Section III requires participating companies “to provide warrants so that taxpayers will benefit from any future growth.”
I’m guessing this won’t work as hoped.
I figure tomorrow the executives of those companies are going to file papers to set up new corporations to buy good mortgage instruments. Then they’ll sell all the good loans at bargain prices to the new company and leave all the crappy loans with the old crappy bankrupt company that our esteemed leaders have just purchased “warrants” in with our taxpayer dollars. The new company will go on making billions. But we don’t own part of that company.
Basically just a replay of the Hillary Clinton cattle futures scheme. The broker assigns the winning positions (after the fact) to the preferred party and the losing positions to another “less preferred” party. You, the taxpayer, are the “less preferred” party in this scenario.
Just more business for government lawyers, CPA’s, accountants and tax lawyers.
Sounds reasonable and certain congress critters will probably be part owners of the new companies or at least their spouses and children will be. Perhaps some influential media types or their families will also be let into the deal provided they know how to keep their mouths shut.
Didn't the militia movement issue warrants like that?
I’m afraid to even read it all.
No doubt Joe citizen will take a beating. Especially those who don’t even realize their brokers have their mutual funds tied up in institutions that are left of the vine to rot.
Hmmm...if there were predatory lending practices...that must mean there were predators...
When are these predators going to jail?
Why is there never any mention of perps going to jail?
Why is that?
Oh, it gets more interesting than what is being released to the press.
The discussion by Treasury on a special, insiders-club conference call puts to lie quite a bit of the public spin:
http://www.nakedcapitalism.com/2008/09/mussolini-style-corporatism-in-action.html
What is the HOPE for Homeowners program ?
SEC. 104. FINANCIAL STABILITY OVERSIGHT BOARD
The oversight board is a classic “fox running the hen house”. It is charged with reviewing that the exercise of authority by the Secretary is in accordance with the Act. It does not terminate until the last troubled asset acquired by the Secretary has been sold or transferred out of the ownership or control of the Federal Government. It is made up of the following:
1. The Chairman of the Board of Governors of the Federal Reserve System;
Bernanke has the unfortunate position of extreme culpability and prejudice, demanding the $700 billion already.
2. The Secretary of the Treasury
Paulson gets to decide how much and who to give the money to and is in charge of everything already.
3. The Director of the Federal Home Finance Agency;
The Federal Housing Finance Board is one of the regulators charged with financing loans for home mortgages and as an organization is culpable in this mess. There are four directors and a chairman. Here’s the recent bio of just one, a Geoffrey S. Bacino: He was appointed by President Bush and confirmed by the Senate on July 28, 2006. Prior to this appointment, Mr. Bacino served as a Senior Vice President for Legislative and Regulatory Affairs at Centrix Financial, an auto finance company that specialized in nonstandard lending (Bad Credit, No Problem, Zero Down kind of stuff). Centrix Financial filed chapter 11 bankruptcy on September 19, 2006, six weeks after Mr Bacino’s appointment.
4. The Chairman of the Securities Exchange Commission
You may have heard of Cristopher Cox when John McCain demanded that he get fired for letting this mess get out of control. Just a few from near the top of a Google search: Investigation into Cox Role in Fraud Should be Launched, Corporate reform dead; SEC chief should resign, http://www.firechriscox.com/.
5. The Secretary of Housing and Urban Development
HUD is another innovation of the “Great Society” of Lyndon Johnson. The new secretary is Steven C. Preston, an ex-Senior Vice President at Lehman Brothers. Lehman Brothers filed for the largest Chapter 11 bankruptcy in US history on September 15, 2008, five months after Mr. Preston took over (just in time) after his predecessor resigned amid ethics violations.
VI. Preferential treatment for minority contractors.
Unless there is something in there forbidding creation of these derivatives, nothing will stop the whole thing from blowing up again. As I understand it some derivatives involve getting another bank to sort of co-sign on the mortgage in exchange for payment. The other derivatives are basically just betting on which side will win - - like betting on a sporting event. If all sports betting stopped the teams would still play. I don’t think this fixes anything without abolishing derivatives.
SEC. 122. 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 ‘‘$11,315,000,000,000’’.