DeFazio to co-introduce new bailout bill

[Source]

Oregon Rep. Peter DeFazio, a Eugene-area Democrat, plans to unveil a new financial industry bailout bill in the House at noon Tuesday.

DeFazio, who voted against Monday’s failed Emergency Economic Stabilization Act of 2008, is backing the new measure with six other representatives. He blasted architects of the failed $700 billion bailout bill, saying the new measure isn’t based on the Bush administration’s bailout package.

“Instead of throwing taxpayer dollars at the program and crossing our fingers that the plan work, the measure will direct the Administration to take five simple steps” suggested by former FDIC head William Isaac, DeFazio said.

The Bush-backed measure would have allotted $700 billion toward rescuing various segments of the nation’s financial services sector. The measure failed by a 228 to 205 count.

DeFazio and the other representatives will release their plan at a press conference. The House isn’t expected to consider any new legislation related to the bailout until later this week.

[Source]

Senate and House Switchboard: (202) 224-3121

I watched an interview of DeFazio earlier today and it sounded like a good plan... In fact it doesn't use any of the tax payers money (we'll see). He says that there are a few ideas from William Isaac that, when combined will relieve a great deal of the stress on the market. I can't remember the exact things he stated but it had to do with several different regulations. If any one can get more details that would be great.

Anyways he has a press conference tomorrow at noon that we need to watch and possibly tell our senators to look at also...

Senate and House Switchboard: (202) 224-3121

Sorry but I got to bump this...

This take place today people so be sure to check it out, if it makes sense we need to let our senators know pronto!!!

Senate and House Switchboard: (202) 224-3121

I'm truely surprised no one is interested in this...

Regardless here is the "No Bailouts Bill"

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.

Its available via a link on this site:

8 Democrats back bailout alternative

Lets get some thoughts on this...

If the senate passes the revised bailout bill tonight, is this alternative bill kaput?

reply to post by GirlNextDoor


I would assume so, but I dont know for sure... they might be able to change it once it gets in the house, but like I said i have no idea...

We need to be calling the senate today and try to somehow get this bill to not pass

Senate and House Switchboard: (202) 224-3121