer scholarships..real ones. to deserving students..

Make the athletic programs support themselves..

[samuraiguppy]

23. I absolutely love this idea--

we should send it to our lawmakers...

[lifesbeautifulmagic]

15. if the tab is going to include auto loans, student loans and credit card debt,

how can the lack of family wage jobs, outsourcing and stagnant wages not be included in the dialog of of causes and solutions. I just don't get it. It's like the Repubs want us to become a third world country.

[Liberal In Texas]

16. A rich guy welfare program. Pure and simple.

And a way to get more $ from the other 90% of us.

I say, if you want free markets, then they have to be free to fail.

NO MONEY unless we get a cut of the action and the "too big to fail" companies get broken up into "not too big to fail companies."

[SweetieD]

17. Wait what is that about student loans?

[progressoid]

18. Well shit, maybe I should quick buy another car and get another mortgage.

Jebus.

[ingac70]

20. You aren't off the hook...

just the company that gives you the credit.

[intheflow]

21. Excellent! Now I don't have to repay my student loan!

I mean, really, why should I pay for it twice?

[shanti]

22. credit card debt?????

didn't they get enough with their bankruptcy fix??? :grr:

[Romulox]

24. LOL. Debtors can't write down student loans in bankruptcy, but CREDITORS can?

force the taxpayer to purchase their worthless student loan portfolio without having to declare bankruptcy at all.

What a country!

[dkofos]

26. They will try to get away with whatever they can.

And we all know the dumbshit congress critters will give it to them.

GIVE THEM NOTHING!!
LET THEM DIE!!