Alternative plan derails bailout
Republicans propose insurance scheme
By Inman News, Friday, September 26, 2008.President Bush is reportedly personally lobbying Republicans who have staged a revolt against the administration's plan to borrow $700 billion to buy up toxic assets from banks and financial institutions, and said publicly today that "we got a big problem" that requires prompt action by Congress.
House Republican Leader Rep. John Boehner of Ohio is demanding "serious consideration" of an alternative plan where banks and other investors holding frozen mortgage assets would pay the Treasury Department to insure them.
Bush said lawmakers "want to be able to express their opinions, and they should be allowed to express their opinions," but said there is no disagreement that something substantial must be done. The president urged lawmakers to resolve disagreements over aspects of the Treasury plan, but did not on comment Boehner's proposal, which takes a completely different approach.
Boehner wants to unfreeze mortgage-backed securities by extending insurance similar to the guarantees provided by Fannie Mae and Freddie Mac on loans they package and sell to investors. That, in conjunction with removing regulatory and tax barriers that block the flow of capital into financial markets, can help resolve the financial crisis without taxpayer expense, he argues.
"Too much private capital is sitting on the sidelines during this crisis," Boehner said in publishing a list of "Economic Rescue Principles" on the Web.
Democrats aren't willing to accept the tax cuts and insurance provisions of Boehner's plan, the Associated Press reported, leaving open the possibility of deadlock.
White House press secretary Dana Perino said she saw no reason to believe an agreement can't be reached by Monday.
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Submitted by Bruno Skopinich on September 26, 2008 - 4:06pm.
We don't want a BIG government solution to this problem...that is what got us in trouble in the first place with Fannie Mae (a government regulated entity).
Insuring investors against a certain percentage of loss is the best and cheapest solution. That is what the government does now with FHA and VA loans.
I 'll vote for that.
Submitted by Walter Boomsma on September 27, 2008 - 4:25am.
My only comment here is to notice the headline is an example of what's "wrong" with journalism.
The use of the word "scheme" is simply inappropriate if this is meant to be news. Inserting connotative words in the headline makes it commentary.
Submitted by Missy Caulk on September 27, 2008 - 4:06pm.
I have to say I was going to post the same comment as Walter, the word "scheme" is inappropriate. what is wrong with a discussion to come to best solution instead of cramming this plan down the tax payers throats? For Pete's sake you have discussions on PTA Boards, HOA etc. Anything this critical and this much money involved needs to be discussed.
Missy Caulk
Ann Arbor, MI
Missy@MissyCaulk.com
www.AnnArborRealEstateTalk.com
www.SearchAnnArborHouses.com
Submitted by Heinz Ahlborn on September 29, 2008 - 4:31am.
I am getting more and more fed up with wall street: The financial markets at Wall Street in combination with the global marketplaces have become such an interwoven, giant, monolithic, extremely complex and as recent history shows, extremely fragile marketplace. Often even financial experts lack insight and comprehensive understanding of all the interdependencies, so it is no surprise that a increasing number of private investors are getting more and more at unease with the lack of transparency. I am proposing to go back to basics: Move the money from this macroscopic, behemoth and abusive market back into small businesses on main street. Brick and mortar usinesses with nuts and bolts, that are in expansion mode. It is transparent, easy to understand, you see your money at work, and often, your investment will be secured by the assets of the business.
I'd characterize this philosophy as Micro Economic Investing. http://invest4real.biz/financialmarket.html