SEC. 112. COORDINATION WITH FOREIGN AUTHORITIES AND CENTRAL BANKS

[Subdivisions]

The Secretary shall coordinate, as appropriate, with
foreign financial authorities and central banks to work to
ward the establishment of similar programs by such au8
thorities and central banks. To the extent that such foreign
financial authorities or banks hold troubled assets as
a result of extending financing to financial institutions
that have failed or defaulted on such financing, such troubled
assets qualify for purchase under section 101.

Karl Denninger over at http://www.tickerforum.org/cgi-ticker/akcs-www?post=64444">TickerForum.org

Paulson and Bush threatened to veto the legislation if there was an explicit prohibition of transfers from foreign banks to an American subsidiary.

THE ASSETS DO NOT EVEN HAVE TO BE AMERICAN MORTGAGE ASSETS - THEY CAN BE A FUCKING OFFICE TOWER IN SHANGHAI!

YOU ARE GOING TO GET FUCKING FLEECED FOR HUNDREDS OF BILLIONS OF DOLLARS IF THIS BILL PASSES - THAT MONEY IS GOING TO GO IMMEDIATELY OUT OF THE COUNTRY!

http://www.youtube.com/watch?v=Hi9vXKWYaZ8

http://afp.google.com/article/ALeqM5ijNM_cMwGE1tTgw7S77ClXislztw">US has responsibility to world to fix economy: Brown

The United States has a responsibility to the world and not just itself to sort out its teetering economy, Prime Minister Gordon Brown said Tuesday.

But Brown, disappointed that US lawmakers have rejected a 700-billion-dollar Wall Street bailout plan, said it was not yet time to apportion blame for the global crisis.

"What people want to know is, on top of these problems, can we get under control ... these problems in the financial system," Brown told Sky News and BBC television.

"They started in America, they've got to be sorted out. I believe that the Americans have come to realise that they have a responsibility to the rest of the world as well as to themselves.

"In Britain, we will do whatever is necessary; however it is necessary to sort out the problems in the system."

He added: "There will be a time for sorting out the blame and clearly what happened in America has got to be analysed for it's effect on Britain but this is the time to roll up our sleeves and sort out the system."

Because I'm nearly clueless about how all this financial/economic stuff works, I've remained neutral with a slight lean toward opposition of this bailout. But I can now say this:

IF A SINGLE DOLLAR IS TO GO TO FOREIGN INTERESTS, THEN NO DEAL! FUCK THAT!

[Subdivisions]

1. Ummm...HELLO!!?!! n/t

[L. Coyote]

2. Is the USG being blackmailed out of a TRILLION dollars by someone?

You would think Wash. DC was going to blow up if this deal wasn't done by tomorrow!!

[L. Coyote]

3. The foreign bank bailout plan!

So, if a foreign bank holds as security something worth less than what it is valued as security, the US can buy it from them IF someone owes them money.

[Subdivisions]

4. The way I understand it, the foreign bank can sell bad assets to

a US entity who can then turn it over to the Treasury.

But, I'd love to have others' opinions on this. Looks like no one else cares about this though. I'm glad I have a bugout location selected.

[L. Coyote]

54. If a foreign back holds securities a bankrupt bank fails to pay on

we get the tab.

Banks are playing their investment games with deposited money.

[tama]

5. You don't understand

US has been spreading the risk globally and is threatening to take the whole global capitalism down together with it. As logical consequense rest of the world have given ultimatum that if US does not do what they want, no more financing US debt and the whole nationg becomes officially bankrupt.

[Subdivisions]

6. I don't give a fuck! If a single dollar is going to bailout foreign banks,

then no deal!

[tama]

9. Glad to hear

I'm against the bailout and EU-leaders (mine included) demanding it, because British-US lead global capitalism was never a good idea.

But it's better to oppose the bailout for right reasons than just stupid nationalism. You Americans need to understand that what is going on is a tectonit shift and Earthqueke epicentre located in US. The deal seems to be clear, IF US now refuses to eat the crow it's been spreading to the rest of the world, no more debt finance to keep US afloat - a national bankruptcy like never seen before. No more dollar, no more imports from foreign countries, US citizens learning to live from what the land has to offer. Each to his own. I'm ready, are you?

[Subdivisions]

10. If that's what it takes, then so be it. Full-on reset! n/t

[ww2player]

32. Sooner or later it will happen

There is no way the US is ever going to pay off its debt. They are adding even more debt to a package that is being created because of bad debt. Stock up on food folks. And if you live in a big city.. I'd buy a gun, cause when mobs and gangs start "living off the land" things will get very bad very fast. Hopefully Martial Law will be declared and the National Guard will patrol the streets.

See how bad it can get fast? You think the slight shortage of gas in the Southeast is a problem. Just wait till you can't get that imported food.

[tama]

34. Woot, breaking the 10T!!!

09/30/2008 5,808,691,665,403.71 4,216,033,231,508.78 10,024,724,896,912.49
http://www.treasurydirect.gov/NP/BPDLogin?application=np

[girl gone mad]

46. I don't know if we'll end up..

in Honda full of silver territory..

but I think we're going to have to default on the debt or inflate like crazy. It'll be bad for a few years, but we will mostly recover.

[snappyturtle]

45. You bring up a good point. For years now I have wished that the

U.S. would be isolationist. The entire planet would be better off and so would we. Just imagine no more pre-emptive wars! We could live off our land and it would be heaven if foreign imports stopped for then our jobs would return. Since THAT is never going to happen I'm for high tariffs on imports. Sounds awful but America has done itself in spreading wealth under the guise of democracy and global economic growth.

on edit: I don't mean that the U.S.should give up humanitarian efforts.

[WhaTHellsgoingonhere]

7. Sherman's full 9 minuite presentation on CNBC with Kudlow

http://www.cnbc.com/id/15840232?video=873682522&play=1

[HamdenRice]

8. The assets can't be an office tower in China under the bill. Please read it

It defines troubled assets in the definition section of the bill. "Troubled assets" are basically defined as mortgage backed securities. An office tower in China does not qualify.

But you may have found a great drafting catch. The paragraph does not limit mortgage assets to mortgages on property in the US. I suspect this was an oversight, but it's worth pointing out.

I'm going to post an analysis of the bill on my new blog, HamdenSRice.blogspot.com that will include all the glitches and make some suggestions, so stay tuned.

[Subdivisions]

11. What are your qualifications? You've been promoting this bailout

since day one. What are your qualifications and what do you stand to gain with passage of a bailout?

And don't try to fuck with my head about Chinese tower buildings. I'm not paying for any Chinese debt! What about that don't you understand?

[tama]

14. Ever went to Wall-Mart

ever bought anything Made In China?

Ever payed taxes to pay for interests on the money that US has been borrowing like madman from the rest of the world, especially China?

[Subdivisions]

16. Sure I have. But it wasn't my idea to take our manufacturing base

over to China! Because assholes like boosh and his cronies did, we have a bullshit "service" economy. Serfs. I want those jobs HERE in the US!

[HamdenRice]

19. Rofl!

Do you think I'm a paid troll of the finance industry sent here specifically just to mess with your head?

I have no financial interest in the bailout whatsoever. My qualifications are that I used to be in the mbs industry, as I've mentioned several times. I got out over 10 years ago. I've been in the not for profit sector ever since. But I do still understand these securities, and I certainly can see 90% of what is being posted about both the problem and the proposed bailout is urban legend level stuff.

If you think disagreeing with you is "promoting" anything other than what I think is best for the country and economy, well I think that's paranoid. I could as well say, why do you want the economy to collapse and what financial interest to you have in the disaster capitalists and financial vultures who will pick over our bones if there's a collapse.

In fact, this is scary: could you answer that question, seriously?

[Subdivisions]

25. I didn't say you were a paid troll. In fact, I don't think that about you, though

there are some here whom I wonder about.

And, I don't know what the fuck you think is so fucking funny. THIS SHIT ISN'T FUNNY! :mad:

You've been all over the place spouting your "knowledge". You are in a very small minority. If I am to take your earnest efforts seriously, I want to know if you know what the fuck you are talking about. But you are getting on my nerves following around every "against the bailout" post your every waking hour. ALLRIGHT! We get it!

I'm still on the fence about this whole bailout mess because NO ONE has adequately explained to me how the fuck we got here and what it's going to take to fix it. No one has asked me to make a personal sacrifice. THEY ARE SIIMPLY ATTEMPTING TO TAKE FROM ME. Now I fuming mad because I, a reasonably intelligent, engaged, citizen and I have no idea what the hell is going on. Now, my set upon that fence is leaning toward NO FUCKING BAILOUT. FUCK NO!

Now they're telling me I have to bailout offshore banks too? FUCK THAT! I'm sick of this shit!!!

WHERE THE FUCK IS OUR $700 BILLION???


ARREST EVERY GODDAMNED ONE OF THEM!!!

[HamdenRice]

29. Project much?

What makes you think I'm following anyone around? Are you saying that only anti-bailout people are allowed to post?

Now could you answer my questions? Do you have a financial interest in disaster capitalists or vulture funds? What is your expertise?

You asked me these questions; why am I not entitled to ask you these same questions?

Please answer both.

I also notice that certain anti-bailout types have been "following around" every sane, sober, knowledgeable analysis with screams of "let it collapse" or "oh noes, tey is stealing 2 trillion dolars from us!!11!"

It works both ways.

[Subdivisions]

33. I'm a guy who makes my living from my home office and computer

and I have $200 to my name. I haven't followed anyone around. I declare at this moment that I am now against any bailout bill. So, until this moment, I haven't followed anyone around. But I've seen you doing it (as well as start threads) and you've been very vocal in your support of this bailout, which you say is not a bailout. Now, if you are to convince me to also support this bailout, which seems to be your Number One Goal for the past two weeks, then answer my fucking questions!

Now.

[HamdenRice]

38. "to convince me to also support this bailout, which seems to be your Number One Goal "

uh, no. The main goal of my life the last two weeks has not been trying to convince you of anything; it's been trying to finish my novel. I wasn't actually aware of you as a separate entity on DU until a moment ago.

But if you want to follow my reporting on this, I've launched my blog:

hamdenSrice.blogspot.com

The S is because I couldn't recover hamdenrice.blogspot.com

[Subdivisions]

40. Project much...?

The use of "me" was metaphorical of each person on this board that you have spent your time trying to convince that this is not a bailout and that it is necessary to fix what ails us.

And, thanks alot for being so self-centered that you have not, until now, been aware of me, a daily active DUer for 2 1/2 years and one who has supported you in the 9/11 dungeon. Yeah, thanks.

Good luck with your novel.

[HamdenRice]

49. How would I connect you with THAT Texas Blank if suddenly you think I'm a paid shill

Texas Observer has been stalking me for days, btw, and so your not the only Texas <Blank>.

So you're the one from the dungeon and suddenly you think I'm a paid shill?

:rofl:

Wow, I would have had to have spent 2 years in the Dungeon waiting for the inevitable financial meltdown to spring into action with my manchurian candidate orders to orchestrate the $700 billion bailout for my Goldman Sachs masters from DU.

[Subdivisions]

52. I'll say this one more time you idiot. I DID NOT SAY YOU WERE A SHILL!

In fact, I said that I don't think that about you at all. All I did was ask you how you are qualified to be so knowledgeable about this topic so I could know to what degree I should take your comments into account in order to help myself make a decision whether or not to support you.

But, apparently, you are too goddamned stupid to get that.

Also, I have supported your position in the 9/11 dungeon several times. And, I've been a daily participant on DU for a few years and I was surprised that you weren't "actually aware of (me) as a separate entity on DU until a moment ago."

[mhatrw]

51. Read this, HR.

http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=114x44788

Why can't taxpayers get the same deal Buffett got?

[anigbrowl]

48. You say yourself that you don't understand this stuff, so I suggest you stop yelling and swearing

you're making an ass of yourself. If you want to have it explained to you, ask polite questions.

[WhaTHellsgoingonhere]

13. Hamden, is that correct?

According to Sherman, bad paper on a piece of property in China, or London can be sent to a subsidiary to the US, then the US bank can sell it to the Treasury.

http://www.cnbc.com/id/15840232?video=873682522&play=1

[HamdenRice]

17. Yes, bad paper, but not the tower

I downloaded the Act from Pelosi's website and am pouring through it. "Troubled assets" is defined in the definitions section as "residential or commerical 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 March 14, 2008, the purchase of which the Secretary determines promotes financial market stability...; and the next graph is "any other financial instrument" the Secretary basically believes promotes stability.

Both definitions are limited to what you call paper. It does not authorize the purchase of actual real estate. As I read it, that paper could include a mortgage on a building in Shanghai, but not the building.

As I mentioned up thread, I think it definitely is wrongly drafted now and needs to be limited to paper that is connected to a mortgage in the US.

I would suggest everyone go to Pelosi's site and download the bill and read it. It's not as much "legalese" as you might expect for such a bill.

[WhaTHellsgoingonhere]

18. Thanks for the quick reply! n/t

[Subdivisions]

20. You have not responded to my post #11. n/t

[HamdenRice]

22. Actually I did; you did not respond to my post 19

Do you have a financial interest in disaster capitalists or so called vulture funds that will profit after a financial collapse? Seriously.

[alcibiades_mystery]

23. Why do people assume that CDO's and other asset-backed vehicles contain just US-based collateral?

If GS is holding a mortgage-backed security, it could be made up of mortgages packaged in numerous countries. Why are people assuming that these instruments refer merely to US mortgages? And what's the difference if they do? The problem is the vehicle, not the location of the collateral.

[HamdenRice]

36. I think it's fair to limit it to the US for several reasons

First, I could be wrong, but from what I've seen most mbs are either US real estate or not. That's not including CDOs. But CDOs in my opinion should not be acceptable for trade with treasury.

I think the reason it's right to limit it to mbs backed by US real estate is that we are trying to address a domestic economic crisis caused by a downturn in the domestic real estate market. That's something that the federal government can in turn address by helping homeowners. The feds cannot, for example, provide assistance to a Spanish homeowner by passing legislation that helps him renegotiate his mortgage. From the beginning, I've been arguing that what makes this feasible is the tremendous bargaining and legal power the feds have to fix this at both the bottom and top at the same time. They don't have that ability foreign real estate markets. Let Spanish banking authorities deal with Spanish mbs and so on.

The feds are basically sitting down at the blackjack table by buying mbs for treasuries. But what most people don't seem to get, is that because of their tremendous legal and financial power over both mortgages at the bottom and securities/banking at the top, it's like sitting down at the blackjack table when you also run the state gaming authority; you set the odds; you know the order of the cards in the deck; and you can tell the dealer what cards to deal to you; and oh yeah, like Michael Corleone in the Godfather, you can slip a note to the pit boss telling him you're buying a stake in the casino and he has no choice (the equity thing). Done properly, I can't see how the feds could fail to make billions on this bailout.

That does not apply if we're talking about foreign real estate markets.

[Leopolds Ghost]

12. So BFEE/Senate is paid to send money out of the country to Dubai until his heirs resume office.

Not much different than when the Roman Emperors emptied the treasury
paying massive tribute to barbarian rulers to finance their own defense.

See my sig pic.

[WhaTHellsgoingonhere]

15. I guess my concern is that, as more becomes revealed...

...our lawmakers are either exposed for not understanding their own bill in its entirety, or they are participating in the "rush this through before America raises any more questions," or both.

[goforit]

21. This pisses me off royally!!!! A bailout for foriegn banks with our money!!!

Sounds like GHWBush had a hand in this one. After all, how much money
does he have in the foriegn banks of untaxable income?????

[tama]

26. Here's the conundrum

Many European banks are bigger than their country of origin, meaning too big to save because ECB is not a bank of last resort. Federal reserve, on the other hand, is a bank of last resort.

On the other hand, US is dependent on foreigners financing their ballooning debt. So this deal is panicky agreement between US and EU financial and political elites of mutual back-scratching, even if for few more days or weeks or months before the whole house of cards falls down.

[WhaTHellsgoingonhere]

24. I hope this thread doesn't implode; pretty good discussion

fingers crossed

[ww2player]

27. This whole thing is being done to protect Foreign Investors

Gotta keep them pumping money into our economy so it doesn't collapse upon itself. But They won't keep it up indefinitely. Sooner or later the house of cards will collapse. When that happens people won't even be able to afford the gas to drive to Washington to Lynch the political crooks who sold us out.

This Bailout - I mean "Rescue deal" will not solve the problem. And it will not help the average person who is already too far in debt trying to survive.

Spending more money to try to keep the failed system propped up will only drag this whole thing out longer and make it worse for folks.

Thats What I Think Anyway.

[alcibiades_mystery]

28. That clause has nothing to do with towers in China

The clause is designed to do two things:

1) Induce a similar program in other countries (and, at this point, particularly in Europe) by
2) Assuring the creation of inter-government market between the US Treasury and their parallel agencies in other countries

Why? Other governments will not establish a similar program unless they can be assured in advance that some market may exist for moving these assets. Once these assets can be traded, they can be more effectively repackaged into profitable tranches, thereby hedging the bad tranches. Basically, the clause suggests that the Treasury is going to try to repackage the vehicles, taking a loss on the bad mortgages that they will hope to make up or minimize by making better vehicles with the good ones. You have a better chance to do this if governments are trading these assets between themselves. The other possible upshot here is that the US can move whole vehicles to another government (needless to say, other governments will be trying to do the same). before you can do that, you need a market, and before you can have a market, you need other governments to commit to similar programs, and before you can have other governments commit to similar programs, you need to give them assurances that you CAN, in principle, act as a buyer in the market. The clause does not require the US to act as a buyer, but rather enables that. If it's all overseen by an independent body, any purchase of assets from a foreign parallel agency would have to be explained and could be evaluat3ed in any case. None of this has anything to do with buying towers from China.

[HamdenRice]

30. I think you're right. But the drafting is so bad, it's incredible

And this gives the sensationalist media the ability to get on the air or on line and misstate what the probable intent of the legislation is.

[alcibiades_mystery]

37. It should read as follows

"For the purpose of establishing a market in troubled assets with such similar programs, troubled assets held by foreign financial authorities and central banks will qualify for purchase under Section 101, while US held troubled assets will qualify for sale to foreign financial authorities and central banks."

[HamdenRice]

39. Oh I see what you mean -- the assets need to be traded for international liquidity?

I have to think that one through, but I see where you're coming from. I think it would be better to do through central bank swaps.

It's also politically unpalatable to too many.

[alcibiades_mystery]

41. That's correct

I think people are going to want to see a way of unloading these things other than swaps since that would limit the form of agency developed in each jurisdiction (indeed, this whole thing would be under Treasury here). That's why they specify "foreign financial authorities AND central banks" in the premise.

[L. Coyote]

55. As I understand the scenario envisioned by the proviso

Banks and financial instiotutions in the USA have mortgage securities and they borrow from abroad. Then they default and the security in the US mortgage is now encumbered/liened by the institution loaning funds to the bankrupt or failing US financial entity. Such being the case, the assets may be purchased under this program. In effect, the bailout money goes abroad.

One has to wonder what currencies exchange were made in? Would exchange rate devaluations impact costs?

[moodforaday]

58. Okay, so it boils down to this:

a) some will say the drafting is unfortunate, most likely an "honest mistake", does not reflect the lawmakers' intent and should/will probably be changed;

b) some will say the drafting reveals the true intent of the bill, so put your tinfoil hat on for the final stage of global economic takeover by corporations.

Is there a way we can find out who is closer to the truth? And would you say that looking at historical precedent with the Bush administration and the Democrats' collusion is a legitimate way of making a judgment in this case?

[HamdenRice]

59. I have no idea which, but my personal experience informs my guesses

I spent 7 years of my life drafting corporate and financial documents and most of the time I was in a fog of confusion. For the first year or so, I thought it was just me. Then it hit me one day that everyone was as completely confused as I was. We were creating these thousand, two thousand, three thousand page documents under a deadline, staying up night after night, becoming sleep deprived, no one completely comprehending the full structure of what was being created (the bankers knowing models, the accountants knowing numbers and the lawyers knowing clauses and conditions) while also looking for catastrophic typos that could change things like "$10 thousand" to "$10 million."

This 100 page bill was drafted basically over the weekend by the staff of Barney Frank, Nancy Pelosi, and Henry Paulson. The Democrats may have rolled over many times, but I'd be surprised if they are driving a process to allow the final corporate global takeover of the world just months before they will be given the keys to the kingdom in an Obama administration.

This legislation is basically coming out of Barney Frank's office, and having followed his career of the years, I just haven't seen him as a driver of final corporate global takeover, even if on economic matters he's pretty beholden to the financial sector.

Maybe they did have nefarious objectives; on the other hand, maybe it's still a very rough, badly drafted, incomplete bill created by confused sleep deprived people.

Hamdenrice.blogspot.com

[BelgianMadCow]

31. It was the Chinese who started it anyway

Asking for government backing of US paper.

I guess they didn't just mean "paper" backing.

[KansDem]

35. Welcome to the New World Order™

The Bush Family couldn't care less about America and Americans. They and their fellow oligarchs want it all!

[ww2player]

42. Read the Senate Bill

http://michellemalkin.com/2008/10/01/read-the-senate-bailout-bill-here/

Money for the crooks and a few bucks to buy some support.
A few of the earmarks stuffed in the bill:

- Film and Television Productions (Sec. 502)
- Wooden Arrows designed for use by children (Sec. 503)
- 6 page package of earmarks for litigants in the 1989 Exxon Valdez incident, Alaska (Sec. 504)

Tax earmark “extenders” in the bailout bill.
- Virgin Island and Puerto Rican Rum (Section 308)
- American Samoa (Sec. 309)
- Mine Rescue Teams (Sec. 310)
- Mine Safety Equipment (Sec. 311)
- Domestic Production Activities in Puerto Rico (Sec. 312)
- Indian Tribes (Sec. 314, 315)
- Railroads (Sec. 316)
- Auto Racing Tracks (317)
- District of Columbia (Sec. 322)
- Wool Research (Sec. 325)

[snappyturtle]

47. My computer won't open anything with malkin's name on it,however,

thanks for posting the earmarks. Does make one wonder how serious the Senate really is? Welcome to DU! :hi:

[L. Coyote]

56. EMERGENCY ECONOMIC STABILIZATION ACT OF 2008

U.S. Senate Committee on Banking, Housing, and Urban Affairs
Oct 1, 2008 -

====================

Key elements of rescue plan
September 29, 2008 - http://www.latimes.com/business/la-fi-bailoutbox29-2008sep29,0,585286.story

Highlights
The 110-page Emergency Economic Stabilization Act of 2008 -- and the $700 billion that goes with it -- was designed to "restore liquidity and stability to the financial system" and to protect U.S. homeownership and other personal investments. The key elements:

Financial institutions
* Provides as much as $700 billion to the U.S. Treasury, including an immediate payment of $250 billion. If needed, there would be additional payments of $100 billion and $350 billion, with the last payment subject to congressional approval.

* The Treasury would create a program to buy distressed mortgage-related investments and other troubled assets from cash-strapped banks and financial institutions.

[lostnotforgotten]

43. Just As I Suspected - We Are Being Lied To Once Again!

eom

[spin]

50. The mushroom theory of politics...

Keep the citizens in the dark and feed them bullshit.

[BrklynLiberal]

44. K & R!!!!!!

[TxBlue]

53. Kick

[OakCliffDem]

57. Kick

[AzDar]

60. Ugh.

:kick: