Bailout.. stealing our money
I read through the 400page bill that just passed and man this is sketchy as HECK. Among all the ludicrous and "grey" powers it gives Paulson all over the place -- there is this that is hidden in there
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Many big banks in the last year took on failing or failed banks as a result of bargain expansion policy or FDIC deals. Technically the asset purchase for them is fairly recent, but the contract that created the asset is old. Thus if the legislation would be passed before a bank failed, this asset would've been covered.
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That's not what it says.
The Secretary (which Paulson will be only until the new one next January) can raise the estimated price of an asset for purchase from an aquired or managed institution as a way to benefit those who accepted a loss leader. This will also give better credit status in the asset which may in the future bring more profit back to the Gov. when it sells or matures.
While said holders may set a higher estimate of value they still are subject to what the Secretary will offer. The rule allows him the authority to control the sale. This method was to stop badly operated institutions from being able to benefit unless they get bought or let better people manage them.
While a Treasury Secretary has WAY TOO MUCH autonomy in this plan, nothing keeps him from being replaced for stupidity. Who'd want to lose that job now?
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