Eliminate the economic stimulus (assuming it's the same as the first one) and I like it.

"Eliminate the economic stimulus (assuming it's the same as the first one) and I like it."

Its not the same as the first.

"The plan would include new spending for infrastructure, an extension of unemployment benefits, energy assistance to lower-income families and aid to states to help pay Medicaid health-care costs for the poor"

If we can give 700 billion to wall street then 50 billion for poor people doesn't seem too unreasonable

Have to agree there with 1oldlady. Sherman used to be my Congressman before we moved to a different part of L.A. - now rep'd by the non-existent Diane Watson. Sherman is a sharp guy and not a grandstander. This bill is a good start to necessary reform.

And there really really are WMD,
I promise with all my heart this time -
cmon be patriotic -
-
suckers

I am very glad to see that supervision is at the top of that list.

Sherman isn't proposing that the government receive an equity interest in the financial firms it would bail out. That's a major omission.

Unless you dilute the shareholders of the firms that need the bailout, you're effectively rewarding them for their mismanagement. If the government is taking the losses, it should get a share of the rebound in the form of equity. Proposals without that, or some equivalent upside participation, are essentially a handout to financial firms that made bad bets. And that would be a bad deal for taxpayers.

As I understand it, Chris Dodd's proposal would include that. Obviously the banks wouldn't want to give up equity if they didn't have to, but that becomes a reasonable barrier to entry for the bailout: if you need government funds, you have to be willing to share some of your potential future profits with the government.

Also, while the clause restricting the bailout to U.S. firms sounds nice and nationalistic, global finance is so interconnected that failure of, say, UBS or Barclay's could have a significant impact on our economy also. Again, making the bailout contingent on equity solves that, as any firm, foreign or domestic, that wants the U.S. to buy its "toxic waste" would need to sell our government some of its equity to participate.

Too complex, too vague, and too much regulation required. In short, doomed to fail. It is absolutely essential, in my opinion, that we redirect the focus of the assistance towards borrowers and away from lenders.

AND...let's keep in mind at all times that the banks whose CMOs and CLOs we're proposing to take off their hands are NOT the mortgage bankers and brokers who made the bad loans to homeowners. What they did was lend too much money to hedge funds who ran off and left them holding the collateral, i.e. the CMOs and CLOs.

Here are some suggestions that a friend sent me yesterday and I have been sending around.
We (taxpayers) definitely need equity until we recoup our investment.

1. Only U.S. domesticated banks are eligble to participate- - no foreign banks or U.S. subsidiaries or affiliates of foreign banks are eligible. No entity that holds MBS for investment purposes only(i.e. hedge funds and mutual funds) are eligible to participate. (The purpose of the Fund is to free up capital to loan to U.S. borrowers- - not to bail out speculative investors.)

2. Any entity availing itself of the Fund can not pay any officer, director or employee more than the annual pay of the highest paid U.S. government civil servant until the Fund recoups 100% of the amounts advanced by the Fund to that entity, together with interest.

3. No officer or director of any entity availing itself of the Fund can sell stock in that entity until the Fund recoups 100% of the amounts advanced to that entity, together with interest.

4. No dividends may be paid by any entity availing itself of the Fund until the Fund recoups 100% of the amounts advanced by the Fund to that entity, together with interest.

5. In the event the Fund does not recoup 100% of the amounts advanced to an entity within a reasonable period (i.e. 3-5 years), the Fund will receive warrants equal to 79.9% of equity securities of such entity.

6. All amounts advanced by the Fund to an entity must be placed in a segregated account and LOANED to customers of that entity at commercially reasonable rates and terms. Such amounts can not be used by the entity for trading or investment purposes (remember were doing this for Mainstreet, not to create the next bubble.)

7. The costs of the Fund(i.e. the temporary federal agency) will be ratably paid for by Fund participants by issuance of warrants in the participating entities or by cash payment.

If an entity is not willing to comply with the above, then they are not eligible to participate.

On point #1: all the asset purchase agreements can easily be under the $1 billion threshold, but still cumulatively, amount to... you name it. It's the simplest exercise in renaming the recipient, i.e. straw men.

Just to start.