vtec9

Hooray for sponsoring a giant corporation with a balance sheet made from gnomes, unicorns, and fairy dust.

cthree

I've heard of wasteful government spending but this is ridiculous

PearlwhiteS2k

At least the government aren't spending on themselves

cthree

Seriously, Hank Paulson makes Warren Buffet look like a shoemaker. You as a US taxpayer will make out just fine on the deal, maybe the best trade in the history of the market.

The plan is to buy mortgage backed securities (mortgages) for pennies on the dollar and hold them to maturity, ~7 years. Sure, some of them are bad but even if 50% go tits up you still make a killing in the end. The banks get to trade their CDOs for treasuries and can get back to being banks again. It's good for everyone. The taxpayers are actually the biggest winners in the deal net net.

How about that AIG deal? That's one for the record books. You basically annex the largest insurance company in the world, loan it money at 12% interest so it can sell off its assets and subsidiaries worth 10 times the amount of the loan over two years. The tax payers stand to lose almost nothing and stand to gain $500B or more on the sale of AIG's business units and nearly $1T in other assets.

This has never happened before. RTC pt 1 was taking over and selling assets of bankrupt companies. pt 2 is buying assets from solvent companies and actively working them to maturity, essentially setting up a treasury sponsored hedge fund. As for AIG, the gov't has never taken over a solvent private company and run it as a viable business. They have now. It may not even be constitutional but by the time it ever gets to court it will be a done deal.

All the rules have changed.

vtec9

It's a huge conspiracy concocted by the evil geniuses: Paulson, Greenberg, John Thain, John Whitehead, Tim Geithner, Gerald Corrigan, and Stephen Friedman!

cthree

AIG was up 60% today. Congrats on a wicked trade.

vtec9

Treasury’s legislative financial bailout proposal to Congress, also known as the proposal to give the Treasury Secretary full power to oversee the Treasury Secretary.

[QUOTE]
Section 1. Short Title.

This Act may be cited as ____________________.

Sec. 2. Purchases of Mortgage-Related Assets.

(a) Authority to Purchase.–The Secretary is authorized to purchase, and to make and fund commitments to purchase, on such terms and conditions as determined by the Secretary, mortgage-related assets from any financial institution having its headquarters in the United States.

(b) Necessary Actions.–The Secretary is authorized to take such actions as the Secretary deems necessary to carry out the authorities in this Act, including, without limitation:

(1) appointing such employees as may be required to carry out the authorities in this Act and defining their duties;

(2) entering into contracts, including contracts for services authorized by section 3109 of title 5, United States Code, without regard to any other provision of law regarding public contracts;

(3) designating financial institutions as financial agents of the Government, and they shall perform all such reasonable duties related to this Act as financial agents of the Government as may be required of them;

(4) establishing vehicles that are authorized, subject to supervision by the Secretary, to purchase mortgage-related assets and issue obligations; and

(5) issuing such regulations and other guidance as may be necessary or appropriate to define terms or carry out the authorities of this Act.

Sec. 3. Considerations.

In exercising the authorities granted in this Act, the Secretary shall take into consideration means for–

(1) providing stability or preventing disruption to the financial markets or banking system; and

(2) protecting the taxpayer.

Sec. 4. Reports to Congress.

Within three months of the first exercise of the authority granted in section 2(a), and semiannually thereafter, the Secretary shall report to the Committees on the Budget, Financial Services, and Ways and Means of the House of Representatives and the Committees on the Budget, Finance, and Banking, Housing, and Urban Affairs of the Senate with respect to the authorities exercised under this Act and the considerations required by section 3.

Sec. 5. Rights; Management; Sale of Mortgage-Related Assets.

(a) Exercise of Rights.–The Secretary may, at any time, exercise any rights received in connection with mortgage-related assets purchased under this Act.

(b) Management of Mortgage-Related Assets.–The Secretary shall have authority to manage mortgage-related assets purchased under this Act, including revenues and portfolio risks therefrom.

cthree

Seems about right and par for the course.

sahtt

Now people are starting to realize the cause for my disinterest in presidential elections. The real power lies elsewhere.