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View Full Version : GOP Members Forging Alternative Bailout Plan



Silverbird
10-01-2008, 12:29 PM
[I prefer this plan over Paulson's, even though I don't see why captital gains tax should be suspended. I wish there was time to put it to vote]
CNBC
By Charles Gasparino, On-Air Editor | 30 Sep 2008

"... Components of the alternative plan including the following, according to sources:

Require the Treasury Department to guarantee, at up to 100 percent, bank losses resulting from failed mortgage-backed securities originated prior to the plan's enactment. Such insurance, supporters say, would provide immediate value to the securities and a foundation for which they could then be sold. The Treasury Department would finance that insurance by assessing a premium on outstanding mortgage-backed securities.

Allow companies to carry back losses arising in tax years ending in 2007, 2008, or 2009 back five years, generating a tax refund and immediate capital

Allow a "repatriation window" for profits earned by U.S. firms overseas. Such repatriation amounts would not be taxed if invested in distressed debt (as defined by Treasury) for at least one year.

Allow banks to treat losses on shares of preferred stock in Fannie Mae and Freddie Mac as ordinary losses, not as capital losses

Suspend the capital gains tax rate for two years

Limit backing of high-risk loans by Fannie Mae and Freddie Mac

Schedule Fannie and Freddie for privatization

Suspend "mark-to-market" accounting until the SEC can issue new guidelines that will allow firms to mark these assets to their true economic value

Stabilize the dollar by repealing the Humphrey-Hawkins Full Employment Act, which alternative bailout supporters say diverts the Federal Reserve's attention from long-term price stability to short-term economic growth

Require the Treasury to write rules prohibiting excessive compensation or golden parachutes to executives of failed companies
Task the SEC with regular, annual audit reports of entities the federal government has brought under conservatorship or now owns
http://www.cnbc.com/id/26962690

XL-entLady
10-01-2008, 12:53 PM
[I prefer this plan over Paulson's, even though I don't see why captital gains tax should be suspended. I wish there was time to put it to vote]



Suspend "mark-to-market" accounting until the SEC can issue new guidelines that will allow firms to mark these assets to their true economic value



You already got part of your wish. A very important part, IMHO!

Wednesday, October 1, 2008 - 8:20 AM PDT
SEC eases ‘mark to market’ accounting rule


Los Angeles Business from bizjournals - from the Phoenix Business Journal


The U.S. Securities & Exchange Commission (http://www.bizjournals.com/losangeles/gen/US_Securities%20&%20Exchange%20Commission_1A92671949CA499FB2FEB0006 7C80641.html) Tuesday decided to ease “mark to market” accounting rules which have hurt banks, mortgage lenders and the housing sector during the downturn.

Mark to market is a Sarbanes Oxley accounting rule that requires holdings, assets, and loans be valued at their current value. It was aimed at keeping company’s books on the up and up but it has devastated banks and mortgage lenders in the housing slump.

On Tuesday the SEC said companies and financial institutions have some leeway in assessing value, not just the current market, which is of course way down.

There is also some talk in Congress of a temporary or permanent mark to market repeal to allow for a more long-term valuation of assets and loans.


http://www.bizjournals.com/losangeles/stories/2008/09/29/daily32.html
:)
Lady

Silverbird
10-01-2008, 01:01 PM
Whee! Yes! Maybe some real valuations coming soon!

Birchtree
10-01-2008, 01:02 PM
Suspending the capital gains tax for two years would really help me - I hope they make it retroactive back to the first of the year.

Silverbird
10-01-2008, 01:10 PM
Well, details of the Senate bill are becoming more clear by the moment.

Looks like the Solar energy tax credit renewals are in it:
http://www.pv-tech.org/editor_s_blog/article/all_eggs_in_one_basket_solar_itc_rests_with_us_bai lout_plan

Birch, I'm getting mixed signals on the capital gains tax suspension, I can't figure out if its in there.

amoeba
10-01-2008, 02:01 PM
This is an even worse idea. There's no difference between buying bad debt worth close to nothing, and insuring same which is likely to fail at some point (in whole or part). Most of the extra provisions look like they are going to cost more money, not less, and it still sounds like a bailout. Baiting with tax cuts to get popular support.

Seen that before.

Terrible idea. And no price tag.

I say NO!

ChemEng
10-01-2008, 02:44 PM
Require the Treasury to write rules prohibiting excessive compensation or golden parachutes to executives of failed companiesThe following rule could be applied across the board to fix this problem: The value of the highest compensation package can be no more than 50x the value of the lowest employee's compensation. This balance would be adjusted as a function of their Quarterly (10Q) and Yearly (10K) SEC reportings processes. If the C level employees want to make more, they have to make sure to bring the rest up with them.

Solved. Next problem.

Silverbird
10-01-2008, 03:25 PM
Senate plan appearing more and more like a XMas tree, and the decorations are not pay as you go. House Blue Dogs (fiscal conservative Dems) may change their vote to "fergitaboutit", http://money.cnn.com/2008/10/01/news/economy/senate_rescuebill2/index.htm?cnn=yes
[and it may not be enough tax cut and forgivness decoration to get the angry Republicans to buy the tree either.]

XL-entLady
10-01-2008, 03:34 PM
Senate plan appearing more and more like a XMas tree, and the decorations are not pay as you go. House Blue Dogs (fiscal conservative Dems) may change their vote to "fergitaboutit", and it may not be enough tax cut and forgivness decoration to get the angry Republicans to buy the tree either.
The market would so tank! If it's voted down in both House and Senate it would be "all hands to the lifeboats" time.

Lady

Birchtree
10-01-2008, 03:41 PM
I'm a NAUI certified diver so I know I won't drown - but I can't speak for all those already under water on their mortgages. I'm prepared for what ever comes my way per destiny.

Silverbird
10-01-2008, 03:57 PM
The market would so tank! If it's voted down in both House and Senate it would be "all hands to the lifeboats" time.

LadyDue to my support of "Blue Dog" policies, my view is through blue-colored glasses, so I may very well be wrong. Note I just pulled out everything for G today, and most everyone else is going in the opposite direction, so YMMV.