U.S. Regulators Prepare to Move Beyond $700 Billion Bailout

U.S. regulators are preparing to expand their response to the financial crisis beyond the $700 billion bailout package that was approved by Congress and signed into law earlier this month, sources familiar with the matter said today.

An additional plan is set to be announced soon, most likely tomorrow morning, the sources said on the condition of anonymity because they were not authorized to speak publicly.

Some of the sources said they expect the plan would go beyond the bailout by taking steps to shore up interbank lending, bank health as well as possibly expand deposit insurance beyond the current $250,000.

Treasury Secretary Henry M. Paulson Jr. and Federal Reserve Chairman Ben S. Bernanke will hold a conference call with the chief executives of the nation's largest banks at 3 p.m. today to brief them on the plan.

Treasury declined to be specific, but in a statement the department said, "Treasury and the Fed are meeting today with leading financial market participants to finalize details on a financial market stabilization initiative."

Three agencies that are involved in the crafting of the plan include the Fed, Treasury and Federal Deposit Insurance Corp.

-- David Cho

October 13, 2008; 12:43 PM ET  | Category:  business
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The horse went that away, and NOW you want to close the barn door.

Time to fire every Representative Republican and Democrat who have been in congress for more then years and who voted to bail out the mega corporations who should have been allowed to go bankrupt as a lesson to the rest of them.

Posted by: John C. Page III | October 13, 2008 1:01 PM

I hope that this cure is more than a Band-Aid applied to a cancerous lesion. If this bailout refinances homes at a rate that homeowners can afford and if gas prices continue to decline and if the price of basic foods such as milk and bread decline etc then I believe this bailout might work.

What difference does it make that banks can make loans if there is no one to loan money to?

Posted by: Jim | October 13, 2008 1:06 PM

These bankers have done more to destroy the economy than Osama could posibly have done. Why are there no regulations on the banks regarding bank assets to liability ratios?

Posted by: Bruce | October 13, 2008 1:18 PM

US Treasury Secretary Henry Paulson
Has Already Received His PERSONAL BAIL-OUT

Under Treasury Secretary Henry Paulson’s .. Former leadership at
Goldman Sachs, the company has been instrumental to its penetration of Western
capital and other markets. - - Henry Paulson was vastly effective in Communist
China’s .. Interests and enabling their access to Western economic assistance
and high technology

In late January 2006, Goldman Sachs purchased a stake in the Industrial and
Commercial Bank of China (ICBC), China’s biggest bank, for $2.58 billion
Treasury Secretary Henry Paulson''''s .. Personal stake .. In this transaction
was $25 million

A PERSONAL BAIL OUT for : Treasury Secretary Henry Paulson and His
Criminal Friends

(Mar 27, 2008 (ruters.com) BBC) ... White House Resists Pleas for .. Mortgage Bailout
WASHINGTON (Reuters) - As clamor rises for federal help for homeowners
who face losing their homes .. U.S. Treasury Secretary Henry Paulson .. Seems
to be digging in heels against the effort.

U.S. Treasury Secretary Paulson sounded a tougher note than ever against any
possibility of bailout for individual mortgage holders, singling out the growing number
going "under water" as their loans exceed the diminishing value of their properties.

THEY ARE BUYING THESE MORTGAGES FOR 6.75 CENTS ON THE DOLLAR. PEOPLE, NOW DO YOU SEE WHAT THEY DOING.

SO YOUR HOUSE YOU JUST BAUGHT FOR 300,000 AND THEY AND YOU THINK IT WAS A STEAL. HAHAHAHHAHAHAHAHAHAHAHAHAHAAH

TO STOP ALL THE BLEEDING THEY NEED TO DO THE FOLLOWING.

STOP ALL FORCLOSEING NOW ASAP.
THEN ANYONE THAT BAUGHT A HOME OR REFI A HOME FROM 2001 UNTIL 2008. THEY NEED TO JUST REFI THEM AT JUST ABOVE THE PRIME RATE, AND MINUS OFF 80 PERCENT OF THE PRINCELBLE AND START OVER .

THIS WOULD GIVE THE BOTTOM..AND OF ALL FORCLOSEING.

THEY WOULD ONLY DO THE HOMES THAT WAS USED FOR HOMES . NOT SOMEONE JUST LOOKING TO FIP.

THIS WOULD END IT. I HAVE BEEN SAYING IT FOR 5 YEARS NOW. IF THEY MANDATED IT 5 YEARS AGO WE WOULDN'T BE IN THIS MESS NOW..

Posted by: DAVID | October 13, 2008 1:28 PM

When the doctor is a quack, the cure is often worse than the disease.

Expect a horrific mess from incompetent government intervention.

Posted by: ALEX H. | October 13, 2008 1:38 PM

First the financial assistance should be given to banks and the main street mortgage holders. There should be an immediate freeze on home foreclosures and the govt should refi anyone standing in line at 2-pts above prime, noting that there cannot be any equity lines of credit taken out for 4-yrs and the financial institutions holding the paper cannot sale the loans for 5-yrs. The margin or financila loss on the loans should be enured by the mortgage/banks. They should also be required to purchase federally backed insurnace on all the loans if they select to participate in the $700B-plus bail out program. Further, and after the 5-yr paper holding program, loans should not be placed in any form of bonds unless they are underwitten by an approved entity with the required financial reserves. These bonds musgt be held for a time period of 6-yrs.

Posted by: Ayl | October 13, 2008 1:39 PM

For those who oppose bailout.

Everyone should remember that stock market is part of the system. If bank fails & market collapse then all of American people will be at loss. Consider stock market as part of body, if there is pain in one part you have to cure it and not to open the wound for punishment.

If you think about only yourself then you can think of not approving bailout, but if you think for country as whole and put behind your ego, selfishness you might say, I don't care about what others did but I will sacrifice for my country and won't allow to come foreign banks and take over my financial systems.

Who will loose if the economy does not turn around
1) General Public - because they will loose in 401K, retirement account, their savings
2) The country - As the money and control goes in hands of others & foreign banks
3) You - You will loose, as prices of food, cloths everything will go up because country goes in depression
4) You - As someone close to you may loose job and don't have money to buy things.
5) Next generation - As it will affect education system and Americans will not be competitive.

So irrespective of Democrat or Republican, think about country and you will be in right direction.

Posted by: Anonymous | October 13, 2008 1:45 PM

Alexander Hamilton proposed a central national bank, with branches throughout the states. That's one of my recollections of his policies. We would not have this financial crisis, or any previous financial crisis, if the banking system had been nationalized as Hamilton proposed, instead of the myriad private banks we've had.

It's time to get the banking system out of the private sphere and make it a part of the federal government as Hamilton proposed, and it looks like that's where the banking system is heading, although it's regrettable that the federal government is buying in to the banking system on a partial basis, only.

The banking system should not be privately controlled; it should be nationalized, as Hamilton proposed. It's not communism or socialism; it's American.

Posted by: David Werner | October 13, 2008 1:45 PM

Well i see Wall Street wins again and main street is again the loser.
Again the rich get richer the poor stay the same and the middle class pay the bills. As you can see by the market the bailout has helped the market grow it will not last. Here is why. Wall street has used a credit card to pay their bills just like main street does. They have refinanced their "house" per Gov bailout. Now they have a clean card again. What do you think they will do now? What is going to happen they will charge up their credit cards again but this thime out government will not have the money to refinance them out of it. This sort of thing happens all the time on main street. Now you have no where to go to pay off the extra debt they have run up. Well will be right back in the same shape we are now in 5 years.
A lot of people that comment on here said let them go down and start over and i feel the strong will survive and the ones that got greedy will go down. I say let them. Then go to washington and clean house of everyone and start over there too. Our government had no right to use our money to do this. I guess AIG had the right idea get the money and have a big ole party on somone else's dime. And so it continues the rich my dances and the poor man pays the band. Thanks a lot Gov. now my son and grandkids will have to pay the band for you. I am sure no one reads these things but i write anyway. But the polititions have done a injustice to the people in this country and they should by being ousted from congress and made to live the we do. They would not last a month. Then maybe they will see how hard it is to buy milk pay a morgage and feed your family. Come to my house and see the way we have to live and maybe you would look at things a bit different. Goverment is so out of touch with the everyday person. We as middle class have the power to change things if we stick together. We are the ones that pay the bills don't you think we should get something for it?

Posted by: Tom | October 13, 2008 2:00 PM

It's time to vote out every representative or senator who voted for the bailout bill.
We knew 700 billions was just any number to get the sellout started. They should be fired, because they have failed the job. We would get fired if we fail our job. That's why I have turned against voting for either Obama or McCain. There is no change from either of them. Neither represents me. The bailout of Wall Street only emboldens more greed. Probably only genetic engineering can get rid of this gene called "Greed" gene on Wall Street.

Posted by: dummy | October 13, 2008 2:34 PM

What economic forecasting models did these lenders use to create their business models from? If the value of the US dollar is down (indicating a bear) and the speculators are tapped out, who's big idea was it to create unsecured debt? These monkies did it to push further speculation which caused the homes to be unaffordable to begin with. Who's big idea was to bribe politicians as a version of their business continuity plan? Why is the government allowing all this to happen? How much money would China loan the U.S. if they realized that the GDP was built on debt based on fraudulent values and the federal deficit exceeded $10trillion? The trouble is that the little guys are getting screwed over in this scheme, there's no real fix until the little guy has REAL job creation to make the mortgage payments with. I wish these idiots would stop beating around the bush.

Posted by: schmoey | October 13, 2008 2:38 PM

Is anyone else sick of the scare tactic that reverses the basic cause and effect logic? These jerks are really preying on the fact that most Americans don't grasp the fundamentals of Economics! There is no "bailout" until the little guys have jobs FIRST. If these unsecured debt instruments want to hold any value, the borrower needs to be able to make their mortgage payments. I'm sick of clueless patriots/idiots trying to act like everyone's financial advisors and telling us to hold in a crash. It's not YOUR money. What has the government done to let us know we can TRUST them? NADA. Actually just the opposite with bailing out criminals and blank checks. Trust is the big sale in finance. And these bailouts are completely unconstitutional. A slap in the face because they lack transparancy. Please stop jerking us around, we have enough problems as it is.

Posted by: schmoey | October 13, 2008 2:57 PM

Posted by: benq11 | October 14, 2008 12:47 PM

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