Posted on 09/20/2008 10:17:51 AM PDT by Fox_Mulder77
LEGISLATIVE PROPOSAL FOR TREASURY AUTHORITY
TO PURCHASE MORTGAGE-RELATED ASSETS
Section 1. Short Title.
This Act may be cited as ____________________.
Sec. 2. Purchases of Mortgage-Related Assets.
(a) Authority to Purchase.--The Secretary is authorized to purchase, and to make and fund commitments to purchase, on such terms and conditions as determined by the Secretary, mortgage-related assets from any financial institution having its headquarters in the United States.
(b) Necessary Actions.--The Secretary is authorized to take such actions as the Secretary deems necessary to carry out the authorities in this Act, including, without limitation:
(1) appointing such employees as may be required to carry out the authorities in this Act and defining their duties;
(2) entering into contracts, including contracts for services authorized by section 3109 of title 5, United States Code, without regard to any other provision of law regarding public contracts;
(3) designating financial institutions as financial agents of the Government, and they shall perform all such reasonable duties related to this Act as financial agents of the Government as may be required of them;
(4) establishing vehicles that are authorized, subject to supervision by the Secretary, to purchase mortgage-related assets and issue obligations; and
(5) issuing such regulations and other guidance as may be necessary or appropriate to define terms or carry out the authorities of this Act.
Sec. 3. Considerations.
In exercising the authorities granted in this Act, the Secretary shall take into consideration means for--
(1) providing stability or preventing disruption to the financial markets or banking system; and
(2) protecting the taxpayer.
Sec. 4. Reports to Congress.
Within three months of the first exercise of the authority granted in section 2(a), and semiannually thereafter, the Secretary shall report to the Committees on the Budget, Financial Services, and Ways and Means of the House of Representatives and the Committees on the Budget, Finance, and Banking, Housing, and Urban Affairs of the Senate with respect to the authorities exercised under this Act and the considerations required by section 3.
Sec. 5. Rights; Management; Sale of Mortgage-Related Assets.
(a) Exercise of Rights.--The Secretary may, at any time, exercise any rights received in connection with mortgage-related assets purchased under this Act.
(b) Management of Mortgage-Related Assets.--The Secretary shall have authority to manage mortgage-related assets purchased under this Act, including revenues and portfolio risks therefrom.
(c) Sale of Mortgage-Related Assets.--The Secretary may, at any time, upon terms and conditions and at prices determined by the Secretary, sell, or enter into securities loans, repurchase transactions or other financial transactions in regard to, any mortgage-related asset purchased under this Act.
(d) Application of Sunset to Mortgage-Related Assets.--The authority of the Secretary to hold any mortgage-related asset purchased under this Act before the termination date in section 9, or to purchase or fund the purchase of a mortgage-related asset under a commitment entered into before the termination date in section 9, is not subject to the provisions of section 9.
Sec. 6. Maximum Amount of Authorized Purchases.
The Secretary’s authority to purchase mortgage-related assets under this Act shall be limited to $700,000,000,000 outstanding at any one time
Sec. 7. Funding.
For the purpose of the authorities granted in this Act, and for the costs of administering those authorities, the Secretary may use the proceeds of the sale of any securities issued under chapter 31 of title 31, United States Code, and the purposes for which securities may be issued under chapter 31 of title 31, United States Code, are extended to include actions authorized by this Act, including the payment of administrative expenses. Any funds expended for actions authorized by this Act, including the payment of administrative expenses, shall be deemed appropriated at the time of such expenditure.
Sec. 8. Review.
Decisions by the Secretary pursuant to the authority of this Act are non-reviewable and committed to agency discretion, and may not be reviewed by any court of law or any administrative agency.
Sec. 9. Termination of Authority.
The authorities under this Act, with the exception of authorities granted in sections 2(b)(5), 5 and 7, shall terminate two years from the date of enactment of this Act.
Sec. 10. Increase in Statutory Limit on the Public Debt.
Subsection (b) of section 3101 of title 31, United States Code, is amended by striking out the dollar limitation contained in such subsection and inserting in lieu thereof $11,315,000,000,000.
Sec. 11. Credit Reform.
The costs of purchases of mortgage-related assets made under section 2(a) of this Act shall be determined as provided under the Federal Credit Reform Act of 1990, as applicable.
Sec. 12. Definitions.
For purposes of this section, the following definitions shall apply:
(1) Mortgage-Related Assets.--The term “mortgage-related assets” means residential or commercial mortgages and any securities, obligations, or other instruments that are based on or related to such mortgages, that in each case was originated or issued on or before September 17, 2008.
(2) Secretary.--The term “Secretary” means the Secretary of the Treasury.
(3) United States.--The term “United States” means the States, territories, and possessions of the United States and the District of Columbia.
Oh, and we didn’t survive? The fact is the Great Depression would have been shorter than it was, if the Government didn’t get involved.
Can’t we learn from history?
Quote “Torches and pitchforks.”
Yes, I keep hearing this on the forum. Just what are you going to do? I would guess nothing. People will sit back and take this, as always.
VERY few people will do anything at all. I predict the blank check will go forward and freepers/others will do nothing.
Just my prediction...
I have yet to see any protests in the streets. Americans don’t know how to fight. Prove me wrong.
This was drafted by the Treasury Dept. not the Dems
The market reaction is a huge sign that this would be a massive giveaway to the very companies that got us into this mess. It's fine for US assets, it's a ball-buster for the taxpayer.
Total BS
I’ve heard several pundits say that the Fed made money on the original RTC. I would be $50,000 that this is not true. Forget the time value of money. There is no way they made money.
Total BS again.
Really? Not that I doubt you,but where is that info in the article? It would make better sense that it was the Treasury that wrote it. After all, didn’t the dems run out of town as fast as they could yesterday.....LOL!!
Thanks for the info.
Frankly, I'm going to go with Bernanke on how the Depression started or was exacerbated. It was his life's work before becoming the Fed Charmian.
“The structure is not much different from RTC “
Did that confer immunity as this does?
What about preventing new “toxic derivatives?”
What percent of equities are these mortgage securities?
The FED made money. WE the taxpayer lost 123 Billion dollars.
Heaven forbid we should read, and study, and “think” for ourselves.
What has he done lately to earn all this trust? Hmm?
I've seen no evidence that this has occurred. All I see here is knee-jerk ideology.
“Did that confer immunity as this does?”
I dont know what that question means.
” What about preventing new “toxic derivatives?” “
The thing that made the derivatives ‘toxic’ was a lack of a market. It got illiquid. Wider credit spreads and regulation on how these are valued in equity/collateral valuations should discourage over-leverage in the future. It’s a great question though: It’s one thing to clean up this mess, but more important to prevent the next one.
“What percent of equities are these mortgage securities?”
Mortgage securities and equities are 2 separate asset classes.
“The Dems just got it this morning, and are already adding the pork to it as we speak.... this thing already stinks, but over the next few days the Dems are going to stuff it with rotting putrid pork!!! “
WE NEED TO BE VIGILANT ON THIS!!!
THEY ADDED A $1 ACORN PAYOFF TO THE EARLIER HOUSING BILL.
>>I’ve seen no evidence that this has occurred<<
Speak for yourself. There are still Americans that still possess the thought process.
I think your characterization is completely off-base and wrong.
Please give specifics of who and what is being done that makes this “African style crony capitalism” (which IMHO is a misnomer anyway since those crony-states are all socialist, led by socialists like Mugabe).
It would be better to talk about specifics of what is good or bad than go around with renting of garments and over-heated rhetoric.
“The market reaction is a huge sign that this would be a massive giveaway to the very companies that got us into this mess. It’s fine for US assets, it’s a ball-buster for the taxpayer.”
I agree on the latter, but on the former, not necessarily. Even a liquidity injection and market ‘clearing’ operation would be a big boost to financials, even if it doesnt cost a lot.
Also what boosted the market was the rule to stop the short-sellers. neat trick that. The uptick rule needs to come back and we need to enforce nake short selling regs.
Change America needs: Dump the Pelosi Democrat Congress!!!
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.