Game of Chicken Against the Imaginary Clock - BailOut May "Drag" until Next Week

Oh isn't that awful? I guess they want that $1 trillion dollars right now.

CNBC reports on the details.

Supposedly Democrats have the gall to ask that these bastards leveraging their companies 40:1 and pocketing the cash not have their multi-million dollar golden parachutes and that is the sticking point.

Here is what Democrats want, which appear to be the shares and unless I'm reading this wrong, nothing about paying good money for worthless debt.

Limitation on Authority

1. In General

The Secretary may not purchase, or make any commitment to purchase, any troubled asset unless the Secretary receives contingent shares in the financial institution from which such assets are to be purchased equal in value to the purchase price of the assets to be purchased.

2. Shares To Be Received

A.) Contingent Shares

i.) In General

The contingent shares to be received by the Secretary under paragraph (1) may, at the determination of the Secretary, include shares of the financial institution, its parent company, its holding company, any of its subsidiaries, or any other entity which is owned, controlled, or managed by such institution.

ii.) Debt Instruments

In the event that the equity of the financial institution from which such troubled assets were purchased is not publicly traded on a national securities exchange, the Secretary shall acquire a senior contingent debt instrument in lieu of contingent shares, which shall automatically vest to the Secretary on behalf of the United States Treasury in an amount equal to 125 percent of the dollar amount of the difference between the amount the Secretary paid for the troubled assets and the disposition price of such assets.

The Secretary may demand payment of such contingent debt instrument under such terms and conditions as determined appropriate by the Secretary.

B.) Multiple Class of Shares

If the financial institution from which troubled assets are to be purchased has more than one class of shares, the contingent shares to be received by the Secretary shall be that class of shares with the highest trading price during the business 15 days prior to the date of the purchase of such assets.

C.) Content

The instrument representing the contingent shares shall contain anti-dilution provisions of the type employed in capital market transactions, as determined by the Secretary, to protect the Secretary from transactions such as stock splits, stock distributions, dividends, and other distributions, mergers, and other reorganizations and recapitalizations.

3. Vesting of Shares

If, after the purchase of troubled assets from a financial institution, the amount the Secretary receives in disposing of such assets is less than the amount that the Secretary paid for such assets, the contingent shares received by the Secretary under paragraph (1) shall automatically vest to the Secretary on behalf of the United States Treasury in an amount equal to—(A) 125 percent of the dollar amount of the difference between the amount that the Secretary paid for the troubled assets and the disposition price of such assets; divided by (B) the amount of the average share price of the financial institution from which such assets were purchased during the 14 business days prior to the date of such purchase.

My question is will this even work? Anybody analyze that one?

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Not nearly good enough

But probably the best we can hope for. IF the democrats actually get this tacked on, basically what they've assured is that the taxpayers *WILL* be paid back for the bailout, eventually.

I say not nearly good enough because I'm not at all sure this financial-instrument-by-fiat-bound economy is worth saving at all, and it certainly does nothing to actually punish those responsible.

Maximum jobs, not maximum profits.

Nobody is Getting any "Shares"

...if I'm understanding your post correctly.

There will be no equity position acquired for taxpayers in this rescue. No way. Ain't gonna happen.

Both Bernanke and Paulson stressed repeatedly -- that if that was a condition "not enough banks would ask for relief" to save themselves or the nation's economy.



laws, they won't let them modify the bad bankruptcy bill (Biden thank you so much!) to enable judges to let people keep their primary residences as well as renegotiate those primary mortgages.

I'm sure they won't let the US taxpayer have actual equity

Right o, "not enough banks will ask" if they can't basically rape the American people and get free money...especially those foreign banks.

This is ridiculous and I'm now really wondering of saying...let the entire system implode, as threatened by Paulson and Bernanke...ok, now what happens to the US in that case in comparison to this blood sucking in this case? top off this cherry there are no guarantees this will work and many economists are saying it would simply be a band-aid and stave of the inevitable a few months down the road.

Actually, the Bankruptcy Bill was the Detonator of the US...

...economic destruction. And the democrats were all traitors when the lobbyists paid them to pass it.

Just think -- if mortgages had been extended, when necessary to 40 years instead of 30 -- no foreclosures would have happened. No banks would have lost any money.

And none of the rest of this crap would have happened either.

Biden is a whore. Had I voted for this bill, I would resign immediately in shame.

it's in one of my top votes to determine corruption

I agree and right now the obvious answer is multi-fold...
1. create a HOLC for it's been proven to generate profits and it's completely bottom up, gives all of the breaks to the homeowners

2. regulate immediate CDSes and repeal immediately the Commodity Futures Modernization Act (this affects oil speculation as well)

3. repeal immediately the Gramm-Leach-Bliley Act

4. SEC start immediately regulating

5. Seems like this one is already happening, since the news just broke the FBI is investigating Fannie/Freddie/AIG and Lehman. You would think Bear Sterns would be on that list along with Countrywide, BoA, WaMu, Etrade and on and on.

Here's the thing I find most amazing. Hillary Clinton has a lot of these plans in place. We all thought she was the ultimate bought and paid for candidate and some of her proposals are the above. Oops!


You know this can't be fixed, right? It's over. Been over for years. But you can still make money betting against America. Even if you live here, you don't have to be a victim of the crash.

I, personally, have no interest in punishing the bad guys. The Americans voted them in -- twice in a row. They got what they deserved. And, I'm not convinced they won't vote them in again in 2008.

We will soon lose our reserve currency status. Deservedly so. I do feel bad for the American people, but they are broken, and quite dangerous to tie your destiny to.

uh...response with a

Yeah but truth be told on the Democratic side well, it wasn't much better that's really the issue. In places like OH, MI and so on, NAFTA was the deal killer and the WTO/China PNTR was the rage builder. So, they see both parties as corrupt, little difference and then it comes down to cultural things, who they believe is the least horses ass and this is also part of the taxes stuff. They feel that since they are getting royally screwed by their government even when they pay a lot of taxes...they should at least pay less taxes when....getting royally screwed by their government.

Blue people just don't understand Red people, but there is more to the story than is advertised. ;)

uh...response with a

Industrial staters know they have been sold down the river by "free" trade

A valid observation Rpbert - in addition to the distractions from economic issues with social issues there is a general anti govt sentiment

Until the left starts understanding this they are doomed to continue to lose the blue collar vote