Some smart guys evaluate the plan to deal with toxic assets.
And what is a toxic asset anyway?
Showing posts with label the bailout. Show all posts
Showing posts with label the bailout. Show all posts
Tuesday, March 24, 2009
Turning the Page
As I suggested in class, the bailout furor seems to be dying down. Some House leaders are claiming the bill has had its intended effect because so many AIG executives are returning the money:
House Majority Leader Steny H. Hoyer said Tuesday that a House-passed bill that would slap a 90 percent tax on bonuses paid to executives and others at companies receiving federal bailout aid seems to already have had much of its desired impact.
The bill (HR 1586) has been criticized by President Obama and some senators as potentially unconstitutional, and as bad policy precedent in any case.
Neither the House measure nor a companion bill (S 651) produced by the Senate Finance Committee are likely to move through the Senate anytime soon. But Hoyer, D-Md., said it appears that executives at American International Group Inc. still have received Congress’ message, because a large number of them have agreed to return their share of the $165 million bonus money that triggered public and congressional outrage.
“I think apparently the House bill had its intended effect. They’re giving it back,” Hoyer said, referring to New York Attorney General Andrew Cuomo’s announcement that about half of the money from the giant insurance company’s bonus program will be returned.
House Majority Leader Steny H. Hoyer said Tuesday that a House-passed bill that would slap a 90 percent tax on bonuses paid to executives and others at companies receiving federal bailout aid seems to already have had much of its desired impact.
The bill (HR 1586) has been criticized by President Obama and some senators as potentially unconstitutional, and as bad policy precedent in any case.
Neither the House measure nor a companion bill (S 651) produced by the Senate Finance Committee are likely to move through the Senate anytime soon. But Hoyer, D-Md., said it appears that executives at American International Group Inc. still have received Congress’ message, because a large number of them have agreed to return their share of the $165 million bonus money that triggered public and congressional outrage.
“I think apparently the House bill had its intended effect. They’re giving it back,” Hoyer said, referring to New York Attorney General Andrew Cuomo’s announcement that about half of the money from the giant insurance company’s bonus program will be returned.
Wednesday, February 11, 2009
The Bailout
I have no idea what to say about this thing, except that it's huge--bigger than the stimulus. Again, we will pick this apart in class, but here's some text from Slate's Today's Paper to get us going:
The much-anticipated announcement turned out to be a big letdown. The New York Times highlights that the administration's plan to rescue the nation's financial system that was unveiled by Treasury Secretary Timothy Geithner "is far bigger than anyone predicted and envisions a far greater government role in markets and banks than at any time since the 1930s." The administration said it's committed to spending as much as $2.5 trillion in the effort. But Wall Street quickly gave the plan "a resounding thumbs down," as USA Today puts it, because it was short on some very key details that made clear the plan is very much a work in progress. The Wall Street Journal points out that the markets experienced the worst sell-off since President Obama moved into the White House as stocks plunged nearly 5 percent sending the market "to its lowest level since Nov. 20."
Investors weren't alone in their unhappiness with the plan. Lawmakers were also quick to criticize Geithner for failing to provide more details on how the administration plans to deal with the ongoing mess. "What they did is over-promise and under-deliver," the head of a private investment firm tells the Washington Post. "They said there was going to be a plan, so everybody expected a plan. And there was nothing." The Los Angeles Times says that the lack of details in the announcement "reflects a double bind for the Obama administration." It's become clear that the problems in the financial system are bigger than expected and could require more money to fix, but at the same time Congress has grown even angrier at Wall Street, which makes it highly unlikely that lawmakers would approve more funding for the effort.
The much-anticipated announcement turned out to be a big letdown. The New York Times highlights that the administration's plan to rescue the nation's financial system that was unveiled by Treasury Secretary Timothy Geithner "is far bigger than anyone predicted and envisions a far greater government role in markets and banks than at any time since the 1930s." The administration said it's committed to spending as much as $2.5 trillion in the effort. But Wall Street quickly gave the plan "a resounding thumbs down," as USA Today puts it, because it was short on some very key details that made clear the plan is very much a work in progress. The Wall Street Journal points out that the markets experienced the worst sell-off since President Obama moved into the White House as stocks plunged nearly 5 percent sending the market "to its lowest level since Nov. 20."
Investors weren't alone in their unhappiness with the plan. Lawmakers were also quick to criticize Geithner for failing to provide more details on how the administration plans to deal with the ongoing mess. "What they did is over-promise and under-deliver," the head of a private investment firm tells the Washington Post. "They said there was going to be a plan, so everybody expected a plan. And there was nothing." The Los Angeles Times says that the lack of details in the announcement "reflects a double bind for the Obama administration." It's become clear that the problems in the financial system are bigger than expected and could require more money to fix, but at the same time Congress has grown even angrier at Wall Street, which makes it highly unlikely that lawmakers would approve more funding for the effort.
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