"No Review" ??!?!?!
ToDaZeD This Century’s WTF?!?!?!?!?!
Treasury Secretary Henry Paulson and Federal Reserve Chairman Ben S. Bernanke ... early in the evening of Sept. 18, they had a bigger fix in mind, and they went to sell it to Congress.
They sat in House Speaker Nancy Pelosi’s office, at a wooden conference table adorned with pink roses and white hydrangeas, surrounded by more than a dozen congressional leaders.
..."The credit lines in the American financial system, the lifeblood of the economy, are completely frozen,” he said, according to Senator Charles Schumer of New York, a Democrat who was in the meeting. Banks had stopped lending to each other overnight, Bernanke said.
That threatened to halt all lending in the U.S., forcing businesses to close and idling workers, the Fed chief said. The Fed also was seeing money being moved out of the country.
“You could have massive failures within days,” he told the group, and it would go beyond the banking system to “large name- brand companies,” according to a congressional staff member who attended the meeting and took notes.
Dire. So what’re they gonna do?
Section 1. Short Title.
This Act may be cited as ____________________.
Sec. 2. Purchases of Mortgage-Related Assets.
(a) Authority to Purchase.--The Secretary is authorized to purchase, and to make and fund commitments to purchase, on such terms and conditions as determined by the Secretary, mortgage-related assets from any financial institution having its headquarters in the United States.
(b) Necessary Actions.--The Secretary is authorized to take such actions as the Secretary deems necessary to carry out the authorities in this Act, including, without limitation: [whatinhell matters after those words?!?]
... Sec. 8. Review.
Decisions by the Secretary pursuant to the authority of this Act are non-reviewable and committed to agency discretion, and may not be reviewed by any court of law or any administrative agency.
Unless Marbury v. Madison has been overturned…
Sec. 10. Increase in Statutory Limit on the Public Debt.
Subsection (b) of section 3101 of title 31, United States Code, is amended by striking out the dollar limitation contained in such subsection and inserting in lieu thereof $11,315,000,000,000.
On the Sunday Morning talking-had shows, Dodd and Baynor discussed tap-danced around the question of what they heard in the White Hydrangea meeting between Administration and Congressional leaders.
Chris Dodd: “I don’t want to use the language… The language has impact...”
Baynor: “Ya can’t describe on Sunday morning how ugly this picture would look if we don’t act."
They never managed to articulate exactly what would happen if they do not act.
What the F’n F F?!?!?!?!
So, insofar as information—or even indicators—about what a sane person might need to do to protect pensions/investments/a crappy bank account, they’ve given us bupkes. Scata. Zippo. Gornisht mit gornisht sauce.
The government plans to hire a number of investment firms to assist it in purchasing these mortgage assets. While there may be few alternatives to such an approach, the government is opening a can of worms. The firms that are the most likely candidates based on their size and market presence will be highly conflicted because they already own tens or hundreds of billions of dollars of the same securities that they will be buying on behalf of the government.
If they bid aggressively for this paper at low prices, they will force the securities in their own portfolios to drop in price. If they don’t bid aggressively enough and overpay for these assets, they will effectively be cheating the American taxpayer. This is why it will be essential to have any plan managed by a public official of unquestionable integrity who can stand up to the lobbyists that are already crawling all over the pending legislation.
...no remedy. ... “blank check.”
The draft language blocks review only of “decisions by the Secretary” under the act. [Mark Levy, who heads the Supreme Court practice at the law firm Kilpatrick Stockton in Washington] said that leaves open the door to challenges to the act itself. Such a claim might, for instance, allege that the statute improperly delegates congressional power to an executive official.
...The senior Senate Democratic aide said that while lawmakers had confidence in the Treasury secretary, “Hank Paulson is not going to sign off on the purchase of every asset” and will instead rely on an army of lower-ranking officials and contractors. Under the administration’s draft, “if one of those folks decides he’s going to help out a friend, or a past employer or a potential future employer to buy some assets at a hugely inflated price,” there’s nothing you can do about it,” the staffer said.
Everyone agrees that something major must be done. [everyone???] But Mr. Paulson is demanding extraordinary power for himself—and for his successor—to deploy taxpayers’ money on behalf of a plan that, as far as I can see, doesn’t make sense.
Anybody got some clues? I’m fresh out.
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