Reactions to story from The New York Times
U.S. Investing $250 Billion in Banks
http://www.nytimes.com/ 2008/ 10/ 14/ business/ economy/ 14treasury.html?partner=rssny...
Treasury Secretary Henry M. Paulson Jr. told nine leading bankers they would have to accept government investment for the good of the U.S. financial system.
Reactions / posts that link to this article
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A $250 Billion Dollar Investment
http://economistsview.typepad.com/economistsview/2008/10/a-2...Some details on the bank bailout plan: U.S. Investing $250 Billion in Banks, NY Times: The Treasury Department, in its boldest move yet, is expected to announce a plan on Tuesday to invest up to $250 billion in banks... The United States is also expected to guarantee new debt issued by banks for three years — a measure meant to encourage the banks to resume lending to one another and to customers... And the Federal Deposit Insurance Corporation will offer an unlimited guarantee on bank deposits in accounts that do not bear interest — typically those of businesses... Treasury Secretary Henry M. Paulson Jr. outlined the plan to nine of the nation’s leading bankers at an afternoon meeting, officials said. He essentially told the participants that they would have to accept government investment for the good of the American financial system. Of the $250 billion, which will come from the $700 billion bailout approved by Congress, half is to be injected into nine big banks, including Citigroup, Bank of America, Wells Fargo, Goldman Sachs and JPMorgan Chase... The other half is to go to smaller banks and thrifts. The investments will be structured so that the government can benefit from a rebound in the banks’ fortunes. ... Bringing together all nine executives and directing them to participate was a way to avoid stigmatizing any one bank that chose to accept the government investment. The preferred stock that each bank will have to issue will pay special dividends, at a 5 percent interest rate that will be increased to 9 percent after five years. The government will also receive warrants worth 15 percent of the face value of the preferred stock. For instance, if the government makes a $10 billion investment, then the government will receive $1.5 billion in warrants. If the stock goes up, taxpayers will share the benefits. If the stock goes down, the warrants will be worthless. The next immediate step is to begin purchasing distressed assets: As Treasury embarked on its recapitalization plan, it offered
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Bush, Paulson Set To Unveil Details Of Bank Nationalization Scheme
http://belowthebeltway.com/2008/10/13/bush-paulson-set-to-un...Tomorrow, the Bush Administration will unveil details of it’s plan to turn some of the largest banks in the country into government-owned entities: WASHINGTON — The Treasury Department, in its boldest move yet, is expected to announce a plan Tuesday to invest up to $250 billion in large and small banks, according to officials. The United States is also expected to guarantee new debt issued by banks for a period of three years, officials said. And the Federal Deposit Insurance Corporation will offer an unlimited guarantee on bank deposits in accounts that do not bear interest — typically those of businesses — bringing the United States in line with several European countries, which have adopted such blanket guarantees. Treasury Secretary Henry M. Paulson Jr. outlined the plan on Monday to nine of the nation’s leading bankers at an afternoon meeting, officials said, in which he essentially told the participants that they would have to accept government investment for the good of the American financial system. This capital injection plan will use a huge chunk of the money authorized for Troubled Assets Relief Program. Citigroup and JPMorgan Chase were told they would each get $25 billion; Bank of America and Wells Fargo, $20 billion each (plus an additional $5 billion for their recent acquisitions); Goldman Sachs and Morgan Stanley, $10 billion each, with Bank of New York Mellon and State Street each receiving $2 to 3 billion. Wells Fargo will get $5 billion for its acquisition of Wachovia, and Bank of America the same for amount for its purchase of Merrill Lynch. The goal is to inject massive liquidity into the banking system. The government will purchase perpectual preferred shares in all the largest U.S. banking companies. And thus the free market suffers yet another death. Not with a bang, but with a whimper. The fact that this intellectual fraud is being perpetrated by a Republican Administration is perhaps the final proof that anyone who really beliefs in individual liberty should not look to the GOP
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McCain to Unveil Radical Economic Plan at Debate
http://www.scrappleface.com/?p=3156(2008-10-14) — Sen. John McCain, sagging in the polls due to recent mixed messages that failed to connect with undecided journalists, will allegedly use his final presidential debate with rival Barack Obama to unveil a new, and radical economic plan. Outlines of the proposal leaked to the news media paint a picture of an imaginary economy driven by the so-called ‘profit motive’ and tempered by a ‘risk-reward’ scheme that “automatically benefits the bold-yet-prudent, and punishes the foolish and wasteful,” according to a draft document. Immediately branded by Congressional Democrats and Republicans alike as “impractical and frankly just wacky,” the McCain plan calls for a near-total government withdrawal from the private business sector, “because elected officials and their appointed bureaucrats operate outside of the arena of risk-reward, therefore their intervention can serve only to foul the engine of prosperity — discouraging investment by the wise, while cushioning falls for fools.” Mr. McCain reportedly theorizes that his concept would not only offer the best prospect of long-term growth and innovation, but also would provide the most effective motive for altruism because “the merchant or laborer who does good for others, does well for himself.” “It’s my hunch,” Sen. McCain will reportedly say, “that if we would actually try this economic plan, not only would it offer more freedom for the individual, but Congress could reduce income and corporate tax rates and yet the Treasury would still realize higher, and steadily-growing, revenues.” “As I envision it,” the Arizona Republican will say, “the whole system, anchored in a realistic understanding of human nature, would harness each person’s self-interest to generate results that tend to the common good, producing what some would call unintended benevolence, and conferring what would appear to be accidental dignity, to even the least educated among us who applies himself to industrious work.” Sen. McCain’s plan reserves to government almost nothing
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End of A Banking Era?
http://www.theleftcoaster.com/archives/013350.phpby Steve Soto After initially opposing the idea, the Bush Administration has changed course and now wants to buy into banks and take an equity stake rather than buy Wall Streets toxic assets. In what amounts to a partial and temporary nationalization of
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Bush: Treasury to Invest $250 Billion in Banks
http://gothamist.com/2008/10/14/bush_treasury_to_invest_250_...This morning, President Bush announced that the Treasury Department would take a $250 billion stake in U.S. banks. The money comes from the $700 billion bailout plan, which originally did not include any bank investment. USA Today reports, "The
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Bank Telethon
http://econlog.econlib.org/archives/2008/10/bank_telethon.ht...Imagine an announcer came on TV and said, "Welcome to the 2008 Bank Telethon. You've heard all the horror stories. Now, with the holiday season approaching, I know you'll want to reach deep into your pockets to lend a hand." "I know what
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The Treasury gives banks an offer they can't refuse
http://www.rothcpa.com/archives/004111.phpThis is incredible: WASHINGTON The Treasury Department, in its boldest move yet, is expected to announce a plan on Tuesday to invest up to $250 billion in banks, according to officials. The United States is also expected to guarantee new debt issued by
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Morning Brief: Monster stock rally
http://blog.foreignpolicy.com/node/10028Top Story SAUL LOEB/AFP/Getty Images The Treasury Department plans to invest $250 billion in nine of the largest U.S. banks in its latest bid to stem the financial crisis. "The efforts are designed to directly benefit the American people by
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None dare call it socialism
http://brainsandeggs.blogspot.com/2008/10/none-dare-call-it-...When the federal government uses 250 billion dollars of taxpayer money and buys the stock of the nine largest US banks, that's called 'nationalizing the banking system'. Or in other words, socialism. However our media specifically avoided using those
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Banks Have To Accept Government Investment
http://www.movermike.com/?p=4027The NY Times reports that the $700 Billion TARP has been revised to directly funnel money to nine banks. Treasury Secretary Henry M. Paulson Jr. outlined the plan to nine of the nations leading bankers at an afternoon meeting, officials said. He
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Treasury Expected To Pump $250 Billion Into Banks In Exchange For Stocks [Bailout]
http://consumerist.com/5062970/treasury-expected-to-pump-250...The Treasury Department is expected to announce that it will be pumping $250 billion into banks both large and small tomorrow... and the FDIC is expected to offer an unlimited guarantee on bank deposits in accounts that do not bear interest. The NYT
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Treasury Launches $250 Billion War On Fear [The Panic Of '08]
http://gawker.com/5062955/treasury-launches-250-billion-war-...Treasury Secretary Hank Paulson rounded up all the major banks for a big meeting Monday and all but told them they'll collectively be accepting $250 billion in government capital. The idea, of course, is to get banks lending to one another and to
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The Nationalization
http://www.theconglomerate.org/2008/10/the-nationaliza.htmlWith the big day on Wall Street, it now, surprisingly, looks like there's wind at the sails of the American government response to the crisis, which before today has looked either orthagonal or slow. You can't say that the government hasn't exercised
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An offer they can't refuse... and a parable
http://www.williampolley.com/blog/archives/2008/10/an-offer-...From the NY Times: Treasury Secretary Henry M. Paulson Jr. outlined the plan on Monday to nine of the nation's leading bankers at an afternoon meeting, officials said, in which he essentially told the participants that they would have to accept
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Treasury Outlines Investments in Banks
http://www.cynical-c.com/?p=11964From the NY Times: WASHINGTON The Treasury Department, in its boldest move yet, is expected to announce a plan Tuesday to invest up to $250 billion in large and small banks, according to officials. The United States is also expected to guarantee new
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New York Times: U.S. Investing $250 Billion in Banks
http://www.bespacific.com/mt/archives/019548.htmlNew York Times: U.S. Investing $250 Billion in Banks New York Times: "The Treasury Department, in its boldest move yet, is expected to announce a plan Tuesday to invest up to $250 billion in large and small banks, according to officials. The United
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Campaign Updates and Media Headlines 10/14/08
http://www.correntewire.com/campaign_updates_and_media_headl...Let me make it clear at the outset that I have no intention of following instructions. Nobel Laureate Paul Krugman, thanks to Economists View Ditto. Its the story of my life, and my ongoing commitment to myself and to you, my readers. I absolutely will
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Crisis watch, 14 October
http://ajayshahblog.blogspot.com/2008/10/crisis-watch-14-oct...Call rate on 13th 9.92 S&P 500 returns +11.58% VIX 54.99 Nikkei 225 (6:50 AM IST) +12.32% US Financials index +9.79% ICICI Bank ADR +29.96% Ila Patnaik on the front page of Indian Express Avinash Persaud in Financial Express.
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