On Monday, ahead of the House vote, we asked you to predict whether or not the bill was going to be passed, mostly because it seemed patently obvious that it was going to, and we wanted to write a big self-congratulatory follow-up for having readers with the best crystal balls on the Street afterwards. Unfortunately, that went to hell when 78.8 percent of you said it was going to go through and it didn’t exactly pan out that way. So! Let’s try again:
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- Use the Bloomberg command
NH BLG_DEALBREAKER <GO>
to access Dealbreaker
With all the extra stuff they are adding in, I don’t see how it can’t pass.
Senators are much better politicians than Congressmen (not a compliment).
They find a piece of legislation that is going to get HUGE amounts of coverage and national attention. Then try and cram their local pork project into it as a rider.
Then you point to the good folks back home and say “Hey look what I got for you.”
I’m only willing to predict that they’ll vote.
It is going to pass because it is being shoved down our throats and no other safe alternatives have been proposed.
Bush, Obama and McCain are all one in the same now. TOOLS, all of them.
is the senate’s Patriot Act Bailout bill essentially the “Paulson Plan”?
Here’s a plan that would nearly eliminate the risks of politicization of the process and need for bureaucratic discretion, and would get the economy moving:
A Financial Rescue Plan that:
1. Is easy to implement — no reverse auction needed because the amounts of preferred stock to purchase in federally insured financial institutions and to loan to homeowners are matters now in financial records.
2. Would provide real help to homeowners without negotiating with lenders.
3. Would provide management the incentive to repay the government in order to receive the balance of its compensation.
4. Would have gains and losses remain with the financial institutions that now own the “toxic” securities while providing the institutions with capital for needed business.
THE PLAN:
1. Treasury preferred stock purchases in any federally insured bank or broker dealer, at the election of the institution, in an amount by which the institution’s acquisition cost of home loans (or pools of home loans) exceeds carrying value.
(a) Such preferred stock would have a cumulative dividend, compounded annually, of 11%, and would be convertible into shares of the institution’s common stock at that stock’s book value as of the date that the government acquired the preferred stock.
(b) Such preferred stock could be redeemed by the institution at its election at any time at par plus the cumulative dividend on 30-days notice to the government (to allow for the government’s optional conversion into the institution’s common stock).
(c) While the preferred stock was outstanding, other than the preferred dividend (i) no dividends could be paid on any other classes of stock and (ii) the compensation of any of the institution’s employees, officers, directors or consultants at an annual rate above the salary of the President of the United States would be payable by warrants redeemable only after the preferred stock’s redemption.
2. Treasury loans to any homeowners of 20% of any debt secured by the home and outstanding as of September 30, 2008, with the loan proceeds being used to pay any delinquent loan payments and the balance applied against principal.
Such loans would be unsecured, would be amortizable over 30 years, would float at 1% over the 2-year Treasury rate adjusted every two years, would be repayable without penalty at any time, and would be collectible like taxes–i.e., could not be discharged in bankruptcy and would have priority over all other debts.
3. Repeal mark-to-market accounting for assets that do not trade in a broad, active market.
4. Prohibit the sale in interstate commerce of any future home loans (except if guaranteed by the Veteran’s Administration) on which the borrower has not paid all closing costs and 20% of the acquisition cost of the home.
This plan would:
1. Cost far less than $700 billion
2. Rescue those institutions worth saving
3. Rescue those homeowners who want to retain their homes
4. Teat the government as an investor and lender
5. Reduce the likelihood of the problem ever occurring again.
last
Are McCain and Obama planning to show up and vote? If yes, then did they say already how they will vote on the Patriot Act Bailout Bill?
@8– obama has said he will. no word from mccain:
http://online.wsj.com/article/SB122282082956692611.html?mod=article-outset-box
“Sen. Barack Obama’s campaign issued a statement Tuesday evening that the senator will return to Washington, D.C., for the vote”
http://www.reuters.com/article/politicsNews/idUSTRE48T5JW20081001
Obama and McCain both support it.
6,
Won’t giving irresponsible consumers more super senior cheap debt just exacerbate the problem? What evidence do you have that it would cost less than $700B?
morning masters of the microverse, what’s o/n LIBOR at?
(too poor for bloomberg)
check out greenlight capital’s earnings release today
3mos LIBOR 4.15, but coming in this morning
even if it’s pass we are still fucked. and both Obama and McCain are shitty presidential options for us to chose from.
@12 3.79
link to the bill is here: http://michellemalkin.com/2008/10/01/read-the-senate-bailout-bill-here/
This is now officially called The Kitchen Sink Act of 2008.
‘‘To provide authority for the Federal Government to purchase and insure certain
types of troubled assets for the purposes of providing stability to and preventing disruption in the economy and
financial system and protecting axpayers, to amend the Internal Revenue Code of 1986 to provide incentives for
energy production and conservation, to extend certain expiring provisions, to provide individual income tax relief,
and for other purposes’’.
I predict the bill won’t pass. In the last few days the media has been complicit in the scaremongering, but when they allow a financial expert to speak, there is often a strong case made against the bill. Realtors and I-bankers have been “Strongly encouraged to lobby for the passing of the bill. Still the majority of people are not self interested and are still protesting the passing of the bill. And I was right on the first vote ;)
It’s truly a sign of how serious Washington is that some anonymous solon thought to throw in this earmark:
Sec. 503. Exemption from excise tax for certain wooden arrows designed for use by children.
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