We have another rumor and another rally (which we were due for today anyway). I’m scared of what happens after this thing becomes news.
The rumor is the head congresscritters are saying they think they have a deal:
WASHINGTON (AP) – Warned of a possible financial panic, key Republicans and Democrats reported agreement in principle Thursday on a $700 billion bailout of the financial industry and said they would present it to the Bush administration in hopes of a vote within days.
Emerging from a two-hour negotiating session, Sen. Chris Dodd, D-Conn., the Banking Committee chairman said, “We are very confident that we can act expeditiously.”
“I now expect that we will indeed have a plan that can pass the House, pass the Senate (and) be signed by the president,” said Sen. Bob Bennett, R-Utah….
Tony Fratto, the White House deputy press secretary said the announcement was “a good sign that progress is being made.”
“We’ll want to hear from (Treasury) Secretary (Henry) Paulson, and take a look at the details. We look forward to a good discussion at the meeting this afternoon,” he said….
“There really isn’t much of a deadlock to break,” said Rep. Barney Frank, D-Mass, chairman of the House Financial Services Committee.
But there were fresh signs of trouble in the House Republican Caucus. A group of GOP lawmakers circulated an alternative designed to attract private capital back into the credit markets with less government intrusion.
Really? Someone is defending the free market?
Under the proposal, the government would provide insurance to companies that agree to buy frozen assets, rather than purchase them directly as envisioned under the administration’s plan. The firms would have to pay insurance premiums to the Treasury Department for the coverage.
I really got my hopes up there for a minute. Not. This sounds like a phoney, roundabout way to offload the losses to the Treasury. There is no difference whether the Treasury buys the bad debt for more than it is worth or insures it for below market rates; the taxpayer takes the loss either way.
