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I finally found the proposed bill and read both the full version and the sectioned version. The full version made my eyes and brain hurt. I am not a lawyer but was able to follow it. Then I found the sections version and found it to be a very good, easy to understand over view of the sections.
I have to say, I was rather against this proposed bill going on what I heard in the news, but now that I have read it, I think it is really not that bad of a plan. Here is the link to the sections version: http://www.politisite.com/section.pdf (broken link)
And the full version: http://www.politisite.com/act.pdf (broken link)
From what I read it gives the government approval to buy "troubled mortgages and loans" from banking and holding institutions and then revamp them in a way that the homeowners, car owners, student loan holders can pay their bills by either extending the length of the loan or reducing the rate or forgiving some of the principle (in the event of a mortgage, the homeowner would then forfeit a portion of their eventual equity).
If "troubled" assets are purchased from a company that has "golden parachutes" for it's top employees, the parachutes have to go away and can not be reinstated in anyway if the gov buys assets from them.
There are several, may actually "over sight" comities that have to be bipartisan established by certain members of house and senate appointing these positions. There is compensation alloted (with limits) for these positions however if they are filled with already Federal Government employees, they can not receive any more pay.
From how I read it, it proposes an insistence on transparency on everything that is bought, who it is bought from and what can be done with the items (papers) bought. What I did not see was what will happen with the money that could very well be made by this proposal.
Now that I have read it, I am really not sure why they didn't pass it.
You must of missed my post where I highlighted most of the bill and what it means... and its ALL bad... when the government promises you transparency, then you know something has been tampered with... which is worse? The hidden truth or the transparent "truth" which was a lie?
Because it has been publicly discussed as a bailout plan instead of a finance resuscitation plan.
I found the plan to be reasonable considering the ugly alternatives, however the efforts to explain the bill have been awful.
If bipartisan, a prominent Democrat and Republican should have held a press conference and explained the measure in a simple and logical way. Afterwards, they can fill in all of the details.
As it was discussed, many folks viewed it as the rich getting another helping, at the expense of everyone else. Hence, the massive public resentment.
However, I think they will soon get something similar passed.
when the government promises you transparency, then you know something has been tampered with... l]
Exactly. The parallel is all those Privacy Notices everybody keeps mailing you. They are written so as to make you think that you now have new privacy guarantees. You used to have a natural privacy, but the notices explain that your natural privacy, which had been respected, can now be taken away "where provided by law"---namely, the "Patriot Act". But everybody feels more secure in their sense of privacy, because the new Privacy Laws made pharmacies put strips of tape on the floor for you to stand behind.
The obvious alternative to a bailout is letting troubled financial institutions declare bankruptcy. Bankruptcy means that shareholders typically get wiped out and the creditors own the company.
Bankruptcy does not mean the company disappears; it is just owned by someone new (as has occurred with several airlines). Bankruptcy punishes those who took excessive risks while preserving those aspects of a businesses that remain profitable.
In contrast, a bailout transfers enormous wealth from taxpayers to those who knowingly engaged in risky subprime lending. Thus, the bailout encourages companies to take large, imprudent risks and count on getting bailed out by government. This "moral hazard" generates enormous distortions in an economy's allocation of its financial resources.
Depends how critical you view liquidity, and how much it would be negatively impacted if a version of what was rejected today doesn't pass.
At some level, the liquidity would appear to be problematic under current conditions, but perhaps they could just let it happen, and take a chance on long term implications.
Keep in mind that much of the problem initially occurred due to homeownership targets set by HUD, which was then aggravated by further lack of oversight and deregulation over packaging mortgages to the secondary market.
I finally found the proposed bill and read both the full version and the sectioned version. The full version made my eyes and brain hurt. I am not a lawyer but was able to follow it. Then I found the sections version and found it to be a very good, easy to understand over view of the sections.
I have to say, I was rather against this proposed bill going on what I heard in the news, but now that I have read it, I think it is really not that bad of a plan. Here is the link to the sections version: http://www.politisite.com/section.pdf (broken link)
And the full version: http://www.politisite.com/act.pdf (broken link)
From what I read it gives the government approval to buy "troubled mortgages and loans" from banking and holding institutions and then revamp them in a way that the homeowners, car owners, student loan holders can pay their bills by either extending the length of the loan or reducing the rate or forgiving some of the principle (in the event of a mortgage, the homeowner would then forfeit a portion of their eventual equity).
If "troubled" assets are purchased from a company that has "golden parachutes" for it's top employees, the parachutes have to go away and can not be reinstated in anyway if the gov buys assets from them.
There are several, may actually "over sight" comities that have to be bipartisan established by certain members of house and senate appointing these positions. There is compensation alloted (with limits) for these positions however if they are filled with already Federal Government employees, they can not receive any more pay.
From how I read it, it proposes an insistence on transparency on everything that is bought, who it is bought from and what can be done with the items (papers) bought. What I did not see was what will happen with the money that could very well be made by this proposal.
Now that I have read it, I am really not sure why they didn't pass it.
WOW! it's very simple .... These Corporations are private corporations that screwed up. They with help from others cheated people into thinking that something was a good deal when in fact they knew or should have known it wasn't.( there the experts in banking remember? )The bill say's tack it on the end of the contracts . I say tack it where it belongs an their ends ( you know what i mean ) and see if they feel it is painless !
WOW! it's very simple .... These Corporations are private corporations that screwed up. They with help from others cheated people into thinking that something was a good deal when in fact they knew or should have known it wasn't.( there the experts in banking remember? )The bill say's tack it on the end of the contracts . I say tack it where it belongs an their ends ( you know what i mean ) and see if they feel it is painless !
I oppose the bill, but to be honest, doing nothing is just as bad as this legislation in the long run. Too long we've let Congress and the Fed dictate how we spend our own money. I wish more people were mad because of the actual legislation rather than the hatred of CEOs and parachutes, but at this point, I'll take what I can get.
That would be a much better solution for both long term and short term, and it wouldn't balloon the federal deficit any more. Of course, no one on Capital Hill has even brought this up as a solution.
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