Bailout Bonanza

[asleepathewheel]

Re: Has this been posted yet?

Originally posted by Sandman
Your Urgent Help Needed

Dear American:

I need to ask you to support an urgent secret business relationship with a transfer of funds of great magnitude.
I am Ministry of the Treasury of the Republic of America. My country has had crisis that has caused the need for large transfer of funds of 800 billion
dollars US. If you would assist me in this transfer, it would be most profitable to you.
I am working with Mr. Phil Gram, lobbyist for UBS, who will be my replacement as Ministry of the Treasury in January. As a Senator, you may
know him as the leader of the American banking deregulation movement in the 1990s. This transactin is 100% safe.
This is a matter of great urgency. We need a blank check. We need the funds as quickly as possible. We cannot directly transfer these funds in the names
of our close friends because we are constantly under surveillance. My family lawyer advised me that I should look for a reliable and trustworthy person
who will act as a next of kin so the funds can be transferred.
Please reply with all of your bank account, IRA and college fund account numbers and those of your children and grandchildren to
wallstreetbailout@treasury.gov so that we may transfer your commission for this transaction. After I receive that information, I will respond with
detailed information about safeguards that will be used to protect the funds.
Yours Faithfully Minister of Treasury,
Paulson

awesome! copy/paste/fwd

[Vanguard]

I liked this comment from http://bigpicture.typepad.com/

AAA rated tulip backed securities.

The President explained all tonight. He wants the taxpayer to pay for all the tulip backed securities the banks hold, at prices just below what they were before the tulip mania burst. If the government holds them till term, the tulip backed securities will return to full value and make the taxpayer a profit. This will in turn stabilize the price of the tulips in the tulip gardens all Americans have in their backyards. The bailout is now a no brainer for me. Thank you Mr. President for clearing it all up. dc.

[Kidlicious]

Bernanke is pissing me off as well, saying that we need to make sure this doesn't happen again. That's what they said after the Great Depression and his type ****ed everything up again, only to ask for this bailout and repeat the same words.

[DanS]

Should have known better than to expect the Democratic congress to have backbone.

What a bunch of self-dealing. Declaring all sorts of losers as winners. It makes me sick.

Throw all these bums out.

[Kidlicious]

The WSJ online is reporting that the bailout agreement likely won't include benefits to those facing home foreclosure. This is a pure give away to the financial industry.

[Dinner]

Originally posted by Vanguard


Credit default swaps are possibly the worst financial instrument ever invented. Why exactly would you even want to spread the risk of investments as broadly as possible? The risk of investment is the only thing that prevents people from making bad investments.

If you're the one holding the bag of course you want everyone else to take a share. The real question is why would anyone else buy any?

Still you have to thank Phil Gram for the CDSs.

[Zkribbler]

Originally posted by DanS
Should have known better than to expect the Democratic congress to have backbone.

What a bunch of self-dealing. Declaring all sorts of losers as winners. It makes me sick.

Throw all these bums out.

Oh, DanS --

Lawmakers agree on bailout principles to protect taxpayers and ensure oversight.

By Tami Luhby, CNNMoney.com senior writer
Last Updated: September 25, 2008: 2:36 PM ET


NEW YORK (CNNMoney.com) -- Lawmakers have reached agreement on a bipartisan counterproposal to the Bush administration's $700 billion financial bailout plan.

Both parties and the House and Senate agreed Thursday to a set of principles on revisions to the rescue plan, which calls for the Treasury Department to buy up bad mortgage securities from banks in an effort to get them to lend again.

The proposal will help homeowners, curb executive pay packages at participating firms and provide oversight of Treasury's actions, said Sen. Christopher Dodd, D-Conn., a key architect of the congressional effort. He did not provide details but said lawmakers will sit down with Treasury officials to discuss it.

"We've reached a fundamental agreement on a set of principles, one, for taxpayers, which is tremendously important," Dodd said. "We're very confident we can act expeditiously."

At least one prominent Republican says matters still aren't settled.

"House Republicans have not agreed to any plan at this point," said John Boehner, R-Ohio, minority leader.

Instead of receiving the entire sum at one time, Treasury will receive the money in installments, with $250 billion in bailout funds available immediately, the Wall Street Journal reported. Lawmakers also said the deal calls for the government to receive stock warrants of participating companies, the Journal said.

Administration officials said they were pleased that progress is being made.

"We'll want to hear from Secretary Paulson, and take a look at the details," said Tony Fratto, a White House spokesman. "We look forward to a good discussion at the meeting this afternoon."

The provisions that Congress wants to add to the administration's plan should make Americans "legitimately feel better about the overall approach," said Rep. Barney Frank, D-Mass., who heads the House Financial Services Committee.

Taxpayers would be protected under the congressional version of the bailout, said Rep. Spencer Bachus, R-Ala., the top Republican on the House Financial Services Committee. Congress' additions to the proposal call for the Treasury to be "reimbursed for their expenditures," he said.

Lawmakers said they wanted to send a message to the markets to calm down. Wall Street heard the message, sending the Dow Jones Industrial Average up more than 300 points after the agreement was announced. It then settled back to a gain of 200 points

[Colonâ„¢]

I don't see why you'd be against CDS unless you find all forms of insurance distasteful (spreading risk is the whole essence of the insurance industry). They aren't for free and the riskier the more you have to cough up for protection. The real issue is the lack of transparency and oversight in the markey.

[Zkribbler]

Lawmakers also said the deal calls for the government to receive stock warrants of participating companies, the Journal said.

So....we'll be buying packages of mortgages -- which in the end will turn out to be worth something -- and we'll get warrants as well. This deal doesn't sound to bad.

[Lancer]

I wonder how many of those houses we're buying have been gutted?

[DanS]

Originally posted by Colonâ„¢
I don't see why you'd be against CDS unless you find all forms of insurance distasteful (spreading risk is the whole essence of the insurance industry). They aren't for free and the riskier the more you have to cough up for protection. The real issue is the lack of transparency and oversight in the markey.

I don't see why oversight is a big deal (regulation is no substitution for proper management). Transparency and standardization of products are what's needed.

[Dinner]

Originally posted by Colonâ„¢
I don't see why you'd be against CDS unless you find all forms of insurance distasteful (spreading risk is the whole essence of the insurance industry). They aren't for free and the riskier the more you have to cough up for protection. The real issue is the lack of transparency and oversight in the markey.

We definately don't have enough transparency or over sight, on that we can agree.

I'm curious to learn more about the mechanics of exactly how a credit default swap works so if someone knows exactly I would love to hear it. My incomplete understanding is that CDSs are a type of derivative which only is triggered if someone defaults on a debt. The person who wishes to be "insured" pays a certain amount each quarter for five years and if a default on the covered debt occurs then the "under writer" (for lack of a better term) agrees to pay up? Is this correct? Is it also correct that there are many layers of CDSs as each company has tried to insure and reinsure themselves and this is why the total CDS market is larger then the entire GDP of the planet?

If we've decided that the regular insurance market needs to be regulated to prevent shady practices then why does this pseudo form of insurance not have any/many regulations? Surely it would be possible to be shady with CDS just like with regular insurance maybe even more so because derivatives are so complicated in and of themselves making CDSs even more open for abuse.

[Zkribbler]

Originally posted by Lancer
I wonder how many of those houses we're buying have been gutted?

Some will have been gutted. Some will be for homes in the 9th Ward of New Orleans or for beach homes in Galveston. Some will be 2nd mortgages, where the remaining 1st mortgage is larger than the equity.

But some, even most, will be for mortgages people are paying on. Some are for mortgages with extreme interest rates that, if you reduce the rates, the owners can make the payments. That is, thar's money in these packages.

Pearlstein of the Washington Post predicts that, at the end of this mess, the result for the government will be between a $200,000,000 loss and a $200,000,000 gain.

[Dinner]

Originally posted by DanS


I don't see why oversight is a big deal (regulation is no substitution for proper management). Transparency and standardization of products are what's needed.

I believe the regulations insure the transparency and standardization plus establish common practices so as to minimize the chance some bad actor might try to game the system.

[Lancer]

Thanks Zkrib.

Is our tax money going to bail out foriegn banks that bought debt in the US?