The United States is Now in a Recession

always red · September 29, 2008

I am glad that the House rejected the bailout. Republicans stand firm for Americans. Give thanks to the 228 Congressmen that voted against the bill. VOTE REPUBLICAN!

September 29, 2008

I am glad that the House rejected the bailout. Republicans stand firm for Americans. Give thanks to the 228 Congressmen that voted against the bill. VOTE REPUBLICAN!

Your Republicans are tanking the Market.

September 29, 2008

THE DOW JUST FELL 500 POINTS BECAUSE OF YOUR DECISION

September 29, 2008

All three of the major indices hit multi-year lows. At session lows, the Dow, Nasdaq and S&P 500 were down 6.3%, 6.7% and 7.2%, respectively. The major indices currently post massive losses, although they have recovered quite a bit from the knee jerk reaction decline.

September 29, 2008

Congressman Jeb Hensarling (R-TX) Voted No on the Bailout.

always red · September 29, 2008

Congressman Jeb Hensarling (R-TX) Voted No on the Bailout.

You Liberals are a dime a dozen. I believe Rep. Hansarling statement was very clear.

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I believe that this Congress, in a rushed effort to provide stability to a troubled credit market, did not adequately discuss or investigate potential alternatives that would have constituted a work out and not a bail out. Even at this moment, it still remains more important for Congress to do it right than to do it fast. I stand ready, as do many of my colleagues, to stay here for as many days as it takes to do this right.

September 29, 2008

Governments of Belgium, Luxembourg and the Netherlands invest EUR 11.2 billion in Fortis

Concerted action of the three governments and the respective supervisory authorities to support Fortis

• Governments of Belgium, Luxembourg and the Netherlands invest EUR 11.2 billion in the respective Fortis bank institutions in each country

• Fortis will sell its interest in ABN AMRO (RFS Holdings)

• Maurice Lippens resigns from the Fortis Board of Directors

• Due to the change in strategy, the deteriorated business environment and the decision to further de-risk the balance sheet, total value adjustments are expected of around EUR 5 billion after tax in the third quarter

• Above measures lead to an estimated Fortis core equity of around EUR 30 billion. This

results in a EUR 9.5 billion excess core equity for Fortis and a Bank core equity ratio

of above 9% (Basel I) at end of the third quarter 2008. This translates into a total regulatory capital ratio for Fortis Bank of 13%

• The announced sale of the participation in RFS Holdings will trigger an impairment, potentially negatively impacting core equity

Fortis and the Governments of Belgium, the Netherlands and Luxembourg announce that they have entered into an agreement, whereby the Government of Belgium has agreed to invest EUR 4.7 billion in Fortis Bank (Belgium), the Government of the Netherlands has agreed to invest

EUR 4.0 billion in Fortis Bank Nederland (Holding) N.V., and the Government of Luxembourg will invest EUR 2.5 billion in Fortis Banque Luxembourg SA.

’The actions taken by the Belgian, Luxembourg and Dutch governments are a sign of confidence in Fortis and of comfort to customers and all other stakeholders alike,’ reacts Fortis CEO elect Filip Dierckx. ‘These actions ensure the financial strength and stability of our company

going forward.’

Divestment of ABN AMRO activities

The sale of the stake in RFS Holdings will represent the acquired activities of ABN AMRO, excluding Asset Management (already transferred in the 2nd quarter of 2008).

This sale, at a price below the acquisition price of EUR 24 billion will lead to an impairment. This impairment will not impact total regulatory capital. However, a sales price below EUR 12 billion would, for that difference, negatively impact core equity.

Expected value adjustments in the third quarter

Due to the change in strategy, the deteriorated business environment and the decision to further de-risk the balance sheet, total value adjustments are expected of around EUR 5 billion after tax in the third quarter, related to, among others, the deferred tax assets, goodwill on the separately

managed asset managers and the structured credit portfolio.

Within the CDO origination portfolio, the high grade assets are anticipated to be written down to 25% and the mezzanine and warehouse positions to 10%. On average 78% of the total CDO origination portfolio is written down. The remaining net exposure on the CDO origination portfolio is expected to amount to EUR 1.1 billion, subject to approval of the external auditors.

In addition to the impairments on the CDO origination portfolio, further impairments are expected to be taken on the remainder of the structured credit portfolio.

In addition, Fortis will impair EUR 1.2 billion of US deferred tax assets. Fortis Capital position after the announced measures All the measures announced will lead to a core equity for Fortis of around EUR 30 billion, EUR 9.5 billion above target. Fortis Bank Core Tier 1 ratio is estimated at above 9% (Basel I), well in excess of regulatory minimum. The total regulatory capital ratio of Fortis Bank under Basel II is estimated to be around 13%.

Governance changes

Maurice Lippens decided to step down from the Fortis Board of Directors. The new Chairman will be recruited from outside the company in consultation with the Belgian government. In addition, the governments of Belgium, the Netherlands and Luxembourg will receive significant

board representation in the respective Fortis banks

Structure of Capital injection:

The terms of the investment by the respective governments are as follows:

• the Government of Belgium has agreed to invest EUR 4.7 billion in Fortis Bank NV/SA (Belgium) in exchange for a 49% share in the common equity of this entity

• The Government of the Netherlands invests EUR 4.0 billion in Fortis Bank Nederland (Holding) N.V. in exchange for a 49% ownership in this entity

• The Government of Luxembourg invests EUR 2.5 billion in Fortis Banque Luxembourg SA

in the form of a mandatory convertible loan. Next to other rights, Luxembourg will be entitled, upon conversion, to 49% of Fortis Banque Luxembourg.

Fortis Bank Nederland (Holding) N.V. and Fortis Banque Luxembourg SA are subsidiaries of Fortis Bank NV/SA.

The capital investment by the Dutch government will be made against the issue by FBN(H) to DNB of a new category of shares to be created through an amendment of the articles of association to such effect. This new category will not be entitled to receive the proceeds of any

sale of the stake held by FBN(H) in RFS Holdings B.V., either by way of dividend distribution

or otherwise. Where necessary, regulatory and shareholder approval will be requested.

Luke_Wilbur · September 29, 2008

Here are the NEA (N) Roll Call Votes

Alabama

Republican - Aderholt, N

Arizona

Democrat - Giffords, N; Grijalva, N; Mitchell, N; Pastor, N.

Republicans - Flake, N; Franks, N; Renzi, N; Shadegg, N.

California

Democrat - Baca, N; Becerra, N; ; Filner, N; ; Lee, N; Lofgren; Napolitano, N; Roybal-Allard, N; Sanchez, Linda T., N; Sanchez, Loretta, N; Schiff, N; Sherman, N; Solis, N; Speier, Y; Stark, N; Tauscher, Y; Thompson, N; Watson, N; Woolsey, N.

Republican - Bilbray, N; Doolittle, N; Gallegly, N; Hunter, N; Issa, N; McCarthy, N; Nunes, N; Rohrabacher, N; Royce, N.

Colorado

Democrat - Salazar, N; Udall, N.

Republican - Lamborn, N; Musgrave, N.

Connecticut

Democrat - Courtney, N

Florida

Republican - Bilirakis, N; Brown-Waite, Ginny, N; Buchanan, N; Diaz-Balart, L., N; Diaz-Balart, M., N; Feeney, N; Keller, N; Mack, N; Mica, N; Miller, N; Ros-Lehtinen, N; Stearns, N; Young, N.

Georgia

Democrat - Barrow, N; Johnson, N; Lewis, N; Scott, N.

Republican - Broun, N; Deal, N; Gingrey, N; Kingston, N; Linder, N; Price, N; Westmoreland, N.

Hawaii

Democrat - Abercrombie, N; Hirono, N.

Idaho

Republican - Sali, N.

Illinois

Democrat - Costello, N; Jackson, N; Lipinski, N; Rush, N.

Republican - Biggert, N; Johnson, N; Manzullo, N; Roskam, N; Shimkus, N.

Indiana

Democrat - Carson, N; Hill, N; Visclosky, N.

Republican - Burton, N; Buyer, N; Pence, N.

Iowa

Democrat - Braley, N.

Republicans - King, N; Latham, N.

Kansas

Democrat - Boyda, N.

Republican - Moran, N; Tiahrt, N.

Kentucky

Democrat - Chandler, N; Yarmuth, N.

Republicans - Davis, N; Whitfield, N.

Louisana

Democrat - Cazayoux, N; Jefferson, N.

Republicans - Alexander, N; Boustany, N; Scalise, N.

Maine

Democrat - Michaud, N.

Maryland

Democrats - Cummings, N; Edwards, N.

Republicans - Bartlett, N.

Massachusetts

Democrats — Delahunt, N; Lynch, N; Tierney, N.

Michigan

Democrat - Conyers, N; Kilpatrick, N; Stupak, N.

Republican - Hoekstra, N; Knollenberg, N; McCotter, N; Miller, N; Rogers, N; Walberg, N.

Minnesota

Democrat - Peterson, N; Walz, N.

Republicans — Bachmann, N; Ramstad, N.

Mississippi

Democrat - Childers, N; Taylor, N; Thompson, N.

Missouri

Democrat - Clay, N; Cleaver, N.

Republicans - Akin, N; Graves, N; Hulshof, N.

Montana

Republican - Rehberg, N.

Nebraska

Republican - Fortenberry, N; Smith, N; Terry, N.

Nevada

Democrat - Berkley, N.

Republicans - Heller, N.

New Hampshire

Democrats - Hodes, N; Shea-Porter, N.

New Jersey

Democrat - Pascrell, N; Payne, N; Rothman, N.

Republican - Frelinghuysen, N; Garrett, N; LoBiondo, N; Smith, N.

New Mexico

Democrat - Udall, N.

Republican - Pearce, N.

New York

Democrat - Gillibrand, N; Hinchey, N; Serrano, N.

Republican - Kuhl, N.

North Carolina

Democrat - Butterfield, N; McIntyre, N; Shuler, N.

Republican - Coble, N; Foxx, N; Hayes, N; Jones, N; McHenry, N; Myrick, N.

Ohio

Democrat - Kaptur, N; Kucinich, N; Sutton, N.

Republican Chabot, N; Jordan, N; LaTourette, N; Latta, N; Schmidt, N; Tiberi, N; Turner, N.

Oklahoma

Republican - Fallin, N; Lucas, N; Sullivan, N.

Oregon

Democrat - Blumenauer, N; DeFazio, N; Wu, N.

Pennsylvania

Democrat - Altmire, N; Carney, N; Holden, N.

Republican - Dent, N; English, N; Gerlach, N; Murphy, Tim, N; Pitts, N; Platts, N; Shuster, N.

South Carolina

Republican - Barrett, N.

South Dakota

Democrat - Herseth Sandlin, N.

Tennessee

Democrat - Lincoln, N.

Republican - Blackburn, N; Davis, David, N; Duncan, N; Wamp, N.

Texas

Democrats - Cuellar, N; Doggett, N; Green, Al, N; Green, Gene, N; Jackson-Lee, N; Lampson, N; Ortiz, N; Rodriguez, N.

Republican - Barton, N; Burgess, N; Carter, N; Conaway, N; Culberson, N; Gohmert, N; Hall, N; Hensarling, N; Johnson, Sam, N; Marchant, N; McCaul, N; Neugebauer, N; Paul, N; Poe, N; Thornberry, N.

Utah

Democrat - Matheson, N.

Republican - Bishop, N.

Vermont

Democrat - Welch, N.

Virginia

Democrats - Scott, N.

Republicans - Drake, N; Forbes, N; Goode, N; Goodlatte, N; Wittman, N.

Washington

Democrat - Inslee, N.

Republican - Hastings, N; McMorris Rodgers, N; Reichert, N.

West Virginia

Republican - Capito, N.

Wisconsin

Republican - Petri, N; Sensenbrenner, N.

Edited September 30, 2008 by Luke_Wilbur

September 30, 2008

The Board of Bradford & Bingley plc ("Bradford & Bingley", "the Company" or "the Group") note the announcement by H M Treasury that it has today acquired all the shares in Bradford & Bingley, that all share options and other entitlements to shares issued by the Company have been extinguished and that the Group's savings business and branches have been transferred to the Banco Santander group ("Santander"), in each case, by way of a Transfer Order made under the Banking (Special Provisions) Act 2008.

Santander is a group of banking and financial companies that operates through a network of offices and subsidiaries across Spain and other European and Latin American countries (including the United Kingdom). With the transfer of our savings business to Santander, savings customers can be confident that their money is secure in a well funded bank. The rest of the Group's business, including the mortgage operation, has been taken into public ownership by the Government. Mortgage customers should continue to make payments as usual. Both the savings business and mortgage operations will continue to operate as normal through these changes and branches, ATMs and on-line accounts will all be operating as usual.

September 30, 2008

1. Today, the Chancellor of the Exchequer, announced that by order (the Transfer Order) under the Banking (Special Provisions) Act 2008, Bradford & Bingley's UK and Isle of Man retail deposit business along with its branch network has been transferred to Abbey National plc. This transfer follows a competitive sale process for this part of the business, conducted by Morgan Stanley on behalf of HM Treasury. The remainder of Bradford & Bingley's business will be taken into public ownership.

2. This action by the Tripartite Authorities, protects savers' money by transferring their deposits to Abbey. Bradford & Bingley's branches, call centres and internet operations will continue to be open for business as usual to provide continuity of service to customers.

3. Following recent turbulence in global financial markets, Bradford & Bingley has found itself under increasing pressure as investors and lenders lost confidence in its ability to carry on as an independent institution. The FSA determined on Saturday morning that the firm no longer met its threshold conditions for operating as a deposit taker under the Financial Services and Markets Act 2000 and FSA rules.

4. The Government, on the advice of the FSA and the Bank of England, acted immediately to maintain financial stability and protect depositors, while minimising the exposure to taxpayers. It has worked over the weekend to bring about the part public, part private solution which best meets those objectives.

5. For savers and borrowers of Bradford & Bingley it will be business as usual. Customers should continue to use their normal branches to access their accounts. The transfer of the retail deposit book has been backed by cash from HM Treasury and the Financial Services Compensation Scheme. Further details about these arrangements are set out below.

6. Branches will be open this morning as usual, and internet, call centre, and all other transaction services will operate as normal. Although some of those employees are now employed under Abbey, they should all attend their workplace in the normal way. Borrowers should continue to make their payments in the normal way.

7. The remaining assets and liabilities of Bradford & Bingley - principally comprising its mortgage book, personal loan book, headquarters and relevant staff, and treasury assets and its wholesale liabilities - has been taken into public ownership through the transfer to the Treasury of the company's shares. HM Treasury and the Financial Services Compensation Scheme will recover payments in the wind-down of the remainder of Bradford & Bingley. To provide assurance to wholesale depositors and borrowers, and to preserve wider financial market stability in this case and maximise proceeds in the wind-down, the Government has put in place guarantee arrangements for six months to safeguard certain wholesale borrowings and deposits with Bradford & Bingley. It is the Government's current intention to seek state aid approval from the European Commission to extend these guarantee arrangements as part of the restructuring of Bradford & Bingley.

8. The FSCS was triggered following the determination by the FSA that Bradford & Bingley was unable or likely to be unable to satisfy claims against it, prior to the making of the Transfer Order.

9. Under the Transfer Order, the FSCS has paid out approximately £14bn to enable retail deposits held in Bradford & Bingley and covered by the FSCS to be transferred to Abbey. The Treasury has made a payment to Abbey for retail deposit amounts not covered by the FSCS, amounting to approximately £4bn. In return, the FSCS and the Treasury have acquired rights in respects of the proceeds of the wind-down and realisation of the assets of the remaining business of Bradford & Bingley in public ownership.

10. The FSCS has financed its payout through a short-term loan from the Bank of England, which will be replaced with a loan from the Government after a short period of time. The repayment terms of the loan for the first three years provide for repayment of interest at a rate of one-year LIBOR plus 32 basis points for the first 3 years and Libor plus 100 basis points for the following years, plus the repayment of any recoverables accruing to the FSCS from the wind-down of the business against the principal outstanding. The first payment, for interest from the period from now until end-March 2009, will take place at end-September 2009 and subsequent payments will be made annually thereafter. It is currently estimated that the first payment required in September 2009 by the FSCS under the loan will be approximately £450 million. After the first three months, the loan will be refinanced by the Treasury, with repayments of the principal to be made over a period of years in the light of prevailing market conditions.

11. The Chancellor of the Exchequer today confirms that the Government stands behind the FSCS, so it can be relied on to be able to play its role in meeting future claims that arise.

12. In the initial period of public ownership the senior management team of Bradford & Bingley will remain in place to manage the transition. The Chief Executive will continue to be Richard Pym. Over time the Government will look at the management of the residual assets to ensure that this is being done in the most efficient manner.

13. In the Transfer Order, the Government has varied the terms of Bradford & Bingley's dated subordinated debt in order to allow for the wind-down. The Transfer Order also, among other things, extinguishes existing share options and provides for rights and obligations of lenders, bond holders, swap counterparties, suppliers and other counterparties which would otherwise be triggered by the transfer not to be triggered.

14. The Treasury with the other Tripartite Authorities, acting in their respective capacities, sought a range of private sector solutions before taking this action. However, with its financial advisor, HM Treasury concluded that this option best delivered its objectives of maintaining financial stability, protecting consumers and protecting taxpayers.

15. The listing of Bradford & Bingley's shares has been cancelled.

16. The Banking (Special Provisions) Act 2008 also provides for a compensation Order to be made. This order - relating to compensation for shareholders and others whose rights may have been affected by the transfer into public ownership - will be laid in due course.

17. In due course the Government will set out further information on the operational management of the residual part of Bradford & Bingley which has been taken into public ownership. 237104

September 30, 2008

The U.S. Chamber of Commerce, the world’s largest business federation representing more than three million businesses and organizations of every size, sector, and region, urges Congress to immediately pass the bipartisan financial rescue package to stem the financial panic. Congress must not adjourn without taking action to stabilize the financial markets.

Today’s failure to approve legislation addressing the financial crisis has resulted in uncertainty and turmoil that have dramatically affected the markets, and lowered equity prices, eroding individual savings and destroying billions of dollars of household wealth.

Make no mistake: when the aftermath of Congressional inaction becomes clear, Americans will not tolerate those who stood by and let the calamity happen. If, on the other hand, Congress supports a plan to successfully restore the financial system and preserve the flow of credit to the economy, the American people will recognize that act of courage.

September 30, 2008

Speaker Nancy Pelosi spoke on the House floor this afternoon in support the Emergency Economic Stabilization Act of 2008. Below are her remarks, as prepared:

“Madam Speaker, when was the last time someone asked you for $700 billion?

“It is a number that is staggering, but tells us only the costs of the Bush Administration’s failed economic policies—policies built on budgetary recklessness, on an anything goes mentality, with no regulation, no supervision, and no discipline in the system.

“Democrats believe in the free market, which can and does create jobs, wealth, and capital, but left to its own devices it has created chaos.

“That chaos is the dismal picture painted by Treasury Secretary Paulson and Federal Reserve Chairman Bernanke a week and a half ago in the Capitol. As they pointed out, we confront a crisis of historic magnitude that has the ability to do serious injury not simply to our economy, but to the American people: not just to Wall Street, but to everyday Americans on Main Street.

“It is our responsibility today, to help avert that catastrophic outcome.

“Let us be clear: This is a crisis caused on Wall Street. But it is a crisis that reaches to Main Street in every city and town of the United States.

“It is a crisis that freezes credit, causes families to lose their homes, cripples small businesses, and makes it harder to find jobs.

“It is a crisis that never had to happen. It is now the duty of every Member of this body to recognize that the failure to act responsibly, with full protections for the American taxpayer, would compound the damage already done to the financial security of millions of American families.

“Over the past several days, we have worked with our Republican colleagues to fashion an alternative to the original plan of the Bush Administration.

“I must recognize the outstanding leadership provided by Chairman Barney Frank, whose enormous intellectual and strategic abilities have never before been so urgently needed, or so widely admired.

“I also want to recognize Rahm Emanuel, who combined his deep knowledge of financial institutions with his pragmatic policy experience, to resolve key disagreements.

“Secretary Paulson deserves credit for working day and night to help reach an agreement and for his flexibility in negotiating changes to his original proposal.

“Democrats insisted that legislation responding to this crisis must protect the American people and Main Street from the meltdown on Wall Street.

“The American people did not decide to dangerously weaken our regulatory and oversight policies. They did not make unwise and risky financial deals. They did not jeopardize the economic security of the nation. And they must not pay the cost of this emergency recovery and stabilization bill.

“So we insisted that this bill contain several key provisions:

“This legislation must contain independent and ongoing oversight to ensure that the recovery program is managed with full transparency and strict accountability.

“The legislation must do everything possible to allow as many people to stay in their homes rather than face foreclosure.

“The corporate CEOs whose companies will benefit from the public’s participation in this recovery must not benefit by exorbitant salaries and golden parachute retirement bonuses.

“Our message to Wall Street is this: the party is over. The era of golden parachutes for high-flying Wall Street operators is over. No longer will the U.S. taxpayer bailout the recklessness of Wall Street.

“The taxpayers who bear the risk in this recovery must share in the upside as the economy recovers.

“And should this program not pay for itself, the financial institutions that benefited, not the taxpayers, must bear responsibility for making up the difference.

“These were the Democratic demands to safeguard the American taxpayer, to help the economy recover, and to impose tough accountability as a central component of this recovery effort.

“This legislation is not the end of congressional activity on this crisis. Over the course of the next few weeks, we will continue to hold investigative and oversight hearings to find out how the crisis developed, where mistakes were made, and how the recovery must be managed to protect the middle class and the American taxpayer.

“With passage of this legislation today, we can begin the difficult job of turning our economy around, of helping those who depend on a growing economy and stable financial institutions for a secure retirement, for the education of their children, for jobs and small business credit.

“Today we must act for those Americans, for Main Street, and we must act now, with the bipartisan spirit of cooperation which allowed us to fashion this legislation.

“This not enough. We are also working to restore our nation’s economic strength by passing a new economic recovery stimulus package—a robust, job creating bill—that will help Americans struggling with high prices, get our economy back on track, and renew the American Dream.

“Today, we will act to avert this crisis, but informed by our experience of the past eight years with the failed economic leadership that has left us left capable of meeting the challenges of the future.

“We choose a different path. In the new year, with a new Congress and a new president, we will break free with a failed past and take America in a New Direction to a better future.”

September 30, 2008

EMERGENCY ECONOMIC STABILIZATION ACT OF 2008

HOUSE FLOOR PROCEEDINGS

LEGISLATIVE DAY OF SEPTEMBER 29, 2008

110TH CONGRESS - SECOND SESSION

12:01 A.M. -

The House Committee on Rules reported an original measure, H. Rept. 110-903, by Ms. Slaughter.

12:01 A.M. -

Provides for consideration of the Senate amendment to the House amendment to the Senate amendment to H.R. 3997. The resolution makes in order a motion by the Chairman of the Committee on Financial Services to concur in the Senate amendment to the House amendment to the Senate amendment with the text of the House amendment printed in this report.

12:05 A.M. -

DEBATE - The House proceeded with one hour of debate on H. Res. 1517.

H.RES.1517

Title: Providing for consideration of the Senate amendment to the bill (H.R. 3997) to amend the Internal Revenue Code of 1986 to provide earnings assistance and tax relief to members of the uniformed services, volunteer firefighters, and Peace Corps volunteers, and for other purposes.

8:46 A.M. -

On agreeing to the resolution Agreed to by recorded vote: 220 - 198 (Roll no. 671).

9:27 A.M. -

DEBATE - The House proceeded with three hours of debate on the motion to agree to the Senate amendment to the House amendment to the Senate amendment with an amendment to H.R. 3997. The bill was to become H.R. 7710. The bill was latched onto Heroes Earnings Assistance and Relief Tax Act of 2007 that gave assistance to members of the uniformed services, increase penalties for noncompliance with tax requirements, and make technical amendments and corrections.

10:28 A.M. -

The House resumed debate on the motion to agree to the Senate amendment to the House amendment to the Senate amendment with an amendment to H.R. 3997.

1:27 P.M. -

The previous question was ordered pursuant to the rule.

2:07 P.M. -

Motion to reconsider laid on the table Agreed to without objection.

On motion that the House agree to the Senate amendment to the House amendment to the Senate amendment Failed by recorded vote: 205 - 228 (Roll No. 674).

http://clerk.house.gov/evs/2008/roll674.xml

September 30, 2008

Yesterday marked a day that will go down in history, when Congressional Democrats and Republicans alike took on full responsibility to protect the interests of taxpaying Americans, and defeated the deceptive bail out bill, defying the dictates of the Administration, the House Majority Leadership, the House Minority Leadership and the special interests on Wall Street.

Obviously Congress must consider quickly another course. There are immediate issues which demand attention and responsible action by the Congress so that the taxpayers, their assets, and their futures are protected.

We MUST do something to protect millions of Americans whose homes, bank deposits, investments, and pensions are at risk in a financial system that has become seriously corrupted. We are told that we must stabilize markets in order for the people to be protected. I think we need to protect peoples' homes, bank deposits, investments, and pensions, to order to stabilize the market.

We cannot delay taking action. But the action must benefit all Americans, not just a privileged few. Otherwise, more plans will fail, and the financial security of everyone will be at risk.

The $700 billion bailout would have added to our existing unbearable load of national debt, trade deficits, and the cost of paying for the war. It would have been a disaster for the American public and the government for decades and maybe even centuries to come.

To be sure, there are many different reasons why people voted against the bailout. The legislation did not regard in any meaningful way the plight of millions of Americans who are about to lose their homes. It did nothing to strengthen existing regulatory structures or impose new ones at the Securities and Exchange Commission and the Federal Reserve in order to protect investors. There were no direct protections for bank depositors. There was nothing to stop further speculation, which is what brought us into this mess in the first place.

This was a bailout for some firms (and investors) on Wall Street, with the idea that in doing so there would be certain, unspecified, general benefits to the economy.

This is a perfect time to open a broader discussion about our financial system, especially our monetary system. Such a discussion is like searching for a needle in a haystack, and then, upon finding it, discussing its qualities at great length. Let me briefly describe the haystack instead.

Here is a very quick explanation of the $700 billion bailout within the context of the mechanics of our monetary and banking system:

The taxpayers loan money to the banks. But the taxpayers do not have the money. So we have to borrow it from the banks to give it back to the banks. But the banks do not have the money to loan to the government. So they create it into existence (through a mechanism called fractional reserve) and then loan it to us, at interest, so we can then give it back to them.

Confused?

This is the system. This is the standard mechanism used to expand the money supply on a daily basis not a special one designed only for the "$700 billion" transaction. People will explain this to you in many different ways, but this is what it comes down to.

The banks needed Congress' approval. Of course in this topsy turvy world, it is the banks which set the terms of the money they are borrowing from the taxpayers. And what do we get for this transaction? Long term debt enslavement of our country. We get to pay back to the banks trillions of dollars ($700 billion with compounded interest) and the banks give us their bad debt which they cull from everywhere in the world.

Who could turn down a deal like this? I did.

The globalization of the debt puts the United States in the position that in order to repay the money that we borrow from the banks (for the banks) we could be forced to accept International Monetary Fund dictates which involve cutting health, social security benefits and all other social spending in addition to reducing wages and exploiting our natural resources. This inevitably leads to a loss of economic, social and political freedom.

Under the failed $700 billion bailout plan, Wall Street's profits are Wall Street's profits and Wall Street's losses are the taxpayers' losses. Profits are capitalized. Losses are socialized.

We are at a teachable moment on matters of money and finance. In the coming days and weeks, I will share with you thoughts about what can be done to take us not just in a new direction, but in a new direction which is just.

Dennis

www.Kucinich.us

216-252-9000 877-933-6647

October 1, 2008

I am on the case. Now, with the defeat of the bailout scheme, the way is open for my own three-step recovery plan, based on a bankruptcy reorganization of the hopelessly gone post-Bretton Woods speculative system. I shall present my action plan during my October 1, 2008 international webcast."

LaRouche will be delivering an international webcast presentation at 1:00 p.m. EDT, Wednesday, Oct. 1, 2008. The webcast will be broadcasted live over the internet at www.larouchepac.com. Internet participants will be able to submit questions to Mr. LaRouche, during the three-hour event, through the LaRouche PAC website.

October 2, 2008

CongressDaily reports this morning that the Senate will vote tonight on the rescue plan, “using the House-passed mental health parity bill as the vehicle and attaching Senate-passed tax extender legislation and a proposal to increase limits on the FDIC insurance program." The Senate will "call up the House mental health parity bill, then substitute the economic rescue plan as an amendment from Senate Banking Chairman Christopher Dodd." It will be subject to a 60-vote threshold for passage. CongressDaily notes that "one sticking point" in the newly constructed package "is that House Democratic leaders have vehemently opposed the Senate's tax extender legislation, instead pushing their extender legislation in parts that are -- except for an alternative minimum tax patch and disaster aid -- offset." An extension of unemployment insurance "was also being considered to gain more Democratic support."The Politico notes that "in what is shaping up to be yet another historic vote, presidential candidates Barack Obama and John McCain will return to Washington tonight for a late night vote. The decision to hold the vote came after "Minority Leader Mitch McConnell (R-Ky.) spent much of the day pressuring the Senate Democrats to put the bill on the schedule. Late Tuesday, Majority Leader Harry Reid (D-Nev.) relented and agreed to schedule the vote after sundown on Wednesday, when Rosh Hashanah ends. "

October 2, 2008

House Majority Leader Steny H. Hoyer (MD) released the following statement today on the status of the economic recovery package in the House:

“Democrats are continuing to work around the clock in a bipartisan way on legislation to address the economic crisis. The House will be back in session tomorrow for legislative business. Members of the House leadership on both sides of the aisle are talking to our colleagues, and if there is bipartisan, majority support for the Senate package we will likely bring it to the Floor on Friday.”

LAW · October 3, 2008

The price tag, originally about $700 billion, is now believed to be in the vicinity of $1 trillion, after expensive pork goodies were shoved into the bill.

Here are some examples:

$15 million tax break for any Hollywood movie is made in the U.S.A.

$223 million tax break to Alaskan fishermen

$192 million for the rum producers of Puerto Rico and the Virgin Islands

$128 million for NASCAR racing tracks

$33 million for corporations in the American Samoa

$6 million for manufacturers of toy wooden arrows.

October 9, 2008

Last Friday Congress finalized and President Bush signed into law the bipartisan Emergency Economic Stabilization Act. The EESA provides the Treasury, the Federal Reserve and the FDIC with important new authorities to complement existing ones. We will continue to coordinate with other federal regulators to use these tools to implement our strategy to address the four key challenges in our financial markets today - confidence, capital, systemic risk and liquidity. Although we are facing particularly difficult circumstances, I remain confident that we will work through this challenge, as we have always successfully worked through every economic challenge in the history of the United States. We are a strong and wealthy nation, with the resources to address the needs we face. I am confident that, with the right public policy response, time and effort, we will conquer these challenges as well.

U.S. and global financial markets continue to be severely strained. A chain of events caused by the ongoing housing correction has reverberated through U.S. banks and financial institutions, and has seriously impacted the underlying economy, reaching American households and businesses. A root cause of this situation is the housing correction and a lack of confidence in mortgage assets, as well as a lack of confidence in many of the financial institutions that hold these assets. Because of this widespread uncertainty, investors are hesitant to commit capital to financial institutions. Investor confidence is critical to restore liquidity and enhance the stability of our financial system.

This financial market turmoil is now directly affecting more families and businesses. When banks can not finance at reasonable levels, and can not or are not willing to lend, everyone in our economy who depends on credit suffers. The capital markets are the pipes through which money flows to finance student loans, car loans, home loans and small businesses' payroll and inventory. And uncertainty and a lack of confidence have clogged our basic financial plumbing. While our actions have been aimed at restoring financial markets and institutions, our purpose is to prevent financial market difficulties from further impacting businesses and families across the country.

New Authorities Needed to Address Challenges

Over the last six months, the U.S. Government has addressed a number of significant problems on a case by case basis. In my judgment, these actions, a number of which were quite significant, were necessary but not sufficient. By September, uncertainty had led to a credit market freeze and it became clear that we needed to take a systemic approach on a significant scale, to get at the underlying cause of much of this turmoil.

We went to Congress and asked for broad new authorities to address the current troubles affecting our financial markets, including the root cause of the financial system freeze --- the illiquid mortgage assets weighing on bank balance sheets. And Congress met the very difficult challenge of providing these authorities by passing the EESA.

Specifically, the EESA empowers Treasury to use up to $700 billion to inject capital into financial institutions, to purchase or insure mortgage assets, and to purchase any other troubled assets that the Treasury and the Federal Reserve deem necessary to promote financial market stability. The new law also gives the Federal Reserve the authority to pay interest on reserves, and temporarily increases FDIC and NCUA deposit insurance from $100,000 up to $250,000.

Two days ago the members of the President's Working Group on Financial Markets, the PWG, made clear that we will coordinate the use of our existing and new authorities to restore market confidence by strengthening financial institutions, preventing systemic impact from bank failures, increasing liquidity to financial markets and keeping mortgage credit available and affordable.

Strengthening Financial Institutions

The Treasury Department is moving rapidly to implement the EESA to help strengthen financial institutions while also protecting taxpayer interests. As I have said before, the ultimate taxpayer protection will be a stable financial system that supports normal economic activity.

Towards that goal, the EESA adds broad, flexible authorities for Treasury to buy or insure troubled assets, provide guarantees, and inject capital. We will use all of the tools we've been given to maximum effectiveness, including strengthening the capitalization of financial institutions of every size. We will design programs that encourage healthy institutions to participate. Much attention has focused on the use of auctions to purchase troubled assets from financial institutions. We are moving as quickly as possible to organize and implement the most effective process possible. We expect it will be several weeks before our first purchase.

Consistent with EESA, I have appointed an interim Assistant Secretary to manage the program and begin its rapid implementation. I am currently working with the President to identify a leader to submit for confirmation, as called for in the legislation, to manage the program and help ensure its long-term success. I will also consult with congressional leaders and Senator McCain and Senator Obama during this process. It is our intent to have an appointee confirmed by the Senate as soon as possible, and I look forward to working with the Senate when they return in November, to ensure we maintain strong leadership and continuity for this unprecedented effort.

We have also identified and retained other very experienced interim leaders for the office, including an interim Chief Financial Officer. We have published guidelines on our procurement and conflict management processes. We have already sent out several essential Requests for Proposals that require 48 hour turnaround so we can contract with private sector experts --- some even as early as later this week --- who will bring complementary skills and expertise to the Treasury team.

We have several policy teams designing detailed programs to purchase mortgage-backed securities, whole loans, and equity-related instruments. In addition, we have begun work on compliance, executive compensation guidelines, foreclosure mitigation, and oversight. Our teams have already been working with Treasury's Inspector General and are scheduled to meet with the General Accounting Office. Yesterday, we held our first meeting of the program's Oversight Board and we are committed to transparency in all aspects of the program.

We will implement our new authorities with one simple goal – to restore capital flows to the consumers and businesses that form the core of our economy.

Prevent Systemic Impact from Bank Failures

One thing we must recognize – even with the new Treasury authorities, some financial institutions will fail. The EESA doesn't exist to save every financial institution for its own sake.

Therefore, a second prong in our strategy is designed to mitigate financial market disruption when a bank fails. In addition to insuring deposits up to the new, temporary level of $250,000, the FDIC has the ability to use its insurance fund and its substantial lines of credit with the Treasury to address systemic financial risk that may be posed by a bank failure.

It is the policy of our federal government to use all resources at its disposal to make our financial system stronger. In light of current conditions, the FDIC, with the full support of the Fed and the Treasury, will use its authority and resources, as appropriate to mitigate systemic risk, by, as appropriate, protecting depositors, protecting unsecured claims, guaranteeing liabilities and adopting other measures to support the banking system.

Increasing Liquidity to Financial Markets

As we address issues of capital and financial strength in our banks, we must also address the liquidity of our markets. The Federal Reserve has introduced innovative facilities and policies to enhance the liquidity that is vital to market stability, and has frequently done so in coordination with the European Central Bank. Today's announcement of a coordinated rate cut, including Europe, China and other large economies, is a welcome sign that central banks around the world are prepared to take the necessary steps to support the global economy during this difficult time. The EESA granted the Fed permanent authority to pay interest on depository institutions' required and excess reserve balances held at the Federal Reserve. This will allow the Fed to expand its balance sheet to support financial stability while maintaining its monetary policy priorities.

In recent weeks, the commercial paper market has suffered severe stress and illiquidity. Businesses ranging from financial institutions to industrial companies rely on the commercial paper market every day to fund their business activities. In particular, financial institutions sell commercial paper, and use the funds to lend to millions of consumers and businesses across the nation. In the wake of the uncertainty surrounding financial institution balance sheets, many investors are reluctant to buy commercial paper from financial institutions – in essence, unwilling to hold this unsecured debt for any significant length of time, even when the particular institution is healthy, because of the fear of not having access to liquid markets.

Yesterday, the Federal Reserve announced a new facility to provide a liquidity backstop to U.S. issuers of commercial paper. Through a special purpose vehicle the Fed will purchase three-month unsecured and asset-backed commercial paper directly from eligible issuers. I expect this initiative to significantly improve the availability of funding for financial institutions and corporations that depend on the commercial paper market. Until those that depend on commercial paper can issue it again in significant maturities, funding pressures will continue to ripple through our economy, dramatically shrinking the availability of credit to support families and businesses.

Mortgage Credit Availability and Affordability

As I have long said, the housing correction is the root cause of the current financial market turmoil. We must continue to keep mortgage credit available and support the housing market, so that we can more quickly turn the corner on the housing correction.

To provide critical additional funding to our mortgage markets, FHFA has directed Fannie Mae and Freddie Mac to increase their purchases of agency mortgage-backed securities (MBS). Supporting the availability of mortgage finance is the mission of the GSEs. There is headroom of over $150 billion between the current GSE portfolios and their regulatory limit. FHFA will supervise the growth in these portfolios, under its expanded authorities to monitor GSE risk-management. We also expect Fannie and Freddie to increase direct support to the mortgage market through their ongoing securitization activities.

To further support the availability of mortgage credit, Treasury also has established a program to purchase agency MBS directly. The program began in September. This will complement the capital provided by the GSEs and help facilitate mortgage availability and affordability.

Stabilizing Fannie and Freddie to support mortgage availability has been constructive. As the rest of our markets experienced increased turmoil the interest rate on a 30-year fixed rate mortgage has come down from its peak of 6.6 percent earlier this year to as low as 5.9 percent this week – a decrease that helps American households reduce monthly mortgage payments and increases the potential for more homeowners to refinance mortgages at lower rates. As Treasury and the GSEs increase their purchases, mortgage affordability should improve for Americans. If we were not actively engaged at the GSEs, we would have expected that rate to increase and further slow the progress of the housing correction.

International Coordination

We see evidence every day that world economies and financial markets are more connected and interdependent than at any time in history. Economic momentum has slowed substantially across the industrialized countries as a consequence of the ongoing financial turmoil, the acute stresses facing our financial institutions, continuing housing markets adjustments in the United States and other countries, and volatile – albeit moderating – commodity prices. Emerging markets are also beginning to show signs of slowing. We see evidence that the freezing of credit markets is having a tangible impact on the everyday lives of citizens all around the world.

Addressing these challenges requires the dramatic steps we are taking here in the United States and it requires strong international partnerships. Governments have and must continue to take individual and collective actions to provide much-needed liquidity, strengthen financial institutions through the provision of capital and the disposition of troubled assets, prevent markets abuse, and protect the savings of our citizens.

We must also take care to ensure that our actions are closely coordinated and communicated so that the action of one country does not come at the expense of others or the stability of the system as a whole.

Over the past twelve months President Bush and I have been in regular contact with our international counterparts, and we have collaborated in a variety of ways. This weekend I will be meeting with my G-7 colleagues to discuss the steps that each of us are taking to confront this crisis and ways to further enhance our collective efforts. In addition, in consultation with Brazil, the G-20 President, I am calling for a special meeting of the G20 that will include senior finance officials, central bankers, and regulators from key emerging economies to discuss how we might coordinate to lessen the effects of global market turmoil and the economic slowdown on all of our countries.

Although the tasks are not easy, I am regularly heartened as I work with my international colleagues who are also committed to securing stability and growth in their domestic economies, and to promoting the orderly functioning of the international financial system.

The Road Ahead

While most Americans understand that economic cycles occur, we are experiencing some extraordinary and difficult challenges at home and abroad – challenges that make it clear Congress was correct to take swift and bold action, and that we have no time to waste implementing the new law. We also know that getting it right is as important as getting it done quickly. We can and will do both. The Presidents Working Group on Financial Markets and all financial regulators are working together to achieve our necessary goal of restoring stability and orderliness to our financial markets. Every effort will require careful analysis, deliberation and transparency, and some measure of patience from the American people as we create the most effective process possible.

We have already taken a number of extraordinary bold actions on the liquidity front that I am convinced have been exactly the right policy steps, including the emergency action to provide a guarantee to our money market funds, actions to stabilize the GSEs and drive down mortgage rates, and the Fed's new program to provide 90-day liquidity to commercial paper issuers.

It is the policy of the federal government to use all resources at its disposal to make our financial system stronger, to safeguard depositors and savers, to help ensure an adequate flow of credit, and to minimize systemic risk. The Congress has recently provided the Treasury with broad powers to acquire financial assets, to make capital available, and to strengthen the balance sheets of individual institutions. The Federal Reserve has also been given new authority to ensure that the system has sufficient liquidity. The FDIC has the authority and the access to resources necessary to protect the banking system. The Treasury, the Federal Reserve and the FDIC will use all their authorities to promote the process of repair and recovery and to contain risks to the financial system that might arise from problems at individual institutions.

But patience is also needed because the turmoil will not end quickly and significant challenges remain ahead. Neither passage of this new law nor the implementation of these initiatives will bring an immediate end to current difficulties. It will take time and bipartisan leadership, cooperation and collaboration, as well as well-conceived and executed policies to overcome the challenges our nation is facing. And we will overcome them. Despite our problems, the U.S. economy is the largest and wealthiest in the world. We will, as we have in the past, emerge stronger and better able to provide new opportunities for our workers and increased prosperity for our families. Thank you.

October 10, 2008

The main reason why the former communist system in Europe could exist while it existed: because the communist regimes and their banks were continuously rescued by a long series of “bailout bills”. They survived because they were kept alive by the global financial-political oligarchy; by the very same oligarchy that is at present regulating the global economy and which is ultimately responsible for the current crisis.

Ironically, the very same oligarchy that has been driving the world-economy toward a final collapse is at present blackmailing and threatening the world-economy with a final collapse, if it is not allowed to continue its course to drive world-economy into collapse.

The so called “bailout plan” of $810 billion paid by the US taxpayers - and a planned $400 billion to be extorted from the EU countries - is a political-economical act of redistributing a community’s wealth by political force, which has been the ultimate feature of communism: the entire communist era in Europe was characterized by a long series of “bailout” acts. Banks and companies existed in the ex-communist countries as well: they were regulated and financed by the communist governments, rather than by the mechanisms of free markets. If they were in trouble, (and, in lack of a free market environment, trouble was their “middle name”), their governments rescued them by absorbing astronomical amounts of international loans from the global financial elites.

In effect, the societies both under the imperialist West and the communist East had to and still have to pay dearly in order to keep both systems running. The only difference between the past “bailouts” to rescue communism and the current ones to rescue imperialism is that the countries thrown under communist oppression after WW2 were a sort of “traffic area” for redistributing the wealth of the global production sphere into the banking sector, whereas the main source of wealth-redistribution was and has been the highly developed countries (the US and West Europe). The ex-communist countries, having been deprived of their economy as such, were not in the position to be plundered; nevertheless they were an excellent means to carry out a long process of wealth-redistribution via giant loan-transactions directed to these countries.

As a side-effect of these transactions, the ex-communist leaders and their domestic and international lobbies have accumulated extremely high private funds while helping the communist system survive. While the ex-communist leaders accumulated irrecoverable amounts of national debts and caused a fatal impoverishment and colony status for the ex-communist countries, they became tycoons in the past and thus became the most influential figures of the present. The political-economical leaders of the communist past have ‘miraculously’ converted themselves into the imperialist leaders of the present, and enjoy the full support of the EU’s imperialist oligarchy in their efforts to keep the ex-communist countries under a profound political-economical oppression, and in a deeper crisis than ever in world history.

At present the imperialist system reveals more and more features of communism, thus revealing more and more of the truth of their common roots:

Both systems are controlled by a small coercive financial-political oligarchy, both have been suffocating under controlling monopolies and financial speculations, certain individuals behind both have been thriving on the centrally regulated banking sector at the expense of generating astronomical national debts and at the expense of impoverishment of the citizenry. The result of both is the colonization of the target countries by driving their citizens into slavery via driving them into national and private bankruptcy, and thus surrendering their financial control to the global financial oligarchy.

The parallel between the present and the past bailout strategy is apparent from the following:

In the past the taxpayers’ of the highly developed countries had to pay the bills to "bail out" the communist regimes so that the global oligarchy could gain financial control over them by pushing them into deeper and deeper national debts. The present “bailout bills” signify a new twist in the strategy. Now the same method is directly applied against the source countries, where the taxpayers are now forced to pay the bill that will colonize them by pushing them deeper and deeper private and national debts.

The only difference between the past and the present bailouts: whereas the current trillion- dollar “bailout bill” is said to be the “price” of many generations in the West living above the standard of what they have produced (on credit), the communist “bailout bills” were to be paid by the artificially impoverished generations in the East, who were and still are forced to live at a below-human standard under the ongoing communist-imperialist oppression. (These countries have been the first victims of the very same process that is now threatening the world on global level.)

This is the brief history of how the ex-communist countries have become bankrupt, impoverished and helpless colonies of the very same oligarchy that is now - with a global “bailout plan” to redistribute an amount above a trillion dollars - is up to colonizing and impoverishing the world. If this process would stay on its course, it will be easy to predict the future of the West; it will be enough just to look at the present of the ex-communist East.

October 10, 2008

Press Briefing by Dana Perino

James S. Brady Press Briefing Room

MS. PERINO: Okay, a couple of things for you. On the economy, in addition to the regular G7 meetings this weekend, Secretary Paulson also announced yesterday that the G20 finance ministers and central bank governors will meet this weekend. The financial crisis we're dealing with is global, affecting major economies, emerging market economies and developing economies. And so this larger meeting of the G20 will be important in making sure that a broader group of nations are coordinated in addressing challenges to the global financial system.

Q Here in Washington?

MS. PERINO: That will be at the -- I was going to say State Department -- the Treasury Department just across the street.

And also, on Saturday morning -- this is a schedule update for you -- President Bush will welcome the G7 finance ministers to the White House. The President will have the opportunity to hear directly from the finance ministers about how the financial crisis is affecting their respective economies and the steps they are taking to deal with these challenges, both individually and collectively.

The President will emphasize the importance of nations working in a coordinated way to address the crisis, while respecting the different conditions in each economy. The meeting will also include the managing director of the IMF and the president of the World Bank. And we'll have more details for you as we get closer. But that has just been decided.

Q Thanks. Does the idea of the federal government taking part ownership in a number of U.S. banks fit with the President's philosophy of free enterprise?

MS. PERINO: As the President has said, the radical and bold aggressive steps that we are taking on the economy are not ones that were part of his natural instincts. But when presented with the evidence that the financial crisis about to hit the United States would affect every single America up and down the economic food chain, this President decided that it was important that the government take robust action. That's why we worked with Congress to establish the rescue package.

Part of that package includes a broad range of authorities for the Treasury Secretary. What you're referring to, I believe, is capital injections that would actually be investing in banks but not taking them over.

Q Not taking them over, but doesn't this idea envision that the government would have part ownership in a number of banks?

MS. PERINO: It would include an equity stake, yes.

Q And how far along is that idea?

MS. PERINO: I would refer you to the Treasury Department for that, but it is a part of the range of authorities that they were given, and this is a dynamic situation. We still have a volatile stock market, and Secretary Paulson is looking at all the different tools to figure out which one should be used at what time and how robustly, and how much money to put into each. He said it's going to take a little bit of time, though, as they implement these -- the rules and regulations that Neel Kashkari is now involved in. So let me refer you over there on specifics for that.

Q But that's an idea that the President would be okay with?

MS. PERINO: It was a part of the rescue package that the President supported, and it gives the Treasury Secretary a range of possibilities, and investing in banks directly was one of those authorities. And Secretary Paulson can use that authority as he sees fit.

Q But given the fact that the markets have not reacted positively so far, or at least not very, wouldn't the President like to see that kind of authority used sooner than later?

MS. PERINO: Well, one of the things that the President wants is to make sure that these new authorities are used in the most effective and efficient way possible. They are moving at lightning speed for government-type work in trying to establish how quickly people can get in those positions so that they can work on the reverse auctions that were also a part of the authority. This -- these capital injections are something that Secretary Paulson is actively considering, but I'd have to refer you to him as to when he thinks he'd be able to make the first move.

Q And the President -- back over this ground again -- the President doesn't object to this in spite of his free market stance?

MS. PERINO: As I -- the President's natural instincts when first presented with these issues was not to have government involvement, but when he realized that it wasn't just a few executives on Wall Street who were going to lose their shirts, but it was possibly everyone in America, and now if you look around the world, everybody is suffering -- the President said the government has the tools and the ability to be able to step in and stem this crisis, and there was no way he was going to stand by and let everyone be hurt by the bad decisions of a few.

Q Well, what's the expectation that something will come out of it from this weekend?

MS. PERINO: I would have to refer you to the Treasury Department, who sets the agenda and is going to be hosting the meeting. What we wanted to continue to do is work to stem the current crisis and address the long-term issues moving forward. Figuring out the long-term vision for a regulatory structure is going to be something that's very important, but it's not necessarily something that you can do when you're in the middle of trying to stabilize and strengthen and return confidence to the markets.

So we'll keep you updated on that. And in the meantime, you might try the Treasury Department, who has the agenda for tomorrow.

Q Dana, on Saturday's meeting, will there be any kind of Russian participation, either as observer or --

MS. PERINO: I don't have participants yet -- a list of those. As I said the other day, the G7 finance ministers are usually -- G7 usually meets at the finance level; the G8 on the political level. This will be a finance meeting. However, as I said the other day, the Russian representative will be at least attending and listening to the meetings at the Treasury Department. I don't have a -- I don't have a participation list yet. But I'll hopefully have one in the next few hours.

Q Dana, two non-election questions.

MS. PERINO: Okay, that's progress.

Q Thank you. Agence France-Presse reports that the city of Chicago appears to be nearing completion on a deal to turn its Midway airport over to a private company. And the question: Since bidders in this offer came from France, Germany, Australia, Spain, and Canada, what concerns does the White House have about national security if this selling of our airports to foreign countries continues?

MS. PERINO: Well I -- as you know there's the CFIUS process that's run by the Treasury Department. I don't even know if this is on their radar screen yet or not. So we'll just have to see what they say.

Q Yesterday the President called German Chancellor Angela Merkel discussing the financial crisis. What exactly does Germany plan to do? What does he expect Germany to do?

MS. PERINO: Well, he didn't have any specific direction for Germany. Obviously, Angela Merkel is working very hard to deal with the crisis there and also to coordinate with her allies. Germany will be represented at this G7 meeting, both at the Treasury Department tomorrow and at the White House on Saturday. So I think that it's important -- let's let those meetings take place, and let the policy experts be able to have conversations to figure out how they are going to coordinate efforts and also work individually to make sure that they stem the crisis and return confidence and stability to the markets.

Q Thank you.

October 10, 2008

In light of the McCain campaign’s latest erratic move on the economy, see below for details on Senator McCain’s plan to reward irresponsible mortgage lenders at taxpayer expense. In the course of twelve hours, McCain transformed a “new” mortgage plan which was simply restating a policy the government had already authorized into what is possibly the largest taxpayer funded handout to irresponsible lenders in U.S. history.

In short, this plan guarantees taxpayers lose money, rewards bad behavior in the past and discourages responsible behavior in the future.

Tuesday Night:

McCain announces “plan” which restates current law. On Tuesday night, the McCain Campaign released a plan to “purchase mortgages directly from homeowners and mortgage servicers, and replace them with manageable, fixed-rate mortgages that will keep families in their homes.” As Senator McCain said, “it's my proposal, it's not Sen. Obama's proposal, it's not President Bush's proposal.” But he was wrong: the Treasury Department and Federal Housing Administration already have the authority to purchase, restructure and guarantee mortgages for struggling families. McCain’s plan appeared to simply restate these authorities, which Barack Obama had previously fought for and supported when they were included in legislation.

Importantly, the plan McCain released on Tuesday night required lenders to take a “haircut.” McCain’s plan on Tuesday night explained that in circumstances when loans were purchased and restructured by the government “[l]enders in these cases must recognize the loss that they’ve already suffered.” This approach was not new – it reflected the shared responsibility approach embodied in the Dodd/Frank housing legislation which forced current lenders to sacrifice by backing mortgages for only 90% of current market value. Also, borrowers who benefit from the program share any upside in their house price with the government.

Wednesday Morning:

McCain announces a new plan – financial institutions no longer have to take any losses and the McCain Bailout guarantees that taxpayers lose money, rewarding the most irresponsible lenders. Overnight, the McCain campaign changed their plan and eliminated this reference to shared responsibility for lenders from the plan on their website, deleting from their plan the phrase “Lenders in these cases must recognize the loss that they’ve already suffered.” Top McCain advisor Douglas Holtz-Eakin explained that, rather than asking lenders to take a haircut, the McCain plan called on the government to purchase mortgages at their full face value. This approach would reward irresponsible banks with taxpayers’ money and would give no upside to the government.

Rewarding Irresponsible Banks. If a homeowner has a mortgage of $200,000 on a house now worth $150,000, the McCain plan would pay off the original lender at the full $200,000 price. His plan would not insist on any sharing of sacrifice by the lender. Indeed, if the original lender engaged in fraud to inflate the size of the initial mortgage, they would be explicitly rewarded for it under the new McCain plan since they would be paid back the full, inflated value of the mortgage.

Guaranteeing a Taxpayer Loss. The McCain plan will stick taxpayers with the full loss on houses and put them at risk of losing even more if home values don’t recover. It would do so without asking anything of the lenders themselves and without giving the taxpayers share in any future upside should house prices recover. It is a recipe for the worst kind of bailout abuse.

Inhibiting Private Solutions to the Problem That Do Not Cost Taxpayers a Dime. Today some lenders, voluntarily or as part of settlements, are working on solutions to the mortgage mess that involve the financial institution modifying mortgages to help homeowners stay in their homes – without costing taxpayers a dime. But if the McCain plan were in place, this process would stop because lenders would know they could always sell their mortgages at full face value to taxpayers.

October 15, 2008

Assistant Secretary for Financial Stability Neel Kashkari Remarks before the Institute of International Bankers

I am here today to provide a comprehensive update on the Treasury Department's progress in implementing the Troubled Asset Relief Program (TARP).

As you know, our credit markets are frozen and lending has become extremely impaired. In recent months our government has taken strong and decisive actions, but a more systemic approach was needed. Secretary Paulson and Chairman Bernanke asked Congress for extraordinary authorities to address the extraordinary challenges in our financial markets. Every American depends on the flow of money through our financial system. They depend on it for car loans, home loans, student loans and their individual family needs. Congress recognized the threat frozen credit markets posed to Americans and to our economy as a whole. On Friday October 3, Congress passed and President Bush signed into law the bipartisan Emergency Economic Stabilization Act of 2008.

The law gives the Treasury Secretary broad and flexible authority to purchase and insure mortgage assets, and to purchase any other financial instrument that the Secretary, in consultation with the Federal Reserve Chairman, deems necessary to stabilize our financial markets -- including equity securities. Treasury worked hard with Congress to build in this flexibility because the one constant throughout the credit crisis has been its unpredictability.

The law empowers Treasury to design and deploy numerous tools to attack the root cause of the current turmoil: the capital hole created by illiquid troubled assets. Addressing this problem should enable our banks to begin lending again. Our nation has successfully worked through every economic challenge we have faced and we are confident this new program will help us overcome these challenges as well.

Today, I will brief you about three areas. First, I will discuss Treasury's strategy to develop multiple tools under the Troubled Asset Relief Program. Second, I will give you a detailed update on the many steps we have already taken to begin to implement the program. And finally, I will briefly discuss our next steps.

Strategy

Let me begin with our strategy, which is clear and focused.

Treasury is implementing its new authorities with one simple goal - to restore capital flows to the consumers and businesses that form the core of our economy. Achieving this goal will require multiple tools to help financial institutions remove illiquid assets from their balance sheets, and attract both private and public capital. Our toolkit is being designed to help financial institutions of all sizes so they can grow stronger and provide crucial funding to our economy.

Implementation

Next, let me turn to implementation. Congress passed the new law just 10 days ago, but in that time, we have accomplished a great deal on many fronts. We are moving quickly - but methodically - and I am confident we are building the foundation for a strong, decisive and effective program.

First, Treasury is working very closely with both domestic and international regulators to understand how best to design tools that will be most effective in dealing with the challenges in our financial system. For example, regulators are helping us to identify the quickest and most efficient method to purchase equity in financial institutions so they can resume lending. Throughout this process, we have kept in mind one clear priority: to protect the taxpayers by making the best use of their money.

Second, we are using the full resources of the Treasury Department to ensure this program's success. As soon as the legislation was signed, we immediately created seven policy teams to develop several tools and other important elements that are required under the TARP. In each case, we designated team leaders to drive the work-streams and take responsibility for their success. We've broken the teams down as follows:

1 ) Mortgage-backed securities purchase program: This team is identifying which troubled assets to purchase, from whom to buy them and which purchase mechanism will best meet our policy objectives. Here, we are designing the detailed auction protocols and will work with vendors to implement the program.

2 ) Whole loan purchase program: Regional banks are particularly clogged with whole residential mortgage loans. This team is working with bank regulators to identify which types of loans to purchase first, how to value them, and which purchase mechanism will best meet our policy objectives.

3 ) Insurance program: We are establishing a program to insure troubled assets. We have several innovative ideas on how to structure this program, including how to insure mortgage-backed securities as well as whole loans. At the same time, we recognize that there are likely other good ideas out there that we could benefit from. Accordingly, on Friday we submitted to the Federal Register a public Request for Comment to solicit the best ideas on structuring options. We are requiring responses within fourteen days so we can consider them quickly, and begin designing the program.

4 ) Equity purchase program: We are designing a standardized program to purchase equity in a broad array of financial institutions. As with the other programs, the equity purchase program will be voluntary and designed with attractive terms to encourage participation from healthy institutions. It will also encourage firms to raise new private capital to complement public capital.

5 ) Homeownership preservation: When we purchase mortgages and mortgage-backed securities, we will look for every opportunity possible to help homeowners. This goal is consistent with other programs - such as HOPE NOW - aimed at working with borrowers, counselors and servicers to keep people in their homes. In this case, we are working with the Department of Housing and Urban Development to maximize these opportunities to help as many homeowners as possible, while also protecting taxpayers.

6 ) Executive compensation: The law sets out important requirements regarding executive compensation for firms that participate in the TARP. This team is working hard to define the requirements for financial institutions to participate in three possible scenarios: One, an auction purchase of troubled assets; two, a broad equity or direct purchase program; and three, a case of an intervention to prevent the impending failure of a systemically significant institution.

7 ) Compliance: The law establishes important oversight and compliance structures, including establishing an Oversight Board, on-site participation of the General Accounting Office and the creation of a Special Inspector General, with thorough reporting requirements. We welcome this oversight and have a team focused on making sure we get it right.

Recruitment

Recruiting the right people is essential to the success of this program and we are moving quickly on several fronts.

It will obviously take time to bring on board permanent members of the team that will manage this program over the long term and provide stability during the transition. While the permanent team is being identified for tomorrow, we are tapping the very best, seasoned, financial veterans from across the government to help launch the program today. We have been successful in recruiting outstanding interim leaders for key positions in the Office of Financial Stability. In each case, the interim official is charged with: One, setting up the office; two, hiring permanent staff; three, operationalizing our programs; and, four, identifying their permanent successor.

The team continues to grow daily and the team members are too numerous to name individually. However, I want to highlight a few of our key interim leaders. In the 10 days since the President signed the law, we have already recruited:

1 ) Tom Bloom, CFO of the Office of the Comptroller of the Currency and former CFO of the Commerce Department to serve as the interim Chief Financial Officer. Tom brings 30 years of financial management and reporting experience in both the public and private sectors.

2 ) Jonathan Fiechter, Deputy Director of the IMF Monetary and Capital Markets Department in charge of financial supervision and crisis management, formerly Board member of the Resolution Trust Corporation and the FDIC, to serve as interim Chief Risk Officer. Jonathan has more than 30 years experience that spans Treasury, the OCC, OTS and the World Bank.

3 ) Donna Gambrell, Director of the Community Development Financial Institutions Fund and former Deputy Director of Consumer Protection and Community Affairs of the FDIC to serve as interim Chief of Homeownership Preservation. Donna brings 17 years of experience at the FDIC, preceded by invaluable experience at the Resolution Trust Corporation.

4 ) Don Hammond, Deputy Director of the Division of Federal Reserve Bank Operations and Payment Systems and former Treasury Fiscal Assistant Secretary to serve as interim Chief Compliance Officer. Don brings 23 years of experience at the Treasury in fiscal operations, including developing policy for and overseeing operations for the Federal government's financial infrastructure.

5 ) Reuben Jeffrey, Under Secretary of State for Economic Affairs and former Chairman of the Commodity Futures Trading Commission (CFTC) to serve as interim Chief Investment Officer. His public sector experience includes serving on the President's Working Group on Financial Markets and as a Special Advisor to the President for Lower Manhattan Development. He brings 18 years of private sector experience in financial services.

Our ability to quickly attract outstanding talent illustrates the importance of this program and this is only the beginning. These leaders are actively building out their operations and contributing to all phases of the TARP.

Procurement

Now, let me turn to procurement.

Our approach to procurement is based on the following strategy. First, in order to protect the taxpayers, we will seek the very best in private sector expertise to help execute this program. Second, we believe, to the extent possible, everyone should have a right to compete for these contracts, especially small businesses, veteran-owned businesses, and minority and women-owned businesses. Third, we are taking appropriate steps to mitigate potential conflicts of interest.

To begin, last Monday, we published three procurement documents:

Procurement authorities and procedures.

Conflict of interest mitigation procedures.

Asset manager selection procedures.

We have established a formal procurement process, to ensure that selections are fair and in the best interest of the taxpayers. We have established expert review committees, made up of Treasury employees and outside experts who review submissions and make recommendations regarding the quality of the proposals. The review committees make recommendations for a final decision to a senior career officer in the Treasury.

Taking aggressive steps to manage potential conflicts of interest is essential because firms with the relevant financial expertise may also hold assets that become eligible for sale into the TARP. We have asked firms that wish to compete for contracts to disclose their potential conflicts of interest and recommend specific steps to manage those conflicts. Firms are evaluated in part on the extent of those conflicts and their ability to design processes and procedures to manage them that are satisfactory to Treasury. Treasury then conducts its own independent examination to determine the firms' potential conflicts of interest, and to help ensure that the firms have fully disclosed any potential concerns. Treasury will only hire firms when we are confident in our and their ability to manage any conflicts.

Secretary Paulson and I believe that it is essential that the TARP be structured in a manner that encourages participation of small businesses, veteran-owned businesses, and minority and women-owned businesses. Our initial procurements set high capability standards; for example, securities asset managers had to have at least $100 billion of dollar denominated fixed income assets under management.

This is critical given the magnitude of the program - up to $700 billion. Treasury believes that it would not be fiscally prudent to ask a firm that only had experience managing only a few billion to manage $100 billion. It could put the taxpayers at unnecessary risk.

However - and this is very important - we asked vendors to demonstrate their ability and commitment to working with small, veteran, minority and women-owned businesses as sub-contractors. And we are evaluating their submissions in part on their capability to do this. In addition, we plan to go out with subsequent solicitations with specific opportunities for these businesses.

Last Monday, we put out four notices and requests for proposals, each requiring responses within 48 hours. We solicited proposals for:

1 ) Investment management consultant – This is an expert firm to help us review asset manager proposals. Our request went out to six firms, we received three proposals and selected Ennis Knupp as the winning vendor on Saturday. They began working immediately.

2 ) Master custodian firm – This is the firm which will hold and track the assets we purchase as well as run and report on the auctions we use to buy the assets. Think of this as the prime contractor of the purchase program. We received seventy submissions of which 10 met the eligibility requirements and minimum qualifications. We invited three firms in for presentations and, in the next twenty-four hours, we will announce the winner, which will begin working immediately.

3 ) Securities asset manager – This is a firm which will hold, manage and ultimately sell the mortgage-backed securities we purchase. We received over 100 submissions and are working with the investment management consultant to review them. We expect to make a selection in the next few days.

4 ) Whole loan asset manager – This is a firm which holds, manages and ultimately sells the whole mortgage loans we purchase, including working with servicers. We received over 100 submissions and are working with the consultant to review them. We expect to make a selection in the next few days.

In addition, on Thursday we reached out to six specialist law firms to advise us on the equity program structuring. We received two proposals, and selected Simpson Thatcher on Friday. They began working immediately.

These solicitations were just the first wave as Treasury establishes the foundations of the program. In the coming weeks we expect to select two accounting firms to provide auditing servicers and to help us design and implement our internal control systems.

Operations

On the operational front, Treasury's management and operations team is working around the clock to establish the institutional and logistical framework. The team is led by Treasury Assistant Secretary for Management and Chief Financial Officer Pete McCarthy, a seasoned official who served 27 years in the banking industry. Not only is his team integral to the procurement process, but they have identified temporary space in the Treasury building to house the TARP staff. As the TARP staff grows and the program is established, we'll move to more permanent space.

Compliance

Let me now turn to compliance. Consistent with Congress' intent, we are committed to transparency and oversight in all aspects of the program and have already taken several important steps in this area:

First, we moved quickly to establish the Financial Stability Oversight Board, which, by law, includes:

The Secretary of the Treasury

The Chairman of the Federal Reserve Board

The Chairman of the Securities and Exchange Commission

The Secretary of Housing and Urban Development, and

The Director of the Federal Housing Finance Agency

The law required the first board meeting to take place within fourteen days. Again, we moved very quickly, and the new oversight board met within four days. At that initial meeting, the members of the board selected Chairman Bernanke to be Chairman of the Oversight Board. In addition, the Board adopted its bylaws and reviewed the work-streams I described earlier.

The new law also requires appointment of a Senate-confirmed Special Inspector General to oversee the program. We are working with the White House to identify candidates for possible nomination and confirmation in November. In the interim, we are coordinating closely with Treasury's Inspector General and we had our first meeting on Monday, October 6, where we walked him through our work-streams, procurement and operational plans.

Additionally, the law calls for the General Accounting Office to establish a physical presence at Treasury to monitor the program. Secretary Paulson had his first call with the Acting Comptroller General, Gene Dodaro, on Monday, October 6. The Acting Comptroller General and his team met with our team on Thursday, October 9. And yesterday, the GAO staff came to Treasury to review the contracts we signed over the weekend.

Treasury is committed to an open and transparent program with appropriate oversight. We look forward to continuing to work with the Oversight Board, the Inspector General, the Comptroller General, and the Congress as we set up and execute this program. Transparency will not only give the American people comfort in our execution, it will give the markets confidence in what form our action will take.

Next steps

As you can see, we have accomplished a great deal in just 10 days. But our work is only beginning. A program as large and complex as this would normally take months - or even years - to establish. We don't have months or years. Hence, we are moving to implement the TARP as quickly as possible while working to ensure high quality execution.

Our goal is to use the multiple tools enabled by the TARP to attack the capital and troubled asset problem from multiple directions, so American families and businesses can get the credit they need. We will complete the design of these tools and deploy them as soon as they are ready. This is Secretary Paulson's highest priority and we are working around the clock to make it happen. We are committed to helping homeowners and to using the taxpayers' money efficiently.

We will provide you with regular updates on our progress. Thank You

October 15, 2008

Prior to joining the Treasury Department, Kashkari was a Vice President at Goldman, Sachs & Co. in San Francisco, where he led Goldman's IT Security Investment Banking practice, advising public and private companies on mergers and acquisitions and financial transactions. Prior to his career in finance, Kashkari was a R&D Principal Investigator at TRW in Redondo Beach, California where he developed technology for NASA space science missions such as the James Webb Space Telescope.

October 15, 2008

President Bush Discusses Economy

Rose Garden

THE PRESIDENT: Good morning. I just completed a meeting with my working group on financial markets. We discussed the unprecedented and aggressive steps the federal government is taking to address the financial crisis. Over the past few weeks, my administration has worked with both parties in Congress to pass a financial rescue plan. Federal agencies have moved decisively to shore up struggling institutions and stabilize our markets. And the United States has worked with partners around the world to coordinate our actions to get our economies back on track.

This weekend, I met with finance ministers from the G7 and the G20 -- organizations representing some of the world's largest and fastest-growing economies. We agreed on a coordinated plan for action to provide new liquidity, strengthen financial institutions, protect our citizens' savings, and ensure fairness and integrity in the markets. Yesterday, leaders in Europe moved forward with this plan. They announced significant steps to inject capital into their financial systems by purchasing equity in major banks. And they announced a new effort to jumpstart lending by providing temporary government guarantees for bank loans. These are wise and timely actions, and they have the full support of the United States.

Today, I am announcing new measures America is taking to implement the G7 action plan and strengthen banks across our country.

First, the federal government will use a portion of the $700 billion financial rescue plan to inject capital into banks by purchasing equity shares. This new capital will help healthy banks continue making loans to businesses and consumers. And this new capital will help struggling banks fill the hole created by losses during the financial crisis, so they can resume lending and help spur job creation and economic growth. This is an essential short-term measure to ensure the viability of America's banking system. And the program is carefully designed to encourage banks to buy these shares back from the government when the markets stabilize and they can raise capital from private investors.

Second, and effective immediately, the FDIC will temporarily guarantee most new debt issued by insured banks. This will address one of the central problems plaguing our financial system -- banks have been unable to borrow money, and that has restricted their ability to lend to consumers and businesses. When money flows more freely between banks, it will make it easier for Americans to borrow for cars, and homes, and for small businesses to expand.

Third, the FDIC will immediately and temporarily expand government insurance to cover all non-interest bearing transaction accounts. These accounts are used primarily by small businesses to cover day-to-day operations. By insuring every dollar in these accounts, we will give small business owners peace of mind and bring stability to the -- and bring greater stability to the banking system.

Fourth, the Federal Reserve will soon finalize work on a new program to serve as a buyer of last resort for commercial paper. This is a key source of short-term financing for American businesses and financial institutions. And by unfreezing the market for commercial paper, the Federal Reserve will help American businesses meet payroll, and purchase inventory, and invest to create jobs.

In a few moments, Secretary Paulson and other members of my Working Group on Financial Markets will explain these steps in greater detail. They will make clear that each of these new programs contains safeguards to protect the taxpayers. They will make clear that the government's role will be limited and temporary. And they will make clear that these measures are not intended to take over the free market, but to preserve it.

The measures I have announced today are the latest steps in this systematic approach to address the crisis. I know Americans are deeply concerned about the stress in our financial markets, and the impact it is having on their retirement accounts, and 401(k)s, and college savings, and other investments. I recognize that the action leaders are taking here in Washington and in European capitals can seem distant from those concerns. But these efforts are designed to directly benefit the American people by stabilizing our overall financial system and helping our economy recover.

It will take time for our efforts to have their full impact, but the American people can have confidence about our long-term economic future. We have a strategy that is broad, that is flexible, and that is aimed at the root cause of our problem. Nations around the world are working together to overcome this challenge. And with confidence and determination, we will return our economies to the path of growth and prosperity.

Thank you.

END 8:08 A.M. EDT

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