For those so inclined to cry over the details of the proposed bailout, the financials are below the fold.
There appears to be some movement, though, which is positive. Reuters reports:
The Bush administration has accepted changes to its $700 billion Wall Street bailout plan that would give the government a stake in institutions unloading assets under the plan, the chairman of the House of Representatives Financial Services Committee said on Monday.
(snip)
On reducing foreclosures, Frank said, “The foreclosure piece is agreed on. There was Republican congressional opposition but the administration accepted it.
“They’ve accepted our views on oversight … There is some contention now over compensation and corporate governance.”
The compensation they are arguing about is, get this, Golden Parachutes; the Democrats are opposed to them and the Republicans do not want to allow those CEO’s to walk away without our tax dollars.
Good to see the Republican’s are staying true to their nature: screwing over middle America.
I bet you’ll be heartened to know that the Pentagon and the Department of Defense will not be affected by shortage of credit funds resulting from this meltdown.
For the wonkish amongst us, the bailout financials, from CNBC, follow:
—Up to $700 billion to buy assets from struggling institutions. The plan is aimed at sopping up residential and commercial mortgages from financial institutions but gives Treasury broad latitude.
—Up to $50 billion from the Great Depression-era Exchange Stabilization Fund to guarantee principal in money market mutual funds to provide the same confidence that consumers have in federally insured bank deposits.
—The Fed committed to make unspecified discount window loans to financial institutions to finance the purchase of assets from money market funds to aid redemptions.
—At least $10 billion in Treasury direct purchases of mortgage-backed securities in September. In doubling the program on Friday, the Treasury said it may purchase even more in the months ahead.
—Up to $144 billion in additional MBS purchases by Fannie Mae and Freddie Mac.The Treasury announced they would increase purchases up to the newly expanded investment portfolio limits of $850 billion each. On July 30, the Fannie portfolio stood at $758.1 billion with Freddie’s at $798.2 billion.
—$85 billion loan for AIG, which would give the Federal government a 79.9 percent stake and avoid a bankruptcy filing for the embattled insurer. AIG management will be dismissed.
—At least $87 billion in repayments to JPMorgan Chase [JPM 47.05 --- UNCH (0) ] for providing financing to underpin trades with units of bankrupt investment bank Lehman Brothers [LEH 0.2151 --- UNCH (0) ]. Paulson said over the weekend he was adamant that public funds not be used to rescue the firm.
—$200 billion for Fannie Mae and Freddie Mac. The Treasury will inject up to $100 billion into each institution by purchasing preferred stock to shore up their capital as needed. The deal puts the two housing finance firms under government control.
—$300 billion for the Federal Housing Administration to refinance failing mortgage into new, reduced-principal loans with a federal guarantee, passed as part of a broad housing rescue bill.
—$4 billion in grants to local communities to help them buy and repair homes abandoned due to mortgage foreclosures.
—$29 billion in financing for JPMorgan Chase’s government-brokered buyout of Bear Stearns in March. The Fed agreed to take $30 billion in questionable Bear assets as collateral, making JPMorgan liable for the first $1 billion in losses, while agreeing to shoulder any further losses.
—At least $200 billion of currently outstanding loans to banks issued through the Fed’s Term Auction Facility, which was recently expanded to allow for longer loans of 84 days alongside the previous 28-day credits.
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1 Comment
September 22, 2008 at 2:45 pm
Geez, that adds about 1.820 trillion dollars to the debt! We’re getting off cheap. And reducing tax collections by 500 billion per year can only enhance the value of the greenback!
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