Bailout plan NOT pwned!

[Covenant]

Is there actually any answer to this? I hear a lot of people with a lot of theories, and none of them seem any less realistic than the next because the market seems to have the collective mind of a child, and none of this money is real outside of perception and investor temperment.

I'd like to think the people here are more objective than lawmakers, but is not voting on a bill really preferable to voting on it? Do I follow the logic here correctly, which says that even if there is a financial loss, it'll be less than the 700 billion's eventual cost? And if that's true, then what should the government do? Is it even possible for skitterish money people to fix this on their own?

[Fingolfin_Noldor]

Is there actually any answer to this? I hear a lot of people with a lot of theories, and none of them seem any less realistic than the next because the market seems to have the collective mind of a child, and none of this money is real outside of perception and investor temperment.

I'd like to think the people here are more objective than lawmakers, but is not voting on a bill really preferable to voting on it? Do I follow the logic here correctly, which says that even if there is a financial loss, it'll be less than the 700 billion's eventual cost? And if that's true, then what should the government do? Is it even possible for skitterish money people to fix this on their own?

The trouble is that there are a grotesque tonne of unwanted assets that need to be disposed off, from houses that no one wants to buy, to defaulted loans that no one wants to claim. As much as we want to pretend these assets don't exist, firms are just going to sit on them and be less willing to lend money because their profits on the near term will be dragged down by the bad assets. Writing them down isn't an option because they used to be valued in billions. Of course, how they were even valued was dubious in the first place.

A similar situation happened in the Scandinavian countries before, but the difference is the governments nationalised banks that accepted aid. You don't see that happening in America though.

[CJvR]

While there is something deeply satisfying about watching those better off crash and burn it is not very smart. A failed finance sector is not likely to restrict it meltdown to para-less base jumpers.

[Admiral Valdemar]

Good find, Shep. That's all that can be said for this plan: blatant cronyism.

[Justforfun000]

Interesting opinion article...

http://www.bostonherald.com/news/opinio ... ormat=text

Bear market for personal responsibility
By Michael Graham | Tuesday, September 30, 2008 | http://www.bostonherald.com | Op-Ed

Despite the vote by the House of Representatives yesterday, the fact remains that America desperately needs a bailout - a massive rescue plan for an institution vital to our nation and its economy.

My bailout target?

Personal responsibility.

America is experiencing a collapse of the ethics market. Belief in the notion that people should be responsible for their own actions, or pay their own bills or keep their promises has plummeted. It’s time to pump moral and ethical capital into the idea of individual responsibility.

Is it any wonder that Wall Street is waiting for a bailout? After all, we’ve become a bailout society.

Earlier this summer - before the financial meltdown - we passed Barney Frank’s $300 billion bailout of individual homeowners who had bought homes they couldn’t afford. Last week, Congress voted a $25 billion bailout of the auto industry because they’ve made cars nobody wants to drive.

And now we’re bailing out banks because they made loans to people who feel no duty to repay them. This failure of personal responsibility has led to the potential failure of our financial markets.

Yes, there is a public policy aspect to this story. The Clinton and Bush administrations were wrong to push easy lending to low-income borrowers, and the Democratic Congress’s scandalous affair with Freddie and Fannie is enough to make Barney Frank blush (almost).

Wall Street bankers who leveraged $1 trillion worth of mortgage-backed securities up to 40 times on the dollar get no sympathy from me. But it is an inescapable - if unpleasant - fact that banks would not be failing or credit markets frozen if borrowers were keeping their word.

This isn’t a failure of finances. It’s a failure of character.

Barney Frankophiles rage against this idea as “blaming the victim.” I ask “victim of what?” The economy?

I’m sorry, but folks who lost their homes during the Depression were victims of the economy. Twenty percent unemployment made it impossible for folks to pay the mortgage.

We are experiencing the opposite: Unemployment has barely hit 6 percent, and yet so many borrowers are walking away from their loans that they might take down the entire economy.

You can blame mortgage brokers willing to make loans to any warm body, but every transaction ended with that warm body - presumably a voting-age adult - signing their good name on a pledge to repay the loan.

But when was the last time you even heard the phrase “my good name?” Has a single politician in the midst of this mortgage crisis mentioned the notion of personal responsibility even once?

No. Instead, John McCain rails against “Wall Street fat cats,” Barack Obama suggests tar and feathers for a few CEOs, and then we write a $1 trillion check to subsidize the bad behavior of all involved.

And it’s not just on Wall Street. Main Street’s always up for a bailout, too.

Marriage too tough to manage? Just bail out, and don’t worry about the consequences. The kids will probably be OK.

Don’t want to pay your bills? Why not bankruptcy? Hey - everybody does it!

And what are proposals here in Massachusetts to abandon the MCAS other than a bailout of under-performing students? Why make failing kids work harder, when it’s so easy to drop the standards instead?

Yesterday, the Herald reported that the Boston City Council is considering legal action against parents who refuse to take responsibility for their truant kids.

In Salem, a woman who tripped over a firefighter’s rescue bag in a rest room is suing the city for her broken wrist. She can’t be held responsible, it seems, for even watching where she’s going.

So here’s the final question: If everyone gets a bailout, who does the bailing?

[Covenant]

A voting age adult can sign his life away in the small print, but if he does, is it his fault that someone put that there? The actions taken by this entire money-machine were amazingly irresponsible unless you look at it from the point of view that people defaulting and giving their homes up was in fact part of the system. The bundling and selling of these mortgages like they're just a piece of stock, and the immense greed that drove them to simply shovel them off, doesn't make me think they were even trying to give these people a realistic loan. When you have adjustable rates and a credit crunch at the same time, people get stuck not being able to refinance and so get hammered with extra fees, additional credit woes, and the all-too-common risk of defaulting and foreclosure. These are complex things. How many people who, for the first time in their life, are able to afford a home using one of these new loans, are going to be able to navigate all this? Many of the people had good credit lines, and were not bad risks. Something else had to be in play. These systems are far too big to simply ask the buyer to understand everything they're getting themselves into, and it's immensely shortsighted to think you can just let them fall on their faces without it biting the rest of us in the ass.

Bailouts suck, yes. But sometimes you need to help your idiot neighbor so that the entire neighborhood doesn't go to shit. I agree that these buyers are dumb as a wet rock, but that should have given pause to someone before they sold that person a house. Since when do businesses have no expectation of responsibility when it comes to checking if their client will be able to pay them?

[Illuminatus Primus]

I think that "woe is personal responsibility" rant sounds like a big wad of nostalgia for good honest America that never existed wrapped around a kernel of truth in the moral decay of American society. Unfortunately, its what Mike said. Most people have to be taken care of, and everyone in America is loathe to admit it. No major commentator would have the balls to say it. But it is true. Instead we'll repeat ad nauseum and people will continue to wax poetic about the moral failure of society blah blah blah. At the end of the day, most humans are not very altruistic, not capable of long-term planning, and not very intelligent.

[J]

Is there actually any answer to this? I hear a lot of people with a lot of theories, and none of them seem any less realistic than the next because the market seems to have the collective mind of a child, and none of this money is real outside of perception and investor temperment.

There are solutions, however we're so far into the mess that there are no longer any solutions to get us out of the hole which do not involve a severe recession or depression. We delayed, lied, and devised half-baked plans which backfired, and now it's too late.

I'd like to think the people here are more objective than lawmakers, but is not voting on a bill really preferable to voting on it? Do I follow the logic here correctly, which says that even if there is a financial loss, it'll be less than the 700 billion's eventual cost? And if that's true, then what should the government do? Is it even possible for skitterish money people to fix this on their own?

Yes. See Ender's post on the previous page, Treasury & the Fed threw $630 billion into the market on Monday and we came out with a 7% crash in all the indices. That's 90% of the proposed bailout bill and it just vanished into a black hole. Throwing money around does not work, it just adds billions to the national debt which you and your children will have to pay for in the form of higher taxes.

Any plan which does not address transparency, leverage, and regulations enforcement in the market will fail. Guaranteed. As long as the banks are allowed to fudge their books, play accounting games, play hedge fund games with insane leverage and the SEC and other regulation agencies turn a blind eye to it all, the market will continue doing what it's doing right now. There will be no confidence and daily 200-500 point swings will be the norm, not the exception.

[RedImperator]

I think that "woe is personal responsibility" rant sounds like a big wad of nostalgia for good honest America that never existed wrapped around a kernel of truth in the moral decay of American society. Unfortunately, its what Mike said. Most people have to be taken care of, and everyone in America is loathe to admit it. No major commentator would have the balls to say it. But it is true. Instead we'll repeat ad nauseum and people will continue to wax poetic about the moral failure of society blah blah blah. At the end of the day, most humans are not very altruistic, not capable of long-term planning, and not very intelligent.

The way I see it, the bankers were supposed to be the grownups. They're supposed to be the experts who know if a borrower can repay a loan or not. Instead they spent the best part of a decade making shitty loans and promising people they could refinance their way out of them, and now everybody's in the shit because we're out of chairs and the music's stopped. Yeah, a lot of people were irresponsible and took out loans they couldn't afford--but each and every one of those loans was approved by someone who should have known better.

[J]

Senate to do an end-run on the bill by tacking it on as a rider on another bill. Now with more tax cut goodness!

Yahoo news link

Senate to vote on rescue plan with added tax cut
Tuesday September 30, 10:54 pm ET
By Charles Babington and Andrew Taylor, Associated Press Writers
Senate to vote on $700 billion financial rescue plan on Wednesday with added tax cut plan


WASHINGTON (AP) -- In a bold bid to revive President Bush's multibillion-dollar financial rescue plan, Senate leaders scheduled a vote for Wednesday night on a version of the bill that adds substantial tax cuts meant to appeal to Republicans when it reaches the House.

The goal is to net at least 12 more House votes than the rescue proposal received Monday, when lawmakers rocked the political and financial worlds by rejecting it.

The gambit is certain to anger some conservative House Democrats, who object to tax cuts that are not offset with spending cuts. But Senate strategists assume it will gain more House votes than it will lose.

If so, Congress would be poised to pass landmark legislation giving the government billions of dollars to buy deeply discounted mortgage-backed securities that are choking off credit and roiling the markets.

The strategy is risky because some House members might see it as a high-handed move by senators. Senate passage of a bailout measure has seemed assured all along. The showdown is in the House, but now the Senate is trying to force the House's hand.

Sen. Charles Schumer, D-N.Y., called it "a brilliant move" that will "help pick up votes on both sides of the aisle."

House Speaker Nancy Pelosi's reaction was much cooler. "The Senate has made a decision about how to proceed and what can pass that body," the California Democrat said. "The Senate will vote tomorrow night, and the Congress will work its will."

The new approach, announced Tuesday night by Senate Majority Leader Harry Reid, D-Nev., and Minority Leader Mitch McConnell, R-Ky., would tack large and contentious tax measures to the bailout bill. Senate leaders figure the House will have to approve it because the tax cuts are too appealing to Republicans and the financial rescue plan will still seem essential to most Democrats.

The Senate approach uses big, game-changing amendments. House leaders earlier were considering the smallest possible tweaks to the bill in hopes of picking up 12 more votes.

The Senate bill would raise federal deposit insurance limits to $250,000 from $100,000, as called for presidential nominees Barack Obama and John McCain only hours earlier.

House Minority Leader John Boehner, R-Ohio, praised the move, but many Democrats had signaled approval as well.

McCain, Obama and Sen. Joe Biden of Delaware, the Democratic vice presidential nominee, signaled plans to return to Washington for the Wednesday night vote. If Obama and Biden vote for the measure, it would make it more difficult for Pelosi and other Democrats to reject or change the Senate measure.

The Senate measure will graft the bailout language to a tax bill it approved last week, on a 93-2 vote. It includes: a provision to prevent more than 20 million middle-class taxpayers from feeling the bite of the alternative minimum tax, $8 billion in tax relief for those hit by natural disasters in the Midwest, Texas and Louisiana and some $78 billion in renewable energy incentives and extensions of expiring tax breaks.

In a compromise worked out with Republicans, the bill does not pay for the AMT and disaster provisions but does have revenue offsets for part of the energy and extension measures.

That wasn't enough earlier this year for the House, which insisted that there be complete offsets for the energy and extension part of the package.

The Senate version also may include a measure to require health plans for 51 or more employees to give equal treatment to mental health or addiction if they cover such illnesses. The House and Senate have passed similar mental health parity measures, but none has gone to Bush for his signature.

The surprise move capped a day in which supporters of the imperiled economic rescue fought to bring it back to life, courting reluctant lawmakers with a variety of other sweeteners including the plan to reassure Americans their bank deposits are safe.

Wall Street, at least, regained hope. The Dow Jones industrials rose 485 points, one day after a record 778-point plunge following the House vote.

Amid Tuesday's negotiations, Federal Deposit Insurance Corp. chairman Sheila Bair asked Congress for temporary authority to raise the limit on deposits by an unspecified amount. That could help ease a crisis of confidence in the banking system, Bair said.

She said the overwhelming majority of banks remain sound but an increase in the cap would help ease a crisis of confidence in the banking system as well as encourage banks to begin more lending.

Monday's House vote was a stinging setback to leaders of both parties and to Bush. The administration's proposal, still the heart of the legislation under consideration, would allow the government to buy bad mortgages and other deficient assets held by troubled financial institutions. If successful, advocates of the plan believe, that would help lift a major weight off the already sputtering national economy.

Bush renewed his efforts to save the bailout plan Tuesday, speaking with McCain and Obama and making another statement from the White House. "Congress must act," he declared.

Though stock prices rose, more attention was on credit markets. A key rate that banks charge each other shot higher, further evidence of a tightening of credit availability.

The rescue package was Topic A on the presidential campaign trail.

"The first thing I would do is say, 'Let's not call it a bailout. Let's call it a rescue,'" McCain told CNN. He said, "Americans are frightened right now" and political leaders must give them an immediate solution and a longer-term approach to the problem.

Obama issued a statement saying that significantly increasing federal deposit insurance would help small businesses and make the U.S. banking system more secure as well as restore public confidence.

Associated Press writers Tom Raum, Ben Feller, Alan Fram and Jim Kuhnhenn contributed to this report.

Next up: President Bush and Skeletor (Paulson) to use executive powers and declare the bill good and passed.

[Illuminatus Primus]

I think that "woe is personal responsibility" rant sounds like a big wad of nostalgia for good honest America that never existed wrapped around a kernel of truth in the moral decay of American society. Unfortunately, its what Mike said. Most people have to be taken care of, and everyone in America is loathe to admit it. No major commentator would have the balls to say it. But it is true. Instead we'll repeat ad nauseum and people will continue to wax poetic about the moral failure of society blah blah blah. At the end of the day, most humans are not very altruistic, not capable of long-term planning, and not very intelligent.

The way I see it, the bankers were supposed to be the grownups. They're supposed to be the experts who know if a borrower can repay a loan or not. Instead they spent the best part of a decade making shitty loans and promising people they could refinance their way out of them, and now everybody's in the shit because we're out of chairs and the music's stopped. Yeah, a lot of people were irresponsible and took out loans they couldn't afford--but each and every one of those loans was approved by someone who should have known better.

Well, I don't think American business/finance culture is going to improve very quickly, so we'll have to forcibly regulate those bankers for their (and our) own good. Sad but true.

[Middleclass]

FWIW, I attended a forum that was primarily focused on the bailout, hosted by 5 faculty members of my school (University of Texas at Dallas). The panel was comprised of 2 economists and 3 professors from the finance department. The economists were in agreement: no bailout. Their position was that we have not seen any evidence that a bailout will help anybody who should be helped, and voiced concerns that it would encourage future dumb practices by Wall Street by assuring governmental assistance in case of collapse. One of the finance professors joined in with this side of the argument, giving some pretty funny rejoinders to his colleagues when challenged.

The other side was arguing that a bailout is necessary because the collapse was caused by government intervention in the form of changing mortgage law in the 90's. They advocated a bailout of some kind, but hesitated to endorse the Paulsen Plan because it is apparently not publicly available.

From my personal vantage, I have to give it to the no bailout side. One of the pro-bailout profs insisted that we not call it a bailout, since we were buying assets that could have large returns. The rejoinder: "We are buying these assets above market rates. What else can we call it but a corporate giveaway?"

News cameras were there, it is possible that Fox 4 or CW 33 (Dallas area stations) have footage. It only went on for an hour, so not as much depth as I would have preferred.

[J]

Updates are coming fast & furious today. There's a breaking headline on the WSJ site which reads as follows:

The Senate financial market rescue bill would temporarily allow the FDIC to borrow unlimited amounts of money from the Treasury Department in connection with the larger government deposit coverage that would extend until the end of next year.

No story nor details yet, and I can't find an up to date copy of the bailout bill to confirm this. If true, it raises some questions: if the bailout bill works as they claim, the financial system will be stabilized and there won't be too many bank failures. In which case, why is the FDIC being given an unlimited credit line? Are they expecting a full out crash anyway? And if so, what's the point of the bailout bill? Hmmmm...

[Solauren]

The point of the bailout bill would be for them to line the pockets of the polititions and their cronies, so when the full out crash happens, they can flee the country to somewhere nice, warm, cheap, and without extradition treaties.

[Covenant]

Thanks for the analysis, J.

Why is it that nobody in Washington is proposing a solution along these lines? Is every single member of the house and senate so wrapped up in the machine that they're unwilling to make an actually good decision, despite the fact that it would be seen as a huge boon for their candidacy? Does some kickback or greed or cowardice outweigh the benefit of being able to tell the taxpayers that you were the one who fixed it? Or are they just as clueless as me?

[Gerald Tarrant]

Can we stop with the conspiracy mongering please?

Brief explanation: The liquidity crisis is based on a few things. Publicly traded Financial institutions are required to have a certain ratio of assets to debt. In general Wall Street has gone for the highest debt:asset ratio it can. This is leveraging it lets them be more profitable with the assets they have. Sub-Prime mortgages and MBS's are one particular asset, and before the bottom fell out of the market they were often held as part of the required on hand assets firms have. When it became clear that the rating agencies were wrong on the rating of these papers the paper's value plummeted. So everyone decided to swap them out for cash. But the problem is the accounting standard for these papers is "Mark to market" or the current market value, if everyone is selling the market value plummets and the firms debt/asset ratio goes up. This means firms can't raise money because these things cannot be swapped off their balance sheets.

The bailout is supposed to do 2 things. First inject assets into credit lending firms swapping cash for the toxic paper. Second hopefully unravel the complicated securities so the full extent of the damage can be figured out. (Another brief explanation, Mortgage Backed Securities are packaged "parts of mortgages" including pieces of sub-prime, and possibly prime, in general no one knows the actual value of each particular part, and no one really trusts any agency to rate these things at the moment.) The treasury would for the second goal, unwind the MBS's and hopefully separate them into existing categories, AAA, alt-A, etc. Sub-Prime papers themselves aren't completely worthless, as the homes backing them do have some value, it's just that it may range below 1/2 of the original loan value. That's the theory anyway.

The alternate plans was something like swapping treasury bills for equity, essentially making the companies solvent again, with the understanding that the t-bills are non-tradable, and the equity is to be repaid. This doesn't clear the balance sheets of the garbage, but it injects equity solving the balance sheet difficulties. It is however partial government ownership. Iceland is a current example

from Krugman again

Iceland has just bailed out Glitnir Bank, with the government putting in 600 million euros — $859 million — in return for a 75% stake.

Iceland has only a bit more than 300,000 people, about 1/1000th the population of the United States. So this was, per capita, the equivalent of an $850 billion bailout here.

Notice, by the way, that it was an equity injection rather than a purchase of bad debt; I approve.

Krugman has a pretty good running commentary on what's going on Link. Today's is particularly relevant.

And if the Bush years have taught us anything, it is that sometimes conspiracy theories are right. But in this case the performance has been more Keystone Kops than Star Chamber.

It's mostly a case of Treasury people having an ideological preference for free markets, not 'cause they want to despoil the treasury.

[J]

http://senateconservatives.files.wordpr ... uttext.pdf

The bailout bill. All 451 pages of it. This is what the Senate will be voting on later today. After an admitedly hasty skim read I don't see any key differences from the original proposal.

[Count Chocula]

j wrote:

The bailout bill. All 451 pages of it. This is what the Senate will be voting on later today.

451 pages? Oh, I'm suuuurrrree they'll read every jot and tittle of it. Just like they did the Patriot Act.

Here's some meat from the bill:

(c) NECESSARY ACTIONS.—The Secretary is author
4 ized to take such actions as the Secretary deems necessary
5 to carry out the authorities in this Act, including, without
6 limitation, the following:
7 (1) The Secretary shall have direct hiring au
8 thority with respect to the appointment of employees
9 to administer this Act.
10 (2) Entering into contracts, including contracts
11 for services authorized by section 3109 of title 5,
12 United States Code.
13 (3) Designating financial institutions as finan
14 cial agents of the Federal Government, and such in
15 stitutions shall perform all such reasonable duties
16 related to this Act as financial agents of the Federal
17 Government as may be required.
18 (4) In order to provide the Secretary with the
19 flexibility to manage troubled assets in a manner de
20 signed to minimize cost to the taxpayers, estab
21 lishing vehicles that are authorized, subject to super
22 vision by the Secretary, to purchase, hold, and sell
23 troubled assets and issue obligations.

Same crap as last week

Section 119 throws a fig leaf of judicial review at Paulson instead of giving him carte blanche.

But at least there's a "Timetable for Withdrawal:"

SEC. 120. TERMINATION OF AUTHORITY.
22 (a) TERMINATION.—The authorities provided under
23 sections 101(a), excluding section 101(a)(3), and 102
24 shall terminate on December 31, 2009.

This looks new. Of course, all it would take is a voice vote to amend this expiration. Hey, lookee here! Next section:

1 (b) EXTENSION UPON CERTIFICATION.—The Sec
2 retary, upon submission of a written certification to Con
3 gress, may extend the authority provided under this Act
4 to expire not later than 2 years from the date of enact
5 ment of this Act. Such certification shall include a jus
6 tification of why the extension is necessary to assist Amer
7 ican families and stabilize financial markets, as well as
8 the expected cost to the taxpayers for such an extension.

Note that only a submission is required. In other words, a rubber stamp, non-vote, non-optional extension of power to whoever has Paulson's position at that time.

And here's how the Senate plans to stick it to high-paid executives:

6 SEC. 302. SPECIAL RULES FOR TAX TREATMENT OF EXECU
7 TIVE COMPENSATION OF EMPLOYERS PAR
8 TICIPATING IN THE TROUBLED ASSETS RE
9 LIEF PROGRAM.

So they won't dictate executive pay, just tax the fuck out of it.


Even if this...this...thing passes the Senate, it still would have to pass the House. Of course pressure on the Representatives would be much higher this time around if they're seen as roadblocks rather than guardians.

I also did not find any proposal to change how banks and lenders calculate their asset base, part of the reason we're in this mess.

[Covenant]

Can we stop with the conspiracy mongering please?

I didn't mean to insinuate that there was a conspiracy at work to defraud the American people--just that individual reps might be so in-the-pocket of various groups that they vote, individually, in such a way that the herd sways to one side or another. Reporting showed that nearly everyone in a dangerous re-election atmosphere at home voted against it, so it seems like the House viewed it as toxic politics. I was just asking if people are honestly saying that politicans are either too dumb or too scared to make a reasoned assessment of this, and are instead voting based on external pressures.

I mean, I sure don't understand this economic stuff, and I'd really want to call in some panel of three differently-minded experts to try to find a common thread. I doubt most representatives are economists, one of the ones from around here is a Fermilab Scientist so they're not necessarily stupid, but that doesn't mean they've had the time to review the thing. Especially all 421 pages of it.

I wish economics were a bit more like a real science with answers that were more or less objective. This, more than anything, seems to be a matter of deep ideological division.

[J]

Well well well, check this out. Sneaky little buggers aren't they? Watch the video, then read the commentary and the bill itself. I missed it on my skim read but others got it. This would explain why the Australians, Germans, and Russians have been putting pressure on the US to pass the bailout bill.

[lukexcom]

Cspan2 is showing 65 Yea's to 19 No's.

[apocolypse]

What a bunch of bullshit. I knew the Senators weren't going to give a fuck and pass it through anyway. Normally I'm one of the last people to go on an anti-America kick, but America pretty much fucking sucks. And of course since we're mostly a bunch of lazy ass sheep (of which I include myself), nothing is actually going to change and it'll just be business as usual.

[lukexcom]

And looks like the modified Finance bailout bill has passed the Senate at 74 to 25. The amendments tacked on to the bill seem juicy enough to win most of the Senators over, but is it possible that Paulson and Bernanke simply had more pull with the Senate than with the House?

[Pelranius]

Or Obama and McCain might just be pulling every bit of leverage on their colleagues, for the reason that they want to appear to be at least doing something. Just my inner cynic speaking out again.

[Ekiqa]

Or Obama and McCain might just be pulling every bit of leverage on their colleagues, for the reason that they want to appear to be at least doing something. Just my inner cynic speaking out again.

I don't think it is possible to be anything but a cynic about the financial system, unless you are involved high up with lots of money involved.

And who would gain the most of the foreign investors?

The Chinese? Would they be able to trade in T-Bills somehow? Or am I totally messed?