Massive financial bailout fails in the House

At least they did manage to limit executive compensation in the final draft:


(2) CRITERIA- The standards required under this subsection shall include--

(A) limits on compensation that exclude incentives for senior executive officers of a financial institution to take unnecessary and excessive risks that threaten the value of the financial institution during the period that the Secretary holds an equity or debt position in the financial institution;

(B) a provision for the recovery by the financial institution of any bonus or incentive compensation paid to a senior executive officer based on statements of earnings, gains, or other criteria that are later proven to be materially inaccurate; and

(C) a prohibition on the financial institution making any golden parachute payment to its senior executive officer during the period that the Secretary holds an equity or debt position in the financial institution.

(3) DEFINITION- For purposes of this section, the term `senior executive officer' means an individual who is one of the top 5 highly paid executives of a public company, whose compensation is required to be disclosed pursuant to the Securities Exchange Act of 1934, and any regulations issued thereunder, and non-public company counterparts.


thomas.loc.gov...

That ought to make a few executives just a little bit more than pissed

which is some consolation if this bill manages to pass later on

***************************************************

Unfortunately, that is not the case. the Treasury Department held a conference call this evening for analysts on the bailout bill. This was not intended to be a call open to the public at large, but some lucky bloggers were in on the call ( dealbreaker.com... ) and there were some pretty startling things saaid, not the least of which is that:

The exec comp provisions sound like a joke, They DO NOT affect existing contracts, they affect only contracts entered into during the two years of the authority of this program and then affect only golden parachutes.ext

and: Section 122. Increase in the Statutory Limit on the Public Debt.

Raises the debt ceiling from $10 trillion to $11.3 trillion.


$700b = $11.3t ?

THe ususl backroom BS and obfuscation...

[edit on 30-9-2008 by leaderof theTFHbrigade]

Im not trying to be argumentative here but surely the Bail-out is a good thing isnt it?

If these middle-tier financial institutions dont get financial aid they go down. And if they go down then they are absorbed by Morgan, Rockefeller etc.

Wont the bail-out help stop monopolisation?

reply to post by grimreaper797


That's not true grim, because I am not rich, that means that I don't have far to fall. The problem is that people are thinking that every business in America is going to go under. That's simply not true either. The business I work in is funded by people in Iraq. It doesn't matter how badly America's economy is doing, Iraq's economy is doing just fine.

Just because large businesses who rely on lines of credit are suffering does not mean those businesses like the one I work in who rely more on cash and carry customers to generate revenue are going to suffer.

I love the judgement in this thread. If you have a better plan that is more likely to unfreeze the credit industry, I am all ears. Fact is though, you don't.

If any of you actually knew my stance in detail, instead of passing judgement based on one thread, with one situation, you would know that I am a Ron Paul supporter, who wants the federal reserve gone, the IRS out, and the income tax abolished.

Unlike most Libertarians, I don't believe in letting all my principles get in the way with my decision making. Just because I have a society in mind that I would LIKE to have, does not mean we are there yet. We cannot get rid of the IRS, Fed, and income tax in one step. It takes time to phase out an institution that has spent years burrowing itself into our system.

Would I like a free market? Yes. Can we do it in one step over the course of one day? No. It took years to get to where we are today, and if we tried to reverse all that with extreme change, the system will react violently. It is still possible to phase this system out safely and without major damage to the average american.

What I do know is that until these bad assets are either sold to some other company or bought by the government, these banks aren't going to continue lending the way they should, and the way we have become dependent upon them to do. Make no mistake, this countries businesses are dependent upon the financial sector and the practices they engage in.

Credit needs to be restored and start to flow again. These banks won't do that unless they can unload these bad assets. If you can find another way, I am all ears. I have been hearing many ideas over the past two days, but none of them directly solve the issue of banks getting rid of the bad assets.

This plan, though a risk, is so far, the best option avalible to bringing lending back to normal standards. This month and next month are going to be very ugly if banks continue this squeeze on lending. This is bulk buying time for companies preparing for the holiday season. This is the time of the year that companies depend on credit most.

I blame the people who took these bad mortgages as much as the ones who gave them, but I'm not looking for revenge, I want a solution. You can argue about who's fault it is, and how heads should roll, but that doesn't solve anything. It's a feel good mentality, and nothing feels good about this situation.

I've been on here for a long time arguing for smaller government, less spending, and stopping this situation from getting out of control. It is too late. It is out of control and the situation has changed. First we let our government regulate when it shouldn't, then we want them to butt out when we need them to step in.

I will say again, this country was not formed out of desperation or a collapsing system. It was formed out of discontent. If people are starting to wake up, now is the time you want to keep the system alive more than ever. If you let it collapse, people will stop worrying about change and start worrying about survival.

This country rose up and changed a system that it was unhappy with. It didn't collapse.

This isn't 1929, things are much more tied together and interdependent. they lean on eachother much more, and the stakes are much higher. I would much prefer that a bill of 150 billion be passed for the next 3 months to moniter how the program is progressing and to see if its working. Hopefully that is what goes through in the end.

We damn near lost our country in the last great depression, and I blame the fed for it. That doesn't change the fact that we are here now. What happened yesterday, though important, does not change the situation we face. Hopefully when we solve this current crisis, people will wake up to see the flaws of the system so we can change it.

Right now we must focus on SOLVING the problem, not letting it destroy us, then hope what we rebuild will be a more fair and balanced system. Thats playing dice with the devil, and thats a gamble we should not be taking.

I'm tired of people making excuses for one group or another when the situation isn't even solved yet. "Its not the citizens fault, we all make mistakes." That is crap. Anyone who remotely caused this situation is at fault, whether the intent was there or not. Some people didn't over extend themselves. Some businesses didn't either. To them, I say thank you. But for EVERY citizen, EVERY business, and EVERY banker who let this situation snowball and become as big as it has, we will deal with you in due time. Today is not that time though, we have bigger issues to deal with. Revenge will have to wait till another day.

I will be responding with a well made post later on about the alternative plans being proposed.

reply to post by MidnightDStroyer


Excellent points and summary - you've covered several of the issues being raised by various people, especially those who think it's treason to discuss changing the govt system in this country. It's one of our basic rights as Americans and one that's been neglected, IMO.

We always want the silver bullet solution, the quick fix. Things are extremely messed up, folks. We have a lot of changes to make if we want to have a country that represents true freedom and liberty - we won't get there by allowing things to get worse and the bailout in it's intended form will cause a lot of damage.

We have to start making the right choices some time, we may as well start with this one. We don't have to suffer a complete collapse of our economy to bring about change, either. We just have to start making our elected representatives serve us and do their jobs. We really, really can't afford much more of the system in it's present form and operating with it's current methodologies.

OK I keep hearing that the Senate is going to vote on the bailout bill TOMORROW!!! As in 10/1/08.

CAN ANYONE CONFIRM THIS???

I heard it on Lou Dobbs today.

We need to find out if this is true and call the Senate Switchboard TOMORROW to voice our opinions.

Senate Switchboard: (202) 224- 3121

Flood their switchboard with calls and let them know!!!

reply to post by XTexan

not a "confirmation" but it implies that the Senate is gonna do some cosmetic changes and send it through
www.bloomberg.com...

Even Yahoo is getting their info from Bloomberg.

OMG! HAHAHA!

You'll never believe this!

McCain and the GOP released two attack ads. What did they say?

One said it was Obama's fault that the Bailout didn't pass.

The other? That Obama was to blame for spending your tax money on passing the 700billion bailout!

The GOP was set to attack Obama no matter what happened, but oops released both ads!

reply to post by redhatty


Thanks for the link...

I found a confirmation, looks like their voting tomorrow night with 2 additions.

Senate to vote on bailout tomorrow — with an added tax cut

Just in: The Senate will vote on the bailout plan tomorrow night — with one big addition to the $700 billion plan the House rejected yesterday.

Majority Leader Harry Reid, D-Nev., and GOP Leader Mitch McConnell, R-Ky., said they will include a tax-cut package already rejected by the House on Monday. The plan would also boost federal deposit insurance limits to $250,000 from $100,000.

Source


Doesn't look any better, how can we give tax cuts at the same time we give $700B away?

this is insanity


[edit on 30-9-2008 by XTexan]

reply to post by XTexan
Correct. It came out on Yahoo several minutes ago.


Senate to vote on financial rescue plan on Wed.
By CHARLES BABINGTON and JIM KUHNHENN, Associated Press Writers 2 minutes ago

WASHINGTON - In a surprise move to resurrect President Bush's $700 billion Wall Street rescue plan, Senate leaders slated a vote on the measure for Wednesday — but added a tax cut plan already rejected by the House.

news.yahoo.com...

We probably are screwed, but we must participate in the system if we expect future accountability. At lease we can vote against the Senators that support the bailout.

reply to post by Flash_dancer


Yes, we need to get the word out and let everyone know. I'm sure ther's plenty that have no clue yet...

SENATE TO VOTE ON REVISED BAILOUT WED. EVE. SEN. DEFAZIO SAYS TO FLOOD THE CAPITOL SWITCHBOARD - ATTACHING B/O TO ANOTHER BILL

Lou will post the Senate switchboard number on his CNN website.

Capitol switchboard at (202) 224-3121
loudobbs.tv.cnn.com...

The Senate is going to attach it to a more popluar bill.

BOTH DEFAZIO AND KATPUR HAVE AN ALTERNATIVE THAT WON'T COST A DIME AND REQUIRES NO BAILOUT LEGISLATION.

Both Senators Obama and McCain are flying back to washington to vote again

What's with this ''US Senate to vote on bailout plan this evening'' on Sky ticker-tape? Sorry if this has been mentioned but ATS was off for a time there.

Does NO not mean no in a democracy? Sounds like the Irish No vote in the Lisbon Treaty!

Er hum, did I say democracy?

Next, people will be held at gunpoint at the polling booths.

[edit on 30-9-2008 by Breifne]

Originally posted by ModernAcademia
BOTH DEFAZIO AND KATPUR HAVE AN ALTERNATIVE THAT WON'T COST A DIME AND REQUIRES NO BAILOUT LEGISLATION.

I watched this, and they're plan sounds good, i'll see what I can dig up

Capitol switchboard at (202) 224-3121

I just want to keep posting the number

Edited to add:

I just emailed my senators, I'll be calling tomorrow also

[edit on 30-9-2008 by XTexan]

reply to post by XTexan

Keep posting that switchboard. We don need to circulate the information.

The Senate will no doubt pass a new bill giving it all up.

There is no way to properly structure this magnitude of a bailout

under these time constraints.

However, we can work to block it and stall until we get some

accountability built into the bailout. King Paulson will get his crown!

Hyperinflation, we coming your way, so don't think we won't!

Last time the Senate voted they passed it overwhelmingly.

Capitol switchboard at (202) 224-3121. Let's all take a minute to call!

Just because were being screwed doesn't mean we have to become mute.

reply to post by grimreaper797

Kicking the tires on other fixes
The SEC and FDIC changes announced Tuesday are not the only ideas being discussed in Washington and among economists. Some others:

-Change federal requirements that force banks to keep a certain level of cash on hand for every dollar they lend out.

-Give banks the chance to exchange loan notes for FDIC notes, which be more valuable and allowing the banks more flexibility to make loans.

-Purchase on a massive scale mortgage-backed securities issued by finance giants Fannie Mae and Freddie Mac.

-Extend limits on short sales of financial sector stocks.

-Cut the fed funds rate - the Federal Reserve's target for short-term lending - perhaps all the way to zero, or in coordination with rate cuts by other central banks around the globe.

Clearly, the controversial $700 billion bailout package - which would give the Treasury Secretary authority to buy distressed assets - is not the only way to unfreeze troubled credit markets.

But it's also true that none of the proposals is without downsides and dissenters.

Gramley, the former Fed governor, questions the wisdom of getting rid of mark-to-market accounting. He would rather see the FDIC and other regulators relax their rules governing the ratio banks must maintain between capital and loans on their books. Those rules are choking off credit to good customers, he said.

money.cnn.com...

And thats just for starts, the thing is that Paulson, the Bush Administration and people with your mindset are just looking at the quick short term option that MIGHT result in a unfreezing on the credit market, when in fact ther is more tangible feasible not so expensive to the taxpayers options that can be enacted to do the same.

You are painting a picture that only with 700 billion dollars this situation can be resolved, when I hear many analyst sating that if buying all this distress assets is the way to go then 700 billion is not nearly enough and thats why I opposed this bill, it doesn't attack the root of the problem.

Why instead of putting taxpayers on the hook for that insane amount of money we dont go the free market route, even if some tweaking is need it for the government I wouldn't opposed that.

The fact that you should not forget is that they have already failed the American people, Paulson for months was saying that the economy was sound, for months he said that Fannie and Freddy were well capitalized, when he get to Congress for the blank check for FRE and FNM he said it would be a backstop and he doubt it would be used.

THEY DONT KNOW WHAT THEY DOING!, and how you expect the american citizen to trust these guys? Think for a second, why if doesn't work? If 700 billion dollars dont work, can you imagine the crisis of confidence this could bring to the markets? That would spell not recession but depression for sure.

Thats why I think we should all take a breather and decide what's the best course of action, because trust me if we shell out 700 billion dollars and it doesn't restore confidence to the markets then all bets are off at that point.



[edit on 1-10-2008 by Bunch]

[edit on 1-10-2008 by Bunch]

New thread started for the Senate vote here

Capitol switchboard at (202) 224-3121

I just want to keep posting the number

reply to post by GordonJQ


The RNC blast Sen. Obama for supporting the bill


Sen. McCain blame Obama for bill not passing


Pretty pathetic to say the least.

[edit on 30-9-2008 by Bunch]

[edit on 1-10-2008 by Bunch]

[edit on 1-10-2008 by Bunch]

I post portions of the Newt Gingrich interview, because I do believe that we ought to ask our Senators whether his recommendation that "no company that gets money from the Treasury in this process be allowed to hire a lobbyist." The PAC issue Newt discussed is important.

The alternative plans chance of being debated doesn't look good.

Now, to talking points with our Senators. Not that we will actually be talking with them, but perhaps the janitor that takes our calls will be interested. With rampant current outsourcing, our calls may be answered in India, so listen carefully to the accent of the receptionist at the "Capitol Switchboard," which is Capitol switchboard at (202) 224-3121.

If in doubt about the Nationality of the purported receptionist, ask whether the receptionist actually answers "alternative calls" for mortgage company's on the other lines. If alarmed, ask whether he/she is presently in America proper. Indian telephone answering service has become quite common in the Mortgage business Outsourcing being all the rage and all, it may have caught on for "Concerned Citizen" calls to Congress.

This may take some of the switchboard's time, but it is better to be certain about the matter on the front end. In the event that you speak another language fluently, test them in that language. If they are very conversant, you might have a receptive audience. Beware in this case. You have probably been transferred to a foreign phone operator.


NEWT GINGRICH ON WHY HE STRONGLY OPPOSES THE BAILOUT
This is a rush transcript from "The O'Reilly Factor," September 26, 2008 www.foxnews.com/story/0,2933,430023,00.html

"BILL O'REILLY, HOST: The top story tonight: the state of the union with Newt Gingrich.

The former speaker of the House is in a unique position. He knows the players. He knows the corrupt system. I spoke with him a short time ago.

O'REILLY: Mr. Speaker, I'm glad to get to talk to you tonight because I'm getting the anger from the folks. Why didn't anybody tell us about this stuff?

NEWT GINGRICH, FOX NEWS CONTRIBUTOR: Well, look, I think to a large extent, we're faced with a genuine crisis of the system because the politicians on Capitol Hill who should have been doing this weren't, and the bureaucrats and the executive branch who should have been doing this weren't. And now they're all going to scurry around and try to cover it up and have sort of an agreement of silence, and it's profoundly wrong.

O'REILLY: When you say they weren't doing their job, are they just stupid? Or are they trying to play a game with the American public? That's their job to be watchdogs, to let us know if the fundamentals of the economy are tottering. So why didn't they let us know?

GINGRICH: One of the provisions that I wanted to put into any kind of financial package is that no company that gets money from the Treasury in this process be allowed to hire a lobbyist. I mean, what you have today is that the rich in Wall Street and the powerful at Fannie Mae and Freddie Mac had so many politicians beholden to them that, in fact, nobody was going to check them. And so they got away with things that were absolute bologna, and it's a tragedy.

O'REILLY: Here's a good example: Hillary Clinton, $600,000; Barack Obama, $500,000; John McCain, 150,000 from Freddie Mac, was it? I believe — it's one of the two, all right. So you're saying because...

GINGRICH: You know, one of the…

O'REILLY: Go ahead.

GINGRICH: One of the ground rules you may have to adopt is that nobody can give money from a PAC or a lobbyist who represents an industry your committee supervises. You have to raise your money away from your own committees.

O'REILLY: So you agree with me that both parties are at fault. Now let's get into the personalities.

GINGRICH: Absolutely."

Well, better to get the truth from the horses mouth..

Those dead-weight assets MUST be gone. And let the financial tycoons deal with their mess. It's NOT the PEOPLE who have to bail them out. It's up to themselves to bail themselves out or just leave the market, and leave room for the new.

Those 700B of your dollars would be a lot more worth if spent on creating a healthcare system, improving education, cleaning up Justice... there's a lot more useful ways to spend your tax-money than gambling on worthless assets. It's like chosing to buy a new full-extras automobile instead of feeding your family on the long-term.

And for Christ's sake, make your Government responsable for regulating and supervising what goes on in the markets. Or you'll suffer Round 2 of this. You, and me, on the otherside of the Atlantic.

[edit on 30-9-2008 by Toorop]

[edit on 30-9-2008 by Toorop]