The TRUTH About The Bailout

“”Hundreds of billions of dollars are going to bail out FOREIGN INVESTORS. They know it, they demanded it, and the bill has been carefully written to make sure that can happen.” – Brad Sherman , D-California”

That’s right folks. You are going to have $700 billion – about 25% of the total federal budget – put on your personal credit card (via taxes forever) in order to bail out foreign investors.

Oh, and the best part of it is that the underlying assets involved do not even have to be in the United States!

Here is the definition of a “troubled asset”, right from the bill:

“(9) TROUBLED ASSETS.—The term ‘‘troubled assets’’ means— (A) residential or commercial mortgages and any securities, obligations, or other instruments that are based on or related to such mortgages, that in each case was originated or issued on or before March 14, 2008, the purchase of which the Secretary determines promotes financial market stability;

and (B) any other financial instrument that the Secretary, after consultation with the Chairman of the Board of Governors of the Federal Reserve System, determines the purchase of which is necessary to promote financial market stability, but only upon transmittal of such determination, in writing, to the appropriate committees of Congress.”

Notice that conspicuously missing from the definition is the requirement that the asset’s underlying thing (that is, the property that was mortgaged, etc) lies within the United States. Also note that Treasury must tell Congress if they add “new types” of debt, but that Congress has no right of review or censure.

That is, it is perfectly legitimate under the bill for a foreign bank to sell or swap any “crap sandwich” it may hold (irrespective of how or where it originated, so long as a mortgage is the basis for it somewhere) with a bank domiciled in the United States, and said bank may then “PUT” it into the TARP.

Note also that Representative Sherman said on Kudlow last night that when this was raised with Secretary Paulson he was told that if Congress tried to restrict the ability of the Secretary to purchase assets “laundered” in this fashion from foreigners, that the bill would be vetoed.

Redacted from:The Market Ticker
by Karl Denninger
http://market-ticker.denninger.net/archives/596-The-TRUTH-About-The-Bailout.html

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2 Responses to “The TRUTH About The Bailout”

  1. wander-rant Says:

    I suppose there would be more anger beng exhibited by our Senate, Congress and the Administration, as well the two detached presidential candidates if they were to suddenly learn that along with all the American taxpayer losses between the $ 700B bailout (and counting) and the 25-30% investment losses, they too were obligated to forfeit the same rate of taxpayer-funded (federal salaries, 401k/pensions) monies. Everything we loose, including homes, they should loose. Then, they can say they truly feel our pain.

    You’d see some emotion and real action then-huh?

  2. armageddonoutahere Says:

    You’re absolutely right wander-rant, but that’s never going to happen. The politicians sit on their thrones and decide how they can screw
    their subjects.

    The laws they pass are for us, not them. They’re above the law. Very few of them have ever done an honest days work. They’re leeches, sucking the blood out of hard working people, many of whom, are just trying to exist.

    These politicians don’t care about the people. They only care about getting reelected. The American Dream has turned into a nightmare.
    I’d love to see them all get stripped of their crooked largess and get kicked out.

    That’s my American Dream.

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