Bailout deal reached

[imported_elp6n]

Final details still to come
http://www.msnbc.msn.com/id/26884523/

WASHINGTON - After a breakthrough on a $700 billion Wall Street bailout, lawmakers and Bush administration now must settle the final details on a rescue intended to keep credit flowing and avert a crippling recession.

"This is the bottom line: If we do not do this, the trauma, the chaos and the disruption to everyday Americans' lives will be overwhelming, and that's a price we can't afford to risk paying,"? Sen. Judd Gregg, the chief Senate Republican in the talks, told The Associated Press on Sunday. "I do think we'll be able to pass it, and it will be a bipartisan vote."?

Congressional leaders, who announced the tentative deal after marathon negotiations that ended early Sunday, hope to have a House vote Monday; a Senate vote would come later.

"We've still got more to do to finalize it, but I think we're there,"? said Treasury Secretary Henry Paulson, who participated in the talks at the Capitol.

The presidential nominees came behind the outlines of the bailout. "This is something that all of us will swallow hard and go forward with,"? said Sen. John McCain, R-Ariz. "The option of doing nothing is simply not an acceptable option."?

Sen. Barack Obama, D-Ill., sought credit for taxpayer safeguards added to the initial proposal from the Bush administration. "I was pushing very hard and involved in shaping those provisions,"? he said.

Under the plan, the government would purchase mortgage-backed securities and other bad debts held by banks and other investors. The money should help troubled lenders make new loans and keep credit lines open. The government would later try to sell the discounted loan packages at the best possible price.

At the insistence of House Republicans, some money would be devoted to a program that would encourage holders of distressed mortgage-backed securities to keep them and buy government insurance to cover defaults.

The legislation would place "reasonable"? limits on severance packages for executives of companies that benefit from the rescue plan, said a senior administration official who was authorized to speak only on background.

It also calls for the financial sector to help make up the difference if the government does not recoup its investment in five years, the official said, but details remained unclear. The government would receive stock warrants in return for the bailout relief, giving taxpayers a chance to share in financial companies' future profits.

To help struggling homeowners, the plan would require the government to try renegotiating the bad mortgages it acquires with the aim of lowering borrowers' monthly payments so they can keep their homes.

"Nobody got everything they wanted,"? said Democratic Rep. Barney Frank of Massachusetts, chairman of the House Financial Services Committee. He predicted it would pass, though not by a large majority.

Gregg, R-N.H., said he thinks taxpayers will come out as financial winners. "I don't think we're going to lose money, myself. We may, it's possible, but I doubt it in the long run,"? he said.

Frank appeared on C-SPAN, Obama was on CBS' "Face the Nation,"? while McCain spoke on "This Week"? on ABC.

[imported_GC1]

This is a huge crock of BS! Just slap the taxpayers who are responsible with their finances in the face and reward greedy Execs. and irresponsible consumers. Why don't they pay off the mortages of us homeowners who have scratched and scrimped to make ends meet and make our payments? Heck, I would have loved to have had a $250,000 home beyond my means but I was realistic.

That is how they got rich.

[1inStripes]

That should have been part of the stipulation as well IMO if they are going to bail them out. Those people get to keep their house, but that land and home could not be figured into any future loan for the owner who was to be foreclosed on.

[imported_elp6n]

A little more info on it:
http://money.cnn.com/2008/09/28/news...ex.htm?cnn=yes

Here's the text of the bill
http://money.cnn.com/2008/09/28/news...ex.htm?cnn=yes

[plantsman]

<div class="ubbcode-block"><div class="ubbcode-header">Originally Posted By: GC1</div><div class="ubbcode-body">This is a huge crock of BS! Just slap the taxpayers who are responsible with their finances in the face and reward greedy Execs. and irresponsible consumers. Why don't they pay off the mortages of us homeowners who have scratched and scrimped to make ends meet and make our payments? Heck, I would have loved to have had a $250,000 home beyond my means but I was realistic. </div></div>

I agree. Government has nothing to do with responsibility. What you and I need is a lobbyist. This country needs a revolution - a pure, hard-core revolution - folks who will travel to DC, drag the crooks out, and commence to tar and feather them. People make take this statement as humor, but until the real Americans -those who work hard every day, strive to support a family - rise up and demand changes, then we're screwed. And screwed royally.

Yep- what he said.

[Shooter]

it didnt pass, now the dow is down almost 500 points. Mass chaos ensues.

[sup-rbeast]

Let it crash...all it'll do is bring everyone else down to the level we've been relegated to in this region.

[imported_elp6n]

It's not 100% dead.... yet....

http://money.cnn.com/2008/09/29/news...ex.htm?cnn=yes

Bailout vote stalls
House struggles over historic measure after four hours of heated debate.

Last Updated: September 29, 2008: 1:57 PM ET

NEW YORK (CNNMoney.com) -- The House, following four hours of heated and emotional debate, started to vote Monday on a sweeping $700 bailout of the nation's financial system.

Investors were watching the vote closely. As votes mounted against the bill, the Dow plummeted more than 700 points at one point before pulling off its lows back to about 400 points lower as the House vote continued.

The debate included impassioned pleas for and against the measure from Democrats and Republicans alike. Even some of those arguing the legislation must be approved were quick to point out problems with it.

But in the end, the vote began with both Democratic and Republican leadership telling their members the only way to protect the economy from a spreading credit crunch was to vote for the difficult to swallow measure.

"Our time has run out," said Rep. Spencer Bachus, the ranking Republican on the House Financial Services Committee. "We're going make a decision. There are no other choices, no other alternatives."

The vote comes after lawmakers and the Bush administration finalized legislation following a weekend of high-stakes negotiations over the controversial measure, which is designed to get battered U.S. credit markets working normally again.

"Today is the decision day," said Barney Frank, D-Mass., on the House floor. "If we defeat this bill today, it will be a very bad day for the financial sector of the American economy and the people who will feel the pain are not the top bankers and top corporate executives but average Americans."

House Minority Leader John Boehner told his members, many of whom objected the measure, that the had accept something he and many of them found distasteful.

"If I didn't think we were on the brink of an economic disaster it would be the easiest thing to say no to this," Boehner said. But he said lawmakers needed to do what was in the best interest of the country.

Leading House Republicans signed on to the proposal on Sunday after expressing earlier reservations. Senate Majority Leader Harry Reid said Sunday he hoped for a vote in that chamber by Wednesday at the latest.

Earlier on Monday, President Bush and Federal Reserve Chairman Ben Bernanke hailed the measure and urged Congress to move quickly to pass it.

Bush, speaking at the White House, called the proposed measure "an extraordinary agreement to deal with an extraordinary problem." He said he is confident the measure will win bipartisan support.

"With this strong and decisive legislation, we will help restart the flow of credit so American families can meet their daily needs and American businesses can make purchases, ship goods and meet their payrolls," Bush said.

Bush acknowledged that many voters were opposed to helping out Wall Street with tax dollars, but said there is little choice to move forward with the plan. He said most if not all of the tax money spent to buy distressed mortgage-backed securities should be recouped when the Treasury sells them in the coming years.

"Every member of Congress and every American should keep in mind - a vote for this bill is a vote to prevent economic damage to you and your community," Bush said.

Bernanke, who had spent hours before Congress last week testifying in favor of the measure, issued a brief statement promising that it would restore the flow of credit to households and businesses. "I look forward to swift passage of the legislation," he said.

Buying troubled assets
The core of the bill is based on Treasury Secretary Henry Paulson's request for authority to purchase troubled assets from financial institutions so banks can resume lending and so the credit markets, now virtually frozen, can begin to operate more normally.

But Democrats and Republicans - concerned about the potential cost - have added several conditions and restrictions to protect taxpayers on the down side and give them a chance at some of the potential upside if the companies benefit from the plan.

Key negotiators for the financial rescue plan were e busy trying to line up votes on Capitol Hill on Sunday. House Majority Leader Steny Hoyer, D-Md., told CNN he believes a majority of representatives on both sides of the aisle can and will support the bill.

On Sunday evening, the House Republican working group, which stringently opposed earlier drafts of the plan and offered a counterproposal, indicated it would support the bill, and its members are encouraging other Republicans in the House to do the same.

"Nobody wants to have to support this bill, but it's a bill that we believe will avert the crisis that's out there," House Minority Leader John Boehner, R-Ohio, told reporters.

But the bill did draw some opposition during the morning debate.

Rep. John Culberson, R-Texas, said the measure would leave a huge burden on taxpayers. "This legislation is giving us a choice between bankrupting our children and bankrupting a few of these big financial institutions on Wall Street that made bad decisions," he said.

Other conservative Republicans argued the bill would be a blow against economic freedom.

Thaddeus McCotter, R-Mich., said the bill posed a choice between the loss of prosperity in the short term or economic freedom in the long term. He said once the federal government enters the financial market place, it will not leave. "The choice is stark," he said.

But there were also Democrats who opposed the bill for not doing enough to help those who taxpayers facing foreclosure or needing unemployment benefits extended, or taxing Wall Street to pay for the rescue package.

"Like the Iraq war and patriot act, this bill is fueled by fear and haste," said Lloyd Doggett, D-Texas.

The crisis and a proposed fix
Banks and Wall Street firms, worried about both their own needs for cash and the condition of other institutions, essentially stopped loaning money to one another in recent weeks. That choked off the money being made available on Main Street in the form of mortgage loans, business loans and other consumer borrowing.

The crisis stems from problems in mortgage-backed securities, which saw their value plunge as home prices have gone into their worst slide since the Great Depression and foreclosures have soared to record levels. In turn, the market for trillion of dollars worth of those securities held by major firms evaporated, sending them down to fire sale prices and raising the risk of widespread failures among the nation's major financial firms.

Under the plan, Treasury will buy the mortgage backed securities, either directly from the firms or through an auction process. It may also arrange to provide guarantees for the securities up to their original values in return for premiums they would charge current holders of the securities.

To make the legislation more politically palatable, the bill calls for the government, as an owner of a large number of mortgage securities, to exert influence on loan servicers to modify more troubled loans to help prevent additional foreclosures. It also provides that the government will take equity in the firms that sell the securities to the government, and limits pay packages for top executives.

The legislation comes amid great upheaval in the nation's financial system. On Monday morning, the Federal Deposit Insurance Corp., which insures deposits at failed banks, arranged for the sale of the banking assets of Wachovia (WB, Fortune 500), the nation's No. 4 bank holding company, to Citigroup (C, Fortune 500) for $2.2 billion in stock.

That follows three weeks of other shocks: the Treasury Department's seizure of mortgage finance firms Fannie Mae (FNM, Fortune 500) and Freddie Mac (FRE, Fortune 500); Wall Street firm Lehman Brothers' bankruptcy filing; rival Merrill Lynch (MER, Fortune 500) purchase by Bank of America (BAC, Fortune 500).

In addition, the Fed bailed out insurance giant American International Group (AIG, Fortune 500), loaning it $85 billion in return for a nearly 80% stake. while Washington Mutual (WM, Fortune 500), the nation's largest savings and loan, became the largest bank failure in history