Bloomberg is reporting Treasury Seeks Authority to Buy Mortgages Unchecked by Courts.
The Bush administration sought unchecked power from Congress to buy $700 billion in bad mortgage investments from financial companies in what would be an unprecedented government intrusion into the markets.
“He’s asking for a huge amount of power,” said Nouriel Roubini, an economist at New York University. “He’s saying, `Trust me, I’m going to do it right if you give me absolute control.’ This is not a monarchy.”
Paulson is seeking an expansion of federal influence over markets that hasn’t been seen since the Great Depression, said Charles Geisst, author of “100 Years of Wall Street” and a finance professor at Manhattan College in New York.
“This is going to be a big package because it’s a big problem,” Bush said following a meeting with Colombian President Alvaro Uribe at the White House. “We need to get this done quickly, and the cleaner the better.”
Democratic presidential nominee Barack Obama said in a radio address that he “fully supports” Paulson and Fed Chairman Ben S. Bernanke’s efforts to stabilize the financial system. The plan, however, should benefit both main street and Wall Street, he said.
Republican Presidential nominee John McCain “looks forward” to reviewing the proposal while focusing at least in part on “minimizing the burden on the taxpayer,” said Jill Hazelbaker, communications director for the McCain campaign.
The Bush administration seeks “dictatorial power unreviewable by the third branch of government, the courts, to try to resolve the crisis,” said Frank Razzano, a former assistant chief trial attorney at the Securities and Exchange Commission now at Pepper Hamilton LLP in Washington. “We are taking a huge leap of faith.”
Unreviewable Dictatorial Power
Notice how everyone wants to rush this through even though it is the biggest financial crisis in history. One might think that something this big should be carefully considered but no… Bush says: “This is going to be a big package because it’s a big problem” and “We need to get this done quickly and the cleaner the better.”
It seems the bigger the problem the quicker and cleaner it can be fixed. Indeed Congress will argue more over the cost of toilet seats than they will over this $700 billion (and counting) bailout.
Democrats Want To Expand The Bailout
“We’re going to be buying up a lot of mortgage paper,” said House Financial Services Committee Chairman Barney Frank, a Massachusetts Democrat. “Between Fannie Mae and Freddie now owned by the federal government and the mortgage paper we’ll be acquiring here” and the Federal Deposit Insurance Corp. running failed bank IndyMac Bancorp Inc., “we should now be able substantially to reduce foreclosures,” he said.
My Comment: Barney Frank is an incompetent socialist fool. Buying mortgages in and of itself will not prevent a single foreclosure. All buying mortgages will do is bail out the banks holding those mortgages. And one thing you can be most certain of is that it will be a selective bailout with no oversight as to who gets bailed out or why.
The Treasury plans to hire asset managers to purchase the assets through so-called reverse auctions, seeking the lowest prices, one of the people said. Congress will need to raise the limit for the federal debt to allow the government to borrow enough to fund the program, the person said.
Senator Richard Shelby, an Alabama Republican who has advocated that markets should be allowed to penalize bad bets, warned that bailout could saddle taxpayers with large debts.
“This could be the biggest bailout in the history of the country and could ultimately cost $500 billion to $1 trillion,” Shelby, the ranking Republican on the Senate Banking Committee, said in a Bloomberg Television interview today. “Congress is not going to rubber stamp something.”
My Comment: The odds of Congress not rubber stamping this are very slim.
Senator Christopher Dodd, the Banking Committee chairman, said the plan’s framers should consider the full debt load of U.S. consumers, possibly including credit cards.
My Comment: Hells bells why not? Let’s throw in credit cards, auto loans, boats, and casino debts? Why stop at credit cards and housing? Let’s just have the government guarantee every debt in the country.
The temporary plan is likely to include a “second stimulus” proposal with infrastructure funds, low-income energy aid and Medicaid assistance, Frank said.
My Comment: Why stop at two? Why not four? Hell, let’s just give everyone $1,000,000 and be done with it.
Officials devising the plan “need to make sure that they keep that hard-headed approach so that people are not profiting off this,” said Martin Baily, who was chairman of the Council of Economic Advisers under Democratic President Bill Clinton.
My Comment: Hard headed approach? What are these clowns smoking? Paulson asks for $700 billion and idiots like Frank and Dodd are clamoring for more already.
“To some extent that’s unavoidable,” said Baily, now a senior fellow at the Brookings Institution in Washington. “Anytime you do something like this you have the problem of bailing people out and creating moral hazard. That’s the reason why you hold your nose. But it’s better than the alternative.”
Martin Baily is another fool. This was perfectly avoidable. All we had to do we eliminate the Fed and fractional reserve lending. And that is what still needs to be done.
Instead Congress is lining up to give “Unreviewable Dictatorial Power”to the Treasury while increasing the size of the already ridiculous proposal.
Contact Your Senator Today!
It’s time to contact your senator. Here is contact information for Senators of the 110th Congress.
Phone or Email your Senators today. Tell them in your own words
- Urge your senator to Filibuster any bailout legislation.
- Emphatically state you do not want a bailout of any kind for anyone.
- No Dictatorial power for Paulson or Bernanke
- Taxpayers should not have to bail out banks making bad loans
- Tell them that “The Fed” and Paulson are systemic risk”.
Email AND Phone Senators Shelby, Bunning, Kyle, Ensign, Hagel
Whether Senator Shelby is your Senator or not, flood him with calls and emails asking for a filibuster and to stop the insanity. Senators Shelby, Bunning, Ensign, and Kyle might be sympathetic to the cause, based on past statements. I am taking a stab at Hagel.
Please email and phone the following. Specifically ask for a filibuster and tell them to vote no to any bailout. Tell them that anyone who votes for this bailout will never get your vote again.
Shelby, Richard C.- (R – AL)
110 HART SENATE OFFICE BUILDING WASHINGTON DC 20510
Bunning, Jim- (R – KY)
316 HART SENATE OFFICE BUILDING WASHINGTON DC 20510
Web Form: http://bunning.senate.gov/public/index.cfm?FuseAction=Contact.ContactForm
Kyl, Jon- (R – AZ)
730 HART SENATE OFFICE BUILDING WASHINGTON DC 20510
Web Form: kyl.senate.gov/contact.cfm
Ensign, John- (R – NV)
Washington D.C. Office
119 Russell Senate Building
Washington, D.C. 20510
Phone: (202) 224-6244
Fax: (202) 228-2193
Web Form: ensign.senate.gov/forms/email_form.cfm
Hagel, Chuck (R – NE)
248 RUSSELL SENATE OFFICE BUILDING WASHINGTON DC 20510
Web Form: hagel.senate.gov/public/index.cfm?FuseAction=Contact.Home
Please email and phone both of your senators as well.
Mike “Mish” Shedlock
Click Here To Scroll Thru My Recent Post List