Rep. Peter DeFazio D-Oregon describing Paulson's "Cash for Trash" proposal.
Jim Rogers: `Welfare for the Rich'
Stephen Colbert: Banking Industry Determined to Strike within US
Richard Shelby: Leading economists say "the Paulson Plan is a bad plan"
The Market Ticker: No Banker Left Behind
Video from Jim Jubak on MSN Money. Well worth watching. Jim discusses the credit rating of the US Government. (Please ignore MSN's commercial.)
Jubak’s Journal: Who’ll bail out the Fed?
Bailout Could Deepen Crisis, CBO Chief Says
During testimony before the House Budget Committee, Peter R. Orszag -- Congress's top bookkeeper -- said the bailout could expose the way companies are stowing toxic assets on their books, leading to greater problems.'Un-American' Bailout, Paulson Should Have Quit, Gingrich Says
"Ironically, the intervention could even trigger additional failures of large institutions, because some institutions may be carrying troubled assets on their books at inflated values," Orszag said in his testimony. "Establishing clearer prices might reveal those institutions to be insolvent."
In an interview later yesterday, Orszag explained using the following example: Suppose a company has Asset X, whose value is recorded on the books as $100. Because of the current economic decline, Asset X's real value has dropped to $50. If the company takes part in the government bailout and sells Asset X for $50, the company has to report a $50 loss on its books. On a scale of millions of dollars, such write-downs could ruin a company.
Such companies "look solvent today only because it's kind of hidden," Orszag said. "They actually are insolvent" already, he said.
"You have the former Chairman of Goldman Sachs asking for 700 billion dollars, and in his initial request, asking for it in such an un-American way that I think he should have resigned," said Gingrich. "I think Paulson has terminally misunderstood the nature of the American system. Not just no review, no judicial review, no congressional accountability. Give me 700 billion dollars, 700 BILLION dollars! 'I'll be glad to spend it for you.' That's a centralization of power that is totally un-American."