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Draft of the Emergency Economic Stabilization Act of 2008

September 29, 2008
By Ken Worsley


For those eagerly awaiting an exciting read, here’s the most recent draft of the “Emergency Economic Stabilization Act of 2008.” (PDF)

Full name: “A Bill for the Federal Government to purchase and insure certain types of troubled assets for the purposes of providing stability to and preventing disruption in the economy and financial system and protecting taxpayers, and for other purposes.”

“Protecting taxpayers” is buried pretty far down that list, it seems to me.

Filed Under Banking, Equity Markets, US 

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Comments

18 Responses to “Draft of the Emergency Economic Stabilization Act of 2008”

  1. Matt Dioguardi on September 29th, 2008 6:38 pm

    Taxpayers need protecting all right, from the politicians who write and vote for bills like this.

  2. Ken Worsley on September 29th, 2008 11:35 pm

    Matt,

    Fully agreed. They also need protection from from unelected, unaccountable, unconstitutional elements who push bills like this. Thomas Paine has been fully forgotten.

  3. Yapp on September 30th, 2008 3:22 am

    Well, it didn’t get through the first vote, so there might be some hope:

    http://money.cnn.com/2008/09/29/news/economy/bailout/index.htm?cnn=yes

  4. Matt on September 30th, 2008 8:05 am

    The bill is so outrageous that it is doing exactly what it needs–distracting attention and resources from exposing the other bailout.

    The SEC, as I understand it, has broadly banned short-selling on about 20 percent of listed American stocks. Additionally, we saw suspension of mark-to-market go through independent of this bill (huge–has the same effect as the bailout does on reducing transparency and price discovery).

    The Federal Reserve is printing money again. We’ve had several recent permanent open market operations (strangely carrid out with Agencies instead of Treasuries as is usual). The alphabet soup of credit facilities is still in place and we see the Fed’s balance sheet expanding dramatically in the past 7 days (but not with it’s usual quality). I would suggest that the dollar, which is normally backed by the Fed’s balance sheet of Treasuries and the faith of foreign investors, is worth less than it ever has been. It has been going up lately and I wonder for how much longer this charade can continue.

    The Paulson bailout will come back, a little tamer, and will pass in round two.

  5. Jeremy on September 30th, 2008 9:31 am

    This legislation is garbage and should not be passed. Most people do not understand how banks work and liquidity isn’t the problem here. The weak banks will be eaten up by the stronger ones. The FDIC is doing an excellent job and taking care of what needs to be taken care of. This bill is too late. There are many other ways to do get rid of the bad loans and this legislation is the worst way possible.

  6. Chris on September 30th, 2008 12:40 pm

    My rep voted for this nonsense. I’m sending money to whoever’s running against him and has the best chance.

  7. Jeremy on September 30th, 2008 4:32 pm

    Matt- you are right, this problem is tiny compared to the bigger problem that the U.S doesn’t want to face, the debt. The dollar should be on par with the Zimbabwean currency. I also find it ironic that people are flocking to the dollar in times of unrest when it IS THE DOLLAR that is shite.

  8. Marv on October 1st, 2008 11:14 pm

    They’re going to pull the wool over the eyes very soon. They’re going after the missing Republican votes by adding in renewable energy tax breaks, deductions on solar panel purchases, R&D credit for businesses, and a deduction of state and local taxes on federal returns. Then there’s relief from the Alternative Minimum Tax. Then, there’s the “Mental Health Parity” section, which forces insurance companies to cover mental health issues same as physical ones.

  9. Paz on October 2nd, 2008 4:30 pm

    The Senate passed this bill, and it will now go through the House. The haters need to keep quiet.

  10. Ken Worsley on October 3rd, 2008 12:32 am

    Paz,

    The Senate did not pass the same bill that was rejected by the house. Read both side by side and then come back. The house is hardly voting on the same version of the bill.

  11. Matt on October 3rd, 2008 5:53 am

    Paz:

    Haters? Need to keep quiet? I would love to know who is hating (vis-a-vis the bailout–supporters or opponents) and why anyone should keep quiet where debate is needed.

  12. Jeremy on October 3rd, 2008 9:06 pm

    Paz- I’m not a hater. The bill is just not necessary. The banks are merging, being bought out by themselves or with the help of the FDIC. The liquidity is the problem and the U.S Gov’t already flooded the markets with money. No bill will help the problem. The problem is banks are unwilling to lend money over the short term because they are scared. Nothing can actually make them lend the money that the Gov’t has put into the market. If they don’t want to lend then they won’t lend and everything will be screwed. The bill is just for the media and confidence but in actually where do you think the money from the FDIC and the money the U.S Gov’t is trying to put into the markets comes from or will come from? It will come from taxes/U.S borrowing and going into more debt. So, there is already a “bailout” and no need for legislation on this. I think you do not understand the markets just like the rest of the U.S and world.

  13. Ronnie on October 7th, 2008 12:03 am

    Thanks to Clinton for killing the Glass-Steagall Act! The bailout passes and the Dow dives below 10,000!

  14. Matt on October 7th, 2008 6:13 am

    Oh Please! Let’s not play politics, as the Republican Administration sent it to Clinton to promulgate. The same shenanigans happen under both parties, as they are just fronts for Wall Street.

  15. Ken Worsley on October 7th, 2008 7:19 am

    Yeah, I have to agree with Matt here. They’re the same party anyway.

  16. Lenin on October 11th, 2008 1:33 am

    Comrades! Welcome to the USSA! You let the government use your tax money to prop up the failures of capitalism. You no longer have any control, nor any say, over where your money goes. Who’s to blame?

  17. J on October 12th, 2008 7:51 pm

    they should let the crap institutions fail, let unemployment rise,etc. the russians and koreans did it 10 years ago and now their economies are better off, look at the Japanese economy with 20 years of shit, that is what happens when you try to “bail out” institutions that are shite.

  18. half monty on October 13th, 2008 12:48 am

    J,

    In theory, of course, failed institutions should fail. But theory does not dictate reality. You bring up the Russians, but they have had about as much false market intervention as anyone, especially over the past few weeks as they shut down their markets whenever they felt like it.

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