Time is of the essence, explains Dylan Ratigan, because if Congress does not act quickly, banks won't resume lending. In turn, the company you work for, or the small business you run, will have to lay people off or struggle with much higher borrowing costs.
As Congress argues over the provisions the White House has backed down on a major sticking point. Treasury Secretary Henry Paulson said he would agree to limit the pay packages of Wall Street executives whose companies would benefit from the proposed bailout.
Nonetheless, politicians continue to bicker. Dems want to add assistance for homeowners while some conservative Republicans recoil at the prospect of federal intervention, at all.
It’s clear to me that many members of Congress don’t understand how the financial system works, says Karen Finerman. They’re under the impression that the $700 billion is a payment and that they get nothing back.
This is not by any stretch lost money. As the market stabilizes it’s quite possible the $700 billion could appreciate.
What do you think? We want to know!
Later in the conversation CNBC’s Steve Liesman reveals some of the major points under review by Congress. They follow:
- Limits on incentive for inappropriate or excessive risk taking
- Claw-back provision for bonuses based on info later shown to be false
- Two year golden parachute prohibition
- Treasury must obtain warrants if they buy directly from companies
- Foreclosure forbearance
- Bankruptcy cramdown
- Judicial review
- Establishes strict GAO oversight
- FDIC to manage whole loans
- Mandates normal government contracting rules
After watching the Congressional hearings I defy anyone to be more confident in this system, exclaims Jeff Macke. All politicans want to do is lollygag.
Want more? For an in-depth explanation of how the crisis happened in the first place, please watch the video.