Having tried without success to unlock frozen credit markets, the Treasury Department is considering taking ownership stakes in many United States banks to try to restore confidence in the financial system, according to government officials. Treasury officials say the just-passed $700 billion bailout bill gives them the authority to inject cash directly into banks that request it. Such a move would quickly strengthen banks' balance sheets and, officials hope, persuade them to resume lending. In return, the law gives the Treasury the right to take ownership positions in banks, including healthy ones.
Treasury officials say the just-passed $700 billion bailout bill gives them the authority to inject cash directly into banks that request it. Such a move would quickly strengthen banks' balance sheets and, officials hope, persuade them to resume lending. In return, the law gives the Treasury the right to take ownership positions in banks, including healthy ones.
Thank God who someone who knew what they were doing managed to sneak in the necessary language in time. Truth unfolds in time through a communal process.
In fact, who knows, Paulson may have had this in mind from the beginning, and wanted "non-reviewable" decision-making power precisely in order to do something like this -- nationalization of the banks -- over the dead bodies of die-hard Republican Congressmen, bankers, and conservative pundits. At least by asking for this power outright, he was honest and open about it. He either decided not to use or simply not did not know that in Washington, he had to resort to such underhanded means of obtaining power beyond the ken and reach of legislators, much less the people.
Normally, I detest sneaking language into bills in such a manner that it is impossible to know that language even exists, much less to review it. It is clear subversion of democracy, and is an essential flaw in how legislation is done. But in this case, well, the ends may justify the means -- a principle that I detest even more. Truth unfolds in time through a communal process.
--The US financial community is being dragged kicking and screaming into the 21st century. Capitalism searches out the darkest corners of human potential, and mainlines them.
You'll have noticed that McLame pitched a variation of this as as his idea in the debate the other night, making him the leader of the common man. One presumes that he didn't want it bad enough to twist the arms of those who prevented it, his 'afraid of socialism' rat-bastards. Never underestimate their intelligence, always underestimate their knowledge.
Frank Delaney ~ Ireland
Treasury Secretary Henry Paulson signaled the government may invest in banks as the next step in trying to resolve the deepening credit crisis. Paulson told reporters in Washington yesterday that legislation Congress passed last week to rescue financial institutions gave him broad authority that he intends to use, beyond just buying mortgage-related assets on banks' balance sheets. He indicated that an option available may be boosting companies' capital with cash infusions. ``It is the policy of the federal government to use all resources at its disposal to make our financial system stronger,'' Paulson said. ``We will use all of the tools we've been given to maximum effectiveness, including strengthening the capitalization of financial institutions of every size.'' Banks worldwide aren't raising enough capital to offset losses: while posting $592 billion of writedowns and losses during the crisis, they have added just $442.5 billion of new capital, according to data compiled by Bloomberg. The International Monetary Fund anticipates losses will more than double to $1.4 trillion.
Paulson told reporters in Washington yesterday that legislation Congress passed last week to rescue financial institutions gave him broad authority that he intends to use, beyond just buying mortgage-related assets on banks' balance sheets. He indicated that an option available may be boosting companies' capital with cash infusions.
``It is the policy of the federal government to use all resources at its disposal to make our financial system stronger,'' Paulson said. ``We will use all of the tools we've been given to maximum effectiveness, including strengthening the capitalization of financial institutions of every size.''
Banks worldwide aren't raising enough capital to offset losses: while posting $592 billion of writedowns and losses during the crisis, they have added just $442.5 billion of new capital, according to data compiled by Bloomberg. The International Monetary Fund anticipates losses will more than double to $1.4 trillion.
