Most Popular
1. It’s a New Macro, the Gold Market Knows It, But Dead Men Walking Do Not (yet)- Gary_Tanashian
2.Stock Market Presidential Election Cycle Seasonal Trend Analysis - Nadeem_Walayat
3. Bitcoin S&P Pattern - Nadeem_Walayat
4.Nvidia Blow Off Top - Flying High like the Phoenix too Close to the Sun - Nadeem_Walayat
4.U.S. financial market’s “Weimar phase” impact to your fiat and digital assets - Raymond_Matison
5. How to Profit from the Global Warming ClImate Change Mega Death Trend - Part1 - Nadeem_Walayat
7.Bitcoin Gravy Train Trend Forecast 2024 - - Nadeem_Walayat
8.The Bond Trade and Interest Rates - Nadeem_Walayat
9.It’s Easy to Scream Stocks Bubble! - Stephen_McBride
10.Fed’s Next Intertest Rate Move might not align with popular consensus - Richard_Mills
Last 7 days
Stock Market Rip the Face Off the Bears Rally! - 22nd Dec 24
STOP LOSSES - 22nd Dec 24
Fed Tests Gold Price Upleg - 22nd Dec 24
Stock Market Sentiment Speaks: Why Do We Rely On News - 22nd Dec 24
Never Buy an IPO - 22nd Dec 24
THEY DON'T RING THE BELL AT THE CRPTO MARKET TOP! - 20th Dec 24
CEREBUS IPO NVIDIA KILLER? - 18th Dec 24
Nvidia Stock 5X to 30X - 18th Dec 24
LRCX Stock Split - 18th Dec 24
Stock Market Expected Trend Forecast - 18th Dec 24
Silver’s Evolving Market: Bright Prospects and Lingering Challenges - 18th Dec 24
Extreme Levels of Work-for-Gold Ratio - 18th Dec 24
Tesla $460, Bitcoin $107k, S&P 6080 - The Pump Continues! - 16th Dec 24
Stock Market Risk to the Upside! S&P 7000 Forecast 2025 - 15th Dec 24
Stock Market 2025 Mid Decade Year - 15th Dec 24
Sheffield Christmas Market 2024 Is a Building Site - 15th Dec 24
Got Copper or Gold Miners? Watch Out - 15th Dec 24
Republican vs Democrat Presidents and the Stock Market - 13th Dec 24
Stock Market Up 8 Out of First 9 months - 13th Dec 24
What Does a Strong Sept Mean for the Stock Market? - 13th Dec 24
Is Trump the Most Pro-Stock Market President Ever? - 13th Dec 24
Interest Rates, Unemployment and the SPX - 13th Dec 24
Fed Balance Sheet Continues To Decline - 13th Dec 24
Trump Stocks and Crypto Mania 2025 Incoming as Bitcoin Breaks Above $100k - 8th Dec 24
Gold Price Multiple Confirmations - Are You Ready? - 8th Dec 24
Gold Price Monster Upleg Lives - 8th Dec 24
Stock & Crypto Markets Going into December 2024 - 2nd Dec 24
US Presidential Election Year Stock Market Seasonal Trend - 29th Nov 24
Who controls the past controls the future: who controls the present controls the past - 29th Nov 24
Gold After Trump Wins - 29th Nov 24
The AI Stocks, Housing, Inflation and Bitcoin Crypto Mega-trends - 27th Nov 24
Gold Price Ahead of the Thanksgiving Weekend - 27th Nov 24
Bitcoin Gravy Train Trend Forecast to June 2025 - 24th Nov 24
Stocks, Bitcoin and Crypto Markets Breaking Bad on Donald Trump Pump - 21st Nov 24
Gold Price To Re-Test $2,700 - 21st Nov 24
Stock Market Sentiment Speaks: This Is My Strong Warning To You - 21st Nov 24
Financial Crisis 2025 - This is Going to Shock People! - 21st Nov 24

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

US Financial Crisis Bailout Crashes to $250 billion

Politics / Credit Crisis Bailouts Sep 25, 2008 - 04:28 PM GMT

By: Mike_Shedlock

Politics Best Financial Markets Analysis ArticleThe Wall Street Journal is reporting Agreement Reached on Bailout Ahead of High-Level Meeting .
Top House and Senate Democratic and Republican lawmakers have reached a tentative agreement on a $700 billion plan to bail out U.S. financial markets, with some predicting the measure would pass both chambers of Congress.


After a three-hour meeting, lawmakers agreed to legislative principles that would approve Treasury's request for the funds, but would break it into installments, according to people familiar with the matter. Treasury would have access to $250 billion immediately, with another $100 billion to follow if needed. Congress would be able to block the last installment through a vote if it was unhappy with the program.

The agreement could require all companies participating in the program to agree to limits on executive pay—such as restrictions on "golden parachutes." It is also likely to give the government equity warrants in all participating companies.

Still unresolved is whether or not to include changes to bankruptcy law that would give judges the right to change the terms of mortgages. Democratic Sen. Dick Durbin of Illinois made a plea for it to be included, even though many lawmakers and the White House are hotly opposed.

Noticeably absent at the Thursday morning meeting in the Capitol was Sen. Richard Shelby of Alabama, the ranking Republican on the Senate Banking Committee. Mr. Shelby has said he opposes the idea of bailing out Wall Street and was replaced in negotiations by Mr. Bennett, the number two GOP senator on the Banking panel.

Significant Changes Recap

  • Initial size of the boondoggle reduced to $250 billion. Paulson was adamant against that provision as was Bernanke.
  • The government (taxpayer) will get warrants in participating companies. This is likely to be symbolic, but perhaps not. It depends on how it is structured. Paulson was adamant against this provision as well.
  • The agreement could require all companies participating in the program to agree to limits on executive pay—such as restrictions on "golden parachutes." The article says could . My translation is " will ". Paulson was adamant against this provision as well. It seems that everything Paulson has been adamant against is failing. His score is -5 and counting, starting with Fannie Mae.

Shelby Replaced

I am curious about how this can happen. "Mr. Shelby has said he opposes the idea of bailing out Wall Street and was replaced in negotiations by Mr. Bennett, the number two GOP senator on the Banking panel."

I have a call into Shelby's office and senator Shelby is still opposed to this deal.

I salute Senator Shelby.

I also salute all of you who phoned, wrote, or faxed Congress. The changes we have seen so far only happened because you took the time to do so.

190+ Economists Slam Bailout

Over 190 top economists in the country have slammed this bailout on grounds of fairness, ambiguity, and long term effects .

Click here to see the Letter From Economists to the Speaker of the House of Representatives and the President pro tempore of the Senate.

What is it that Paulson knows that 190+ economists don't? After all Paulson was telling us all how safe the US Banking system was just a few weeks ago.

House Republicans Balk

This story is AFTER the alleged agreement: More Republicans Balking At Wall Street Bailout Plan .

Still Work To Do

This modified bill is going to pass the house. There is still a chance for a filibuster in the U.S. Senate. I would like all of you to Fax Senator Shelby thanking him for his courageous stance so far and asking him to please continue the fight, and to block this bill by filibuster if he has to.

Another Fax Needed

Fax Title " Senator Shelby, Installments Won't Help. Block This Bill"

Senator Shelby

I salute you for the courageous stance you have taken so far.

However, there is still work to be done. Installments will not help and you know it.

You are correct when you state "There are no credible assurances that this plan will work. We could very well spend $700 billion and not resolve the crisis."

Senator, the odds of failure are 100%. The Paulson plan will not create any jobs or help homeowners pay their bills. Instead it diverts $700 billion of taxpayer funds to failed banks that took excessive risks. The sheer size of the bailout will cause interest rates to rise, further adding to taxpayer woes.

Long term interest rates are already up a half point on news of this bill. They will rise more if it passes. How is that supposed to help homeowners?

Robbing taxpayers to pay failed banks cannot possibly work!

Installments are a trap.

Printing money and giving it away cannot work either. If it did work, Zimbabwe would be the most prosperous nation in the world.

190+ Economists Slam Bailout

Over 190 top economists in the country have slammed this bailout on grounds of fairness, ambiguity, and long term effects.

http://faculty.chicagogsb.edu/john.cochrane/research/Papers/mortgage_protest.htm

What is it that Paulson knows that 190+ economists don't? After all Paulson was telling us all how safe the US Banking system was just a few weeks ago.

Senator Shelby, our prayers are with you that you have the courage to stand up for what you know you must do: Block This Bill.

I ask that you approach fellow Senators Jim Bunning, Chuck Grassley, and Jim DeMint in hope that one or more will have the courage to join you to in preventing what is still a preventable disaster.

Your Name
Your Phone Number

Fax For Bunning, Grassley, DeMint, Ensign, Reid

Dear Senator

Earlier today I asked Senator Richard Shelby to have the courage to stand alone, if necessary, block the Paulson proposal.

Senator, the odds of failure are 100%. The Paulson plan will not create any jobs or help homeowners pay their bills. Instead it diverts $700 billion of taxpayer funds to failed banks that took excessive risks. The sheer size of the bailout will cause interest rates to rise, further adding to taxpayer woes.

Long term interest rates are already up a half point on news of this bill. They will rise more if it passes. How is that supposed to help homeowners?

Robbing taxpayers to pay failed banks cannot possibly work!

Printing money and giving it away cannot work either. If it did work, Zimbabwe would be the most prosperous nation in the world.

190+ Economists Slam Bailout

Over 190 top economists in the country have slammed this bailout on grounds of fairness, ambiguity, and long term effects.

http://faculty.chicagogsb.edu/john.cochrane/research/Papers/mortgage_protest.htm

What is it that Paulson knows that 190+ economists don't? After all Paulson was telling us all how safe the US Banking system was just a few weeks ago.

Senator, our prayers are with you that you have the courage to stand up with Senator Shelby and do what you know you must do: Block This Bill.

Your Name
Your Phone Number

Sen. Richard Shelby (R) 202-224-3416 or 202-224-5137 (both seem to work, I fax both)
Sen. John Ensign (R) 202-228-2193
Jim DeMint (R) 202-228-5143
Sen. Jim Bunning (R) 202-228-1373
Sen. Chuck Grassley (R) 202-224-6020
Sen. Harry Reid (D) 202-224-7327

The Odds Of Success Improve With Every Fax!
Your Fax Counts.
This is a critical Juncture, please act now.

Send this article to 10 others and have them do the same.


Once More.
We are almost there.
One more round of faxes.

If agreement in the Senate is not reached over the weekend, this bill is dead.

Thanks For Your Help!

Addendum:

Barbara Boxer was on TV 30 minutes ago saying she hasn't decided how to vote! Call her up whether she is your senator or not! There's only 100 Senators, everyone counts! Senator Boxer Phone: (202) 224-3553

Fax: (202) 224-0454

Please phone AND fax Senator Boxer whether she is your senator or not.

By Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com

Click Here To Scroll Thru My Recent Post List

Mike Shedlock / Mish is a registered investment advisor representative for SitkaPacific Capital Management . Sitka Pacific is an asset management firm whose goal is strong performance and low volatility, regardless of market direction.

Visit Sitka Pacific's Account Management Page to learn more about wealth management and capital preservation strategies of Sitka Pacific.

I do weekly podcasts every Thursday on HoweStreet and a brief 7 minute segment on Saturday on CKNW AM 980 in Vancouver.

When not writing about stocks or the economy I spends a great deal of time on photography and in the garden. I have over 80 magazine and book cover credits. Some of my Wisconsin and gardening images can be seen at MichaelShedlock.com .

© 2008 Mike Shedlock, All Rights Reserved

Mike Shedlock Archive

© 2005-2022 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Comments

Litunovskiy
15 Aug 10, 02:11
Litunovskiy

Especially involves that anybody more probably and has not understood that the author meant


Post Comment

Only logged in users are allowed to post comments. Register/ Log in