Breaking on CNBC: Treasury Secretary Paulson Working on to Set Up Federal Facility to Take Bad Debt

[villager]

Source: CNBC

So far, just a banner headline on their website; no details...

Read more: http://www.cnbc.com/

[babylonsister]

1. What does that even mean?

:shrug: Isn't the treasury a federal facility? They've done a bang-up job...:eyes:

[villager]

4. More funding to absorb more bad debt? Can I give them my usurious Credit Card payments?

n/t

[Roland99]

78. Socializing losses onto the taxpayers. Welfare for the top 1%

[Matariki]

18. Maybe it means they'll collect it the way they do taxes and delinquent school loans

via wage/bank account garnishments and taking tax returns?

[SoCalDem]

32. They are creating a Department of Shit..(photo here)

A place where all schemers and speculators can "deposit" their "bad paper"...and the good folks of the US (taxpayers) will give them cash in exchange for their "boo-boos".. Of course they get to keep all the commissioons, stock options & bonuses they took along the way while accumulating all that shit...

[Triana]

34. It means the TAXPAYERS (you and me) get to bail out the failed banks and Wall St.

JUST LIKE last time the Repigs f*cked up the economy - taxpayers had to bail the S & Ls out.

NOW we're doing it again.

Happens every Republican.

[dysfunctional press]

38. we take the bad loans off their hands- they keep the profitable ones.

socialize the risks, privatize the profits...that's how american-style capitalism works best!

[Deny and Shred]

56. Exactly. The FED is now a late-night infomercial for Wall St

"Turning Your Debt into Wealth"
"We won't consolidate your debt, we'll eliminate it!"
"No liquidity, no Problem."

[olddad56]

53. it probably means we are one step further to the dollar being replaced by the Amero

[babylonsister]

2. Dupe-oops! nt

[Hugin]

9. It's a fancy way of saying Bail Out.

Those guys... Always talking over our heads. Like we're not even here, only our money.

[kirby]

3. Google Resolution Trust Corp. n/t

[bigworld]

5. what happened to personal responsibility?

Or doesn't that extend to corporations?

[Hugin]

6. Uh, um... Henry... Henry... Why should the Government be saddled with privately generated bad debt?

And isn't this the same thing as a FRICKING BAILOUT!

[SpiralHawk]

7. "All our debt are belong to you. Smirk." - Republicon economic cronies

[villager]

8. details now: Similar to Resolution Trust Company

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 proposal to lawmakers in Congress, a congressional aide told Reuters.

The news sparked a big rally in stocks after a day in which investors remained nervous about the spreading effects the global credit crisis. Europe and Asia closed lower.

Stocks also got a lift after Britain announced Thursday that it would bar short-selling until January.

<snip>

http://www.cnbc.com/id/26773689

[dixiegrrrrl]

37. call your congress critters and tell them NOOOOOOOO

[muriel_volestrangler]

66. So McCain is the guy to ask about savings and loan problems, isn't he?

Can't we ask him for the way he helped everyone back then? The name 'Keating' seems to spring to mind.

[melody]

10. Can't these people support themselves? Is it MY responsibility to support them?

Honestly.

Edited to add as it seemed to be necessary:

:sarcasm:

[harun]

22. The people of the United States need to get the gov't under control

because they are clearly off the reservation.

[melody]

23. I thought it would be clear I was mocking comments that Repugs make about poor people

Apparently not, so I'll go add a sarcasm icon.

[anarch]

75. actually, it's always been your job to support them

that's kind of the way things are set up.

[melody]

84. I think I *was* supporting poor people by what I said

That was sort of my point.

That was the purpose of the joke.

Never mind ... I really have to stop using satire entirely.

[anarch]

105. I meant that we proles have always been intended to support the oligarchy

I mean, shit, that's the whole point of our consumer-capitalist system, right? It's like feudalism, except also like getting ripped off in a con game at the same time. Maybe at one time there was such a thing as the Horatio Alger-esque "American Dream", rags to riches pull yourself up by your bootstraps if you work hard enough you can get anything you want etc., but that was when we had an actual manufacturing infrastructure and vast untapped natural resources. That was before "consumer confidence" became such a bastion of our economy, and before cronyism became so thoroughly entrenched in our government that people stopped even being slightly surprised by it. Lately, your job has been to continue to buy overpriced shit in order to keep the profits rolling in for those who already have...well, pretty much everything.

So it seems to me that openly calling for us serfs to pony up to keep the status quo in place is right in line with the way things have been headed for some time.

[SOS]

68. The 400 richest Americans have $1.25 trillion in wealth

That's 400 people.
Maybe they should bail out their friends and leave us alone.

[anarch]

71. what do you mean? that's almost even thirds

very nice distribution of wealth...for a feudal society.

[melody]

85. Yes, but mere humans aren't their responsibility, you see n/t

[buzzard]

88. Do you have a link for this I am curious it seems so disgusting.n/t

[SOS]

106. Here is the link:

http://www.demos.org/inequality/

[izquierdista]

11. Here it is

All the people who floated this bad debt can go directly to.....

[redirish28]

12. maybe I'm wrong but won't this set up another "Great Depression" in the country?

I mean if we keep taking all this bad debt how can the government stop borrowing money from foregin countries?

Aren't we in debt as is due to the Iraq war? I don't mean to be so negative but to me it just sounds like we are end up over our heads again.

[CatholicEdHead]

15. Grover Norquist's bathtub plan

[redirish28]

20. ? sorry I'm not understanding that line.

[CatholicEdHead]

87. Here you go

[badgervan]

57. Exactly

Spend the government into the ground.... no money left for social, medical, SSI, etc. The rethug holy grail = bankrupt all government programs, then privatize everything for profit to their buddies.
I really, really hate rethuglicans.

[Zynx]

26. That doesn't follow at all. How does more debt result in a "Great Depresssion"? That's not at all

related to the subject at hand.

[IndependentDem]

13. WTF?!?!

--snip--

"This will bring real trust back into the market." Donald Marron, chairman of Lightyear Capital, said on CNBC. "It would free up real, spendable capital in these organizations. They can use that to make loans, to make transactions and to build confidence in the system. This is a confidence crisis."


:wtf:

[Yavin4]

14. IOW, The U.S. TaxPayer Is Bailing Out Wall Street En Masse

Wall Street will be able to park all of their bad assets with the U.S. govt. while keeping the profits for themselves.

[dysfunctional press]

42. privatize the profits, socialize the risks- that's the national motto that should be on our currency

this country really fucking sucks sometimes...

[DuaneBidoux]

74. Indeed, under Republicans we have become a socialist country for the wealthy.

[HereSince1628]

16. And these damned welfare CEO's drive around in Cadillacs

I'm Series11111. They buy expensive Caviar and Mushrooms with all those aid dollars we give them.
The ungrateful creeps have the nerve go to Blunderbooger Conventions that try to run the world.
I am outraged! They should be made to work for a living!! I say some W2 type reforms are needed for these greedy snits
The only tax-cuts they should get is being cut-off tax support for their gambling habits.
What do they take us for drugged up morans? :silly:

[WorseBeforeBetter]

39. Cadillacs? Pfft. Try Bentleys.

At least Mr. Freddie Mac did, according to a friend who worked there.

[HerbieHeadhunter]

17. Nothing like having a post hoc plan in place*

nm

[harun]

19. Translation of: "repository for banks' bad debt."

Means it is going up the taxpayer's rear end and Wall Street is good to go.

[marco86]

21. I have to admit I give the edge to McCain on this issue

McCain knows all about the RTC, as his good buddy and travel agent Keating was a big reason we needed it to begin with.

[EnviroBat]

24. Did ya ever play Monopoly?

You know the point in the game when your getting your ass kicked, and you have to sell off your properties just to stay in the game. Yeah, we're pretty much there. A sad game of Monopoly where, across the table from us is China, and over there is Europe. Oh and look, there's Saudi Arabia at the table. I feel sick...

[fasttense]

25. We have officially become the USSR.

Raygun never won the cold war, America simply became a communist nation. Nationalizing speculative financial firms, becoming a depository for the bad debt of free wheeling CEOs. Oh, we are a communist country alright.

[kirby]

27. FU Schumer! n/t

[rkc3]

28. As long as they are parking debt...

I've got 16 years left on a mortgage and 3 on a Subaru.

Who gets the payment booklets?

The party of personal responsibility and small government once again proves to be neither.

[SOS]

79. Sickening isn't it?

We have to pay off our own debts, as entered into.
Now we have to pay the bad debts of the criminals to whom we make our monthly payments.
This is an outrage against the People of the United States.

:mad:

[phusion]

29. WTF?

"Privatized profits and socialized losses" really sums it up. This is lunacy!

"Mussolini said that fascism should more properly be called "corporatism" since it was, under Mussolini, a blending of state and corporate power. "

[panAmerican]

30. This leaves debtors on the hooks while lenders get a clean balance sheet

So on top of whatever losses the dilligent and diversified among us have already sustained in our portfolios, we just got well and truly f*cked today. :grr:

[slipslidingaway]

31. Dodd Says the Fed Has Authority to Set Up Debt Fund

http://www.bloomberg.com/apps/news?pid=20601087&sid=axN7il2n3WO0&refer=home

By Viola Gienger

Sept. 17 (Bloomberg) -- Senate Banking Committee Chairman Christopher Dodd said the Federal Reserve can act as an ``effective Resolution Trust Fund'' to buy and dispose of bad debt stemming from the subprime mortgage crisis.

``The Fed has the authority to move in this area,'' Dodd told reporters in Washington today.

Creating a separate agency to take on bad debt, akin to the Resolution Trust Corp. set up in 1989 to absorb losses from savings and loan associations, would take about a year, he said. Instead, the Fed should use its own authority to act....

...Dodd met yesterday with Federal Reserve Chairman Ben Bernanke and Treasury Secretary Henry Paulson and said Bernanke agreed that the subprime mortgage collapse remains the core of the broader crisis...


For the longer term, Dodd said he is ``willing to entertain'' the idea of a separate agency.

House Financial Services Committee Chairman Barney Frank, who proposed creating an RTC-like agency to take on bad loans on Sept. 15, said there is ``growing agreement among a lot of people that that is exactly what we need to be doing."

[Lithos]

33. And if they don't fix the cause of the leak

Ie, the deregulation, this is throwing good money after bad.

[slipslidingaway]

41. Agree, I've been reading about many of these problems for the

last 8 years and they have only compounded the problem by not addressing them sooner. Maybe they should read the investment and trader message boards.

:)

[high density]

35. Will they take 'good' debt?

I've got $13k between a car loan and student loans, I'd love to get those 'off' of my books.

[NM Independent]

36. The value of the dollar is going to jump of the cliff. Mark my words. n/t

[dixiegrrrrl]

43. it does not have far to go, only worth about 4 cents now.

[hunter]

40. Can we stack it up in a big pile, light it on fire, and roast a few billionaire executives?

We could throw a few politicians on the fire too.

I think the American Public would appreciate that.

[jazzjunkysue]

83. Long as I don't live downwind!

[Ilsa]

44. These RTCs are usually pretty good at working out dbt.

I worked in a workout bank 20 years ago. Workout specialists usually know how to squeeze blood out of a turnip. Anyone can learn how to lend. Knowing how to collect is another ballgame.

[kirby]

47. Interesting (VERY LONG) history of RTC

http://www.fdic.gov/bank/analytical/banking/2007apr/article1/index.html

In particular its took over 6 years and constantly kept come back to Congress for 30 Billion here, 80 Billion there.
In the end, some banks SUED the RTC complaining that they didnt get enough money back.

Regardless though, this just rewards bad behavior.

[Ilsa]

55. Ah Geez, that bad, huh?

Our workout bank collected pretty well on the billions in commercial and real estate loans. They weren't derivatives, or hedge instruments, though.

[calmblueocean]

45. It's gone beyond company bailouts to just taking everything any big bank wants to get rid of

How would you like that? Any bill you don't want to pay, you give it to Uncle Sam, and he pays it. That's basically what it looks to me is going to happen.

[Celeborn Skywalker]

46. Motherfuckers.

They are fucking up my and my children's future by doing all this shit! Fuck McCain and fuck all corporate republicans.

[kirby]

48. Schumer really wants this too n/t

[Celeborn Skywalker]

49. Well, I think he's wrong.

I'm not an economic expert by any means, but I this sounds like a terrible idea in the long run.

[SOS]

81. Schumer is a Wall Street tool.

Always has been.

http://www.nytimes.com/2007/07/30/washington/30schumer.html

[Individualist]

82. Of course he does; he's DLC.

[Zorra]

50. I'm totally sick of greedy republicans collecting welfare paid for with my tax money.

Never was the term "Borrow and Spend Republican" more appropriate.

[NM Independent]

52. Shouldn't that be...

"Borrow and Deficit-Spend Republicons"

:shrug:

[katty]

51. facility? will this be like GITMO?...how about a Fed Prison Facility

for bush/cheney/gramm, etal

[kirby]

54. RTC - 1989 - $50B funding, in the end $132B cost.

This ponzi scheme with complex derivatives will cost a whole lot more and probably end with the same begging Congress for more and more funds in the future years.

[mbperrin]

77. That 132 is about $218 billion in today's bucks.

I do recall large developers like Crow and others buying up miles of brand new Dallas condos for about 2 cents on the dollar, bulldozing about half of them, and voila, 2 or 3 years later, returns of thousands of percent for them! Uh, who ate the 98 cents to make this possible? Well, you and I did!

RTC actually stood for "Rich Take the Cash" or that was the joke back then. We had to laugh, cause if we cry, THEY'LL laugh.

No RTC! But with my heavyweight influence, I'm sure it will happen, and that's exactly what Happy Henry is talking about right now.

[HopeHoops]

58. Paulson considers plan to take over bad debts

Source: CNBC.com

Treasury Secretary Henry Paulson is considering setting up a government facility to take on bad debts from financial institutions...
Such a move, according to its advocates, would allow banks to shovel bad debt off their balance sheets and allow the firms to go back to business as usual.


Read more: http://www.msnbc.msn.com/id/26780312/

---

Isn't "BUSINESS AS USUAL" what caused the problem in the first place???

[wanpete]

59. wow, just wow, we, the lowly, get screwed all the way around.

[Raven]

60. Who the fuck is going to pay for this????? Are they going to

garnish the inflated wages of CEO's who screwed up" How about those "severance packages"? They are going to leave Obama with an enormous problem.

[lapfog_1]

61. ok, bail them out

but this time we treat these executives and board members just like the Chinese treat their bad executives.

Otherwise we'll be doing all again in 10 to 20 years.

[HopeHoops]

63. Um, the Chinese shoot them and bill the family for the bullet

[lapfog_1]

65. Exactly.

And if you think that they haven't actually killed anyone in the commission of this crime, you'd be sadly mistaken.

[prayin4rain]

102. and it will be blamed on a democratic legislature n/t

on edit: oops ... didn't mean for this to be a reply to you
:+

[Wednesdays]

70. There seems to be more than a hint of fear in your post

Hmmm, I wonder why? :shrug:

[badgervan]

104. That's a Big Problem....

... if these Lords of Capitalism can get their screwups erased, what's to keep them from intentionally doing the same thing, or worse, in the future... knowing that the feds will cover the bad money... while they skate with healthy profits before the ax falls?

[CountAllVotes]

62. this sucks

why should we the people bail out these fat cat crooks? Why don't they have to pony and/or go to jail just like the average citizen?

FUCK THEM!

Call your congress people and JUST SAY NO to these fatcat bailouts. They've already stolen 1/2 trillion dollars this week from We the People!

:kick:

[FVZA_Colonel]

64. How much longer can we keep doing this?

How much money do we have left?

[earthside]

67. This 'Plan' is an Insult to American Taxpayers

The Bush regime really must think we are totally stupid.

We get to own and pay for all the rotten fruit, while the economic elites get to keep and make more profit on all the good fruit.

On the other hand, it we let 'them' do this to us, then we will be some of the stupidest people in history.

[anarch]

72. they've got the guns, but we've got the numbers

if you see what I mean.

[dysfunctional press]

86. the american public IS stupid, & they'll gladly take another ass-fucking from their creepy uncle sam

:grr: :banghead: :grr:

[ihelpu2see]

69. I think it means you can gamble on the bankers debt... You can play the debt market

like the stock market.... This is where I jump off the Leze Faire capitalism.

[DuaneBidoux]

73. I never thought it would be the Republicans that take us on the path to socialism.

But they didn't realize that, like the russians once said "capitalists will sell the rope needed so their enemies can hang them."

By not properly regulating industry, we are assuring the destruction, ultimately, of free enterprise.

[unkachuck]

76. c'mon....

....Congressional Democrats....if you're going to create the new Department of Corporate Welfare at least packaged it with a new Department of National Healthcare....

....it's time to stop pissing our tax-dollars away and bring us something for our money....if these crooked repug bastards want their bailout money at least make them sign off on a Universal Healthcare package....

....no Universal Healthcare, no wall street corporate bailout....

[Chemical Bill]

80. Can I send them my credit card bills? n/t

[AlphaCentauri]

89. The Fed and Treasury Offer Congress a Plan for a Vast Bailout

Source: NYT

WASHINGTON — The head of the Treasury and the Federal Reserve began discussions on Thursday with Congressional leaders on what could become the biggest bailout in United States history.

While details remain to be worked out, the plan is likely to authorize the government to buy distressed mortgages at deep discounts from banks and other institutions. The proposal could result in the most direct commitment of taxpayer funds so far in the financial crisis that Fed and Treasury officials say is the worst they have ever seen.

Senior aides and lawmakers said the goal was to complete the legislation by the end of next week, when Congress is scheduled to adjourn. The legislation would grant new authority to the administration and require what several officials said would be a substantial appropriation of federal dollars, though no figures were disclosed in the meeting.

Democrats, having their own desire for a second round of economic aid for struggling Americans, see the administration’s request as a way to win White House approval of new spending to help stimulate the economy in exchange for support for the Treasury request. Democrats also say they will push for relief for homeowners faced with foreclosure in return for supporting any broad bailout of struggling financial institutions.



Read more: http://www.nytimes.com/2008/09/19/business/19fed.html?ref=business

---

a) So now is the responsibility of the democratic congress.
b) Can they just bailout my credit card?
c) Why not let those greedy corp. monsters rich poverty so they feel how poor people feel about their failure?

[orwell]

90. Legislation...

...at the end of a shotgun.

This sounds bad...

[Union Thug]

91. And who is going to prison? Anyone?

[Booster]

92. The neocons are rushing their agenda & the Dems are helping.

[trthnd4jstc]

93. There has to be much more to help us through this.

We need to decrease our military spending. The Green Technologies idea is excellent. We need to increase taxes on the rich. Most of the crap that is happening to our economy is from their ideas, which do not work anyway. Invisible Hand my A$$.

[lutherj]

94. I think the ceo of every company that gets a bail out should forfeit all

wealth and be forced to spend the rest of his life working for minimum wage.

[Wapsie B]

96. I agree. CEOs and senior management should have their assets garnished.

That means houses, pensions, even money in the Cayman Islands. Make it hurt bad.

[prayin4rain]

97. absolutely... i wish we could track down all of the swindlers, most just walked into the sunset n/t

[thecrow]

95. ..........new authority to the administration ?

pleaaase.... don't give * any "new authority"!!!

Wait didn't McSenile say he would fire the SEC chairman?
Maybe he knows something we weren;t supposed to know...yet?

God help us.

[Javaman]

98. 1) where is this imaginary money going to come from? 2) how much are they going to squeeze out of me

3) when was it okay to give corporations welfare?

I think it's time to revive ray-guns "welfare queen" with a corporate twist.

[Az_lefty]

99. unless it comes with re-regulation and nationalizing the oil industry..

fuck'em!

[w4rma]

100. Why should it be a bailout instead of a buyout? What do Americans get back for our money? (nt)

[Triana]

103. They like an OWNERSHIP society? Let those CEOs OWN this mess by...

...getting NO golden parachutes or millions in payouts - let them live DESTITUTE for the rest of their greedy lives.

MAKE.

THEM.

OWN IT

SAME with the Republicans who got us into this mess. HANG IT around their necks like an iron albatross and make them

OWN it

for the next 75 years at LEAST.

[classysassy]

101. The sheep

baaa,baaaa,baaa,they are stealing my wool.