the visible hand

it is the theory which decides what can be observed – einstein

No deal on these principles

Posted by ecoshift on September 25, 2008

Here’s the principles negotiators nearly hammered out an agreement on.

I’ve pasted this whole post straight out of the Calculated Risk blog.  I highly recommend regular visits to Calculated Risk for those who want to stay abreast of the nuts and bolts of this crisis.  CR has been way ahead on these issues for several years.  But, he’s done an incredible job of tracking and analyzing for the past several weeks.  If you prefer political theater you can just watch TV.

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Bailout: Agreement on Principles

by CalculatedRisk

Via the WSJ:

Agreement on Principles

1. Taxpayer Protection

a. Requires Treasury Secretary to set standards to prevent excessive or inappropriate executive compensation for participating companies

b. To minimize risk to the American taxpayer, requires that any transaction include equity sharing

c. Requires most profits to be used to reduce the national debt

2. Oversight and Transparency

a. Treasury Secretary is prohibited from acting in an arbitrary or capricious manner or in any way that is inconsistent with existing law

b. Establishes strong oversight board with cease and desist authority

c. Requires program transparency and public accountability through regular, detailed reports to Congress disclosing exercise of the Treasury Secretary’s authority

d. Establishes an independent Inspector General to monitor the use of the Treasury Secretary’s authority

e. Requires GAO audits to ensure proper use of funds, appropriate internal controls, and to prevent waste, fraud, and abuse

3. Homeownership Preservation

a. Maximize and coordinate efforts to modify mortgages for homeowners at risk of foreclosure

b. Requires loan modifications for mortgages owned or controlled by the Federal Government

c. Directs a percentage of future profits to the Affordable Housing Fund and the Capital Magnet Fund to meet America’s housing needs

4. Funding Authority

a. Treasury Secretary’s request for $700 billion is authorized, with $250 billion available immediately and an additional $100 billion released upon his or her certification that funds are needed

b. final $350 billion is subject to a Congressional joint resolution of disapproval

Not much here. We need details on the equity sharing and other provisions.

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