It should never have been called a “Bailout” in the first place. Who would it bailout ? Nobody.
Not the banks that are going to be able to sell their mortgages to the plan at less than 50 cents on the dollar.
Not the CEOs, who will be required to waive compensation to participate in the plan.
Not the shareholders of the banks, who will see their share price fall as the banks have to take actual losses instead of holding mortgage assets on their books at a fictitiously high valuation.
It should be called a “Fincancial System Stability Plan”. It won’t cost $700B. It is really using $700B to purchase assets which will later be resold for more than $700B — making the taxpayer money rather than costing them anything. It is the banks that lose, not the taxpayer.
McCain’s statement: “I’m going back to Washigton to get something passed before the market opens on Monday.”
Obama’s statement: “I... uh... thank... uh... Coburn and... uh... and Senator McCain called me this afternoon... and... uh... let me reiterate the conditions I’ve laid out before... and... uh... we should all put politics aside... and... uh... let me go over the chronology from today... uh... I wanted to release a joint statement... uh... and... I recommended we send a clear signal... and... uh... when I got back to the hotel he had already gone on television... and... uh... we need to send a clear signal... uh.. with respect to the debates... uh.. this is exactly the right time people need to hear from us... and... uh... it’s more important than ever that we present ourselves to the american people... and.. uh.. he had already agree to a joint statement... and he mentioned that... uh... he was going to fly to washington... and... uh... this was something he was more decisive about.. or... uh.. i mean... uh...”
“It should never have been called a “Bailout” in the first place. Who would it bailout ? Nobody.”
The plan is not being very well explained, but that’s probably unavoidable since so many have need to cover their own rear ends and it’s very political.
But any business that would otherwise have failed is being bailed out. When a business fails the assets are liquidated, but it sounds like a number of banks and others holding the bad mortgages will be saved from failure.