tag:blogger.com,1999:blog-4679367111526265280.post1577617970769660782..comments2023-10-17T08:48:44.310-07:00Comments on Hoosiers For Fair Taxation: The U.S. Mortgage Bailout Bill ...they came up with all this in just two daysM Theoryhttp://www.blogger.com/profile/01892309818226431745noreply@blogger.comBlogger1125tag:blogger.com,1999:blog-4679367111526265280.post-3681266318233939042008-09-21T20:38:00.000-07:002008-09-21T20:38:00.000-07:00Tensions mount over bail-outBy Krishna Guha, Harve...Tensions mount over bail-out<BR/><BR/>By Krishna Guha, Harvey Morris, Andrew Ward and Daniel Dombey in Washington and George Parker in Manchester<BR/><BR/>Published: September 21 2008 19:13 | Last updated: September 22 2008 03:47<BR/><BR/>A high stakes game of political poker was under way in Washington on Sunday as Congress prepared to vote this week on a plan to create a $700bn fund to buy toxic assets from banks and thereby ease the credit squeeze.<BR/><BR/>Democratic legislators pressed for a housing component to be added to the bill and demanded assurances that President George W. Bush would not veto a subsequent second stimulus bill.<BR/>EDITOR’S CHOICE<BR/>Full coverage: Global financial crisis - Sep-16<BR/>Gillian Tett: Calm must prevail - Sep-21<BR/>The shadow banking system is unravelling - Sep-21<BR/>Lex: Hanks a lot - Sep-21<BR/>Banking on success of Paulson’s big idea - Sep-21<BR/>Wolfgang Münchau: Defaults will test a fair-weather construction - Sep-21<BR/><BR/>The Bush administration was trying to hold out for a “clean” bill that dealt only with the financial rescue, while Republicans in Congress said they would fight a hasty compromise that included many add-ons.<BR/><BR/>At 5pm Nancy Pelosi, the speaker of the House of Representatives, issued a statement that said: “Congress will respond to the financial markets crisis by taking action this week in a bipartisan manner.” But it added “we will not simply hand over a $700bn blank cheque to Wall Street.” Democrats would insist on “independent oversight, protections for homeowners and constraints on excessive executive compensation.”<BR/><BR/>Some Republicans also favour restrictions on executive pay for banks taking part in the scheme. The Treasury fears this could undermine banks’ willingness to take part.<BR/><BR/>The political negotiations came as Hank Paulson, US Treasury secretary, called on other nations to follow the US lead in tackling the problems in the global financial system. During a tour of US television networks, Mr Paulson said: “I will be pressing my colleagues around the world to design similar programmes for their banks.” The US is not asking other governments to join its proposed fund.<BR/><BR/>The Treasury secretary said the US scheme should be open to all banks with “significant operations” in the US – including foreign-owned banks, even though this is likely to be politically controversial. “The American people don’t care who owns the financial institution. If the financial institution in this country has problems it has the same impact whether it is US or foreign-owned,” he added.<BR/><BR/>A senior US official told the Financial Times the banks could be paid partly in cash and partly with a capital note giving them some exposure to future losses and possibly gains on the assets.<BR/><BR/>Some industry groups are lobbying for a clause that would allow banks selling assets to the fund to account for any losses realised over a number of years.<BR/><BR/>The passage of the legislation is seen as essential to avoid a renewed tailspin in world financial markets.<BR/><BR/>“I don’t like the fact that we have to do this. I hate the fact that we have to do this,” Mr Paulson said on Sunday. “But it is better than the alternative.”<BR/><BR/>Top legislators and administration officials stressed their shared determination to get the legislation passed. But behind the bipartisan statements there was anger in both camps at what each saw as efforts by the other to use financial danger to bounce them into policy decisions.<BR/><BR/>The White House warned the Democrats against overplaying their hand. “This is not the time to be testing what are very unsettled and fragile markets,” said Tony Fratto, White House spokesman.<BR/><BR/>“It’s important that everyone understands the seriousness of the situation we’re in and that we send a very strong signal to the market that this plan will go forward and go forward quickly.”<BR/><BR/>Meanwhile, the global crackdown on short-selling continued, with the Securities and Exchange Commission requiring large asset managers to disclose short sales starting on Monday, while Australian regulators extended their ban on naked short-selling to cover all short-selling.<BR/><BR/>In what amounted to a vote of confidence for the US treasury secretary, Barack Obama, the Democratic presidential nominee, said he would ask Mr Paulson to play a role in any transition towards a Democratic administration.<BR/><BR/>“I would certainly want to make sure that Paulson was involved in the transition,” Mr Obama told CNBC television, in comments that highlighted his own efforts to project an image of continuity and stability in dealing with the financial turmoil. “That doesn’t necessarily mean that he’d end up being the Secretary of the Treasury, but I think it’s important for us to make sure that those who are currently in charge when it comes to the financial crisis and defence and intelligence... are deeply involved in the transition process.”<BR/><BR/>John McCain, the Republican nominee, sounded a similar bipartisan note, suggesting that he would appoint Andrew Cuomo - a Democrat- as head of the Securities and Exchange Commission. Last week, Mr McCain said he would dismiss the SEC’s current Chairman, Christopher Cox, a former Republican Congressman.<BR/><BR/>”I’ve admired Andrew Cuomo,” Mr McCain told CBS televison’s ”Sixty Minutes” programme. ”I think he is somebody who could restore some credibility, lend some bipartisanship to this effort.”<BR/><BR/>Mr Obama told the programme he considered the US to be in recession and that Mr Paulson and Ben Bernanke, the Chairman of the Federal Reserve, had no alternative but to put together the bailout.<BR/><BR/>”There’s no doubt that we’re going to see, when the numbers come out, that we are officially in recession,” he said. ”I think by the time Secretary Paulson and Federal Reserve Chairman Bernanke were looking at these problems, they had no good options left.”Anonymousnoreply@blogger.com