McClatchy: Treasury scraps original bailout plan as economy worsens

[babylonsister]

Treasury scraps original bailout plan as economy worsens
By Kevin G. Hall | McClatchy Newspapers


WASHINGTON — Treasury Secretary Henry Paulson on Wednesday scrapped plans to purchase troubled assets under the $700 billion Wall Street rescue plan that Congress passed last month and shifted his agency's focus to rescuing financial institutions other than banks that lend money, whose problems are affecting U.S. consumers' ability to borrow.

During tense negotiations to craft a bank rescue bill in late September and early October, the Treasury argued that it needed the authority to purchase distressed mortgages and other bad assets to clean up bank balance sheets and allow them to resume lending. The legislation created the Troubled Asset Relief Program.

"Our assessment at this time is that this is not the most effective way to use TARP funds, but we will continue to examine whether the targeted forms of asset purchase can play a useful role," Paulson said Wednesday in an update on rescue efforts.

Taking questions afterward, the treasury secretary explained that "the facts changed and the situation worsened." Instead of focusing on troubled mortgage assets, the Treasury will shift to addressing a complex area of lending that's been crucial to U.S. economic vitality.

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[BR_Parkway]

1. Fine - 1) wipe out credit default swaps 2) open up the Treasury window

and SBA to average guy or business who needs help, let them withdraw up to $5000.00 - if the purpose is to get money moving, this will do it. If the banks are going to sit on the money they've already drawn or use it purchase other banks, it's due and repayable instantly.

Buy the existing bad mortgages from the banks for 5 cents on the dollar - takes them off their books and gives them some breathing room from capital requirements. Re work the notes to anything that is affordable to help those people maintain a roof over their head.

Purchase stock in GM and Ford (absorb Chrysler) and fire management (stripping all stocks and golden parachutes) Begin retooling to produce electric and electric hybrid passenger cars, SUVS and Pickups for verified business needs only

Put money into Amtrak and begin aggressive public works project to re-rail our country

[Neshanic]

2. We want to save homeowners! Slap. We want consumers! Slap. We want to save homeowners! Slap.

[Coexist]

3. Obama has a mighty task ahead of him.

[jimshoes]

4. How much you want to bet it makes the price

of gas go up, whatever it is. Like lending money to the fucking speculators so oil goes back up to $150.00 bbl.