The No Bailout Plan
The "No Bailout Plan" by congressmans Pete DeFazio, Donna Edwards and Marcy Kaptur.
Hopefully I copied this right.
DRAFT
No BAILOUTS Act
Bringing Accounting, Increased Liquidity, Oversight and Upholding Taxpayer Security
1. Require the Securities and Exchange Commission (SEC) to require an economic value standard to measure the capital of financial institutions.
This bill will require SEC to implement a rule to suspend the application of fair value accounting standards to financial institutions, which marks assets to the market value, no matter the conditions of the market. When no meaningful market exists, as is the current market for mortgage backed securities, this standard requires institutions to value assets at fire-sale prices. This creates a capital shortfall on paper. Using the economic value standard as bank examines have traditionally done will immediately correct the capital shortfalls experienced by many institutions.
2. Require the Securities and Exchange Commission to restricting naked short sells permanently
This bill will require SEC to implement a rule that blocks naked selling, selling a stock short without first borrowing the shares or ensuring the shares can be borrowed. Such practices many times harm the companies represented in the sales and hurt their efforts to raise capital. There is no economic value produced by naked short sales, but significant negative effects.
3. Require the Securities and Exchange Commission to restore the up-tick rule permanently.
This bill will require SEC to implement a rule that blocks short sales without an up-tick in the market. On September 19, 2008, the SEC approved a temporary pause of short selling in financial companies "to protect the integrity and quality of the securities market and strengthen investor confidence." This rule prevents market crashes brought on by irrational short term market behavior.
4. "Net Worth Certificate Program"
This bill will require FDIC to implement a net worth certificate program. The FDIC would determine banks with short-term capital needs and the ability to financially recover in the foreseeable future. For those entities that qualify, the FDIC should purchase net worth certificates in these institutions. In exchange, these institutions issue promissory notes to repay the FDIC, counting the amount "borrowed" as capital on their balance sheets. This exchange provides short term capital, with not cash outlay. Interest rates on the certificates and the FDIC notes should be identical so no subsidy is necessary.
Participating banks must be subject to strict oversight by the FDIC including oversight of top executive compensation and if necessary the removal of poor management. Financial records and business plans should be subject to scrutiny while participating in the program.
In 1982, Congress approved a program, known as the Net Worth Certificate Program, that allowed banks and thrifts to apply for immediate capital assistance. From 1982 to 1993, banks with total assets of $40 billion participated in the program. The majority of these banks, 75%, required no further assistance beyond the certificate program.
5. Increase the FDIC Insurance limit from $100,000 to $250,000.
The bill will require the FDIC raise its limit to provide depositors confidence that their money is safe and help eliminate runs on banks which are destabilizing to the industry.
Under the cut was the basics of the plan. I saw an interview with two of the congressman on Lou Dobbs. References where made as examples to the old RTC (Resolution Trust Corporation) as to help describe this plan and its form. Lou Dobbs is an independant politically whom I have just recently been reintroduced to on CNN in the last number of weeks from long ago personal times. Frankly he makes sense and so did the congressman.
For some history of what the RTC was, a link: http://en.wikipedia.org/wiki/Resolution_Trust_Corporation
As it stands I trust this idea more. If anything I know the RTC worked. In addition it is was not some last minute the world is going to end ram it down everyones throats plan.
The current 700 billion plan on the table comes from such persons as Secretary Of The Treasury Paulson. If there was a stock or commodity called "Paulson" I wouldn't buy it.
Yes there are some modification to the plan from Paulsons original plan.
Put even more simply in contrast the current plan on the table calls for $700,000,000,000 dollars. The "No Bailout Plan" in essence calls for no dollars at the onset and or very little in the long term.
Which is more affordable to the real people that have to pay for it? The No Bailout Plan
Chee where already in debt 9 or 10 Trillion why not tack on some more? NO
Frankly folks it has to stop now. We have a chance to start that long stop. Because in essence it is going to be like slowing down and stopping a train. It takes awhile but it gets done. The only other way to stop a train is to wreck it. Which would you rather have you'll be the one paying for it.
If anything please look up the information on the "No Bailout Plan" on your own and read it and decide. If it satisfies your curiousity support it. Not just do that BUT make a phone call to Congress and state your support: 1-202-224-3121 and/or send an email to your congressman and senator (hey it is an opportunity to find out who the hell they are)
So as a challenge: Whomever you think gave it to you, use your brain.
Thank You
Hopefully I copied this right.
DRAFT
No BAILOUTS Act
Bringing Accounting, Increased Liquidity, Oversight and Upholding Taxpayer Security
1. Require the Securities and Exchange Commission (SEC) to require an economic value standard to measure the capital of financial institutions.
This bill will require SEC to implement a rule to suspend the application of fair value accounting standards to financial institutions, which marks assets to the market value, no matter the conditions of the market. When no meaningful market exists, as is the current market for mortgage backed securities, this standard requires institutions to value assets at fire-sale prices. This creates a capital shortfall on paper. Using the economic value standard as bank examines have traditionally done will immediately correct the capital shortfalls experienced by many institutions.
2. Require the Securities and Exchange Commission to restricting naked short sells permanently
This bill will require SEC to implement a rule that blocks naked selling, selling a stock short without first borrowing the shares or ensuring the shares can be borrowed. Such practices many times harm the companies represented in the sales and hurt their efforts to raise capital. There is no economic value produced by naked short sales, but significant negative effects.
3. Require the Securities and Exchange Commission to restore the up-tick rule permanently.
This bill will require SEC to implement a rule that blocks short sales without an up-tick in the market. On September 19, 2008, the SEC approved a temporary pause of short selling in financial companies "to protect the integrity and quality of the securities market and strengthen investor confidence." This rule prevents market crashes brought on by irrational short term market behavior.
4. "Net Worth Certificate Program"
This bill will require FDIC to implement a net worth certificate program. The FDIC would determine banks with short-term capital needs and the ability to financially recover in the foreseeable future. For those entities that qualify, the FDIC should purchase net worth certificates in these institutions. In exchange, these institutions issue promissory notes to repay the FDIC, counting the amount "borrowed" as capital on their balance sheets. This exchange provides short term capital, with not cash outlay. Interest rates on the certificates and the FDIC notes should be identical so no subsidy is necessary.
Participating banks must be subject to strict oversight by the FDIC including oversight of top executive compensation and if necessary the removal of poor management. Financial records and business plans should be subject to scrutiny while participating in the program.
In 1982, Congress approved a program, known as the Net Worth Certificate Program, that allowed banks and thrifts to apply for immediate capital assistance. From 1982 to 1993, banks with total assets of $40 billion participated in the program. The majority of these banks, 75%, required no further assistance beyond the certificate program.
5. Increase the FDIC Insurance limit from $100,000 to $250,000.
The bill will require the FDIC raise its limit to provide depositors confidence that their money is safe and help eliminate runs on banks which are destabilizing to the industry.
Under the cut was the basics of the plan. I saw an interview with two of the congressman on Lou Dobbs. References where made as examples to the old RTC (Resolution Trust Corporation) as to help describe this plan and its form. Lou Dobbs is an independant politically whom I have just recently been reintroduced to on CNN in the last number of weeks from long ago personal times. Frankly he makes sense and so did the congressman.
For some history of what the RTC was, a link: http://en.wikipedia.org/wiki/Resolution_Trust_Corporation
As it stands I trust this idea more. If anything I know the RTC worked. In addition it is was not some last minute the world is going to end ram it down everyones throats plan.
The current 700 billion plan on the table comes from such persons as Secretary Of The Treasury Paulson. If there was a stock or commodity called "Paulson" I wouldn't buy it.
Yes there are some modification to the plan from Paulsons original plan.
Put even more simply in contrast the current plan on the table calls for $700,000,000,000 dollars. The "No Bailout Plan" in essence calls for no dollars at the onset and or very little in the long term.
Which is more affordable to the real people that have to pay for it? The No Bailout Plan
Chee where already in debt 9 or 10 Trillion why not tack on some more? NO
Frankly folks it has to stop now. We have a chance to start that long stop. Because in essence it is going to be like slowing down and stopping a train. It takes awhile but it gets done. The only other way to stop a train is to wreck it. Which would you rather have you'll be the one paying for it.
If anything please look up the information on the "No Bailout Plan" on your own and read it and decide. If it satisfies your curiousity support it. Not just do that BUT make a phone call to Congress and state your support: 1-202-224-3121 and/or send an email to your congressman and senator (hey it is an opportunity to find out who the hell they are)
So as a challenge: Whomever you think gave it to you, use your brain.
Thank You