[Caveat that I know very little about finance or Wall Street. However, since the Wall Street just managed to collapse the financial system, they don't know much about those things either. What they do know, apparently, is politics, since they just managed to loot a trillion dollars from the public purse.--lambert]
Never an explanation of why, why a trillion, why NOW NOW NOW, and universal agreement by teh serious that the deal needs to be made. So, no accountability for past failure at all. That means to me: (1) The fail is massive (otherwise they'd explain it); (2) They're all in on it (otherwise they'd find one of their number to throw under the bus); and (3) since this is arguably the most important political issue this year, that when push comes to shove, there's no meaningful difference between the Democrat leadership and the Republican leadership in policy terms at all, since the Paulson plan ("give my golfing buddies a trillion") forms the basis of the deal (as opposed to, say, HOLC). Bloomberg:
U.S. lawmakers said they made a breakthrough in talks on a $700 billion plan to revive the credit markets and expect to announce an agreement on legislation later today.
Negotiators resolved ``our differences so we can go forward with a package to stabilize the market,'' House Speaker Nancy Pelosi told reporters when talks at the Capitol ended after midnight Washington time. Lawmakers will review a written version of the plan later today, she said. The House may vote tomorrow.
Oh, nothing on the Internet after all?
Now, I should say that, reading Nance's press release below, it sounds like the Ds have done some tinkering with Paulson's plan; they've tried to throw a big net over the lunatic -- but the lunatic is still a lunatic, and the strength of the net is quite unclear. I'd need to see the text of the actual legislation to come to any conclusion; none of the people making the deal on either side deserve any of our trust or confidence on this -- Pelosi, Reid, and Blount already betrayed us on FISA, and they'd betray us again in a heartbeat -- especially with so much more money, and power, at stake.
The plan would let the Treasury begin purchasing distressed debt securities from financial companies affected by the record number of home foreclosures.
As opposed to just buying the mortgages (HOLC), they buy the toxic waste derives from the mortgages. Let's reward the guilty! (Even Ben Stein gets this).
After five years, if there was a net loss to taxpayers, the president would have to submit a plan to Congress to recoup the funds, according to an outline circulated by congressional aides.
I like the 5 years thing. It kicks the can down the road to the next President. I beat MoCama was enthusiastic about that one.
The proposal also includes accountability provisions, limits on executive pay for participating companies, and foreclosure relief, said Senate Banking Committee Chairman Christopher Dodd, a lead negotiator.
Lipstick on Hank Paulson's pig, since he obviously didn't give a shit about any of that. We'll have to see the text, and especially if any part of Clause 8 survives.
Senate Majority Leader Harry Reid, a Nevada Democrat, sought an agreement to reassure investors before Asian financial markets open late today.
Wouldn't it be simpler if we structured the entire legislative calendar based on market timing?
Treasury Secretary Henry Paulson said the proposed deal ``will work and be effective'' in the marketplace. More work needs to be done, ``but I think we're there,'' he said.
What "marketplace"? Haven't we socialized everything?
Paulson and Federal Reserve Chairman Ben S. Bernanke said the rescue plan was necessary to revive lending and restore the flow of credit to the U.S. economy. President George W. Bush warned yesterday that legislative action was needed to avoid a ``deep and painful recession.''
What does he mean, "avoid"?
Lawmakers had resisted giving Paulson unrestricted power to buy the debt and sought controls to assuage angry constituents who bombarded congressional offices with e-mails and phone calls.
The single bright spot: Well done, voters!
Voters ``don't want a bailout of Wall Street and neither do we,'' Democratic Senator John ["Ohio Vote Theft Challenge"] Kerry of Massachusetts told reporters yesterday. ``What we are talking about is not losing 3 million jobs in a matter of weeks'' and helping ``small banks and small businesses literally keeping their doors open.''
And why is that? Was the Fed about to become illiquid? They won't say. As I said above: Massive fail, by them all, and R == D.
Senator Kent Conrad, a North Dakota Democrat who chairs the Budget Committee, said $250 billion would be immediately available and another $100 billion could be used when requested by the president for debt purchases. Congress could bar the expenditure of the remaining $350 billion only by passing a resolution to block it from being spent.
Which, of course, they will do. Unless, of course, Wall Street holds a gun to their head again. But that will never happen.
The package includes a provision aimed at ``preventing golden parachutes'' for executives of companies who leave firms that have sold troubled assets to the government, Conrad said.
We should claw back everything that was stolen.
Companies that sell debt to the government will issue stock warrants to the government so that taxpayers ``can gain as companies recover'' from economic difficulties, Conrad said.
Uh huh. The stock warrants are also non-voting, so the taxpayers get a bastard form of ownership, and put in their capital, but get no control. Ideal for Wall Street.
At one point during the negotiations billionaire Warren Buffett spoke by telephone to a lawmaker involved in the talks to offer ``his best thinking about market reaction to various things,'' Conrad said. ``People are trying to reach out to the best minds that they know.''
Oh, good.
A proposal that would allow judges to modify mortgage terms for struggling borrowers in bankruptcy proceedings wasn't included, said Dodd, a Connecticut Democrat. ``We pushed very hard'' for the bankruptcy provision, ``but we feel we got good foreclosure mitigation language in there,'' Dodd said.
Dodd is a wuss on foreclosures. So is Obama.
Democratic presidential nominee Barack Obama said the plan ``appears to embrace'' his principles that the legislation include oversight by an independent board; protections for taxpayers to ensure they receive any profits; measures to help homeowners stay in their homes; and rules to make sure ``CEOs are not being rewarded at taxpayers' expense.''
Sure, Obama, after signaled that protecting homeowners wasn't a priority. No foreclosure protection, but "mitigation"? What on earth does that mean?
Democrats blamed Republican presidential candidate John McCain for encouraging the House Republicans' rebellion by traveling to Washington last week to meet with them.
The trip also included a White House meeting on Sept. 25 with Bush and congressional leaders, where a bipartisan consensus on the outlines of a deal broke down.
McCain ``only hurt this process,'' Reid complained to reporters.
Thanks, Harry. You just gave me a momentary impulse to vote for McCain.
So, it's Christmas on Wall Street! And the Democrat Party helped decorate the tree and wrap the packages! Well done, all.
NOTE Krugman: It's up to the House Republicans. I hope they scuttle it. As a prominent political figure said: Enough!
Here's (via CR) is Leader Nance's press release.