Thursday, September 25, 2008

The Bailout's Skeleton

From ABC:
1) a panel to conduct oversight of how the vast sums of taxpayer cash are spent;
2) taxpayer protections -- a way for taxpayers to receive some equity, through warrants, in the companies receiving government aid;
3) limits on executive compensation for officers of the companies receiving government aid -- regarding golden parachutes, bonuses based on erroneous earnings (or 'clawback'), and tax deductions for bonuses;
4) but a source tells ABC News that there was a problem resolving the issue of how to help homeowners facing foreclosure. Democrats want to re-write bankruptcy laws to enable judges to re-negotiate mortgages; Republicans do not.

A Democratic source says that Sen. Judd Gregg, R-NH, ranking Republican on the Senate Budget Committee, and Sen. Bob Bennett, R-Utah, the No. 2 Republican on the Senate Banking Committee, advocated for the Bush administration's argument that the bill needs to passed as quickly and as cleanly as possible.
No, number 4 should not happen. I don't want the whole thing to happen, but certainly not the latter.

What strikes me as odd is that the people most likely to declare bankruptcy and then seek to renegotiate those mortgages are the very people that Democrats wanted to get mortgages, i.e. those "diversity" mortgage recipients who would probably not otherwise qualify for credit. So not only have Democrats given these people an improper way into homeownership other than being a good credit risk, but now we are going to force mortgage companies to accept mortgage terms that add to the risk of these high risk mortgages. The inevitable result--no risk taking by mortgage lenders.

1 comment:

Anonymous said...


Recently an insurance company nearly wind up....

A bank is nearly bankrupt......filing chapter 11 protection.

How it affect you? Did you buy insurance? Did you buy mini note or bonds?

Who fault?

They bailout trouble finance company, but they will not bail out your credit card bills……And the bill out of company is still not enough yet…….You got no choice, and no point pointing finger but you can prevent similar things from happen again……

The top management of the Public listed company ( belong to "public" ) salary should be tied a portion of it to the shares price ( IPO or ave 5 years ).... so when the shares price drop, it don't just penalise the investors, but those who don't take care of the company.....If this rule is pass on, without any need of further regulation, all industries ( as long as it is public listed ) will be self regulated......because the top management will be concern about their own pay check…… And they are still spend big money on hotel stay and luxury function……..

Meanwhile if company was being acquired, there will be a great movement in terms of staff……eventually staff suffer also.

Are you a partisan?

Sign a petition to your favourite president candidate, congress member, House of representative again and ask for their views to not just comment on this, and what regulations they are going to commit and implementation the regulation, I believe should vote for the one who come suggest good implementation and let’s see who back up, which don’t implement after just mentioning in the election campaign.....If you agree on my point, please share with many people as possible.... Finance and Media are the two only industries can shaken politics ( Maybe Hackers can ), please help to highlight also...


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