Archive for the ‘Cover-ups’ Category
On August 17, 2007 – we posted the article below. In light of the events of the past few weeks, please take a few minutes and re-read this amazing piece of information.
BILL MOYERS:Welcome to the Journal.
You are not alone if you are worried about the financial melt down. So is my guest George Soros, one of the world’s best known and successful investors, making billions in times of boom or bust. He’s been warning for years of a financial melt down fueled by easy credit and sleepy regulation. Now he’s out with this timely book, “The New Paradigm for Financial Markets: The Credit Crisis of 2008 and What It Means.”
In the interest of full disclosure, you should know that I served three years on the board of George Soros’ foundation, the Open Society Institute, dealing with such issues as a free press, the rule of law, and human rights. But I’ve had no involvement in his political activities and nothing to do, with his business interests unfortunately. It’s good to see you.
GEORGE SOROS:Same here.
BILL MOYERS:Let’s imagine for a moment that we’re not in a New York studio but we are in Neely’s Barbecue Stand in Marshall, Texas, my hometown, and we’re surrounded by people I know, people who have lost half of their 401(k)s in the last three or four weeks, and what they want to know is does this financial meltdown represent the end of the American dream as they have known it.
GEORGE SOROS:No. No. I think it’s got nothing to do with the American dream as such. There has been some kind of an ideological excess; namely, market fundamentalism for the last 25 or so years. And now that world is collapsing…
BILL MOYERS:What do you mean “market fundamentalism”?
GEORGE SOROS:It’s that markets will correct themselves, that you should leave it to the markets, and there is no need for government intervention in financial affairs. Letting markets run rampant. And that doesn’t work.
Markets have the ability to adjust and they’re very flexible. There is this invisible hand. But it is also prone to be mistaken. In other words, markets instead are reflecting reality. They always look at reality with a bias. There is always a prevailing bias. I’ll call it, you know, optimism/pessimism.
And sometimes those moods actually can reinforce themselves so that there are these initially self-reinforcing but eventually unsustainable and self-defeating boom/bust sequences or bubbles. And this is what has happened now.
This current economic disaster is self-generated. It was generated by the market itself, by getting too cocky, using leverage too much, too much credit. And it got excessive.
BILL MOYERS:You used the word “disaster.”
GEORGE SOROS:The financial system is teetering on the edge of disaster. Hopefully, it will not go over the brink because it very rarely does. It only did in the 1930s. Since then, whenever you had a financial crisis, you were able to resolve it. This is the most serious one since the 1930s, there hasn’t been one as serious as this.
Unfortunately, the authorities are behind the curve. They are reacting to these crises as they emerge. One thing leads to another, one market after another gets into difficulty. And they react to it. And they don’t quite understand what’s hitting them. So they are not anticipating and not gaining control of the situation.
BILL MOYERS:This is what’s interesting, why wouldn’t the government be able to look at what you looked at and see what’s coming?
GEORGE SOROS:Because actually they have been working on false premises. This sounds very strange, but there’s been this development of, this belief of market fundamentalism. And particularly the idea that markets always revert to the mean and deviations from the mean occur in a random fashion. And you can calculate it.
And you will get a nice distribution and you can anticipate it. And based on that, you can manage your risk. And that actually was based on a false idea. This namely, the markets self-correcting because the market moods have a way of affecting the fundamentals the markets are supposed to reflect.
And there’s always a divergence between our perception and what actually exists. For instance, take the simplest situation, namely housing.
Banks give you credit based on the value of the houses. But they don’t seem to somehow understand that the value of the houses can be affected by the amount of credit they are willing to give. Now, we’ve developed these fabulous new ways of securitizing mortgages, which has made credit much more amply available.
And we’ve been able to calculate risk. And, therefore, we were willing to give more and more credit. And that has pushed up the value of the houses. Also, of course Greenspan kept interest rates too low, too long. And so you had very low interest rates, easy credit, and house prices have been appreciating at more than ten percent a year for a number of years. And the willingness to lend actually increased. There was an insatiable appetite for these new fangled securities.
BILL MOYERS:Yeah. Nobody understood, really.
GEORGE SOROS:Which they didn’t properly understand. And there was always a separation between the people who generated the mortgages and packaged them and sold them to you and the people who owned them. So nobody was paying attention to the quality of the mortgages because they didn’t have an interest. They — all day collecting fees. And then there were other people holding the mortgages.
GEORGE SOROS:And that was not factored into those instruments. The idea was that by distributing risk, you actually reduce risk. But by separating the principal from the agent, you actually greatly increase the risk. And that was not reflected. And the rating agencies didn’t realize it. So they gave triple-A ratings. And then a few weeks later, those triple-A bonds became practically valueless. And that’s what has happened.
BILL MOYERS:But how does the system become deranged like that? So separated from reality like an individual who goes insane because he or she is separated.
GEORGE SOROS:Well sometimes we get carried away. I mean, you know, let’s say in the Middle Ages, people were religious. And so they had tremendous discussions about how many angels can dance on the eye of a needle. Now, if you believe that angels can dance then that’s a legitimate question. And this is exactly what has happened here. You thought that you could slice and dice and engage in this kind of financial engineering. And it became very, very sophisticated and got carried away.
BILL MOYERS:What happened that we lost control?
GEORGE SOROS:There was a failure of regulations because they couldn’t understand these new instruments. But they said, “Oh, well, the banks have very good risk management techniques. So we leave it to them to calculate their own risks.”
And, you see, it wasn’t only in the housing market. There were all kinds of other financial instruments. So there was not just one bubble. I describe in my book there is the housing bubble. But this housing bubble, when that burst, it was only the detonator that exploded the bigger bubble, the super bubble.
Which is this 25 years of constant credit expansion using greater and greater leverage. The amount of credit in the economy has been growing at, I don’t know, I don’t know the exact figure, but maybe at least twice as fast as the economy itself. I think it’s more like three.
And now, suddenly, you have a contraction of credit. And it’s a sudden thing. And it’s a period of great wealth destruction. And that’s how these poor people in Texas suddenly find that their 401(k) is worthless.
BILL MOYERS:So as we talk, Secretary Paulson and the government seem to be coming around to what you’ve been advocating and that is taking taxpayer money, public capital, and injecting it directly into the banks — in effect, nationalizing some of these banks. Why do you think that will work when everything else has failed?
GEORGE SOROS:Well unfortunately because they are delaying it, it may not work so well because there’s a certain dynamism. And they’re always behind the curve. So there are many things that they’re doing now if they had done several months ago, it would have turned things around.
BILL MOYERS:That’s a very gloomy assessment. You’re saying that everything they’re doing is coming too late? How does that ultimately play out?
GEORGE SOROS:Unfortunately, that is the case. I’m quite distressed about it. I hope that you know, eventually they’ll catch up.
We are determined to put the money in, not to allow the financial system to collapse. And that’s the lesson we learned in the 1930s. It’s an important lesson. But because we are behind the curve, the amounts get bigger and bigger. If we understood it earlier, we could have brought it to a halt perhaps sooner. But they’ve got still a number of things to do. And this idea, you see, of just buying noxious instruments of you know, off the balance sheet of the banks was a non-starter.
BILL MOYERS:But that was the idea.
GEORGE SOROS:But it was the wrong idea.
BILL MOYERS:But this is disturbing, George. If everything we’re doing keeps accelerating the downward negative feedback and isn’t working, are you suggesting, can one insinuate from what you say that we’re heading for 1930?
GEORGE SOROS:Hopefully not. But we are heading for undoubtedly very difficult times. This is the end of an era. And this is a fact.
BILL MOYERS:End of an era?
GEORGE SOROS:At the end of an era.
BILL MOYERS:Capitalism as we have known it?
GEORGE SOROS:No. No, no, no. Hopefully, capitalism will survive. But the sort of period where America could actually, for instance, run ever increasing current account deficits. We could consume, at the end, six and a half percent more than we are producing. That has come to an end.
BILL MOYERS:So what do we do now?
GEORGE SOROS:We are probably at the height of the financial crisis. I think it can’t get much worse. I think it could get a bit worse yet. But then you have the fallout in the real economy.
BILL MOYERS:We’re in a downward spiral.
GEORGE SOROS:We are in a downward spiral.
BILL MOYERS:How long will it go on?
GEORGE SOROS:Look the one thing that my theory says is that you can’t predict the future because the future depends on how you react to it. So if we do the right things then things will not — will be less painful. If you do the wrong things, they’ll be more painful. Now, so far we’ve been doing the wrong things. I very much hope that we’ll have a different government in a few months and they’ll be doing the right things.
BILL MOYERS:Well, don’t be shy. What do you think the new government should do?
GEORGE SOROS:Well, first of all you have to prevent housing crisis from overshooting on the downside the way they overshot on the upside. You can’t arrest the decline, but you can definitely slow it down by minimizing the number of foreclosures and readjusting the mortgages to reflect the ability of people to pay. So you have to renegotiate mortgages rather than foreclose.
And you provide the government guarantee. But the loss has to be taken by those who hold the mortgages, not by the taxpayer.
BILL MOYERS:You mean the homeowner doesn’t take the loss. The lender.
GEORGE SOROS:The homeowner needs to get relief so that he pays less because he can’t afford to pay. And the value of the mortgage should not exceed the value of the house. Right now you already have 10 million homes where you have negative equity. And before you are over, it will be more than 20 million.
BILL MOYERS:But, you’re talking about taking action three months from now, whether it’s a McCain administration or an Obama administration. What happens in these next three months? And I’m serious about that.
GEORGE SOROS:I am very worried about it. And I hope that they will have a new secretary of treasury, somebody else.
BILL MOYERS:Sooner than later?
BILL MOYERS:You don’t think…
GEORGE SOROS:It would be very helpful if…
BILL MOYERS:You don’t think Paulson’s up to it?
GEORGE SOROS:Unfortunately, I have a negative view of his performance.
GEORGE SOROS:Because he represents the very kind of financial engineering that has gotten us into the trouble. And this buying off the noxious things was a…
BILL MOYERS:Buying the bad assets, that was his…
BILL MOYERS:First idea.
GEORGE SOROS:Yeah, and before that, he wanted to create a super SIV, special investment vehicle, to take care of the other special investment vehicles. That didn’t fly. And they are now within a week recognizing that they have to change and inject money into the banks to make up for the whole in the equity because those banks lost money. And they can’t make it up by taking their assets off their hands. You have to recognize the losses and replenish the equity.
BILL MOYERS:Is that what you would do with the bailout money now? Right now?
GEORGE SOROS:Yes, yes, yeah.
BILL MOYERS:You would put it where?
GEORGE SOROS:Into the capital of the bank so that the capital equity can sustain at least 12 times the amount of lending. So that’s an obvious thing. And every economist agrees with this.
You see, what is needed now the bank examiners know how those banks stand. And they can say how much capital they need. And they could then raise that capital from the private market. Or they could turn to this new organization and get the money from there. That would dilute the shareholders. It would hurt the shareholders.
BILL MOYERS:Of the bank?
GEORGE SOROS:Of the banks. Which I think Paulson wanted to avoid. He didn’t want to go there. But it has to be done. But then, the shareholders could be offered the right to provide the new capital. If they provide the new capital then there’s no dilution. And the rights could be traded. So if they don’t have the money, other people could, the private sector could put in the money. And if the private sector is not willing to do it then the government does it.
BILL MOYERS:The assumption of everything you say is that the government is going to be a big player now in the economy and in the financial markets. But what assurance do we have that the government will do a better job?
GEORGE SOROS:We don’t. Right now they are doing a bad job. So you want to use the government as little as possible. The government should play a smaller role. In that sense, people who believe in markets, I believe in markets. I just want them to function properly. To the extent you can use the market, you should use the market.
Governments are also human. They’re also bound to be wrong. Moreover, they are bureaucratic. So they are slow and they are subject to political influence. So you want to use them as little as possible. But to not to use them, see, assumes that markets are perfect. And that is a false belief.
BILL MOYERS:Has the whole global system become so complex with such gargantuan forces interlocked with each other, driving it forward, that it doesn’t know how to obey Adam Smith’s natural laws?
GEORGE SOROS:No, I think our ability to govern ourselves doesn’t keep pace with our ability to exercise power over nature, control over nature. So we are very complicated civilization. And we could actually destroy our civilization because of our inability to govern ourselves.
BILL MOYERS:Would this all be happening if we still had a strong sense of the social compact? I mean, our social safety net has been greatly reduced. The people have a real sense that the gods of capital have left little space for anyone else. People at the top don’t have much empathy for people at the bottom.
GEORGE SOROS:There is a common interest. And this belief that everybody pursuing his self-interests will maximize the common interests or will take care of the common interests is a false idea. It’s a suitable idea for those who are rich, who are successful, who are powerful. It suits them to justify you know, enjoying the fruits without paying taxes. The idea of paying taxes is an absolute no-no, right?
GEORGE SOROS:Unpatriotic. So, yes, you must have, in my opinion, you need, for instance, a tax on carbon emissions. But that is unacceptable politically. So we are going to have cap and trade. And the trading will have all kinds of loopholes and misuse of the regulations and all kinds of ways of making money without actually dealing with the problem that it’s designed to cure. So that’s how the political process distorts things.
BILL MOYERS:So let’s think about those people down at Neely’s Barbecue going home tonight having heard you. What they’ve heard you say is the system is really disfunctioning right now. It’s out of control. Nobody’s in charge. They’ve heard you express your own worry that in the next three months it could get much, much worse.
And they’ve heard you say that you don’t see much good news immediately on the horizon. So let’s leave them something to think about as they go home. Let them go home and say, “Mr. Soros said here are three things we can do, simply.” One?
GEORGE SOROS:Well, deal with the mortgage problem. Reduce foreclosures. Recapitalize the banks. And then work on a better world order where we work together to resolve problems that confront humanity like global warming. And I think that dealing with global warming will require a lot of investment.
You see, for the last 25 years the world economy, the motor of the world economy that has been driving it was consumption by the American consumer who has been spending more than he has been saving, all right? Than he’s been producing. So that motor is now switched off. It’s finished. It’s run out of — can’t continue. You need a new motor. And we have a big problem. Global warming. It requires big investment. And that could be the motor of the world economy in the years to come.
BILL MOYERS:Putting more money in, building infrastructure, converting to green technology.
GEORGE SOROS:Instead of consuming, building an electricity grid, saving on energy, rewiring the houses, adjusting your lifestyle where energy has got to cost more until it you introduce those new things. So it will be painful. But at least we will survive and not cook.
BILL MOYERS:You’re talking about this being the end of an era and needing to create a whole new paradigm for the economic model of the country, of the world, right?
BILL MOYERS:One of the British newspapers this morning had a headline, “Welcome to Socialism.” It’s not going that way, is it?
GEORGE SOROS:Well, you know, it’s very interesting. Actually, these market fundamentalists are making the same mistake as Marx did. You see, socialism would have worked very well if the rulers had the interests of the people really at heart. But they were pursuing their self-interests. Now, in the housing market, the people who originated the houses earned the fee.
And the people who then owned the mortgages their interests were not actually looked after by the agents that were selling them the mortgages. So you have a, what is called an agent principle problem in socialism. And you have the same agent principle problem in this free market fundamentalism.
BILL MOYERS:The agent is concerned only with his own interests.
GEORGE SOROS:That’s right.
BILL MOYERS:Not with…
GEORGE SOROS:That’s right.
BILL MOYERS:The interest of…
GEORGE SOROS:Of the people who they’re supposed to represent.
BILL MOYERS:But in both socialism and capitalism, you get the rhetoric of empathy for people.
GEORGE SOROS:And it’s a false ideology. Both Marxism and market fundamentalism are false ideologies.
BILL MOYERS:Is there an ideology that…
GEORGE SOROS:Is not false?
GEORGE SOROS:I think the only one is the one that I’m proposing; namely, the recognition that all our ideas, all our human constructs have a flaw in it. And perfection is not attainable. And we must engage in critical thinking and correct our mistakes.
BILL MOYERS:And that’s one…
GEORGE SOROS:That’s my ideology. As a child, I experienced Fascism, the Nazi occupation and then Communism, two false ideologies. And I learned that both of those ideologies are false. And now I was shocked when I found that even in a democracy people can be misled to the extent that we’ve been misled in the last few years.
BILL MOYERS:The book is “The New Paradigm for Financial Markets: The Credit Crisis of 2008 and What It Means”. George Soros, thank you for being with me.
This is scandalous! They are assuming you are too tired and beaten down to care. A lot of these people are up for re-election – continue to let them know what you think!
This is a conference call place BY THE TREASURY DEPARTMENT – it’s too long to post here in its entirety – so read and listen at NakedCapitalism.com.
We certainly are glad we are NOT in Washington D.C. – the stench must be horrible!
House Speaker Nancy Pelosi has directed nearly $100,000 from her political action committee to her husband’s real estate and investment firm over the past decade, a practice of paying a spouse with political donations that she supported banning last year.
Financial Leasing Services Inc. (FLS), owned by Paul F. Pelosi, has received $99,000 in rent, utilities and accounting fees from the speaker’s “PAC to the Future” over the PAC’s nine-year history.
The payments have quadrupled since Mr. Pelosi took over as treasurer of his wife’s committee in 2007, Federal Election Commission records show. FLS is on track to take in $48,000 in payments this year alone – eight times as much as it received annually from 2000 to 2005, when the committee was run by another treasurer.
Lawmakers’ frequent use of campaign donations to pay relatives emerged as an issue in the 2006 election campaigns, when the Jack Abramoff lobbying scandal gave Democrats fodder to criticize Republicans such as former House Majority Leader Tom DeLay of Texas and Rep. John T. Doolittle of California for putting their wives on their campaign and PAC payrolls for fundraising work.
Last year, Mrs. Pelosi supported a bill that would have banned members of Congress from putting spouses on their campaign staffs. The bill – which passed the House in a voice vote but did not get out of a Senate committee – banned not only direct payments by congressional campaign committees and PACs to spouses for services including consulting and fundraising, but also “indirect compensation,” such as payments to companies that employ spouses.
“Democrats are committed to reforming the way Washington does business,” Mrs. Pelosi said in a press release at the time. “Congressman [Adam] Schiff’s bill will help us accomplish that goal by increasing transparency in election campaigns and preventing the misuse of funds.”
Last week, Mrs. Pelosi’s office said the payments to her husband’s firm were perfectly legal, insisting she is compensating her husband at fair market value for the work his firm has performed for the PAC. But ethical watchdogs said the arrangement sends the wrong message.
“It’s problematic,” said Melanie Sloan, executive director of the Citizens for Responsibility and Ethics in Washington (CREW), a nonprofit ethics and watchdog group. “From what I understand, Mr. Pelosi doesn’t need the money, but this isn’t the issue. … As speaker of the House, it sends the wrong message. She shouldn’t be putting family members on the payroll.”
A senior adviser to Mrs. Pelosi described the payments to FLS as “business expenses.”
“She’s followed all the appropriate rules and regulations in terms of records and paperwork,” said Brendan Daly, Mrs. Pelosi’s spokesman. “When [former treasurer] Leo McCarthy became ill, she thought that it was best that that firm did the accounting and she’s paid fair market value in San Francisco.”
Between 1999 and 2006, FLS collected $500 per month to cover rent, utilities and equipment for the leadership PAC, according to the FEC records. The PAC’s address is listed as a personal mailbox in San Francisco, across the street from FLS’s Montgomery Street office building, but the rent payments went to an office space.
In early 2007, the PAC’s treasurer, Leo T. McCarthy, former Democratic speaker of the state assembly and lieutenant governor in California, died. Mr. Pelosi took over as treasurer and his company’s PAC payouts rose.
At that point, FLS started charging the PAC $24,000 per year for accounting work. In January 2008, the PAC’s rent – paid to FLS – also quadrupled from $500 to $2,000 per month.
Mr. McCarthy, the previous treasurer, had done the work as a volunteer, according to FEC documents and Jennifer Crider, a senior adviser to Mrs. Pelosi and spokeswoman for the Democratic Congressional Campaign Committee. She said FLS’ accounting fees are in line with costs for other PACs.
The jump in rent was an adjustment to reflect San Francisco’s pricey real estate market, Miss Crider said. The rent was adjusted to $1,250 per month, with $750 in back rent to reflect that the rent should have been increased in mid-2007. This was the first increase since the PAC was established in mid-1999, records show.
Over the first six months of 2008, FLS was the largest vendor for Mrs. Pelosi’s PAC. Brian Wolff, a political consultant, is the second-largest vendor, bringing in $22,500 this year.
FLS’ payments represent 11 percent of the $213,900 the PAC raised over the first half of this year, according to the FEC documents.
PACs, which are designed to help politicians contribute to other candidates and build influence with colleagues, operate under lighter restrictions than traditional campaign committees.
Meredith McGehee, policy director at the nonpartisan Campaign Legal Center, said putting family members on a PAC payroll is bound to raise questions and, in some cases, allow for abuse.
“The reality is that under the current system, PACs are rife with self-dealing transactions,” she said. “The laws and regulations could and should be strengthened.
“There is a point now that you’re starting to talk about real money,” she said of Mrs. Pelosi’s PAC. “This is not just a mom-and-pop operation and any self-dealing transaction by a member of Congress is going to get scrutiny, particularly with large amounts of money and prominent members.”
It is illegal for members of Congress to hire family members to work on their official staff, but hiring relatives to work on a campaign or PAC is legal.
To be sure, many political action committees employ or work with family businesses. Last year, CREW found that 19 members of Congress used campaign committees or PACs to purchase services from a family member between 2002 and 2006.
Mrs. Pelosi’s PACs have been in trouble before. In 2004, one of her political action committees, Team Majority, was fined $21,000 by the FEC for accepting donations over federal limits. It was one of two PACs she operated at the same time. The Team Majority PAC was closed shortly after the fine was levied.
You won’t @#$#&$%-ing believe this!
“It’s not based on any particular data point,” a Treasury spokeswoman told Forbes.com Tuesday. “We just wanted to choose a really large number.”
CONTACT YOUR SENATOR AND CONGRESS-PERSON NOW! THEY ARE NOT SAVING THE MARKETS – THEY ARE COVERING THEIR CRIMINAL ACTIVITIES AND YOU WILL PAY FOR IT! TELL THEM NOT TO VOTE FOR THE BAIL-OUT.
AND BY THE WAY – WHY CAN THEY FIND $700,000,000,000 TO BAIL OUT CROOKS, BUT CAN’T “FIX” NEW ORLEANS?!
Google “Charles Keating” and “The Keating Five” – NOW!
In case you don’t have time –
This is a MUST READ for any voter in the United States. It is taken, in its entirety, with no additions or subtractions, from Mish’s Global Economic Trend Analysis, by Mike “Mish” Shedlock. Please read it, ladies and gentlemen, and read it NOW. This is what is being put forth in your name by your leaders to “save” you.
The New York Times has the Text of Draft Proposal for Bailout Plan. Given this is legislation, under fair use terms, here is the complete draft. My thoughts follow.
LEGISLATIVE PROPOSAL FOR TREASURY AUTHORITY
TO PURCHASE MORTGAGE-RELATED ASSETS
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.
Weep For The Taxpayer
Notice that this bill raises the national debt. Notice that the bill is supposed to take into consideration “protecting the taxpayer”.
The reality is this bill does not and cannot protect the taxpayer. Rather this bill only promises to take the taxpayer into consideration. The Treasury will indeed take the taxpayer into consideration, then immediately discard any such ideas.
Inquiring minds are also noting “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.”
The idea behind the above statement is to allow for a continual dumping ground such that there will always be $700 billion in toxic garbage held under this program. As soon as any asset can be unloaded by the Treasury at cost, another toxic loan is eligible to be assumed on the books of the Treasury. This process can last for as long as two years.
Pay particular attention to section 8.
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.
Essentially the law will state that whatever the Treasury does it is above the law. Such a provision is undoubtedly unconstitutional.
Weep For The Free Market
It’s time to Weep For The Free Market (or rather what little free market the US had left).
Weep For The Unites States of America
At taxpayer expense, Bernanke and Paulson are willing to bail out their banking buddies at enormous expense to the average taxpayer of this country. Bernanke and Paulson both should be fired. Instead Congressional sheep will baa yes to this bailout and Bush will baa yes when he signs it. It is a sickeningly sad that day for America that Congress will go along with this proposal that makes the US Taxpayer A Giant Dumpster For Illiquid Assets.
$700 billion will be wasted by this program and it is $700 billion the US does not have to waste. I ask that everyone vote against any congressman who votes for the passage of this bill.
Rep. Charles Rangel (D-NY) Lobbied IRS for Tax Breaks on Behalf of Yankees
The city and the Yankees secretly crafted a letter Rep. Charles Rangel used to lobby the IRS for tax changes that would save the team $66 million, the Daily News has learned.
They did this at the same time Yankees owner George Steinbrenner and the team’s law firm, Akin Gump Strauss Hauer & Feld, raised almost $25,000 for Rangel, records show.
The law firm’s political action committee also donated an additional $30,000 to the Democratic Congressional Campaign Committee in this election cycle. Rangel is chairman of the DCCC’s board of directors and a key fund-raiser for House Democrats. Yankees President Randy Levine is senior counsel at Akin Gump.
ANCHORAGE, Alaska (AP) — Gov. Sarah Palin’s administration is threatening to block any subpoenas by the Alaska Legislature as it investigates whether she abused her authority in trying to have her former brother-in-law fired as a state trooper.
Read the rest of the story.
*****UPDATE 8/28/08***** We learned late last night that Greg Quibell, star of SAVE THE BRAVE lost his heroic battle. Please see our post “First Responder Greg Quibell Dies of 9/11 Illness”.
RESPONDERS DOCUMENTARY SHOWS AFFECTS OF 9/11 SEVEN YEARS LATER
“SAVE THE BRAVE” TELLS STORY OF DIGNITY, COURAGE, SUFFERING
SON SALUTES SICK DAD WITH GRAND SLAM TO WIN BALLGAME
August 4, 2008, New York City- The Fealgood Foundation is producing SAVE THE BRAVE a documentary made and produced by 911 responders to inform the nation of the intense suffering 911 responders and their families are experiencing. The single focus of the documentary is passage of the 911 Health & Compensation Bill named for James Zadroga, the police officer who perished as the result of his illness contracted from service at Ground Zero. Hundreds of 911 Responders have died of illness contracted from Ground Zero.
John Feal, founder of the Fealgood Foundation comments, “If all of America understood what the men and women who rushed to save lives and retrieve remains for grieving family members are going through on a daily basis they would be shocked. As New York Congressman Jerrold Nadler says in SAVE THE BRAVE, “it’s a moral outrage”.
The Fealgood Foundation is reaching out to Americans urging them to see that the 911 Health & Compensation Bill is passed in Congress so that Responders have access to much needed medical care, medicines and disability compensation to allow their families to thrive.
The Fealgood Foundation assigned the production of SAVE THE BRAVE to another 911 Responder, Reverend Bill Minson. Minson served as a Red Cross and Salvation Army chaplain, he has continued to provide spiritual care through his TUDAY Ministries, his all voluntary service began Sept. 13, 2001. Rev. Minson also narrates the documentary with noted artist and videographer Robert Agriopoulos directing.
John Feal continues, “With Responders across the country suffering we don’t want one to be without support. We’re praying that Jim Ritchie, John McNamara, Greg Quibell and Charlie Giles, the subjects of our documentary, will all be with us when our documentary debuts later this month. Please let me share a touching email with you from Greg Quibell’s family yesterday as he fights for his life at North Shore University hospital”.
“Today Theresa’s son Nick came up to the plate with 3 men on base in his little league game. With that his coach approached him and said Nick a hit brings home 2 runs, they were trailing by 1. Nick replied to the coach in front of everyone in the stands to hear, hey coach how about one hit brings home 4 runs. The coach laughed and then Nick said, ‘this one is for my dad in the hospital’. Well Nick hit a grand slam over the 220 ft. fence and cleared it by 30 feet. Everyone who heard him say that and then do it started to cry. Nick then went to the hospital and brought Greg the home run ball. You just cant make that up, and if it doesn’t make you cry or feel the love and pain this family is going through, then your not human. Theresa thank you for this story and for a good cry”, concludes 911 Responder, John Feal.
SAVE THE BRAVE http://www.youtube.com/profile_videos?user=franniebird&p=r
For additional information please contact Anne Marie Baumen at the Fealgood Foundation
Anne Marie Baumen
516.551.0986 / 631.724.3320