Sunday, September 28, 2008

Outline for US bailout reached

Just read that the outline for the US $700 billion bailout package has been reached. The gist of it is as follows:
  1. First $250billion issued when legislation is enacted
  2. Additional $100billion can be added if president decide it is needed
  3. Remaining $350billion is subjected to congressional review
  4. Institutions selling assets under this plan will need to issue stock warrants to taxpayers
  5. No executives in the participating institutions will get multi-million dollar severance pay, and CEO pay that encourages excessive risk-taking will be limited
  6. Participating institutions would be supervised by Congress's investigative arm, and an independent inspector general
  7. The program itself would be supervised by Fed Reserve chairman, and an oversight board
  8. Treasury secretary's actions will be reviewed
  9. Government can modify the terms of the home loans as they are the owners

The current problem is more of a crisis of confidence than anything else. The package should be agreed in principal soon. If the Republicans delay this package again, it will not help them in the upcoming presidential election, because they will soon see the biggest financial blowout in history.

I agree with Obama... Politics do get in the way of everything.

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