GOP plan put forth, scuttles agreement at last moment.

[SirNitram]

Gee, whose surprised? McCain swoops in and fucks it all up.

Link to the basics of their proposal.

Let's see. The 'Private market will solve EVERYTHING' schtick. Remove taxes schtick. Remove regulations schtick. And make a group of people to talk about it while, you know, regulations are removed and taxes suspended or slashed.

Raise hand if surprised that the GOP plan is the same nonsense it always is.

[Col. Crackpot]

from my understanding of this, the government may very well end up making money back on this deal as there is quite a big of prime paper rolled into this bailout.

[Aratech]

Gee, whose surprised? McCain swoops in and fucks it all up.

Link to the basics of their proposal.

Let's see. The 'Private market will solve EVERYTHING' schtick. Remove taxes schtick. Remove regulations schtick. And make a group of people to talk about it while, you know, regulations are removed and taxes suspended or slashed.

Raise hand if surprised that the GOP plan is the same nonsense it always is.

Can I raise my hand if I am of the belief that there is a significant number of American people waiting to eat this up and proclaim that McCain's proposal would have been the financial equivalent of the second coming?

[Col. Crackpot]

As someone who holds no ill will towards McCain, and actually still has a great deal of respect for the man, I would just like to chime in and say he needs to stop acting like a turd burglar on this. Swooping in like superman shouting, "Oh Noes! Cancel teh election! H3rez i coMe 2 save the ec0nomi3s!"

[SirNitram]

from my understanding of this, the government may very well end up making money back on this deal as there is quite a big of prime paper rolled into this bailout.

There's a chunk of economists who are looking at it and concluding, for whatever reason, that 100-200 B of it will be in stuff that's so soaked in Alt-A that it'll be net losses. The rest is prime paper that's not moving because of A) The people smart enough to realize deflation is in swing are hording and B) The rating downgrades are hitting entire institutions.

Further, none of the plans reinvest the money. So if we take some of that trash, buy it for 70B, it winds up sold for 50B, that's 20B lost.. And the rest is put into paying down the debt or other treasury operations.

I'm immensely skeptical of net profits on this. But it could happen. The whole plan bypasses the nervous nature of the market at present. But it is a big question on whether the government will pay a fair price or premium prices.

[Stormbringer]

Gee, whose surprised? McCain swoops in and fucks it all up.

From what I've heard on NPR it was Senator Shelby that torpedoed the deal, not McCain. Same cute little (R) but a different guy.

Of course, they also said that the "agreement in principle" ignored several major issues so this might have just been political theater.

I'm immensely skeptical of net profits on this. But it could happen. The whole plan bypasses the nervous nature of the market at present. But it is a big question on whether the government will pay a fair price or premium prices.

It largely depends on how things are handled. As I understand it, one of the big unresolved that split the deal was the Democrats wanting much stronger protections to make sure such assets are handled in the American taxpayers best interest instead of big business's. The Republicans, unsurprisingly, were not so eager to go along with that.

[SirNitram]

Gee, whose surprised? McCain swoops in and fucks it all up.

From what I've heard on NPR it was Senator Shelby that torpedoed the deal, not McCain. Same cute little (R) but a different guy.

Of course, they also said that the "agreement in principle" ignored several major issues so this might have just been political theater.

I don't recall anything major of Shelby, but I will hold off my declarations of the stunt impacting it for now. Shelby a normal shill for the deregulation/suspend taxes nutbars?

I'm immensely skeptical of net profits on this. But it could happen. The whole plan bypasses the nervous nature of the market at present. But it is a big question on whether the government will pay a fair price or premium prices.

It largely depends on how things are handled. As I understand it, one of the big unresolved that split the deal was the Democrats wanting much stronger protections to make sure such assets are handled in the American taxpayers best interest instead of big business's. The Republicans, unsurprisingly, were not so eager to go along with that.

Gee, surprised. I'm not surprised, the equity part of the Dem plan would make it painful for banks to sell bad stuff to the government if they knew it would go bad.

[Col. Crackpot]

There's a chunk of economists who are looking at it and concluding, for whatever reason, that 100-200 B of it will be in stuff that's so soaked in Alt-A that it'll be net losses. The rest is prime paper that's not moving because of A) The people smart enough to realize deflation is in swing are hording and B) The rating downgrades are hitting entire institutions.

Further, none of the plans reinvest the money. So if we take some of that trash, buy it for 70B, it winds up sold for 50B, that's 20B lost.. And the rest is put into paying down the debt or other treasury operations.

I'm immensely skeptical of net profits on this. But it could happen. The whole plan bypasses the nervous nature of the market at present. But it is a big question on whether the government will pay a fair price or premium prices.

Even if all of the Alt-A crap goes down the shitter, (which it wont) the notes are still secured by tangible assets... houses. Like Larry Kudlow said today treasuries are great, but you cant live in a T-bill.

we need to know the ages of these notes. the finance charge on a 30 year note even at 5% is in excess of the principal. This deal isn't as bad as you think. From what i have heard, house GOP'ers are more concerned about starting a pissing contest over who has oversight and garbage "gah! socialism!" arguments.

[J]

Currently the federal government insures approximately half of all mortgage backed
securities. (MBS) We can insure the rest of current outstanding MBS; however, rather
than taxpayers funding insurance, the holders of these assets should pay for it. Treasury
Department can design a system to charge premiums to the holders of MBS to fully
finance this insurance.

Duh yeah. Make the banks pay for insurance with money they don't have. Brilliant idea. Or maybe he means designing a derivatives system similar to credit default swaps for hedging the loans. That just spells abuse.

Temporary tax relief provisions can help companies free up capital to maintain
operations, create jobs, and lend to one another. In addition, we should allow for a
temporary suspension of dividend payments by financial institutions and other regulatory
measures to address the problems surrounding private capital liquidity.

When in doubt, cut taxes, and the free market will provide!

Increase Transparency. Require participating firms to disclose to Treasury the value of
their mortgage assets on their books, the value of any private bids within the last year for
such assets, and their last audit report.

It's a start, but needs a lot more. All level 3 assets must be disclosed, if there are no bids, they are a big fat zero.

Limit Federal Exposure for High Risk Loans: Mandate that the GSEs no longer securitize
any unsound mortgages.

How about oh, don't make those unsound loans in the first place. All mortgages will be full doc, fixed rate, 20% down, 36% DTI max, end of story.

Call on the SEC to audit reports of failed companies to ensure that the financial standing
of these troubled companies was accurately portrayed.

How about we get the FBI and IRS to audit them since the SEC has proven to be completely incompetant.

Wall Street Executives should not benefit from taxpayer funding.

No, they should be locked away in prisons with high rates of forced sodomy.

Call on the SEC to review the performance of the Credit Rating Agencies and their
ability to accurately reflect the risks of these failed investment securities.

That's just hilarious, sure, let's have the mafia do an audit on their own racket.

----------------------


In short, it neither addresses nor fixes any of the problems in the financial system.

[Stormbringer]

I don't recall anything major of Shelby, but I will hold off my declarations of the stunt impacting it for now. Shelby a normal shill for the deregulation/suspend taxes nutbars?

From the No Basis for 700B thread is an article confirming that.

I can't say as I know Shelby's track record and the report didn't mentions his reasons so I have no real idea.

Gee, surprised. I'm not surprised, the equity part of the Dem plan would make it painful for banks to sell bad stuff to the government if they knew it would go bad.

Among other things.

[The Kernel]

Duh yeah. Make the banks pay for insurance with money they don't have. Brilliant idea. Or maybe he means designing a derivatives system similar to credit default swaps for hedging the loans. That just spells abuse.

That's exactly what it sounds like, some kind of horrible structure like a credit default swap. Does anyone really need to explain to these knuckle draggers why a CDS is a terrible idea? Jesus Christ, we may not like the original bailout plan but at least it has the potential to help while the government acting as a giant CDS provider is just guaranteed to be a clusterfuck.

[The Kernel]

I would also like to know how the government providing credit default swaps is somehow more in line with the Republican platform of less government interference in the free markets. This seems completely ass backwards to me.

[Tribun]

Hey, if the whole thing is delayed, you think McCain will be caught in a bad situation (Will debate with Obama or won't he)?

[Darth Fanboy]

At this point, I would not be shocked to hear reports that McCain torpedoed the deal so that he wouldn't lose his excuse to back out of the debate.

[Tribun]

At this point, I would not be shocked to hear reports that McCain torpedoed the deal so that he wouldn't lose his excuse to back out of the debate.

I heared the theory he did that to then "suddenly" present himself as the man who had brought the conservative Reps back into the boat so that he would look like the hero who saved everything in the last second.

Of course if it is true, that he could have called ghosts that he couldn't control.

[DarkSilver]

Actually..if McCain did that to try to win over people, I think he just lost a lot.

No one was happy with McCain going "I must go and saves de economies!" and trying to get get out of the debate with Obama (or his idea to get Palin off of debating Biden). And while a grand majority oppossed the original Bailout Plan, I've no clue how many were in support of Dodd's plan (I was one of them, it sounded like a good plan to start off with, and gave us great protection and oversight over those bailed out).

If McCain doesnt show up for tonight's debate, I'll gladly enjoy 90 minutes of a Town Hall or a In Depth interview with Senator Obama.

[Broomstick]

This jumped out at me:

Instead of injecting taxpayer capital into the market to produce liquidity, private capital can be drawn into the market by removing regulatory and tax barriers that are currently blocking private capital formation. Too much private capital is sitting on the sidelines during this crisis.

That's because, at this point, anyone who still has any capital is too smart to buy bullshit. It has nothing to do with "regulatory and tax barriers", it's because you'd be stupid to touch this stuff with a 10 foot pole, which is EXACTLY why no one is buying it any longer and we have a crisis!

[J]

I would also like to know how the government providing credit default swaps is somehow more in line with the Republican platform of less government interference in the free markets. This seems completely ass backwards to me.

Ummm...it creates yet another market for credit default swaps, putting liquidity into the system and stuff, or something. I give up, I can't make sense of it either. But looking at it as a tool to leverage up, muddy the waters and launder yet more money it makes perfect sense.

That's because, at this point, anyone who still has any capital is too smart to buy bullshit. It has nothing to do with "regulatory and tax barriers", it's because you'd be stupid to touch this stuff with a 10 foot pole, which is EXACTLY why no one is buying it any longer and we have a crisis!

No kidding, hedge funds and other investors have pulled out something like $600 billion in the past few weeks and stuffed it into the equivalent of a giant mattress. They're sitting in cash and waiting for the SEC's short selling restrictions to expire so they can short the financials into the ground.

[aerius]

The way I see it the longer they keep arguing over the bill the better it is for all of us. What we have before Congress now is a bunch of crap that was thrown together at the last second without any thought of the consequences, and which if passed will undoubtedly fuck everything over completely. We can't have that, they need to think things through and understand, really understand the underlying situation and what the bill will do to it. Cause if they fuck it up, there ain't gonna be anyone around to unfuck till sometime next year.

Look at all the shit which has happened this month alone. When things really start coming apart it's going to make September look like a picnic, and there won't be anyone around to do anything about it.

[Sriad]

That's because, at this point, anyone who still has any capital is too smart to buy bullshit. It has nothing to do with "regulatory and tax barriers", it's because you'd be stupid to touch this stuff with a 10 foot pole, which is EXACTLY why no one is buying it any longer and we have a crisis!

No kidding, hedge funds and other investors have pulled out something like $600 billion in the past few weeks and stuffed it into the equivalent of a giant mattress. They're sitting in cash and waiting for the SEC's short selling restrictions to expire so they can short the financials into the ground.

Seriously. Smart investors have been betting against real-estate for the last 15 months now. "Lowering barriers" would only get sucker money involved for now, and would make the NEXT round of marketplace abuses that much easier.