John Carney

Posts by John Carney

  • 20 Sep 2008 at 8:10 PM

Bailout Proposal

via AP
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.
(c) Sale of Mortgage-Related Assets.-The Secretary may, at any time, upon terms and conditions and at prices determined by the Secretary, sell, or enter into securities loans, repurchase transactions or other financial transactions in regard to, any mortgage-related asset purchased under this Act.
(d) Application of Sunset to Mortgage-Related Assets.-The authority of the Secretary to hold any mortgage-related asset purchased under this Act before the termination date in section 9, or to purchase or fund the purchase of a mortgage-related asset under a commitment entered into before the termination date in section 9, is not subject to the provisions of section 9.
Sec. 6. Maximum Amount of Authorized Purchases.
The Secretary’s authority to purchase mortgage-related assets under this Act shall be limited to $700,000,000,000 outstanding at any one time
Sec. 7. Funding.
For the purpose of the authorities granted in this Act, and for the costs of administering those authorities, the Secretary may use the proceeds of the sale of any securities issued under chapter 31 of title 31, United States Code, and the purposes for which securities may be issued under chapter 31 of title 31, United States Code, are extended to include actions authorized by this Act, including the payment of administrative expenses. Any funds expended for actions authorized by this Act, including the payment of administrative expenses, shall be deemed appropriated at the time of such expenditure.
Sec. 8. Review.
Decisions by the Secretary pursuant to the authority of this Act are non-reviewable and committed to agency discretion, and may not be reviewed by any court of law or any administrative agency.
Sec. 9. Termination of Authority.
The authorities under this Act, with the exception of authorities granted in sections 2(b)(5), 5 and 7, shall terminate two years from the date of enactment of this Act.
Sec. 10. Increase in Statutory Limit on the Public Debt.
Subsection (b) of section 3101 of title 31, United States Code, is amended by striking out the dollar limitation contained in such subsection and inserting in lieu thereof $11,315,000,000,000.
Sec. 11. Credit Reform.
The costs of purchases of mortgage-related assets made under section 2(a) of this Act shall be determined as provided under the Federal Credit Reform Act of 1990, as applicable.
Sec. 12. Definitions.
For purposes of this section, the following definitions shall apply:
(1) Mortgage-Related Assets.-The term “mortgage-related assets” means residential or commercial mortgages and any securities, obligations, or other instruments that are based on or related to such mortgages, that in each case was originated or issued on or before September 17, 2008.
(2) Secretary.-The term “Secretary” means the Secretary of the Treasury.
(3) United States.-The term “United States” means the States, territories, and possessions of the United States and the District of Columbia.T

  • 19 Sep 2008 at 5:19 PM

Write-Offs: 09.19.08

$$$ Gawker is holding an “Absurd Financial Product You Actually Bought.” Email your submissions! [Gawker]
$$$ Thoughts on the RTC [Business Week]
$$$ A Look At Wall Street From The Birthplace of American Government [WSF]
$$$ Inside Merrill’s Merger Agreement [Dealbook]
$$$ Someone would like credit for calling the SEC terrorists first. [TS]

  • 19 Sep 2008 at 4:00 PM

So Long To All That

Farewell DealBreaker.jpgI almost didn’t answer the phone when DealBreaker came calling. It was a Sunday afternoon and I was sitting in a bar somewhere in Brooklyn. The phone was sitting on the bar next to a pack of smokes and a pint of Six Point. A glass of whiskey was in my hand. The phone buzzed, shimmying on the bar a bit. The girl I was drinking with gave me that look girls give you when you consider answering your phone in the middle of a conversation with them. That’s probably why I answered it.
It was Elizabeth Spiers. She asked if I would be interested in writing for her new financial website. I wasn’t working at all in those days, unless you count pretending to freelance and writing pieces of a novel once a week as working. I told her yes. When did she want me to start? Monday. And so the next day I became an ink-stained wretch, reporting the follies and foibles of Wall Street.
We’ve come a long way. In those early days–two and half years ago–the excesses bred by wealth and entitlement provided fodder for my writing. There was this government sponsored mortgage company that should have been delisted but got the New York Stock Exchange to bend the rules for it. Some kids engaged in the zaniest insider trading scheme ever. Another kid made a video about himself, proclaiming “Impossible Is Nothing.” Steve Schwarzman threw himself a birthday party that would have made the Marie Antoinette blush. It was heady times but we knew, even then, that the end was coming.
Lately we’ve spent our time covering the collapse, the fall of the titans. Now Wall Street is busy shoring up its ruins, plotting the rebuild its empire. In the course of my two and a half years at DealBreaker I’ve watched the masters of the universe become welfare queens, tin cup in hand, begging for protection and subsidies from the government. Millionaires and billionaires who want taxpayers to rescue them from market processes. And it looks like we’re going to do it.
Today is my last day at DealBreaker. I leave you in the capable hands of Bess Levin, my writing companion for the past 130 weeks or so, while I move on to other forums. Equity Private and a special surprise writer will be around to help out. You’ve been the best readers a writer could hope for. Thank you for your tips, your comments and for reading. Thanks, really, for going along with me all this way.
For those of you still on Wall Street or wondering what to do next, I’ll offer a four pieces of advice. Remember that we’ll get through this mess we’re in, and we’ll have great stories to tell about it for the rest of our lives. Never work in a job that makes you miserable. Love your family, help your friends. Buy drinks for strangers.
There’s the closing bell. My work here is done.

  • 19 Sep 2008 at 2:40 PM

Quasi- Unfounded Rumor Of The Day

Nasdaq is breaking trades of certain stocks that were up huge on the open; and sending them back. Apparently too many idiots put market orders in the system to cover shorts given the new rules and we saw financials and other heavily shorted stocks rip. we must have made 20 trades that have been broken. Most trading desks at the brokerages are probably freaking out.

Update From The Nasdaq:

Read more »

  • 19 Sep 2008 at 1:37 PM

Answers

The recent move by the Securities and Exchange Commission to temporarily ban short selling has left a lot of people very angry, extremely confused, and demanding a logical explanation for why this fakakta plan went through. We were as shocked as you to hear it actually went down, especially after we’d sent a note to Charles Christopher Cox advising him to dick slap Lloyd Blankfein and John Mack back to the corner with their dunce caps on, when they went crying to the SEC chairman because the market had served them one measly down day. At first we thought it was merely a misreading on C-Cubed’s part, seeing the word “suck” where we’d written “slap.” Now we know it was no mistake at all.
And it’s not that Cox and Co. are pussies easily bent to the will of the almighty Goldman Sachs. It’s that they’re suckers for the those four little words: “but it’s my birthday.” Yes, people, the reason for this Long-Only-Suction is that today is Lloyd Blankfein’s 54th b’day. And knowing that Cox couldn’t say no to a birthday wish, LB laid it on thick. “I never thought I’d be a mid-life crisis guy but I’m just really, super depressed about this one.” “I look at the first years and I’d give anything to trade places with those little shits.” “What’s the point of buying a convertible with no hair to billow in the wind?” He pulled out all the stops. The others were added to give the impression of not playing favorites. We were not fooled. And as a Well-Played, LB, Well-Played, indeed birthday gift, we’ll be sending something over to 85 Broad today. But our usual panty-gram or Geoffrey Raymond original doesn’t seem right for the occasion. If you can think of anything better, let us know.

  • 19 Sep 2008 at 10:18 AM

Just Putting It Out There

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[Click to view]

  • 19 Sep 2008 at 9:35 AM

Dow Soars 300 Points In 5 Minutes

Look how easy this shit is when you just throw the rules away!

  • 18 Sep 2008 at 8:53 PM

SEC: Welcome To Pakistan

The WSJ is reporting that the SEC plans to temporarily ban short-selling, if Chris Cox– who apparently did not get yesterday’s note– doesn’t get his face ripped off first.
Interestingly enough, we’ve been told that earlier this week, Steve Cohen had instructed his Tonton Macoutes to stay on the sidelines re: making money off the banks. So this cannot make him happy. Only Steve Cohen tells Steve Cohen he can’t short stocks. Sleep with one eye open, Christopher, and maybe see if Blankfein and Mack will return the favor you’ve bestowed on them by providing some sort of safe house.
P.S. According to Bloomberg, Cox and Co. are meeting right now to come up with more ass-backward rules. So what I’m thinking here is someone find out where, and we’ll throw a grenade through the window. Einhorn pulls the pin.