Tentative meltdown deal: Bush, McCain, Obama meet

[GinaMaria]

Source: AP

Welcoming Republican John McCain and Democrat Barack Obama, Bush said, "My hope is that we can reach an agreement very shortly."

The tentative accord would give the Bush administration just a fraction of the $700 billion it had requested up front, with half the money subject to a congressional veto, congressional aides said. Under the plan, the Treasury secretary would get $250 billion immediately and could have an additional $100 billion if he certified it was needed. The last $350 billion could be blocked by a vote of Congress under the arrangement, designed to give lawmakers a stronger hand in controlling the unprecedented rescue.

The aides described the details on condition of anonymity because they were not authorized to speak publicly.



Read more: http://news.yahoo.com/s/ap/20080925/ap_on_bi_ge/financi...

---

a little more information. We might be able to piece things together from different articles.

[olddad56]

1. $350 Billion here, $350 Billion there, pretty soon it starts to add up to real money.

he truth is that the economy has already collapsed. This bailout is just an attempt to preserve the public's preception until after 11/4. I don't think they can keep the big secret that long. Especially with China no longer playing along.

[GinaMaria]

9. If China is no longer floating us loans

where will the money come from for this bailout? Will the tax man be at the door ready to shake us down?

[crossroads]

12. Oh the Federal Reserve will just print some more paper!

None of our money is 'real' anyway!

[EFerrari]

10. How long to apples keep in the 'frig?

If I'm going into retail, I need to figure out the supply line.

[Voice for Peace]

2. They could make it 249 billion and give the extra billion where it might do some good.

[greyghost]

3. What a cluster fuck! The economy is going to tank regardless

and these assholes continue to have their way.

[Indenturedebtor]

4. Yes but at least they're consistent

There is no uncertainty when it comes to figuring out who comes first in this country, and who doesn't even factor in. The American people were/are against this plan. But who gives a shit about that. You'll take it and you'll like it PEON! Now get back to work!

[greyghost]

6. They are that!

[amandabeech]

5. No word on how the price for these assets will be determined.

Krugman has voiced concern that the prices paid to financial institutions will be above current market price, because the administration, as per some remarks by Bernanke, seems to believe that the financial institutions will not have enough capital even if the U.S. buys those things at current market price.

Apparently, the idea is to buy at an above market price on the assumption that the current market price is a fire sale price. Then, the U.S. would hold the assets for as long as necessary to get the price up to something close to the government's purchase price plus interest and costs.

Personally, I think that time may never come considering the amount of junk derivative assets out there. Allowing bankruptcy courts to drop mortgages down to market value of houses at what would be considered fire sale prices might help, but I think there will be objections (I will have them), if bankrupts are allowed to then wait for home prices to go up, and make a windfall profit on the difference between the fire sale price and the market price once the housing market settles out. That doesn't seem any more fair than giving a windfall to the financial institutions.

Another issue that does not seem to be addressed is the type of junk that the U.S. gov will be buying. It has been suggested that the Gov not only purchase mortgage-backed securities, but also car loans backed by depreciating assets like monster trucks and SUVs, unsecured credit cards and credit default swaps. I am aware that there are derivatives out there involving commodity contracts, but I haven't heard anything about them.

This is all just far too much in scope and price, and THERE IS NO GUARANTEE THAT THIS PLAN WILL WORK!

I'd be happier if Congress had to ACT to hand more than $350 bill or so instead of allowing the Shrub/Cheney/Paulson/Bernanke to use the entire $700,000 unless Congress stops them. It will be difficult to get Congress focused and in session if it looks like things are not going as planned after $350 bill, and the bushies know it.

With what I know right now, I would be reluctant to vote for this thing, no matter how much respect I have for Barney Frank and Chris Dodd.

[dixiegrrrrl]

11. They wan to buy dogshit at gold prices, essentially.

and then hope if they bury it long enuff, it will turn to gold.

Say NO to Alchemy !!!!

[Historic NY]

7. the only thing to shake them up would be a run on the banks...

they're knees would be banging together if Americans in droves began yanking their funds back. I personally would take all my funds and put them in the Credit Union which is made up of neighbors & co-workers. How much has the FEd thrown down the swere this past year for what to keep the market going.

[GinaMaria]

8. I've got most everything in the Credit Union

WaMu holds my mortgage though. What a mess.