View Full Version : Deal Near on Bailout Plan

25th September 2008, 12:31

Deal said to be near on big financial bailout plan

By JULIE HIRSCHFELD DAVIS, Associated Press Writer

WASHINGTON - President Bush is bringing presidential candidates Barack Obama and John McCain into negotiations on a $700 billion rescue of Wall Street as Democrats and Republicans near agreement on a bailout plan with more protections for taxpayers and new help for distressed homeowners.

Senior lawmakers and Bush administration officials have cleared away key obstacles to a deal on the unprecedented rescue, agreeing to include widely supported limits on pay packages for executives whose companies benefit.

They're still wrangling over major elements, including how to phase in the eye-popping cost _ a measure demanded by Democrats and some Republicans who want stronger congressional control over the bailout _ without spooking markets. A plan to let the government take an ownership stake in troubled companies as part of the rescue, rather than just buying bad debt, also was under intense negotiation.

A bipartisan meeting was set for Thursday to begin drafting a compromise, which top Democrats said they hoped could pass within days.

The core of the plan envisions the government buying up sour assets of shaky financial firms in a bid to keep them from going under and to stave off a potentially severe recession.

Bush acknowledged in a prime-time television address Wednesday night that the bailout would be a "tough vote" for lawmakers.

But he said failing to approve it would risk dire consequences for the economy and most Americans.

"Without immediate action by Congress, America could slip into a financial panic, and a distressing scenario would unfold," Bush said as he worked to resurrect the unpopular bailout package. "Our entire economy is in danger."

Bush's warning came soon after he invited Obama and McCain, one of whom will inherit the economic mess in four months, as well as key congressional leaders to a White House meeting Thursday to work on a compromise.

With the administration's original proposal considered dead in Congress, House leaders said they were making progress toward revised legislation that could be approved.

Rep. Barney Frank, D-Mass., who has led negotiations with Treasury Secretary Henry Paulson on the package, said that given the progress of the talks, the White House meeting was a distraction.

"We're going to have to interrupt a negotiating session tomorrow between the Democrats and Republicans on a bill where I think we are getting pretty close, and troop down to the White House for their photo op," said Frank, the House Financial Services Committee chairman. "I wish they'd checked with us."

Paulson and Federal Reserve Chairman Ben Bernanke have been crisscrossing Capitol Hill in recent days, shuttling between public hearings on the proposal and private meetings with lawmakers, to sell the proposal.

Obama and McCain are calling for a bipartisan effort to deal with the crisis, little more than five weeks before national elections in which the economy has emerged as the dominant theme.

"The plan that has been submitted to Congress by the Bush administration is flawed, but the effort to protect the American economy must not fail," they said in a joint statement Wednesday night. "This is a time to rise above politics for the good of the country. We cannot risk an economic catastrophe."

Presidential politics intruded, nonetheless, when McCain said earlier Wednesday he intended to return to Washington and was asking Obama to agree to delay their first debate, scheduled for Friday, to deal with the meltdown.

Obama said the debate should go ahead.

Lawmakers in both parties have objected strenuously to the rescue plan over the past two days, Republicans complaining about federal intervention in private business and Democrats pressing to tack on more conditions and help for beleaguered homeowners.

Former President Clinton said Thursday that one thing lawmakers must avoid is any bill that effectively rewards bad judgments and dangerous risk-taking among financiers.

"You have to be careful not to have unjust enrichment," he said on CBS's "The Early Show."

But many in both parties said they were open to legislation, although on different terms than the White House has proposed.
Some partisan sticking points remain.

Democrats are pushing to allow bankruptcy judges to rewrite mortgages to ease the burden on consumers who are facing foreclosure _ a nonstarter for Republicans.

Democrats acknowledge privately that the provision will almost certainly be dropped in the interest of a bipartisan deal. Obama told reporters it's "probably something that we shouldn't try to do in this piece of legislation."

Democrats also want any potential proceeds the government reaps from the bailout to go to a fund designed to pay for housing for poor families. Many Republicans oppose the very existence of the fund, which they say is a backdoor means of funneling money to liberal political groups.

Democratic demands that Congress be given greater authority over the bailout and that the government be required to help homeowners renegotiate their mortgages so they have lower monthly payments already have been accepted in principle.

Under the bailout bill, which will let the government buy huge amounts of toxic mortgage-related assets, "we're now the biggest mortgage holder in town, and we can do serious foreclosure avoidance," Frank said.

25th September 2008, 13:47
The banking industry is attempting to loot the US Treasury before the entire system INEVITABLY crashes. It is as simple as that. The rest is just smoke and mirrors in an attempt to obscure that fact.

We are being robbed blind by criminals of the most vicious sort.

Hope your preps are in order... it's gonna be a rough one.

25th September 2008, 13:54
It looks like "stock up on canned food and water" time for every citizen of the USA.

25th September 2008, 16:04
Now that the deal has been made watch how quickly the press will try to make the whole thing seem like so much 'old news'. I'm glad it's over really.

But now, we all have to understand and take stock of our own cash reserves. Remember before the whole bailout plan was announced when there was a piece in Bloomberg and other places about the Treasury Department offering protection for money market funds and accounts? The government spoke of the money market accounts and CDs folks hold that have high minimums to get. Well, it's turning out well over a third of people over 45 who have 401K accounts HAVE NOT BEEN contributing to them as much this year, due to prices for food and gasoline going up! The experts are still encouraging savings through the 401K because the company the investor works for will match the contribution they contribute. And the Treasury was seeking to offer insurance to those mutual funds that are on the rocks! There are real estate mutual funds in 401K! Now there's more discussion for people to seek out self directed IRAs!

These are great because an investor can invest in PMs; and even real estate holdings through a self directed IRA. The problem with self directed IRAs is that your employer will never match what you contribute. But at least it's an option you can have when you can't regularly contribute to a 401K. There's millions of people who will be retiring in less than 5 years. Here's another place to put cash instead of short term bond funds. I have an international bond fund that is short term, and they've returned nearly 10% THIS YEAR. I have no idea why... I switched all my contributions to bonds in February of this year. Bonds are DEBT. Investing was hard before, now it's just gambling! You would think you'd invest in something that would grow! Oh I forgot DEBT GROWS NOW. So it should be considered an investment... No wonder we're in the financial mess we're in.

25th September 2008, 16:33
It looks like "stock up on canned food and water" time for every citizen of the USA.

I was thinking the same thing. What's sad though is that countless Americans will NOT even give this a second thought. They don't think that they will need to prepare for this kind of thing. In talking with people, they just seem to have glaze about them when you mention what this will mean in the future, for them. Not sure if it's ignorance, apathy or what have you, but it is disturbing.

25th September 2008, 16:52
My folks lived through the Great Depression and millions of people in America were starving during that time. The government had decided it wanted to keep the price of food artificailly high so they simply ordered crops plowed under. People were starving simply because the government created artificial conditions that resulted in very severe food shortages all over the country.

From the time I was a kid, my folks drummed the idea of keeping an adequate stock of emergency food on hand into my head. It's one of the first things I think of whenever the future looks bad.

I suspect that people who have never lived through either a severe economic downturn or even severe weather related conditions, never even think about their food supply. It simply doesn't occur to them that when the SHTF, for whatever reason, the grocery stores get emptied out and there is often no guarentee of more deliveries.

If the Fed is actually engineering a depression, then I certainly wouldn't put it past them to find a way to artificially create food shortages as well.

Silver is a very good hedge against inflation, but when push comes to shove, you can't eat it.

It may be time for people to start thinking about the bottom line.

25th September 2008, 18:07
Being raised by my grandparents during the early years of my life I have heard many stories of the depression. I was raised where growing a garden and canning everything you could get your hands on was a way of life. Some how in this country many people have lost sight of the big picture, it's all about the here and now and rush rush no time for such foolishness as a garden. I'm reminded of a famous quote by Henry David Thoreau " Live simply that others might simply live" something that all of us in this country would be better off if we all lived this way. This is truly going to be an intresting year coming up.

25th September 2008, 18:36
I love how politicians MEET then SAY they still haven't made up THEIR minds if the plan will work or not. But at least now it's considered done.

Public and private gardens are going to be the next big 'thing'. People probably thought San Francisco's plowing up part of the lawn in front of City Hall to make a community garden was pretty wierd, when they did it earlier this year. Veg should be harvested there this Fall. The Slow Food Nation did a fund raiser in the garden once the seedlings were up - to raise awareness and money for food programs. Vacant land in Detroit is also being used this way. There are plots of land people in apartments will be using to grow food. There are programs to gleen fruit from trees planted in urban neighborhoods now, with the food going to food banks. Restaurants have been supplying food banks and Senior Centers for years now. People have been trying to help themselves. On their own. They've probably been looked upon as strange by others until now!

So basically - all the things all of us DO and have been doing to keep expenses low will help us through these times! I have been working on NOT feeling sorry for others when it's them that got themselves into financial trouble. People have to help themselves. Foresight IS the bottom line.

25th September 2008, 18:49
Once the bailout deal was announced the facilities manager for the building I work in sent out an email warning of expected protests at the Federal Reserve building across the street! No protesters are around! There WAS a small police presence but it's gone now.

Vincent Vega
25th September 2008, 20:33
The "deal" broke down and we are back to square one. Silver's up a dime on the international markets - wonder if there's a correlation? Decisions, decisions - buy now or wait till Monday to see what happens?

25th September 2008, 21:37
I was thinking the same thing. What's sad though is that countless Americans will NOT even give this a second thought. They don't think that they will need to prepare for this kind of thing. In talking with people, they just seem to have glaze about them when you mention what this will mean in the future, for them. Not sure if it's ignorance, apathy or what have you, but it is disturbing.

What's scary, imv, is that even they did stock food... who knows for how long it would last? It's a pretty tough problem to deal with even without the fact that people simply can't afford it. Myself, I've only been able to stock enough food to last a little over a month... and if it takes a year for this crash to come about well... about half of what I have for myself and the family goes bad! My silver may or may not be able to sustain in a prolonged depression. If there's little to nothing to buy...

I tell ya... it just feels more and more futile as time goes on. I do hope people are flooding their reps with letters and that those will be heeded. Speaking of which... I think people honetly are just scared and have been subconsciously aware of all this in recent months. How could they not? Most folks I talk to about it, they'll listen but they try to find ways to avoid SUSTAINING their attention. They want to turn away and forget, but you watch their eyes close enough... they get it!

So I've been keeping on it, urging we all write write write until the Fed is gotten rid of. Talk revolution later if it's needed.

Anyway, thanks Kelly for posting the happenings. Between my illness and taking care of my parents, I just don't have the time to chase down news these days! Nice to come to one place and get the important stuff all in one shot!

25th September 2008, 23:05
Richard - Canned food and freeze dried food will not go bad for years and years. Also, one of the best staples you can buy that is excellent for long term storage is any kind of dried beans or lentals and they are very high in protein too.

Freeze dried is always much more expensive than canned food. However, if you think you can stick it out where you are living now, freeze dried isn't absolutely necessary. It's good if you think you will be on the run; like moving into the woods and camping while the rest of the world goes crazy.

But if you think you are planning to stick it out where you live, canned food is a whole lot cheaper. It's way too heavy to lug around with you if you think for some reason you will have to be on foot.

Hope this helps. I know it's hard these days. If you are struggling, you might find yourself elegible for food stamps, and that might help you put some food aside for emergencies too.

I think a whole lot of people are starting to "get it." But it's all just too damn scary to talk about.