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jstan
climber
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Topic Author's Original Post - Sep 30, 2008 - 02:41pm PT
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I tried to send the following to Lois Capps my representative in the House. Right now her site is so busy I cannot send the message.
We are at that point.
This is the moment when we can take back our country.
The Honorable Lois Capps:
I have read your statements on the bailout issue and I feel much as do you. I have two comments.
1. I appreciate the difficulty that was encountered in getting any amendments to the original Bush proposal. After reading the bill that failed I have to say it seems to me we are still giving far too much unrestrained power to a single functionary, the Secretary of the Treasury. If this administration simply continues its past practice of ignoring Congress, Secretary Paulson will be subject to no real restraint. Oversight boards will make no difference. If that all comes to pass we will have once more signed on to a measure like that used to authorize the invasion of Iraq.
2. The bill authorizes the Secretary to buy securities not tied directly to mortgages on real property. Derivatives, like those employed in the hedge fund industry, may be bought without even use of an auction to help determine value. These derivatives may have no value and they are reported to pose a two trillion dollar liability. The bill that failed would have allowed bailout of hedge funds also with no real review – immediately upon passage.
Few things in life are certain. We do not know whether we have the time to carefully craft a bill with proper safeguards and strong enforcement. Based upon the past we do know one thing however.
Once passed, the bill that failed would have been used immediately in ways that Americans will feel to be abusive of our citizens' best interests.
That we know.
We need not go there again – whatever the cost.
My greatest regards,
John Stannard
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JuanDeFuca
Big Wall climber
Stoney Point
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Sep 30, 2008 - 02:44pm PT
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If you think the government does not have to step in and provide a bailout at this point you no nothing of economics.
I just lost over a five hundered thousand dollars because of a simple vote.
Juan
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SteveW
Trad climber
The state of confusion
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Sep 30, 2008 - 02:45pm PT
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John
I had to call my representative, who capitulated and voted FOR
the bailout. I casticated her aide and told them that any bailout should be for the US taxpayer, those foreclosed due to unscrupulous lenders etc. That those responsible need to be punisheed, and there must be oversight. No way should Henry
Paulson get this money to use as he pleases. I'm glad to
see your congress person voted correctly. Hopefully there will
be more that demand accountability and no bailout of the gamblers
who put us in this position!
PS, it was great working with you last week--even if it was a stretch for you! (LOL!)
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jstan
climber
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Topic Author's Reply - Sep 30, 2008 - 02:54pm PT
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Mr. Batten:
I, on the other hand, have not made a half million dollar bet in this environment and so I have not lost a half million dollars.
If this is what being ignorant of economics causes, I am quite pleased to be as ignorant of economics as you claim I am.
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dirtineye
Trad climber
the south
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Sep 30, 2008 - 02:57pm PT
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Good one Jstan.
But I still think something must be done, to protect home owners and tax payers and really, the country as a whole from another Great Depression.
Maybe since the legislators and executive branchers ALL look scared to death, they will finally do something right for the American people.
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BBWolf
climber
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Sep 30, 2008 - 03:04pm PT
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Well done. I've added the following language to my letter:
3) Rather than pass this bailout, please pass another form of bailout for Taco members. Banish JDF, Talus, and the others who disrupt this forum with their idiotic blathering to a land far far away - preferably without internet.
Best, BBWolf
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BBWolf
climber
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Sep 30, 2008 - 03:24pm PT
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Dear Talus,
Go solo Reticent.
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jstan
climber
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Topic Author's Reply - Sep 30, 2008 - 03:27pm PT
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At 12:30 PM
Messaging Service Unavailable
The House of Representatives is currently experiencing an extraordinarily high amount of email traffic. The Write Your Representative function is therefore intermittently available. While we realize communicating to your Members of Congress is critical, we suggest attempting to do so at a later time, when demand is not so high. System engineers are working to resolve this issue and we appreciate your patience.
Steve:
Will do.
But this tells you what is happening!
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SteveW
Trad climber
The state of confusion
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Sep 30, 2008 - 03:31pm PT
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What one should do is go to their congess person's website and
they usually list a local phone number for their office.
Call that number and voice your displeasure at their vote,
or to give them a message that you wish to pass on to the legislator.
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TradIsGood
Chalkless climber
the Gunks end of the country
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Sep 30, 2008 - 04:01pm PT
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jstan,
Did you REALLY read the bill in its entirety?
How about sections 104, 113, 116, 132, 133 and particularly section 134?
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k-man
Gym climber
SCruz
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Sep 30, 2008 - 04:06pm PT
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I just lost over a five hundered thousand dollars because of a simple vote.
I'm sure, Juan, that you worked very hard for that $500k.
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Karl Baba
Trad climber
Yosemite, Ca
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Sep 30, 2008 - 04:57pm PT
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I've written my congressman twice. Back-stabbing Repubican voted FOR the bailout anyway.
Remember, if you're lazy, they often pay little attention to the details of your emails and mostly check your opinion on general lists as for or against and maybe a subcategory of reasons so you could write
1. Against the Bailout
Reasons:
Lack of transparancy and accountability
Doesn't help regular homeowners with mortgages
Bails out high risk derivitive buyers who should have known at taxpayer expense.
or whatever you feel
That'll save ya time and do the job
peace
Karl
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jstan
climber
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Topic Author's Reply - Sep 30, 2008 - 05:02pm PT
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On Monday I was riding Amtrak back from Yosemite and the conductor did not have a 110 page copy of the bill, unfortunately. I read and annotated my copy of the NYT however. It was pretty clear "The Secretary shall" is about what the bill contained and that is borne out when I look at what is available on
http://publicmarkup.org/bill/emergency-economic-stabilization-act-2008/
As to sec 134 what I got from the NYT seems right on target. "The president shall" come up with some sort of legislative proposal to recoup losses. From firms that even if they still exist, are well able to litigate and lobby?
And yes. Like many comments I have seen I still think the review board is a joke.
I have yet to see any teeth anywhere.
Others may want to see the sections you noted so I put their texts below:
Sec. 104. Financial Stability Oversight Board. (2 Comments)
0. ESTABLISHMENT.There is established the Financial Stability Oversight Board, which shall be responsible for
0. reviewing the exercise of authority under a program developed in accordance with this Act, including
. policies implemented by the Secretary and the Office of Financial Stability created under sections 101 and 102, including the appointment of financial agents, the designation of asset classes to be purchased, and plans for the structure of vehicles used to purchase troubled assets; and
. the effect of such actions in assisting American families in preserving home ownership, stabilizing financial markets, and protecting taxpayers;
0. making recommendations, as appropriate, to the Secretary regarding use of the authority under this Act; and
0. reporting any suspected fraud, misrepresentation, or malfeasance to the Special Inspector General for the Troubled Assets Relief Program or the Attorney General of the United States, consistent with section 535(b) of title 28, United States Code.
0. MEMBERSHIP.The Financial Stability Oversight Board shall be comprised of
. the Chairman of the Board of Governors of the Federal Reserve System;
. the Secretary;
. the Director of the Federal Home Finance Agency;
. the Chairman of the Securities Exchange Commission; and
. the Secretary of Housing and Urban Development.
0. CHAIRPERSON.The chairperson of the Financial Stability Oversight Board shall be elected by the members of the Board from among the members other than the Secretary.
0. MEETINGS.The Financial Stability Oversight Board shall meet 2 weeks after the first exercise of the purchase authority of the Secretary under this Act, and monthly thereafter.
0. ADDITIONAL AUTHORITIES.In addition to the responsibilities described in subsection (a), the Financial Stability Oversight Board shall have the authority to ensure that the policies implemented by the Secretary are
Zeroth. in accordance with the purposes of this Act;
Zeroth. in the economic interests of the United States; and
Zeroth. consistent with protecting taxpayers, in accordance with section 112(a).
0. CREDIT REVIEW COMMITTEE.The Financial Stability Oversight Board may appoint a credit review committee for the purpose of evaluating the exercise of the purchase authority provided under this Act and the assets acquired through the exercise of such authority, as the Financial Stability Oversight Board determines appropriate.
0. REPORTS.The Financial Stability Oversight Board shall report to the appropriate committees of Congress and the Congressional Oversight Panel established under section 125, semiannually, on the matters described under subsection (a)(1).
0. TERMINATION.The Financial Stability Oversight Board, and the authority of the Oversight Board under this section, shall terminate on the expiration of the 15-day period beginning upon the later of
〇. the date that the last troubled asset acquired by the Secretary under section 101 has been sold or transferred out of the ownership or control of the Federal Government; or
the date of expiration of the last insurance contract issued under section 102.
Sec. 113. Minimization of Long-Term Costs and Maximization of Benefits for Taxpayers. (0 Comments)
0. LONG-TERM COSTS AND BENEFITS.
0. MINIMIZING NEGATIVE IMPACT.The Secretary shall use the authority under this Act in a manner that will minimize any potential long-term negative impact on the taxpayer, taking into account the direct outlays, potential long-term returns on assets purchased, and the overall economic benefits of the program, including economic benefits due to improvements in economic activity and the availability of credit, the impact on the savings and pensions of individuals, and reductions in losses to the Federal Government.
0. AUTHORITY.In carrying out paragraph (1), the Secretary shall
0. hold the assets to maturity or for resale for and until such time as the Secretary determines that the market is optimal for selling such assets, in order to maximize the value for taxpayers; and
0. sell such assets at a price that the Secretary determines, based on available financial analysis, will maximize return on investment for the Federal Government.
0. PRIVATE SECTOR PARTICIPATION.The Secretary shall encourage the private sector to participate in purchases of troubled assets, and to invest in financial institutions, consistent with the provisions of this section.
0. USE OF MARKET MECHANISMS.In making purchases under this Act, the Secretary shall
〇. make such purchases at the lowest price that the Secretary determines to be consistent with the purposes of this Act; and
〇. maximize the efficiency of the use of taxpayer resources by using market mechanisms, including auctions or reverse auctions, where appropriate.
0. DIRECT PURCHASES.If the Secretary determines that use of a market mechanism under subsection (b) is not feasible or appropriate, and the purposes of the Act are best met through direct purchases from an individual financial institution, the Secretary shall pursue additional measures to ensure that prices paid for assets are reasonable and reflect the underlying value of the asset.
0. CONDITIONS ON PURCHASE AUTHORITY FOR WARRANTS AND DEBT INSTRUMENTS.
0. IN GENERAL.The Secretary may not purchase, or make any commitment to purchase, any troubled asset under the authority of this Act, unless the Secretary receives from the financial institution from which such assets are to be purchased
0. in the case of a financial institution that is registered (or approved for registration) and traded on a national securities exchange or a national securities association registered pursuant to section 15A of the Securities Exchange Act of 1934 (15 U.S.C. 78o-3), a warrant giving the right to the Secretary to receive nonvoting common stock or preferred stock in such financial institution, as the Secretary determines appropriate; or
0. in the case of any financial institution other than one described in subparagraph (A), a senior debt instrument from such financial institution, as described in paragraph (2)(C).
0. TERMS ANDCONDITIONS.The terms and conditions of any warrant or senior debt instrument required under paragraph (1) shall meet the following requirements:
0. PURPOSES.Such terms and conditions shall, at a minimum, be designed
to provide for reasonable participation by the Secretary, for the benefit of taxpayers, in equity appreciation in the case of a warrant, or a reasonable interest rate premium, in the case of a debt instrument; and
to provide additional protection for the taxpayer against losses from sale of assets by the Secretary under this Act and the administrative expenses of the TARP.
0. AUTHORITY TO SELL, EXERCISE, OR SURRENDER.The Secretary may sell, exercise, or surrender a warrant or any senior debt instrument received under this subsection, based on the conditions established under subparagraph (A).
0. CONVERSION.The warrant shall provide that if, after the warrant is received by the Secretary under this subsection, the financial institution that issued the warrant is no longer listed or traded on a national securities exchange or securities association, as described in paragraph (1)(A), such warrants shall convert to senior debt, in an amount determined by the Secretary.
0. PROTECTIONS.Any warrant representing securities to be received by the Secretary under this subsection shall contain antidilution provisions of the type employed in capital market transactions, as determined by the Secretary. Such provisions shall protect the value of the securities from market transactions such as stock splits, stock distributions, dividends, and other distributions, mergers, and other forms of reorganization or recapitalization.
0. EXERCISE PRICE.The exercise price for any warrant issued pursuant to this subsection shall be set by the Secretary, in the interest of the taxpayers.
0. SUFFICIENCY.The financial institution shall guarantee to the Secretary that it has authorized shares of nonvoting stock available to fulfill its obligations under this subsection. Should the financial institution not have sufficient authorized shares, including preferred shares that may carry dividend rights equal to a multiple number of common shares, the Secretary may, to the extent necessary, accept a senior debt note in an amount, and on such terms, as will compensate the Secretary equivalently, in the event that a sufficient shareholder vote to authorize the necessary additional shares cannot be obtained.
0. EXCEPTIONS.
○. DE MINIMIS.The Secretary shall establish de minimis exceptions to the requirements of this subsection, based on the size of the cumulative transactions of troubled assets purchased from any one financial institution for the duration of the program, at not more than $100,000,000.
OTHER EXCEPTIONS.The Secretary shall establish an exception to the requirements of this subsection and appropriate alternative requirements for any participating financial institution that is legally prohibited from issuing securities and debt instruments, so as not to allow circumvention of the requirements of this section.
Sec. 116. Oversight and Audits. (1 Comment)
0. COMPTROLLER GENERAL OVERSIGHT.
○. SCOPE OF OVERSIGHT.The Comptroller General of the United States shall, upon establishment of the troubled assets relief program under this Act (in this section referred to as the "TARP"), commence ongoing oversight of the activities and performance of the TARP and of any agents and representatives of the TARP (as related to the agent or representatives activities on behalf of or under the authority of the TARP), including vehicles established by the Secretary under this Act. The subjects of such oversight shall include the following:
○. The performance of the TARP in meeting the purposes of this Act, particularly those involving
foreclosure mitigation;
cost reduction;
whether it has provided stability or prevented disruption to the financial markets or the banking system; and
whether it has protected taxpayers.
○. The financial condition and internal controls of the TARP, its representatives and agents.
○. Characteristics of transactions and commitments entered into, including transaction type, frequency, size, prices paid, and all other relevant terms and conditions, and the timing, duration and terms of any future commitments to purchase assets.
○. Characteristics and disposition of acquired assets, including type, acquisition price, current market value, sale prices and terms, and use of proceeds from sales.
○. Efficiency of the operations of the TARP in the use of appropriated funds.
○. Compliance with all applicable laws and regulations by the TARP, its agents and representatives.
○. The efforts of the TARP to prevent, identify, and minimize conflicts of interest involving any agent or representative performing activities on behalf of or under the authority of the TARP.
○. The efficacy of contracting procedures pursuant to section 107(b), including, as applicable, the efforts of the TARP in evaluating proposals for inclusion and contracting to the maximum extent possible of minorities (as such term is defined in 1204(c) of the Financial Institutions Reform, Recovery, and Enhancement Act of 1989 (12 U.S.C. 1811 note), women, and minority- and women-owned businesses, including ascertaining and reporting the total amount of fees paid and other value delivered by the TARP to all of its agents and representatives, and such amounts paid or delivered to such firms that are minority- and women-owned businesses (as such terms are defined in section 21A of the Federal Home Loan Bank Act (U.S.C. 1441a)).
○. CONDUCT AND ADMINISTRATION OF OVERSIGHT.
. GAO PRESENCE.The Secretary shall provide the Comptroller General with appropriate space and facilities in the Department of the Treasury as necessary to facilitate oversight of the TARP until the termination date established in section 120.
. ACCESS TORECORDS.To the extent otherwise consistent with law, the Comptroller General shall have access, upon request, to any information, data, schedules, books, accounts, financial records, reports, files, electronic communications, or other papers, things, or property belonging to or in use by the TARP, or any vehicles established by the Secretary under this Act, and to the officers, directors, employees, independent public accountants, financial advisors, and other agents and representatives of the TARP (as related to the agent or representatives activities on behalf of or under the authority of the TARP) or any such vehicle at such reasonable time as the Comptroller General may request. The Comptroller General shall be afforded full facilities for verifying transactions with the balances or securities held by depositaries, fiscal agents, and custodians. The Comptroller General may make and retain copies of such books, accounts, and other records as the Comptroller General deems appropriate.
. REIMBURSEMENT OF COSTS.The Treasury shall reimburse the Government Accountability Office for the full cost of any such oversight activities as billed therefor by the Comptroller General of the United States. Such reimbursements shall be credited to the appropriation account "Salaries and Expenses, Government Accountability Office" current when the payment is received and remain available until expended.
○. REPORTING.The Comptroller General shall submit reports of findings under this section, regularly and no less frequently than once every days, to the appropriate committees of Congress, and the Special Inspector General for the Troubled Asset Relief Program established under this Act on the activities and performance of the TARP. The Comptroller may also submit special reports under this subsection as warranted by the findings of its oversight activities.
0. COMPTROLLER GENERAL AUDITS.
. ANNUAL AUDIT.The TARP shall annually prepare and issue to the appropriate committees of Congress and the public audited financial statements prepared in accordance with generally accepted accounting principles, and the Comptroller General shall annually audit such statements in accordance with generally accepted auditing standards. The Treasury shall reimburse the Government Account ability Office for the full cost of any such audit as billed therefor by the Comptroller General. Such reimbursements shall be credited to the appropriation account "Salaries and Expenses, Government Accountability Office" current when the payment is received and remain available until expended. The financial statements prepared under this paragraph shall be on the fiscal year basis prescribed under section 1102 of title 31, United States Code.
. AUTHORITY.The Comptroller General may audit the programs, activities, receipts, expenditures, and financial transactions of the TARP and any agents and representatives of the TARP (as related to the agent or representatives activities on behalf of or under the authority of the TARP), including vehicles established by the Secretary under this Act.
. CORRECTIVE RESPONSES TO AUDIT PROBLEMS.The TARP shall
. take action to address deficiencies identified by the Comptroller General or other auditor engaged by the TARP; or
. certify to appropriate committees of Congress that no action is necessary or appropriate.
0. INTERNAL CONTROL.
. ESTABLISHMENT.The TARP shall establish and maintain an effective system of internal control, consistent with the standards prescribed under section 3512(c) of title 31, United States Code, that provides reasonable assurance of
. the effectiveness and efficiency of operations, including the use of the resources of the TARP;
. the reliability of financial reporting, including financial statements and other reports for internal and external use; and
. compliance with applicable laws and regulations.
. REPORTING.In conjunction with each annual financial statement issued under this section, the TARP shall
. state the responsibility of management for establishing and maintaining adequate internal control over financial reporting; and
. state its assessment, as of the end of the most recent year covered by such financial statement of the TARP, of the effectiveness of the internal control over financial reporting.
0. SHARING OF INFORMATION.Any report or audit required under this section shall also be submitted to the Congressional Oversight Panel established under section 125.
0. TERMINATION.Any oversight, reporting, or audit requirement under this section shall terminate on the later of
. the date that the last troubled asset acquired by the Secretary under section 101 has been sold or transferred out of the ownership or control of the Federal Government; or
the date of expiration of the last insurance contract issued under section 102.
Sec. 132. Authority to Suspend Mark-to-Market Accounting. (2 Comments)
0. AUTHORITY.The Securities and Exchange Commission shall have the authority under the securities laws (as such term is defined in section 3(a)(47) of the Securities Exchange Act of 1934 (15 U.S.C. 78c(a)(47)) to suspend, by rule, regulation, or order, the application of Statement Number 157 of the Financial Accounting Standards Board for any issuer (as such term is defined in section 3(a)(8) of such Act) or with respect to any class or category of transaction if the Commission determines that is necessary or appropriate in the public interest and is consistent with the protection of investors.
SAVING SPROVISION.Nothing in subsection (a) shall be construed to restrict or limit any authority of the Securities and Exchange Commission under securities laws as in effect on the date of enactment of this Act.
Sec. 133. Study on Mark-to-Market Accounting. (1 Comment)
0. STUDY.The Securities and Exchange Commission, in consultation with the Board and the Secretary, shall conduct a study on mark-to-market accounting standards as provided in Statement Number 157 of the Financial Accounting Standards Board, as such standards are applicable to financial institutions, including depository institutions. Such a study shall consider at a minimum
. the effects of such accounting standards on a financial institutions balance sheet;
. the impacts of such accounting on bank failures in 2008;
. the impact of such standards on the quality of financial information available to investors;
. the process used by the Financial Accounting Standards Board in developing accounting standards;
. the advisability and feasibility of modifications to such standards; and
. alternative accounting standards to those provided in such Statement Number 157.
REPORT.The Securities and Exchange Commission shall submit to Congress a report of such study before the end of the 90-day period beginning on the date of the enactment of this Act containing the findings and determinations of the Commission, including such administrative and legislative recommendations as the Commission determines appropriate.
Sec. 134. Recoupment. (2 Comments)
Upon the expiration of the 5-year period beginning upon the date of the enactment of this Act, the Director of the Office of Management and Budget, in consultation with the Director of the Congressional Budget Office, shall submit a report to the Congress on the net amount within the Troubled Asset Relief Program under this Act. In any case where there is a shortfall, the President shall submit a legislative proposal that recoups from the financial industry an amount equal to the shortfall in order to ensure that the Troubled Asset Relief Program does not add to the deficit or national debt.
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jstan
climber
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Topic Author's Reply - Sep 30, 2008 - 05:07pm PT
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Good suggestions Karl. Great finally to meet you at Facelift.
I'll put your format at the front as an Executive Summary and then follow up with the text I posted - if the phone lines ever get free. As Steve suggested, a phone call is going to be the most effective.
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TradIsGood
Chalkless climber
the Gunks end of the country
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Sep 30, 2008 - 05:11pm PT
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Nice, jstan. And when that proposal is submitted (assuming that it is even necessary), do you think Congress won't pass it on behalf of the taxpayers, (and their other constituents).
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