TARP bill still has serious flaws - call your congressperson!
September 29th, 2008The Troubled Asset Relief Program (TARP) Bill, which is being voted on today by the House of Representatives, doesn’t require any transparency for the sales transactions when the Treasury dumps the troubled assets it has bought.
Why?
Mortgages and Default Swap Loans Hidden From View
Because when prices begin to rise, rather than hold the assets and make gains for the American people, the Treasury will be selling them as quickly as possible to foreign and domestic banks.
The language in the TARP Bill ought to ensure that NO MORTGAGES ARE USED TO COLLATERALIZE FOREIGN LOANS. I have the sense that the news article out today that foreign countries support the U.S. bailout, but without financial support, is
There won’t be any gain on these assets, as it will simply go to pay interest on the loans taken to finance this bill. Let the Treasury sell the derivatives, but NOT the mortgages upon which the derivatives are founded. The derivatives are crap, worthless junk. The mortgages are the keys to U.S. property and it would be nice to keep it in the hands of Americans rather than hand it over for nothing.
Additionally, there ought to be language that NO MORTGAGE ASSETS SHALL BE RESOLD TO ANY COMPANY THAT HAS ITSELF, OR THROUGH A SUBSIDIARY, SOLD ANY SUCH ASSETS, FOR LESS THAN THE ORIGINAL SALES PRICE PLUS ________. At the very least, the administrative costs for this program, but I think we ought to see a three hundred percent gain!
I included the language from the bill pertaining to the sale of assets and the distribution of the proceeds. This deal really looks poor for Americans. This needs more refining!!! If a contract/bill isn’t vetted and clear, it will be exploited and the people who will be exploited as a result will be those that aren’t adequately represented, namely the average American!
UPDATE - The Senate is voting on the revised version of the bill presently.
Swaps and Derivative are rather simple to understand. Did you know that you can payoff all the sub prime loans for $536,964,808,868. If you payoff the loans of those that had been late in the last 12 months it would be $227,136,207,581. Its a ponzi scheme look at the banks Revenues and compare them with their net income the annual reports are available online. nomedals.blogspot.com
Jason, you’re right! The derivatives market eclipses the actual assets from which they are derived. The issue is that while the $750B could pay for all the homes that are/will fall into foreclosure, it seems that the hedge funds, the banks, foreign investors, etc., would be a bit upset that the U.S. Government invaded their quasi legal gambling hall.
It seems that simply paying off the mortgages would greatly simplify the unwinding of the derivatives market. All bets against the house, LOSE! Bet against the house, especially when the house can print its own currency,I guarantee you’re going to lose. Unless the house isn’t interested in winning.
So there you have it. My opinion on this matter.