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Bailout Bill Clears the Senate, Heads for (Another) House Vote |
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By Jason Simpkins
Associate Editor
The U.S. Senate last night (Wednesday) passed a $700 billion banking-sector bailout package, and will now watch as the House of Representatives reviews the inducement-laden pact. The House rejected an earlier version of this bill on Monday.
The legislation, approved by a 74-25 vote, authorizes the federal government to buy problem financial assets from banks and other financial institutions that have been squeezed by a credit crunch that stems from a burst housing bubble that’s led to record home foreclosures. The new bill contains two political "sweeteners" that were included to get the House to reverse its earlier opposition to this plan: The first raises the limit on federal bank-deposit insurance; and the second underscores the authority of U.S. securities regulators to suspend asset-valuing rules that corporate executives blame for fueling the crisis.
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Dear Hank: Here’s How to End the Credit Crisis at No Cost to Taxpayers |
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By Shah Gilani
Contributing Editor
While it’s clear from the current credit crisis that our financial system is at a critical juncture, it’s just as clear that there’s no agreement over how we should fix the problems we face. The reality is that neither the plan put forth by U.S. Treasury Secretary Henry M. "Hank" Paulson Jr. - nor any of the addendums offered up by Congress or the lobbyists - will resolve this crisis.
The key culprits are the structured financial products that reside on the balance sheets of banks, dead investment banks, insurance companies, hedge funds and all manner of other duped and unsuspecting investor entities worldwide, as well as the proliferation of the unregulated $62 trillion credit default swaps (CDS) market.
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Dodge the Pitfalls and Uncover the Profits From the $700 Billion Banking System Bailout |
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By Martin Hutchinson
Contributing Editor
With the exception of a few curmudgeonly old Republicans, there has been general rejoicing at U.S. Treasury Secretary Henry M. Paulson’s $700 billion banking system bailout. Indeed, to hear some commentators you would think it was cost free - they explain joyfully that assets will only be acquired at a discount, so of course there is a good chance the taxpayer will not be out of pocket on the deal.
Well, if you believe that I have a bridge to sell you. The deal has large costs to taxpayers, and considerable negative implications for our economic future. Investors didn’t buy into the upbeat spiel either: U.S. stocks were routed yesterday (Monday) on fears that the bailout’s cost could sink the U.S. economy.
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