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This just in, Treasury Secretary Paulson now confirming that the government is pursuing a plan similar to what happened to the savings and loan.  

While the exact details haven't been released.  I will be updating this as more news comes out.  For those who aren't aware of what a Resolution Trust Corporation or RTC is, basically it's an outfit that buys the bad loans from failing banks to supply capital.  Well, it's a lot more complicated than that.  I will be posting a primer on this tonight.  Anyways, below is an excerpt from CNBC's site.

Treasury Secretary Henry Paulson is working on a plan that would set up a government facility to take on bad debts from financial institutions, preventing a worsening of the global credit crisis, Wall Street sources have told CNBC.

The facility would be similar to the Resolution Trust Corporation, which was set up in the late 1980s to take on all the failed thrift assets during the savings and loan crisis, these sources said.

Paulson is said to be shopping the proposal to lawmakers in Congress, a congressional aide told Reuters.

- excerpt from "US Weighing Plan to Set Up Facility to Hold Bad Debts", CNBC, 2008.

It should be noted that Representative Barney Frank had been calling on the government to come in and just this months ago.  Back then, financial companies like Lehman were trading near $100 giving off reassurances, and Barney Frank was laughed at.  Guess who was correct?

Cross posted on
The Economic Populist
-
A Community Site for Economics Freaks and Geeks

Update
Below is a link of CNBC's video announcing this.  Sorry, not sure how to post the actual video on here.  Anways, take a look.

Charlie Gasparino reporting on Paulson's RTC plan.

Update 2:

Senator Schumer's proposes establishing a different organization than the Resolution Trust Corporation. Along the same lines of the Depression age Reconstruction Finance Corp.  Under Schumer's plan, the RFC would infuse new capital into the ailing instution, BUT would hold preferred stock becoming part owner of the bank or financial company, along assuming the debt.  Secondly, mortgages would be renegotiated to give more breathing room to homeowners.

``The series of ad-hoc interventions in the market over the past 10 days were important to avoid a systemic disaster,'' Schumer said. ``But we cannot continue to act in such an uncoordinated and ad-hoc fashion.''

Under Schumer's RFC plan, ``the government would come first,'' he said. ``The government would get repaid before the others in the financial chain.''

- excerpt from Bloomberg's talk with Senator Schumer.

Update 3:

There are now two competing plans.  One, by Senator Charles Schumer, establishing a Reconstruction Finance Corp.  And the yet-announced/still formulating Treasury Secretary Paulson's Resolution Trust Corp type plan.

Update 4: Wall Street Journal is reporting that the Treasury is now not looking at duplicating the old Resolution Trust Corporation. As I am typing this, officials are meeting at the White House.  Details to come forth shortly!

Update 5:

Paulson claims any new plan must be approved by Congress. The new details coming out are that we will see a hybrid of the Resolution Trust Corp and the Reconstruction Finance Corporation.  That this new RTC/RFC will be there to provide capital for banks who are not at death's door but would soon be.  For those who are almost dead, they would not only buy the bad debt, but take stock into the financial company in question.  Several questions remain.  Will this new RTC/RFC agency also take stock into financials that it will inject capital into?  At what price will this new hybrid purchase this bad debt?

Also, this new government plan, would introduce a new FDIC program for Money Market Funds.  This comes in the light of the closures of one major retail MMF this week and today's Institutional Money Market Fund.

Originally posted to Johnny Venom on Thu Sep 18, 2008 at 12:56 PM PDT.

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| 43 votes | Vote | Results

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Comment Preferences

  •  Tips for barney frank (34+ / 0-)

    hey, he nailed it over 6 months ago!

    corporations interpret "loyalty" the way a prisoner might interpret "dropping the soap"

    by Johnny Venom on Thu Sep 18, 2008 at 12:56:42 PM PDT

  •  make them sign a loyalty pledge first. (2+ / 0-)
    Recommended by:
    SammyJames, Shhs

    send them all to frickin jail for defrauding the American public.-

    Republicans are not a national party anymore. Read My Lips: One Spouse, One House.

    by jalapeno on Thu Sep 18, 2008 at 12:58:49 PM PDT

  •  I wondered why McCain called for this today.. (5+ / 0-)

     
    Guess he got a heads-up from some everyone..

     

    John McCain makes George W. Bush look prudent - Andrew Sullivan

    by DiegoUK on Thu Sep 18, 2008 at 12:58:54 PM PDT

  •  Doesn't this just mean (5+ / 0-)

    that we will owe even more money as taxpayers?  And those who caused the problems walk away with us holding the bag, again?  

    And my god, at what point do we run out of money, this is going to be well into a trillion by the time it is done, and if housing continues to crash for at least five years or more, we get no return on this money?

    I don't really understand this, but what I think I understand is that we the taxpayers are fucked and this might not even really fix the problem.

    AfterHoursStamper.blogspot.com

    by SanJoseLady on Thu Sep 18, 2008 at 12:58:57 PM PDT

    •  The problem is ... (4+ / 0-)
      Recommended by:
      Limelite, Jbeaudill, pgm 01, CeeusBeeus

      ... that if you don't do an RTC we'll end up spending more tax payer money bailing out WaMu, Wachovia, Morgan Stanely, Goldman Sachs, and eventually the FDIC. And destabilizing our economy even further, with everyone waiting for the next failure and the next bailout.

      An RTC is a clean solution that should get it all off the table and out of the markets as long as the banks and companies holding these questionable assets agree to sell them at a reasonable price.

      Sent from a Blackberry, a miracle made possible and invented by John McCain

      by Larry Madill on Thu Sep 18, 2008 at 01:03:51 PM PDT

      [ Parent ]

    •  The fear is that it is this or a (2+ / 0-)
      Recommended by:
      Jbeaudill, pgm 01

      depression like we haven't seen since the 1930's. We really don't want to see a run on the banks and unemployment at 30%. This crisis could get THAT bad if nothing is done.

      "Give 'em Hell, Harry!"
      "I don't give them Hell. I just tell the truth about them and they think it's Hell."

      by davewill on Thu Sep 18, 2008 at 01:04:52 PM PDT

      [ Parent ]

    •  Just where is all this money coming from? (5+ / 0-)
      Recommended by:
      maren a, pgm 01, davewill, smellybeast, Shhs

      When the Feds put money into a bailout or to increase market liquidity, where does the money come from?  It appears to me that we must be borrowing all these dollars from China and Sovereign Wealth Funds in the Middle East?  Our national debt is soaring, now at $10 TRILLION, where does it end?  When does the dollar become worth a lot less?... maybe like Lira or Bahts?  And now the automakers have asked for a bailout too!

      In youth we learn, in age we understand.

      by Jbeaudill on Thu Sep 18, 2008 at 01:10:06 PM PDT

      [ Parent ]

      •  Two places... (2+ / 0-)
        Recommended by:
        Jbeaudill, pgm 01

        out of taxpayer's pockets and out of the inkwell. The problem being that we've been taking too much out of the inkwell all during the Bush years. That's one of the two reasons that oil prices soared so. We've been diluting the dollar by spending what we don't have.

        All we can do is weather this storm and start to balance the budget. Both the federal budget and individual budgets. And to hell if that means the economy can't grow us a new bubble for the fat cats.

        "Give 'em Hell, Harry!"
        "I don't give them Hell. I just tell the truth about them and they think it's Hell."

        by davewill on Thu Sep 18, 2008 at 01:19:46 PM PDT

        [ Parent ]

      •  Someone correct me if I am wrong... (2+ / 0-)
        Recommended by:
        reflectionsv37, Jbeaudill

        But when we borrow money from the FED we borrow money from the FED.

        The FED is a group of private banks, and we allow them to print money out of thin air.  Then we pay them back with interest...............SO, our wealth goes to a group of private banks, in the end.

        Am I wrong?

        •  You're right and it's something I've thought (3+ / 0-)

          we should change for a long time. We should go back to having a government owned Bank of the United States that is the sole source of new money. Then get rid of the reserve rules that allow private banks to create money out of thin air. Only let them lend what they either have assets to cover. Every year the Bank can calculate the amount of new money needed and distribute it through tax rebates. Call it the trickle up theory.

          Yes, I know there are big problems and this is a bigger task than I can probably guess. And don't bother to mention that it will never fly politically.

          "Give 'em Hell, Harry!"
          "I don't give them Hell. I just tell the truth about them and they think it's Hell."

          by davewill on Thu Sep 18, 2008 at 01:54:08 PM PDT

          [ Parent ]

          •  I simply cannot imagine that any of those (0+ / 0-)

            private banks have the assets to cover what the FED has given away over the past month. If they don't have the assets to back up the money, what is the money worth?  I think what we have here are a bunch of Zimbabwe dollars = the US dollar on its way to being worthless.

            In youth we learn, in age we understand.

            by Jbeaudill on Thu Sep 18, 2008 at 03:25:24 PM PDT

            [ Parent ]

          •  It WOULD fly... (1+ / 0-)
            Recommended by:
            davewill

            politically, but would not fly with the people who benefit from the private bank (FED) so it could not happen.  You see, money is power, and they got money!

            •  Not as much (or either) as they used to have... (0+ / 0-)

              maybe this is the time! It actually makes sense. If the government HAS to increase the money supply, why should a bunch of private banks get the new cash? Why should the government have to then BORROW the new money from those same private bankers? It should start out belonging to the government, and the people.

              It doesn't matter to the economy how it the cash enters the economy, just so it does.

              "Give 'em Hell, Harry!"
              "I don't give them Hell. I just tell the truth about them and they think it's Hell."

              by davewill on Thu Sep 18, 2008 at 04:24:47 PM PDT

              [ Parent ]

  •  I was thinking about it... (2+ / 0-)
    Recommended by:
    pgm 01, Shhs

    ...that McCalin might end up worsening things for themself. By maybe talking even more about "small government" despite our growing one.

  •  Privatize the profits (5+ / 0-)
    Recommended by:
    Jbeaudill, pgm 01, TomP, SammyJames, Shhs

    nationalize the risk. Thom Hartmann said it in the title of his book SCREWED, as in we are being/have been screwed by these companies and these Rethugs.

    To paraphrase Stephen Colbert: 2008-Great Depression or Greatest Depression?

    by MufsMom on Thu Sep 18, 2008 at 12:59:16 PM PDT

    •  Shouldn't that be "Nationalize the profits" (0+ / 0-)

      and privatize the risk...?

      •  I really DON'T know... (0+ / 0-)

        because I don't really know exactly what all of this means in the long run.

        •  It means you pass it on to me, the next (2+ / 0-)
          Recommended by:
          Jbeaudill, SammyJames

          generation.  Like they did in the 80's.  Just push it off.  Pump and dump.

          The definition of insanity is voting the same way and expecting a different result. I'm talking to you FL,OH, KY, WV!

          by Shhs on Thu Sep 18, 2008 at 01:07:02 PM PDT

          [ Parent ]

          •  Okay. Let me step back for a second -- (1+ / 0-)
            Recommended by:
            Shhs

            I guess that the problem that I'm having with all of this is that I HAVE NO MONEY. I am flat broke. I've never owned a credit card in my life, and I have never made more than about $29,000 in any given year, ever. And that was a decade ago, before I became disabled.

            I'm on a fixed income now. I simply cannot fathom the huge sums of money that people discuss these days. It isn't that I'm unintelligent -- it is that I have ZERO experience with an actual budget.

            •  Okay -- NOW I see what you are saying... (1+ / 0-)
              Recommended by:
              Shhs

              ...it makes sense now.

              I believe that we should both privatize both the profit AND the risk. But we should also regulate i--

              Oh. Duh. That's right. That is why we are electing Obama.

              Right?

      •  And to defend what I was writing here (0+ / 0-)

        I guess that what was confusing me is as follows:

        To "nationalize" anything, to ME, means that the NATION gets the profit. By Nation, I'm thinking of all 305 million of us.

        By "privatizing" something, I envision the companies who we, the nation, are bailing out.

        But I guess that the writer of which you speak is calling these two groups different things. He is calling the Nation our Government -- NOT the government as in "the people," but the government as in the executive branch.

        And he is calling the "prvate sector" the 305 million people who live here.

        This is, of course, a big part of the problem. When people stop seeing themselves as being a part of the government, it is too easy to see the government as being apart from us. This is what we stand for as Democrats. (I'm not TELLING YOU that. I'm simply stating it so that I can work all of this out -- however publicly -- so that I can be certain that I'm understanding it.)

        If anyone wants to jump in and help me to figure this out, be my guest.

    •  Fear not, those CEOs will still have their (5+ / 0-)

      millions and golden parachutes... there was one who ran his company into a ditch and still got his $169 million payout.  Fear not, the rich will survive.

      In youth we learn, in age we understand.

      by Jbeaudill on Thu Sep 18, 2008 at 01:12:56 PM PDT

      [ Parent ]

      •  Exactly and that is freaking wrong. n/t (2+ / 0-)
        Recommended by:
        reflectionsv37, pgm 01

        The definition of insanity is voting the same way and expecting a different result. I'm talking to you FL,OH, KY, WV!

        by Shhs on Thu Sep 18, 2008 at 01:15:06 PM PDT

        [ Parent ]

      •  Oh, *I* am not afraid -- (2+ / 0-)
        Recommended by:
        pgm 01, Shhs

        -- but THEY should be.

      •  saw on CNBC today that Lehman's COO has to sell (1+ / 0-)
        Recommended by:
        Jbeaudill

        his house.

        corporations interpret "loyalty" the way a prisoner might interpret "dropping the soap"

        by Johnny Venom on Thu Sep 18, 2008 at 01:34:57 PM PDT

        [ Parent ]

        •  A 33 million dollar house (1+ / 0-)
          Recommended by:
          Johnny Venom

          Yeah, good luck with that. I know people right now trying to unload houses in L.A. for 125K that are probably under-valued and they can't find a buyer.

          Sent from a Blackberry, a miracle made possible and invented by John McCain

          by Larry Madill on Thu Sep 18, 2008 at 01:38:51 PM PDT

          [ Parent ]

        •  poor guy I feel so sorry for him. (0+ / 0-)

          My neighbor has to short sell his house, but you didn't see that on CNBC!

          The definition of insanity is voting the same way and expecting a different result. I'm talking to you FL,OH, KY, WV!

          by Shhs on Thu Sep 18, 2008 at 01:43:42 PM PDT

          [ Parent ]

        •  A little advice for that COO from Dylan: (2+ / 0-)
          Recommended by:
          reflectionsv37, Jbeaudill

          Once upon a time you dressed so fine
          You threw the bums a dime in your prime, didn't you?
          People'd call, say, "Beware doll, you're bound to fall"
          You thought they were all kiddin' you
          You used to laugh about
          Everybody that was hangin' out
          Now you don't talk so loud
          Now you don't seem so proud
          About having to be scrounging for your next meal.

          How does it feel
          How does it feel
          To be without a home
          Like a complete unknown
          Like a rolling stone?

          You've gone to the finest school all right, Miss Lonely
          But you know you only used to get juiced in it
          Nobody has ever taught you how to live out on the street
          And now you're gonna have to get used to it
          You said you'd never compromise
          With the mystery tramp, but now you realize
          He's not selling any alibis
          As you stare into the vacuum of his eyes
          And say do you want to make a deal?

          How does it feel
          How does it feel
          To be on your own
          With no direction home
          A complete unknown
          Like a rolling stone?

          You never turned around to see the frowns on the jugglers and the clowns
          When they all did tricks for you
          You never understood that it ain't no good
          You shouldn't let other people get your kicks for you
          You used to ride on the chrome horse with your diplomat
          Who carried on his shoulder a Siamese cat
          Ain't it hard when you discover that
          He really wasn't where it's at
          After he took from you everything he could steal.

          How does it feel
          How does it feel
          To be on your own
          With no direction home
          Like a complete unknown
          Like a rolling stone?

          Princess on the steeple and all the pretty people
          They're all drinkin', thinkin' that they got it made
          Exchanging all precious gifts
          But you'd better take your diamond ring, you'd better pawn it babe
          You used to be so amused
          At Napoleon in rags and the language that he used
          Go to him now, he calls you, you can't refuse
          When you ain't got nothing, you got nothing to lose
          You're invisible now, you got no secrets to conceal.

          How does it feel
          How does it feel
          To be on your own
          With no direction home
          Like a complete unknown
          Like a rolling stone?

  •  If Bush had acted a year ago (5+ / 0-)

    Or even Six Months ago with something like this think of how many jobs could've been saved, how many companies and banks could've been spared, and how many bailouts could've been avoided. Astounding.

    All in all this seems like a good solution. It's been done twice before (during the S&L crisis and during the Great Depression) so it will work as long as companies holding those risky assets agree to sell them for something reasonable.

    Sent from a Blackberry, a miracle made possible and invented by John McCain

    by Larry Madill on Thu Sep 18, 2008 at 01:00:45 PM PDT

    •  No he should have saved the people (3+ / 0-)

      He should have made the companies sit down and renegotiate the loans.  They did it to themselves.  I don't want to take on this debt.  What about our future?

      The definition of insanity is voting the same way and expecting a different result. I'm talking to you FL,OH, KY, WV!

      by Shhs on Thu Sep 18, 2008 at 01:02:10 PM PDT

      [ Parent ]

      •  Exactly! (0+ / 0-)

        The bailouts happened too far up the food chain. If they were going to bail anyone out, it should have started at the level of the homeonwner, not speculators, that were sold a bill of goods, encourage to buy into a housing market that was grossly overinflated just so the fat cats at the top could pocket enormous sums that were created out of thin air.

        As it stands now, the homeowner loses his home and still ends up paying back the loan as a taxpayer while the Fed bails out the firms who created the mess in the first place. We have just been screwed again! There should be a lot of people who go to jail for this. But as we've seen for the past 8 years, those at the top are never held responsible. I wonder how long this can continue to go before the American people finally grab their torches and pitchforks and take to the street!

        Attention Waxman Staffers! Clean up on aisle 1600! huttotex 3/27/07

        by reflectionsv37 on Thu Sep 18, 2008 at 02:22:52 PM PDT

        [ Parent ]

    •  I HATE to say it -- I really, really do -- (1+ / 0-)
      Recommended by:
      Jbeaudill

      -- but if Bush had acted back then as you describe, then McPalin would be in much better shape today.

      I do hate how bad news for Republicans is "good" news for Democrats. The shitty part is that this is NOT good news for ANYONE -- no matter how you slice it.

  •  Sen Schumer (4+ / 0-)

    Sen. Schumer was on Cspan 30 minutes ago AND HE offered the RTC plan after meeting with Paulson. While he was giving his speach the DOW went up over 150 pts on the news..  I watched a breif part of it on Bloomberg when they cut away for it and as soon as Schumer started blasting McSame the cut the feed. But did give credit to Schumer for offering a solution.

  •  So, taxpayers assume all that bad debt (5+ / 0-)

    They gamble away other people's money and we pick up the bad debt.

    •  Yea pump and dump. (4+ / 0-)

      Seems like they are passing the problem off to the next generation.  That's me.  I don't like it.  

      The definition of insanity is voting the same way and expecting a different result. I'm talking to you FL,OH, KY, WV!

      by Shhs on Thu Sep 18, 2008 at 01:10:43 PM PDT

      [ Parent ]

      •  The problem is that there is no good (0+ / 0-)

        solution.  I hate the idea that these corporations can do anything they want despite the risk simply because the US government will clean up the mess.  However living through a great depression would be horrible for everyone.  If the government buys out the bad loans there needs to be a method for paying back the government.  I want a symbolic gesture such as cutting the CEO's pay as part of the deal but a real negotiated plan that repays the government for the investment.  If I am going to be on the hook for thier bad buisness practices, I want them to have to pay for it.

  •  End result. (6+ / 0-)

    This won't prevent the Great Depression (or is it the Greatest Depression), but it will so burden the federal government that it will be very difficult to use fiscal policy to ameliorate its effects.

    These thieves are now going to get legal sanction for a vacuum sweeper that will suck up the last assets left in the U. S. and vaporize them.

    Apparently, they're not going to be satisfied until they turn the U. S. into Argentina.

    •  Hmm... interesting... (1+ / 0-)
      Recommended by:
      Shhs

      The Republicans want to let business do what it wants to. Now, they have stepped in to assume both the risk and the profit.

      You are saying that they will reap the benefits, but only if they succeed. And if they fail, they'll put the tab on us.

      Is that what you are saying

      ?

  •  Why does this not surprise me? (2+ / 0-)
    Recommended by:
    pgm 01, Shhs

    I will need to research this more to see how this will help and give it due thought.  But my pocketbook just got thinner.

    I vote and I'm pissed off!

    by TheStormofWar on Thu Sep 18, 2008 at 01:15:10 PM PDT

  •  it is ALL a con . . . (6+ / 0-)

    just pumping the market, like they did the stock market today.  They will "buy" the bad debt (from the banks and speculators) at far more than it's worth, and then turn around and sell the forclosed properties to the same speculators, "financed" by the same banks, at firesale prices.

    And tack it all onto the "National Debt", which is nothing more than a transfer, by taxation, of still more wealth from the poor to the rich.

    A con on top of a con on top of a con . . . with the same people always "winning" . . . (hint . . . it's not you and me . . .).

    •  Exactly pump and dump. (0+ / 0-)

      Pump it up today, to dump on the next generation.  Look your children/teens/and under 30 year olds in the face tonight.  See if you can look in their eyes and tell them why you are dumping this problem on them again.

      The definition of insanity is voting the same way and expecting a different result. I'm talking to you FL,OH, KY, WV!

      by Shhs on Thu Sep 18, 2008 at 01:17:13 PM PDT

      [ Parent ]

      •  This is not a good situation by any means. (1+ / 0-)
        Recommended by:
        pgm 01

        But there is no other choice at this point if we want to avoid a complete collapse into a depression that would be worse that 1929.  Which future do you prefer, one were we taking on the debt and still have a viable economy or one were we are transformed into a third world country.  

        Those are the options at this point.

        •  You have it backwards. (0+ / 0-)

          It's assuming this debt that will turn the U. S. into Argentina.

          It cannot be paid back.

          •  I don't see how letting our financial system (0+ / 0-)

            collapse would avoid that outcome.

            And the biggest problem with all of this "bad debt" that banks have on their books, isn't that all of the mortgages are bad, but they can't tell which ones are bad.  

            If we can separate all of this toxic debt and figure out which loans are good and which ones are actually bad we can cut the loses.

            I don't see any other alternative. If you have any suggestions I'm willing to listen.

        •  To quote Bill O’Reilly (0+ / 0-)

          the fucking thing sucks.

          How about for saving the Republicans assess again, the federal government will be controlled by Democrats for the next 25 years.  I think that will be a fair trade.

    •  I believe Deward that you have aptly (3+ / 0-)
      Recommended by:
      reflectionsv37, smellybeast, Shhs

      described 'a Ponzi scheme.'  That is what we are dealing with here.

      In youth we learn, in age we understand.

      by Jbeaudill on Thu Sep 18, 2008 at 01:17:33 PM PDT

      [ Parent ]

  •  Don't pass this problem off to your children this (0+ / 0-)

    time.  Deal w/the mess now.  Take the hard medicine.  This is the 3rd time, you guys have a chance to actually own up to your mistakes.

    The definition of insanity is voting the same way and expecting a different result. I'm talking to you FL,OH, KY, WV!

    by Shhs on Thu Sep 18, 2008 at 01:15:54 PM PDT

    •  You keep spouting platitudes (1+ / 0-)
      Recommended by:
      pstoller78

      about hard solutions. So what exactly is your hard solution? Besides letting everything implode?

      Sent from a Blackberry, a miracle made possible and invented by John McCain

      by Larry Madill on Thu Sep 18, 2008 at 01:34:24 PM PDT

      [ Parent ]

      •  I said I'm not an economist (0+ / 0-)

        I just called this latest FAIL.  I do think that we should try something new.  Something that will break the cycle.  I think the system needs a massive overhaul, and I would like law makers to at least spend maybe 3 days thinking about a new solution, instead of just proposing something to pump up investors.  

        Listen Larry, people have been hurting for a while, the market has been divorced from reality for a while, if we don't stop the reasons why our econ is messed up, we won't stop this cycle we will only shove it off to the next generation.

        The definition of insanity is voting the same way and expecting a different result. I'm talking to you FL,OH, KY, WV!

        by Shhs on Thu Sep 18, 2008 at 01:47:56 PM PDT

        [ Parent ]

  •  Everyone should read up on the original RTC (6+ / 0-)

    S&Ls made bad loans after regulations were lifted.

    Crooked politicians were bought off to keep it quiet, most notably the Keating 5 - 4 democrats and John McCain

    The government created a dumpster (Resolution Trust) for the garbage created by the S&L scandal in the late 80s, early 90s.

    S&Ls got to survive showing that they get all the upside reward with none of the downside risk.

    Here we are again, same story although this time the crooked politician is now the GOP candidate for president.

  •  He should consult with McCain.... (0+ / 0-)

    ...for the particulars of how the problems with the Savings and Loans were handled.

    If you are spending time denying accusations and repeating your accusers' own words in your denial, you are losing. -- Tucker Eskew, Republican Operative

    by Bensdad on Thu Sep 18, 2008 at 01:17:42 PM PDT

  •  Volatility in the WH Administration? (0+ / 0-)

    In August 2007, as financial markets began to crumble under the weight of bad mortgage loans, Chairman Ben Bernanke told the Federal Reserve's annual gathering at Jackson Hole, Wyo., that it wasn't the central bank's responsibility — "nor would it be appropriate" — to protect lenders and investors from poor decisions. USA Today Aug, 2008

    The worst of the nation's credit crisis may have passed, Treasury Secretary Henry Paulson said Wednesday, USA Today May, 2008

    Who hired this guy too late?  Why's Bernanke the boss?

    When Randall Kroszner came to the Federal Reserve Board of Governors from the University of Chicago in 2006, a watchdog group warned of his "contempt" for government regulation, and some academics termed his muscular free-market theories out of the mainstream.

    So much for economic forecasting.

    In the past year, Fed Gov. Kroszner has been the point man as the central bank, in response to the housing and financial market meltdown, has crafted the most sweeping consumer-protection regulations in its modern history: It has proposed wide-ranging national standards for tens of thousands of mortgage lenders and targeted unfair and deceptive credit card practices.

    "Randy knows a free-market failure when he sees one," says Robert Litan at the non-profit Brookings Institution. . .USA Today June 2008

    Guess that depends on what the definition of "know" is.

    They burn our children in their wars and grow rich beyond the dreams of avarice.

    by Limelite on Thu Sep 18, 2008 at 01:18:08 PM PDT

  •  Get tough! (8+ / 0-)

    I'm sorry, but as a Econ major, I say screw this deal UNLESS it is coupled with HEAVY regulation, I'm talking about full disclosure of the Level 3 assets and all the toxic waste on the banks' balance sheets (or should I say off balance sheet?)  Obama needs to come out and say the same thing.  To get a bail out, the banks are gonna have to be held freakin' ACCOUNTABLE.  

    If there are no strings attached like there were in the 80s, then this cycle is just gonna repeat over and over again.

    Accountability and regulation, NOW!

    •  Amen n/t (1+ / 0-)
      Recommended by:
      pgm 01

      The definition of insanity is voting the same way and expecting a different result. I'm talking to you FL,OH, KY, WV!

      by Shhs on Thu Sep 18, 2008 at 01:27:28 PM PDT

      [ Parent ]

    •  Actually that would be (2+ / 0-)
      Recommended by:
      pgm 01, pstoller78

      ... Four months from now. You can forget about any type of Regulation while Bush is still in office. Hell, the U.K.'s version of the SEC came out and put a stop to short selling today, and the U.S. SEC should've done the same thing, and where is Christopher Cox?

      Sent from a Blackberry, a miracle made possible and invented by John McCain

      by Larry Madill on Thu Sep 18, 2008 at 01:28:01 PM PDT

      [ Parent ]

    •  You are right it is a cycle (0+ / 0-)

      If there are no strings attached like there were in the 80s, then this cycle is just gonna repeat over and over again.

      Sure there might be some pain now, if we work it out another way, but in the end it will be better for me, and my future kids (and yours too).

      Let's not take the easy way out, let's not have a failure of imagination.  

      The definition of insanity is voting the same way and expecting a different result. I'm talking to you FL,OH, KY, WV!

      by Shhs on Thu Sep 18, 2008 at 01:29:08 PM PDT

      [ Parent ]

    •  I wholly agree about adding the needed regulation (0+ / 0-)

      as part of the deal, but something like this must be done and soon if we are to avoid the worst.

  •  STOP THIS PLAN (3+ / 0-)
    Recommended by:
    goinsouth, SammyJames, Shhs

    the savings and loan bailout was a swindle that allowed cronys to buy savings and loans at deflated prices and sell off at inflated ones.  The "bailout" was a bigger crime than the fraud that led to the crisis.

    To Dare is to Do!...Tottenham Hotspur slogan

    by randyhauser on Thu Sep 18, 2008 at 01:24:37 PM PDT

    •  So what would be your solution? (2+ / 0-)
      Recommended by:
      Johnny Venom, pstoller78

      We either bailout them out one by one, and let the economy implode. Or don't bail anyone out and let the economy implode. There really aren't any great solutions here.

      And, sorry, letting the economy implode so you can live out some Progressive Apocalypse Fantasy of home gardening and carpentry for barter just isn't on my To-Do list.

      This is a good, sane solution as long as it is accompanied by the appropriate Regulations.

      Sent from a Blackberry, a miracle made possible and invented by John McCain

      by Larry Madill on Thu Sep 18, 2008 at 01:32:42 PM PDT

      [ Parent ]

      •  Can the world afford to lose the U.S economy? (1+ / 0-)
        Recommended by:
        Johnny Venom

        I don't think so.

        The definition of insanity is voting the same way and expecting a different result. I'm talking to you FL,OH, KY, WV!

        by Shhs on Thu Sep 18, 2008 at 01:39:51 PM PDT

        [ Parent ]

        •  Actually, probably yeah (1+ / 0-)
          Recommended by:
          pgm 01

          I think the real story of this Market Crisis will be that Europe and Asia basically finally woke up and realized that, hey, we don't have to follow the United States' lead anymore. We can do our own thing!

          There was just an editorial in some CHinese newspaper about that today.

          To me it is almost reminiscent of the stupid WGA strike I went through last year. The WGA and the Studios basically assumed that their  T.V. audience was going to wait around for them. Well, the audience didn't wait and now T.V. ratings are in the toilet across the board.

          Same thing... The U.S. is assuming that the  entire world is just going to follow our lead forever and the dollar will always be the currency of choice. But everyone else is looking at the U.S. as a mess right now, and realizing that their are other places, like China and Eastern Europe, to park money.

          Sent from a Blackberry, a miracle made possible and invented by John McCain

          by Larry Madill on Thu Sep 18, 2008 at 01:48:04 PM PDT

          [ Parent ]

          •  So China has a new market for all their goods (0+ / 0-)

            Plus they don't want a return for their investments (by their sovereign wealth fund).  That's awesome.  

            The definition of insanity is voting the same way and expecting a different result. I'm talking to you FL,OH, KY, WV!

            by Shhs on Thu Sep 18, 2008 at 01:50:37 PM PDT

            [ Parent ]

      •  Progressive Apocalypse Fantasy? (2+ / 0-)
        Recommended by:
        smellybeast, Shhs

        Actually, this RFC crap makes that even more likely because it kills the chance of a New Deal/WPA type recovery.

        Maybe you better brush up on those carpentry skills instead of ridiculing them.  They might prove more useful than a Blackberry.

        •  The RFC was originally part of the New Deal (0+ / 0-)

          And its an iPhone, not a Blackberry. Hate Blackberries, the wheel thingie screws me up.

          And, yeah, especially these last few days, I've noticed that the Left has its own Apocalypse Fantasy just like the Christian Right. While the Rightwing centers around mass murder and the return of Jesus for even more mass murder the Left's centers around some sort of collapse that will take us back to some idyllic agarian lifestyle were we can all work with our hands and sign folk music.

          Personally I find it sociologically fascinating that there seems to be an innate desire among certain people to see the World End and revert back to some perceived simpler state.  

          Sent from a Blackberry, a miracle made possible and invented by John McCain

          by Larry Madill on Thu Sep 18, 2008 at 01:56:00 PM PDT

          [ Parent ]

          •  For billions of people... (0+ / 0-)

            the collapse of American capitalism would improve their chance at a decent life.

            A lot of us won't miss the monster.

            If you're invested in it, I'd offer the unsolicited advice that you should at least start considering the possibility that some major changes lie ahead.

            Just in case this whole RTC thing doesn't calm the markets for more than a few days.

            BTW, how long did that 1/4 of a trillion succeed in propping up the markets this morning?  A couple of hours?

      •  Don't let Bush Republicans near it (0+ / 0-)

        thats my solution.

        The Bushes made a lot of money out of the Savings and Loan crisis that their own deregulation helped create.

        don't let it happen again.  

        Are there only two solutions?  Economic collapse or making the Bush family richer?  

        To Dare is to Do!...Tottenham Hotspur slogan

        by randyhauser on Thu Sep 18, 2008 at 02:12:13 PM PDT

        [ Parent ]

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