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Dems' 'Discussion Draft' of Bailout Bill Already Changing

We're posting a copy of the Democrats' "discussion draft" (pdf) of the $700 billion Wall Street bailout bill that Sen. Chris Dodd (D-Conn.) referred to earlier today. This is their response to Treasury Secretary Hank Paulson's plan.

Please note: The situation unfolding on the Hill is so fluid and moving so rapidly that the final bailout bill may bear little or no resemblance to what you see in the document above.

Still, it's worthwhile for taxpayers to see what their representatives are thinking.

-- Frank Ahrens

By Frank Ahrens  |  September 26, 2008; 1:42 PM ET
Categories:  The Ticker  
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Comments

Thanks for posting the pdf draft. I hope people take the time to read it.

Posted by: Third Base | September 26, 1908 1:55 PM | Report abuse

Can someone explain why the file name of this document is JULY 25?

Posted by: Jakeman | September 26, 1908 2:00 PM | Report abuse

I would not give Treasury Secretary Hank Paulson's permission to blow his nose...especially the power the President wants to give him...All Paulson wants to do is enrich he and his corrupt friends at the top!!!

Posted by: nallcando | September 26, 1908 2:34 PM | Report abuse

Well, at least it's more than three pages long.

At last, the American people are awake. If only they'd been awake 6 years ago, of 8 years ago.

Not participating in your government has an effect.

Posted by: ralph | September 26, 1908 2:35 PM | Report abuse

I've been reading posts that state the Repukes wrote this bailout bill SIX MONTHS AGO. With the notorious Article 8 that put Paulson above the law.

Then they pushed it on Congress after a bad week on Wall Street and the last week before the crucial fall recess. The election recess.

This was another baldfaced attempt to railroad through a bad bill.

Like Chimpy and his Repuke thugs did with the Iraq war and the Patriot Act.

The Democrats better throw out the entire bill and start with a blank page. And tell the Repukes to shut the hell up while the grownups are working.

Posted by: Tom3 | September 26, 1908 2:43 PM | Report abuse

I for one am glad that my Congressman Jim McDermott will make sure that CEO golden parachutes, bonus, and options grants based on mistated earnings (aka LIES) are not part of the bailout.

Stick it to the Socialist Republicans, Jim!

Because if you don't it's Boston Tea Party time! Lock and load!

Posted by: Will in Seattle | September 26, 1908 2:45 PM | Report abuse

Cantor has been talking to Gramm.

The House GOP is pushing for more deregulation and tax cuts in their "plan". They are freakin' ideologues to the end.

They will never stop denying reality.

Posted by: Becca | September 26, 1908 2:55 PM | Report abuse

But don't cry for Fishman, who reportedly was sky-high — literally — last night, on a flight from New York to Seattle, when WaMu collapsed. Even though he's only been on the job for less than three weeks, he's bailing out with parachute worth close to $20 million, according to an executive compensation analysis conducted for the New York Times by James F. Reda Associates.

That's right, $20 million for 17 days on the job ... and his company failed.

HAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAAHAHAHAAHAHAHAHAHAHAHAH

AND WE THE PEOPLE WILL GET THE SAME WHEN THEY BAILOUT WALLSTREET..

Posted by: DAVID A BELANGER | September 26, 1908 2:56 PM | Report abuse

two questions:

1. are taxpayers buying the garbage at current market rate, as Warren Buffet recommended, or are the taxpayers getting fleeced by paying "hold to maturity" prices per Bernanke's suggestion?

2. are taxpayers *only* paying for mortgage assets or are banks going to dump credit card, auto, other non-secured/non-performing assets onto the FedGov balance sheet?

as always, abolish the Fed, kill all Wall Street bankers.

Posted by: legion, for we are many | September 26, 1908 3:04 PM | Report abuse

The portion of the draft discussing controls on executive compensation (Section 110) is quite limited as it appears to bar excessive executive compensation (i.e.golden parachutes) only during the period of time that a corporation is actually receiving assistance under the bailout plan. To be effective the plan should provide, at a minimum, that in order to receive federal assistance, a corporation may not enter into any new executive compensation agreements that exceed a compensation thereshold (to be determined by some formula established by the Board overseeing the administration of the plan).
My other concern in this area is whether acceptance of the relief can have any effect on the payment of executive compensation pursuant to pre-existing agreements. The draft [(Section 110(e)(2)] does not affect any severance or retirement packages that are already vested under applicable law. Those contracts are between the corporation and the individual executives, the bill addresses the relationship between the corporations and the government. Under Article I, Section 10, Clause One of the US Constitution (the Contract Clause), a state could not pass a law impairing such a contract. Can Congress constitutionally prevent a corporation receiving assistance from honoring those prior commitments? You know the executives would file lawsuits to enforce the agreements. Unless executives expressly waive their rights under these agreements (hardly likely) I'm not sure the legislation could prevent those payouts.

Posted by: lmscdad | September 26, 1908 3:07 PM | Report abuse

Wow, the biggest wealth transfer from middle-class taxpayers to elite Wall Street thieves/conmen in the history of civilization and Democrats are leading the way for Goldman Sachs CEO Paulson and the Federal Reserve Bank!

I had to see it with my own eyes to believe it.

Posted by: Hypocrisy Bites | September 26, 1908 3:10 PM | Report abuse

NO BAILOUT!!\
Bailout bailout bailout
lets git this straight.
we the people are not being helped.
let me show you this;
I'm against the $85,000,000,000.00 bailout of AIG.

Instead, I'm in favor of giving $85,000,000,000 to America in a We Deserve It Dividend.

To make the math simple, let's assume there are 200,000,000 bonafide Citizens 18+.

Our population is about 301,000,000 +/- counting every man, woman and child. So 200,000,000 might be a fair stab at adults 18 and up..

So divide 200 million adults 18+ into $85 billon that equals $425,000.00.

My plan is to give $425,000 to every person 18+ as a We Deserve It Dividend.

Of course, it would NOT be tax free. So let's assume a tax rate of 30%.

Every individual 18+ has to pay $127,500.00 in taxes. That sends $25,500,000,000 right back to Uncle Sam.

But it means that every adult 18+ has $297,500.00 in their pocket. A husband and wife has $595,000.00.

What would you do with $297,500.00 to $595,000.00 in your family?

Pay off your mortgage – housing crisis solved.

Repay college loans – what a great boost to new grads

Put away money for college – it'll be there

Save in a bank – create money to loan to entrepreneurs.

Buy a new car – create jobs

Invest in the market – capital drives growth

Pay for your parent's medical insurance – health care improves

Enable Deadbeat Dads to come clean – or else

Posted by: GHM | September 26, 1908 3:11 PM | Report abuse

The Congress does not have the power to transfer this much power to the Executive Branch, without amending the Constitution. This bailout of Wall Street robber barons is a massive restructuring or our government and financial systems that should not be made without modifying the Constitution.

This move will change the entire power relationship between the Congress and the Executive Branch, as well as the power relationship between American citizens and our government. To give governmental powers and obligations to financial institutions over our populace is clearly outside of the realm of the Constitution.

There is no sunset provision on many of the main powers granted by this legislation and thus these powers will become a permanent change to our government.

Let's face the truth and respond accordingly. The same political sellouts in Washington, DC who have been giving big business and liberal social agendas anything they want have been doing the same behind the scenes by removing most of the laws and regulation management on that level as well.

Over the last ten years they have removed or ignored most of the regulations that were put in place to assure another great depression never happened again.

They are desperate for more power and money to delay the inevitable and to assure that your average American citizen takes on most of the burden! Including bailing out foreign banks that are in the U.S.!

So, we have a President with approval ratings in the low 20 percentiles rushing out to ask a Congress with a 9% approval rating to give them unprecedented powers, amnesty from oversight and court prosecutions, and another 700 Billion+ dollars guaranteed by the taxpayers and the full force of the American government to extract that money and interest from us all. They have made slaves of us!

They say the power and funds must be delivered within days to avoid a global economic meltdown that will have dire consequences for us all.

It's a shame to think that there are many Americans left in our nation who believe a word of what comes out of the mouths of any of these traitors in the Bush administration. Politicians in Washington, DC are fearful of losing their jobs if the true economic consequences manifest BEFORE election day, instead of after, and thus the politicians give the appearance of doing something huge.

First, there is no assurance or even likelihood that this unprecedented bailout and amnesty for Wall Street traders will work. They have already thrown hundreds of billions of dollars of your money into bailouts for Barons, Fannie Mack, Fanny May, and AIG. The 700B+ more they claim they need this week is probably what they estimate is needed to prevent the collapse till after Nov 4, 2008 which is election day.

The requested bailout bill would establish unprecedented powers for the Executive Branch to keep borrowing large sums, many analysts believe that the true costs could range between 1 to 5.5 Trillion dollars of your money!

They want the power to designate private financial companies and banks "as financial agents of the Government, and they shall perform all such reasonable duties related to this Act as financial agents of the Government as may be required of them" (Sect. 2-B-3).

Upon passage of this legislation, going to the bank will be similar to going to the DMV, tax offices, or any government agency. The banks will be more under the control of the Executive Branch and inversely your bankers will be your government. MORE FREEDOM TAKEN AND BIG BROTHER WATCHING!!

The secretary will be allowed to buy and sell mortgage securities and then use the funds from any sales to pay for administrative costs and other measures in this program, instead of returning the funds to the taxpayers.

The real kicker is found in Section 8, where it reads "Decisions by the Secretary pursuant to the authority of this Act are non-reviewable and committed to agency discretion, and may not be reviewed by any court of law or any administrative agency."

No more power and money in exchange for their failures!

Let the financial chips fall where they may and let the market corrections occur and if the consequences for the American public are dire, let us shift through the ashes and rubble of their greed and the excess created to determine how and why this happened. Let Congress use their investigatory power to launch inquiries to determine who should have their assets seized and who is going to prison for this treachery.

This monopoly game is over. It is time to enforce the rules and start over. It is time for many of those in high places to go to jail!

Posted by: Anonymous | September 26, 1908 3:15 PM | Report abuse

I agree with BB&T CEO John Allison, St. Louis Fed Governor Fisher, Former Treasury Secretary John Snow, and the 190 top tier economists nation-wide (including 3 Nobel laureates) who are against bailing out Wall Street's greedy excesses. The small, responsible banks on Main Street are operating business as usual.

Posted by: million | September 26, 1908 3:16 PM | Report abuse

I have been monitoring the Congressional Hearings on TARP and I am dismayed at the fact that a core issue is not being brought to light. I hope you can bear with the frustrated tone of my message and pass this information to the public before our government hands over $700 billion. The common person is hearing more and more about the bailout and not understanding where the pressure is coming from to the credit markets because everything else seems fine. Although there are many foreclosures the total value of the loans defaulting isn't a number that by itself should be able to affect our national financial system so adversely, that is, until the common person learns about the Credit Default Swaps (CDS) derivatives market which is the true culprit behind this economic crisis. The CDS market is controlled by roughly 15 banks and firms. Our banking system is essentially in an abysmal hole of debt that was created not by the loans and foreclosures themselves but because of the non regulated hedge bets placed by large investment firms and banks that have turned the American economy into a poster child for gamblers anonymous. The most infuriating part of this is that the "gamblers" owe big money and the other banks and firms they owe money to have enough financial power to hold the entire country ransom until their bets have been covered. This strategy is no more complicated than tactics used by terrorists and gangsters. The "fragility" of our current markets is no more than the effect of an economy held for ransom. The tighter these 15 banks squeeze credit funding, the more pressure there is for the US government to pass the TARP bail out. Instead of holding a gun to someone's head these 15 banks are wielding a financial weapon against the United States Government. Not many people know or understand these dynamics but the sheer terroristic quality of the situation is an affront to me as an American taxpayer. IF you are ever curious and want to check the "odds" at the bookie's just refer to the CDR Counterparty Risk Index, which tracks credit-default swaps on leading banks and brokerage firms. Go ahead and Google it. IF the voting public do not push our leaders to do what is in our interest more of this is sure to come in the future since the bailout is really just somebody "paying up" for our own protection.

Posted by: Anonymous | September 26, 1908 3:17 PM | Report abuse

There is so much money involved that everyone can be bought off and still leave hundreds of billions for Paulson's friends at Goldman. I think he and Bernanke should be arrested. They said no one could see what was coming, but they were called liar loans for god's sake. To be fair the government would have to purchase every house in the U.S. at the price it was at the height of the boom. Then people could buy their house back from the government at its currently appraised value and keep the difference. That's the only way I see to do it fairly.

Posted by: rgs | September 26, 1908 3:19 PM | Report abuse

Anonymous Genius --

I would use my money to light my cigars, since inflation would sky rocket and the money would be worthless.

Posted by: Smarter than Anonymous | September 26, 1908 3:19 PM | Report abuse

This is way too broad. "Troubled assets" can include those airy-fairy debt insturments that are worthless like debt swap contracts and even hedge funds. The definition of institutions is also too broad. What if a bank or institution is a China based bank with offices in the US and has US permits or charters? Does that allow it to participate even if it is not "state owned?" This is ridiculous! When I read that Obama received his talking points for yesterday's White House meeting from a Wall Street "friend," and then he's the reason the whole thing blew up, I keep wondering how many of those jerks on Wall Street just want to stay in the game and continue to keep score by how much they get compensated. Somebody stop this idiocy. If they do anything, they should help prop up the actual mortgage loans and local banks and borrowers--bottom up not top down. Let the rest of Wall Street collapse. It needs to.

Posted by: Jackson | September 26, 1908 3:22 PM | Report abuse

Twenty million dollars for 17 days work at crashing a bank??

Anybody got a rope?

Posted by: Tom3 | September 26, 1908 3:23 PM | Report abuse

'So divide 200 million adults 18+ into $85 billion that equals $425,000.00.'

Jesus our school system sucks, check your math moron.

200,000,000 * 425,000 is 2*425 plus count them 11 zero's, or 85,000,000,000,000. That is 85 trillion with a T not 85 billion with a B.

Posted by: brian | September 26, 1908 3:24 PM | Report abuse

A lot of this is BS double speak - wherever "consistent with the investment contract" is mentioned it renders the bill language useless so all the lip service to helping homeowners and preventing foreclosures, etc, is USELESS - LOAD OF BS - THE BANKS ARE STILL WRITING THIS, it is going to TAKE MONTHS to fine tune this legislation quit RUSHING IT IN PANIC MODE because the bank lobbyists say so.

Posted by: frayedcat | September 26, 1908 3:25 PM | Report abuse

I heard all the bad paper floating around there is a $1.15 QUADRILLION debt.

That's a lot of airy-fairy. That's probably more than the entire world's GDP.

Posted by: Anonymous | September 26, 1908 3:29 PM | Report abuse

1.My Congressman is dead set against this bail out turkey.
2. Why should taxpyers be on the hook for irresponsible homeowners? If they cannot afford their mortgage today, what makes you think they will in 6 months or a year?
ARM's have been around for more than 20 years and mortgage foreclosures are nothing new. Why the bailouts for mortgage foreclosures now? Where is personal responsibility and living within your means?
3.Why no mention that Bill Clinton opened the door to this mess in 1999 when he repealed the Glass-Steagall Act?

Posted by: Cheryl | September 26, 1908 3:39 PM | Report abuse

TARGETING OF AMERICANS BY GOV'T AGENCIES
A ROOT CAUSE OF WALL STREET MELTDOWN?

Once again, Congress is being asked to rush through emergency legislation -- to cede effective control of the economy to the government.

Officials continue to blame lax lending policies on the part of the mortgage industry for spawning this crisis. But were lenders ORDERED to offer "easy credit" to people "targeted" by government agencies?

Is government "targeting" of American citizens a root cause of the mortgage meltdown that spawned the broader financial crisis?

Consider this:

http://www.nowpublic.com/world/targeting-u-s-citizens-govt-agencies-root-cause-wall-street-financial-crisis OR
members.nowpublic.com/scrivener

Posted by: scrivener | September 26, 1908 3:40 PM | Report abuse

Somebody please tell how this bailout is going to be paid for, as the sums proposed are to be released. What is the source of the funds, how is it to be raised. If it is bonds who is to buy it who is to pay the interest.

Posted by: Eva | September 26, 1908 3:47 PM | Report abuse

Did anyone else notice that there isn't a cap of $700 billion - there's a cap on holding $700 billion in assets AT ANY ONE TIME.

Posted by: B. | September 26, 1908 4:25 PM | Report abuse

NEW YORK (CNN) -- "I have great, great confidence in our capital markets and in our financial institutions. Our financial institutions, banks and investment banks, are strong. Our capital markets are resilient. They're efficient. They're flexible."
-- Treasury Secretary Henry Paulson, March 16, 2008
"Our policy in this administration -- laws shouldn't bail out lenders, laws shouldn't help speculators."
-- President Bush, May 19, 2008
"Our economy has continued growing, consumers are spending, business are investing, exports continue increasing and American productivity remains strong. We can have confidence in the long-term foundation of our economy...I think the system basically is sound. I truly do."
-- President Bush, July 15, 2008
Those were the words of Treasury Secretary Henry Paulson and President George W. Bush just a few months ago.
Today, of course, they have been proven completely wrong.
They are now telling us we are in a dire crisis, and that we must hand over hundreds of billions of dollars so they can lead us out of this mess.
What's amazing to me is that the administration seems a little surprised that Congress and the American people are not marching in lockstep with them on this and not fully appreciating the urgency.
"No bias, no bull" The latest on the effort to pass a financial bailout plan "Campbell Brown: Election Center"8 ET tonight on CNN see full schedule » Well here's why, in one word: accountability.
This administration missed the boat on this crisis. They didn't see it coming. That's why when Bush goes on TV in a few minutes, he will face a very wary audience.
And Secretary Paulson, frankly, you didn't help the situation with your initial, imperious request to Congress that you be handed this money and that your decisions "may not be reviewed by any court of law or administrative agency." Seriously, what were you thinking?
And Democrats, you are by no means blameless in all of this.
At the center of this crisis are Fannie Mae and Freddie Mac. Although they didn't intend to encourage this spiraling chain reaction, it was leading Democrats in Congress -- Senate banking chairman Chris Dodd and his long-time counterpart in the House, Barney Frank -- who supported legislation that ultimately led to more and more of these bad loans we are all stuck with.
The people you thought you were trying to help are in even worse shape financially.
I know everyone is screaming about how urgent this crisis is and that action must be taken immediately.
Don't Miss
 Campbell Brown: Election Center
 iReport.com: Your thoughts on the bailout
But I love and live by former Supreme Court Justice Brandeis' great quote: "Sunshine is the best disinfectant."
What we need is scrutiny and debate. If it has to happen quickly, then do it fast, but without grandstanding or political posturing.

We need serious scrutiny and debate, and that should happen whether we are talking about a giant piece of legislation that is going to affect us all, or whether we are talking about presidential and vice presidential candidates.

Posted by: david belanger | September 26, 1908 4:30 PM | Report abuse

Why the bailouts for mortgage foreclosures now? Where is personal responsibility and living within your means?
3.Why no mention that Bill Clinton opened the door to this mess in 1999 when he repealed the Glass-Steagall Act?

Posted by: Cheryl | September 26, 2008 3:39 PM

The problem with this bailout, Cheryl is that it dos NOT bail out individual homeowners. The government is buying 700 billion worth of mortgages from the investors who bought them. This is an investor bailout, not a homeowner bailout.

Posted by: NM Moderate | September 26, 1908 4:33 PM | Report abuse

Increase Deposit guarantee/FDIC insurance NOW

BailOut/Rescue MUST INCLUDE INCREASE IN FDIC Insurance to cover at least $400,000 in bank deposits/ CD's per household; this would (1) prevent "run on banks", protect consumer deposits and (2) increase local bank funds for lending for mortgage re-finances and other local credit needs critical to consumers, small business and our broader US economy.
This Increase in the amount of FDIC deposit guarantees could be funded by increasing FDIC fees to cover costs, even if it means higher fees for largest depositors.
People want and deserve Peace of Mind that money in the bank is, in fact, Money in the Bank --and can be counted on NO MATTER WHAT.

Main Street needs this NOW; it is tragic that Congress has waited so long to act on increasing deposit guarantees to keep step with inflation/COLAs.
( Just as Congress has failed to keep wages and the AMT linked to inflation/COLA's!) More bank failures will not only squeeze consumers and push our economy closer to the brink, but more worrisome in the long term, result in a few mega banks and even more "too big to fail" booby traps in our economy.

Driving the Bail Out money down to Store fronts so as to immediately expand local lending is imperative.
The last thing we need is more Wall Street and K Street Fat Cats manipulating the system and robbing
taxpayers/investors blind. Please Keep Out the Special Interest vulchers that prey on power in both parties.

ps - Funding such a large Bail Out in trauches seems most prudent. Before the US Government doubles down and bets the wages of our children and grandchildren, there must be clarity about what works and what does not work to settle markets, increase liquidity and protect consumers/investors and taxpayers.

Posted by: Sam | September 26, 1908 4:36 PM | Report abuse

I agree with imscdad and anonymous, who say this agreement has serious legal problems. Again I urge that authorities wait, study the valid objections and reputable alternatives, before committing to this outrageous buyout.

I also agree with those who say its time to say goodbye to business as usual (our fervent love for supply side economics) and enter the 21st century.

Posted by: realadult | September 26, 1908 4:57 PM | Report abuse

Can someone please explain to me (and I apologize because I just don't get it) who and what the heck we are bailing out? Also, why is it so critical that this happen this week when this problem started months ago? Thanks!

Posted by: Disenchanted by Government | September 26, 1908 5:21 PM | Report abuse

From Toronto, Canada
Our banks are heavily regulated, with 10% of the population of the US, they still manage to rake in a few billion(CAN$) profit each, year after year. Not a bad haul. As for mortgages, background checks on your yearly financial position, job status, credit scores etc are the norm and considered reasonable precautions for the banks to take by most Canadians. After all, they have our savings accounts, and retirement savings plans... they better be certain that everyone is keeping up their end of the bargain! Right? Common saying in Canada is "you can only get a mortgage if you really don't need one". Also, interest only mortgages are not allowed, and the interest on the mortgage is not tax deductible. All this drives down speculation in real estate to some degree, and while we see modest year over year gains, it is (was) nothing in comparison to what we watched in other world markets. Canadians expect their government to keep an eye on these guys who are playing with our money, and they do, so we see much more conservative investment strategies. Unlike in the USA, the majority of Canadians do not directly invest in the stock market, but through registered and insured funds backed by our government chartered banks.
Good luck to all of you.
Notice I never said "Eh" even once

Posted by: Mac in Canada | September 26, 1908 5:30 PM | Report abuse

Here's an idea to rescue without bailing out. It's pretty simple, too.

The Fed borrows talents from the FDIC and sets up the Federal Security Insurance Corp. (FSIC).

FSIC is a pawn shop + elective insurance.

Insolvent companies surrender hard asset ownership (e.g., commercial real estate deeds) to get money for elective insurance of their troubled assets (e.g., mortgage securities).

There's no dumping of the bad loans/securities to the Fed, there's no outright sale event that poses challenge of valuation. The companies buy the amount of insurance they're willing to the premium/barter assets for, up to a ceiling, perhaps 75% of the original value.

With the government insurance, the financial institutions may trust one another again, and be better trusted by other investors and lenders.

Again, no dumping of bad assets on the government; no actual transactions of the bad assets outside the free market; easier explanation to voters allergic to "bail-out" with the pawn shop analogy; follows existing models similar to that a ballet dancer insures her legs; and there's a chance that this would actually make money for the taxpayers by leveraging the brand value of the US government.

If people understand this is not a bail-out plan, this may have a chance to let those lawmakers hold on to their seats and still pass it.

Posted by: JZ | September 26, 1908 5:31 PM | Report abuse

GHM and anyone else passing this on:

You're morons. Illiterate morons. Has anyone tracked down the original source of this embarrassingly ridiculous email that's being copy pasta'd everywhere there's an electronic light pole to affix it to?

ps - I agree with the sentiment though. No bailout. Yeah I've taken a bit of a hit thus far, and it's going to get worse, but I'd rather suck it up now and get the fat weaned off rather than continue to put lipstick on this pig.

Posted by: washpost18 | September 26, 1908 6:50 PM | Report abuse

3.Why no mention that Bill Clinton opened the door to this mess in 1999 when he repealed the Glass-Steagall Act?

Wow, that is an extremely narrow version of history you are pedaling. The "repeal" of the Glass-Steagall Act was enacted by the Gramm-Leach-Bliley Act (the Gramm oas in McCain's economic advisor) which passed through the Senate and Congress through Repulican Majorities. This bill allowed banks to now offer any combination of Insurance, Investment and Commercial Banking services.

A revision by the Democrats which Clinton signed provided oversights called SafeGuard Rules. The most important of them was the Net Capitol Rule (Rule 15c3) which stated that a bank had to count it's debt using a specific calculation and maintain a specific capitol ratio to make sure it could remain liquid if a crisis occurs.

Well, in 2004, under the Bush administration, the SEC handed out voluntary exemptions to this rule to banks who qualified that allowed them to use new untested calculations of debt which allowed them to carry 3 times as much debt to capitol as before. Only 5 companies qualified for this exemption: Goldman, Merrill, Lehman, Bear Stearns, and Morgan Stanley.

All the companies we are now bailing out.

Posted by: rel | September 26, 1908 7:15 PM | Report abuse

Why Pelosi impulsively wants to give Paulson the money with clarification. Is the Dem COngress trying to cover up what the aver. american is not privy to. THe smell of rats in 'lipstick'abound.

Posted by: RIGHTS4ALL | September 26, 1908 8:55 PM | Report abuse

the transfer of so much of money, SOUNDS LIKE A 'revist'OF the GREAT TRAIN ROBBERY OF THE MILLINIUM

--------

Posted by: TRUTH08 | September 26, 1908 8:59 PM | Report abuse

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