Dodd, Now a Four Letter Word

[Clove]

http://www.courant.com/news/politics/hc-dodd-countrywide-0320.artmar20,0,5251192.story

Congressional Report: Countrywide Bent Loan Rules For Dodd
By MATTHEW KAUFFMAN

The Hartford Courant

March 20, 2009
An executive at mortgage giant Countrywide Financial overrode the company's loan-writing policies to give a discount to Sen. Christopher Dodd, the powerful chairman of the Senate banking committee, according to an internal Countrywide document turned over to congressional investigators and obtained by The Courant.

But paperwork, e-mails and other loan documents reviewed as part of the congressional probe include no direct evidence that Dodd was aware at the time that he was getting a discount, according to a source familiar with the investigation.

And a Dodd spokesman Thursday repeated the senator's contention that there was nothing in the negotiation or loan process that was unusual or out of the ordinary.

Dodd, who refinanced two mortgages with Countrywide in 2003, has said that he did not know that he had been placed in a special group of customers known as "Friends of Angelo" — a reference to Countrywide CEO Angelo Mozilo — or that he might have received preferential loan terms. Internal Countrywide documents do not contradict that assertion, a congressional source said.

By contrast, Thursday's report by Republican members of the House Committee on Oversight and Government Reform describes a freewheeling program in which Countrywide loan officers gleefully boasted to other VIPs that Mozilo had personally authorized discounted rates and fees.

The report also concludes that Dodd and another senator, Kent Conrad, D-N.D., "appear to have violated" Senate ethics rules related to accepting gifts and loans not generally available to the public.

Bryan DeAngelis, Dodd's press secretary, disputed that conclusion.

"There is no new information from today's report. As the senator said in February, when he made all the documents public related to the refinancings of his 2003 mortgage loans, the Dodds acted properly in their mortgage refinancing negotiations," DeAngelis said. "They did not seek or expect any special rates or terms on their loans and they never received any. Furthermore, as both the materials he provided and an independent report showed, the rates and terms they did negotiate were widely available in the market when they refinanced."

Although the 63-page congressional report includes little new information on Dodd's deals, its release Thursday is more unpleasant news for the Democratic senator, who has been buffeted for months by politically damaging revelations.

On Wednesday, Dodd acknowledged that he had "reluctantly" agreed to amend legislative language designed to limit executive compensation for companies receiving federal bailout money -- a change that ultimately permitted insurer AIG to pay millions in bonuses.

He has also faced questions about past real estate deals in Washington, D.C., and Ireland.

But Dodd's political troubles began with the Countrywide deal, and assertions that one of the nation's top banking overseers had received favors from a key player in the subprime mortgage meltdown.

An internal "Loan Policy Analysis" of Dodd's mortgages shows that Countrywide's underwriting rules called for an interest rate of 4.875 percent on both loans, with fees equal to three-eighths of a point on one loan, and a quarter-point on the other. A point is equal to 1 percent of the borrowed amount, and for both mortgages, those up-front fees would have totaled about $2,500.

But the computerized record includes a second column showing what Dodd and his wife, Jackie Clegg, were actually charged. In that column, the points had been eliminated.

According to investigators, Countrywide's computer system required a manual override to implement loan terms more favorable than the company's standard underwriting policy. In Dodd's computer files, in a column labeled "Reason For Override," is the designation: "CMD Approved" — which investigators say is shorthand for approval by a Countrywide managing director. Similar overrides are noted in loan documents for many other VIPs, investigators said.

Last month, Dodd allowed reporters to review more than 100 pages of mortgage documents for his homes in East Haddam and Washington, D.C., but did not permit them to make copies. A spokesman for Dodd said that the Loan Policy Analysis was among the records reporters were permitted to review. But none apparently recognized its potential significance.

Dodd also announced last month that he would refinance the loans with another lender.

The report released Thursday concludes that officials at Countrywide gave special loan deals to thousands of VIPs — from Washington politicians to Hollywood celebrities — as part of an aggressive campaign to curry favor and extend the company's influence.

From U.S. senators to a mayor in Montana and former TV sidekick Ed McMahon, Countrywide gave breaks to the well-connected and the well-known, often coolly discussing in e-mail exchanges whether a customer's political juice justified the discount.

In an internal e-mail, a Countrywide managing director hesitates to cut a break for the mayor of Billings, Mont. "I'm usually in favor of settling on the side of the borrower with political influence," the official wrote, before concluding that the money at stake "has the potential of being a greater number than the Mayor of Billings Montana influence."

But a higher-up, noting the mayor's leadership role with the U.S. Conference of Mayors, approved the discount.

It was an easier call when loan officers learned that an applicant was the brother-in-law of an aide to a senior member of the House Financial Services Committee.

"Put this one in a 'moderate VIP' status," a Countrywide executive instructed in an e-mail. "The Hill staffer is very important to us."

In addition to politicians and government officials, other prominent Countrywide clients given special deals, according to the report, included actors Roy Scheider, Stanley Tucci and Uma Thurman; a deputy in the Malibu, Calif., sheriff's department; and Margaret Warner, a correspondent for "The NewsHour with Jim Lehrer."

Copyright © 2009, The Hartford Courant
--
I say we tax him 90%

[radamanthys]

He should be listed as a co-conspirator.

Maybe he can pay off the AIG bonuses with the graft he received for writing in that little tidbit.

[Gan]

A real pillar of the community...

[Parkbandit]

A real pillar of the community...

That will no doubt get re-elected by the retards of Connecticut.

[Clove]

That will no doubt get re-elected by the retards of Connecticut.Coming from the state that doesn't know how to vote.

http://www.mediabistro.com/fishbowlny/original/florida_hanging_chad_recount.jpg

http://www.google.com/hostednews/ap/article/ALeqM5jOV59FNo4z3TqJoYhy51P-VQ9GMAD971SBC82

[Gan]

LOL

[Back]

Wow. Did you somehow think Dodd was only spelled with two letters?

[Clove]

Wow. Did you somehow think Dodd was only spelled with two letters?Keep smoking hippy.

[Back]

http://www.youtube.com/watch?v=5Xd_zkMEgkI

Help help I’m being repressed!

[Apotheosis]

wow.. why isn't anyone defending Dodd?

[Mabus]

wow.. why isn't anyone defending Dodd?
To defend Dodd changing the Wyden-Snowe amendment (companies receiving funding under the Troubled Asset Relief Program (TARP) would be forced to repay Washington for any 2008 bonuses in excess of $100,000, or pay a 35-percent tax on funds not returned) to the "Stimulus" bill in conference they would have to bring up Treasury requesting Dodd to strip the language. Most here will say nothing against the current administration.

[Clove]

wow.. why isn't anyone defending Dodd?You forgot the italics.

[Gan]

To defend Dodd changing the Wyden-Snowe amendment (companies receiving funding under the Troubled Asset Relief Program (TARP) would be forced to repay Washington for any 2008 bonuses in excess of $100,000, or pay a 35-percent tax on funds not returned) to the "Stimulus" bill in conference they would have to bring up Treasury requesting Dodd to strip the language. Most here will say nothing against the current administration.

Bingo.

Nobody wants to link the Dodd+Geitner+Obama pieces right now.

I know, lets make an appearance on the tonight show, hopefully that will throw the dogs off the scent!

[Gan]

Wow. Did you somehow think Dodd was only spelled with two letters?




And now Geitner defends Liddy and the bonus payouts.

Outstanding.

You can thank Sen. Chris Dodd for the loophole that allowed the bonuses to go through without congressional restrictions.
http://forum.gsplayers.com/images/reputation/reputation_neg.gifA.I.G. planning huge... (http://forum.gsplayers.com/showthread.php?p=908240#post908240)03-18-2009 11:26 PM Not confirmed - Back

Since we're talking about Dodd and you felt it necessary to reply in private rather than spew your stupidity in public... Here you go!

Yes, it is confirmed, dicknose.

[Daniel]

Bingo.

Nobody wants to link the Dodd+Geitner+Obama pieces right now.

I know, lets make an appearance on the tonight show, hopefully that will throw the dogs off the scent!

It's a liberal conspiracy!!

[Gan]

If the shoe fits...

[Daniel]

Break out the tin foil hats!

[Gan]

Wait, I was talking about shoes...

[Clove]

My sincere hope is this is the end of Dodd. He's been the "the lesser of two evil's" for a lot of voters here for too long; hopefully this will graduate him to sucky-enough-not-to-reelect, finally.

I was willing to give Geitner the benefit of the doubt too but so far, I'm unimpressed.

[Clove]

Bingo.

Nobody wants to link the Dodd+Geitner+Obama pieces right now.

I know, lets make an appearance on the tonight show, hopefully that will throw the dogs off the scent!


It's a liberal conspiracy!!


If the shoe fits...


Break out the tin foil hats!Maybe tinfoil hats aren't necessary...


http://www.politickerny.com/2622/obama-sells-out-friend-connecticut

The thought has surely crossed Chris Dodd's mind more than once these past few days: is this how Barack Obama treats his friends?

When word spread a week ago that A.I.G. had used $165 million in federal bailout money to lavish bonuses on the same executives whose incompetence had forced the insurance giant to the trough in the first place, unusually intense public anger erupted and leaders from both parties rushed to condemn the payments.

For Obama, this was a particularly sensitive development. Along with his Treasury secretary, Tim Geithner, the president was poised to propose a massive and complex scheme to relieve beleaguered banks of toxic assets. But the public's rage at the A.I.G. bonuses threatened to sabotage efforts to build support for what would amount to another huge federal bailout - especially if it could be shown that Obama and his team had actually played a role in allowing A.I.G. to dish out the bonuses.

In fact, that's exactly what had happened, back in February, when the $787 billion stimulus bill was working its way toward passage. At that time, Dodd, the chairman of the Senate Banking committee, tacked on an amendment to the stimulus that applied strict limits to all existing and future executive compensation packages at firms receiving federal bailout money. Wall Street, predictably, was apoplectic - and Geithner rushed to its defense, pressuring Dodd to water down his amendment so that it only applied to future packages. Dodd ultimately relented, the stimulus was passed and signed by Obama, and the groundwork was in place for A.I.G. to cut those fat bonus checks.

This all played out relatively quietly; it wasn't until the A.I.G. bonuses came to light that the masses began demanding answers. At that point, it was time for the White House to go into damage control mode - and that meant sacrificing Dodd. Two Saturdays ago, in a New York Times story that detailed the then-emerging bonus story, an "administration official," speaking anonymously, did his or her best to keep the focus off the White House and on Connecticut's senior senator.

"The official noted that even a provision recently pushed through Congress by Senator Christopher J. Dodd, a Connecticut Democrat, had an exemption for such bonus agreements already in place," Times reporters Edmund L. Andrews and Peter Baker wrote.

From a public relations standpoint, the ploy worked brilliantly. Dodd, reeling from months of media scrutiny of his dealings with the financial industry, spent last week as the de facto fall guy for the bonuses. A popular narrative emerged: After taking in $100,000 in donations from A.I.G. employees in 2007 and 2008, the bought-and-paid-for Dodd had turned around and snuck into the stimulus bill a cozy little provision that gave those same employees a giant payday - on the taxpayers' dime.

All week, Dodd furiously protested his innocence and tried to note that he'd actually been pushing to ban the bonuses that now have the country in an uproar. But it didn't to him any good: the media had found a perfect target. Finally and very belatedly, Geithner admitted in a television interview that, yes, as it turned out, his department had prodded Dodd to water down the amendment. But Geithner's lame admission was barely a whisper compared to the week of screaming and shouting directed Dodd's way. Already in trouble heading into his 2010 re-election campaign, Dodd is now saddled with the widespread perception that, someway, somehow, he was the guy who made the A.I.G. bonuses possible. You can see the anti-Dodd campaign ads now.

On a Machiavellian level, the White House's treatment of Dodd is understandable. The alternative to pinning the blame on him would have been to be straight from the beginning - meaning to admit that it was Geithner, presumably with Obama's blessing, who championed the provision that paved the way for the A.I.G. bonuses. But to do that would have meant sacrificing Geithner, whose two-month tenure has already been marred by controversy and limited public confidence.

Even before the bonus scandal, Geithner was hearing calls for his head; if he were the fall guy, he'd never survive. And given Geithner's central role in Obama's pending push to address the banking system - and importance of that plan to Obama's long-term success as president - Geithner (in the White House's view) was simply too sacred to be sacrificed.

The political price of serving up Dodd, on the other hand, is far more manageable. In the worst case, it means that Obama's party will lose a Senate seat in Connecticut in '10 - not a desirable outcome for the president, of course, but not nearly as bad as losing his Treasury secretary at this point in his administration. And losing Dodd as Banking chairman wouldn't be that devastating to the White House, either, with another Democrat simply stepping in and taking his gavel.

But at a personal level, Obama's willingness to abet the scapegoating of Dodd is as cold as cold gets.

By all accounts, the two men weren't acquainted until Obama entered the Senate in 2005, but Dodd proved an invaluable ally when Obama sought the presidency last year. In case you forgot, Dodd also ran for the 2008 Democratic nomination, and his most enduring contribution to that campaign probably was an assist to Obama - at a time when Obama most needed it.

That was on October 30, 2007, when the Democratic candidates met for a debate in Philadelphia. Hillary Clinton, as she had been for the entire race, was the runaway favorite for the nomination, while Obama - supposedly her strongest rival - was facing second-guessing from the media and party establishment about whether he had the right style and strategy to topple her.

Toward the end of the debate, Clinton was asked a seemingly innocuous question about then-New York Governor Eliot Spitzer's plan to allow illegal immigrants to qualify for drivers' licenses. She waffled, not wanting to serve up Spitzer, but also not wanting to be so supportive that Republicans could use the moment against her in the general election. When Clinton told moderator Tim Russert that "I did not say that it should be done, but I certainly recognize why Governor Spitzer is trying to do it," Dodd pounced.

"Wait a minute," Dodd interjected. "No, no, no. You said yes, you thought it made sense to do it."

Clinton had been hoping to skate by with double-speak, but Dodd's interruption stopped the debate in its tracks and the rest of Clinton's rivals piled on. It may have been the most significant moment of any of the dozens of Democratic primary debates. Clinton's double-speak dominated news coverage for days, reinforcing one of the prime arguments against her candidacy, and for Obama's - that she was unwilling to stake out positions on principle, the polls be damned. The urgency that propelled Obama's campaign may have been born that night.

Then, a few months later, after his own campaign had officially fizzled out, Dodd endorsed Obama - a somewhat risky move on his part, because the nomination had yet to be settled. Plus, he had been one of the Clintons' most loyal friends in the 1990s, serving as general chairman of the D.N.C. during Bill Clinton's 1996 re-election campaign (at Clinton's request). Dodd's endorsement signaled a new willingness on the part of Bill and Hillary's old Washington friends to embrace Obama as the new Democratic standard-bearer.

For his service, Dodd was rewarded the traditional way: Obama made sure his name was prominently leaked in connection with the Democratic vice presidential nomination last summer. And now...this. As he watches his poll numbers plummet in Connecticut, Dodd must be wondering if it was really worth it to speak up at that debate back in Philadelphia.

[Clove]

http://themoderatevoice.com/27220/it%E2%80%99s-time-to-throw-geithner-under-the-bus/

IT’S TIME TO THROW GEITHNER UNDER THE BUS
March 19th, 2009
By MARC PASCAL

No wonder Republicans have essentially opted out of participating in any government stimulus plans and turned on themselves as a distraction. They realize that their chances in November 2010 might be improved by just doing nothing. They know that by letting Treasury Secretary Timothy Geithner run things, the banking and financial mess will drag out way beyond 2010 and the public will get pretty tired of things around the time of the next Midterm elections.

Without a functioning, responsible, ethical, trustworthy and strong banking and financial sector, all the spending and tax stimuli will not turn around the economy. More people will continue to lose jobs throughout 2010 and the American people will quickly lose patience with the Obama Administration. A transparent and thorough reorganization of the banking and financial sector must be done as fast as possible and contemporaneous with pursuing the rest of the Obama policy priorities. Most people, including Presidents, have little or no control over circumstances and events. However, we are all judged by how we respond to them.

Secretary Geithner has impeccable credentials: An Ivy League Education and backgrounds on Wall Street, the IMF, and President of the New York Federal Reserve, all before the age of 46. In 2008, he also played a major role in organizing all the initial bailouts through TARP of the major banks and AIG with prior Treasury Secretary Hank Paulson. It was no wonder that Wall Street gave thumbs up to his nomination by President Obama to head the Treasury Department. His priorities were and are tilted more towards Wall Street than Main Street. At his confirmation hearings he admitted he wanted to preserve the status quo of ownership and control on Wall Street - and the best interests of the nation were only secondary.

However his upcoming complex and unworkable plans for additional bank and AIG bailouts, public-private purchases of toxic assets with huge governmental subsidies, tepid plans for mortgage and foreclosure relief, overall secrecy, and an inability to simply articulate what he is doing, instead belie a completely different person. Here is a man without much imagination or creativity who rides on his resume and his connections. He appears to be a lackey for other stronger parties, mainly Wall Street insiders and possibly those in the Republican Party who want the President to fail. His credibility was destroyed by the policies he has pursued, not just his personal income tax problems.

There is a growing chorus for bank nationalizations and an aggressive and comprehensive policy towards reorganizing the nation’s bank and financial system from intelligent and experienced people across the political spectrum that care about this country’s economic future. In response Secretary Geithner appears to be dithering, obfuscating, delaying and covering up a variety of Wall Street’s past and current sins. Do people in Wall Street - to whom he caters unnecessarily - have some major secrets on him to which he is being held hostage?

President Obama did not win the Democratic Nomination or the Presidency because he stayed loyal to anyone except himself. If someone were causing damage to his personal or long-term goals for the country, they were quickly “thrown under the bus” and disposed of rather shamelessly. Now Secretary Geithner is dragging down the overall speed and direction of the Obama Presidential bus. He is causing much of the bank and financial mess to slide onto the Obama Administration, moving it off the original perpetrators, Wall Street and the top officials of the prior administration of George W. Bush. To see the shift in blame in less than 100 days is phenomenal.

However, it is not too late to reverse course. It would even help the President in the long run to quickly admit he made a mistake with Mr. Geithner. The American people would welcome it and support him at this early juncture. It would also give the President needed political cover and permit the blame to be reasonably dumped on Mr. Geithner, Wall Street and the prior administration where it belongs. Most politicians, pundits and taxpayers from the left and right are ready to dump on Mr. Geithner anyway.

The greedy, narcissistic, obtuse, and arrogant Wall Street schemers are still 2 steps ahead of the rest of us. Until a pro-active, talented, unified, aggressive, knowledgeable group of professional regulators are in place over this country’s banking and financial sector, we will be continuously surprised and outraged at the fraudulent and self-enriching behavior of those still in control on Wall Street. Furthermore, a comprehensive set of laws and regulations over our financial sector must be in place for aggressive enforcement.

Those on Wall Street probably realize they have no credibility left with the American public since their actions over the past few years destroyed all trust within and for the system. Now they simply want to skim off as much money for themselves before the entire charade and Ponzi scheme completely implodes. Their only steadfast front has been Mr. Geithner.

Despite the Wall Street excesses, we really have ourselves and our politicians of both parties to blame for over 20 years of deregulation and trusting the market could actually impose ethical and rational behavior on itself. The Congress and the Obama Administration have only until the end of 2009 to create a comprehensive and expansive regulatory system over the entire financial sector and the complete reorganizing of the U.S. banking system.

It’s only 20 months to go until the 2010 midterm elections and most Democrats in the House of Representatives are already dancing around the public outcry and aching to move our financial and banking bailout in a more sane direction. Mr. Geithner is now a bigger liability for the Administration than his resume and alleged brilliance can possibly offset. First impressions do matter and Mr. Geithner has failed every one during the past 2 months.

Thus it is time for President Obama to throw Mr. Geithner under the bus and quickly move onto salvaging his Presidency and getting ready for 2010 and 2012. Those dates are immovable in American politics; Mr. Geithner is eminently disposable for the good of the nation.

Then the President can throw a good part of the financial and banking system under the bus along with their greedy and arrogant managers and executives. They simply have to be put through a complete, supervised and rigorous reorganization and possible liquidation in bankruptcy court. Then bankruptcy rules would apply to cancel all contracts and permit the trustees to go back 6 years and rescind all prior questionable compensation, bonuses, salaries, commissions and other fraudulent transfers. We could put in public dollars to protect certain important national and international creditors but public participation should not be an open-ended unsupervised multi-trillion-dollar dump into a black hole. The greedy banking executives should be allowed to simply drown in their own toxic soup of worthless assets.

Perhaps the public outrage against AIG and the bank bailouts is due to the widespread realization that the economic, social and even criminal laws in this country are very different for the wealthy from those laws that apply to the rest of us. While tens of millions of people are losing jobs, homes, pensions and trust in our entire economic and political system as a result of the actions of the most powerful in our economy, the Government bends over backwards to protect those that created this deep recession. When fairness and ethics are thrown under the bus by the powerful in Washington and Wall Street, then resentment and anger are natural results. Until and unless the Administration promptly matches its actions to its lofty words, its slow but steady drop in public support will not be arrested.
Wall Street has lied to us for too long in trying to scare us that the world would come to an end without more unsupervised bailouts to them. They lost our trust many months ago and now they have no credibility whatsoever. The world will continue just fine without Wall Street - only their world would come to an end - which is long overdue. The rest of the economy and the American people would feel only a slight bump as those characters are run over by the bus.

3/19/09 by Marc Pascal in Phoenix, AZ.Emphasis added. Geithner's not going anywhere. Look how long we had Rumsfeld.

[Rocktar]

Geithner's not going anywhere. Look how long we had Rumsfeld.

~HAHAHAHAHAHAAHAHAHAHAHAHAHAHAHAHAHAHAHAHHAHAHAHAH AHAHAHA~

~deep inhale~

~HAHAHAHAHAHAHAHAHAAHHAHAHAHAHAHAHAHAHAHAHAHAHAHAH AHHAHAHAHAHAHAHAHAHAHAHAHAHAAHAAHHA~


Oh, I feel MUCH better now, thanks for that. Rumsfeld hasn't done nearly the damage, but then again, he didn't kiss presidential ass nearly as well as Geitner either.

[Clove]

Oh, I feel MUCH better now, thanks for that. Rumsfeld hasn't done nearly the damage, but then again, he didn't kiss presidential ass nearly as well as Geitner either.Okayy...
In an unprecedented move in modern US history, eight retired generals and admirals called for Rumsfeld to resign in early 2006 in what was called the "Generals Revolt," accusing him of "abysmal" military planning and lack of strategic competence. Rumsfeld rebuffed these criticisms, stating that "out of thousands and thousands of admirals and generals, if every time two or three people disagreed we changed the secretary of defense of the United States, it would be like a merry-go-round." Commentator Pat Buchanan reports that "Washington Post columnist David Ignatius, who travels often to Iraq and supports the war, says that the generals' and admirals' views mirror those of 75 percent of the officers in the field, and probably more." Bush responded to the criticism by stating that Rumsfeld is "exactly what is needed," and also defended him in his controversial decider remark. Just what we needed indeed.

[Gan]

Didn't Geitner and Bernanke just call for more regulatory powers?

That and I'm getting a huge populist undertone from that article above.

It must be because I'm reading this on a blackberry.

:help:

[CrystalTears]

Didn't Geitner and Bernanke just call for more regulatory powers?That's what I heard on the news this morning.

[Parkbandit]

Didn't Geitner and Bernanke just call for more regulatory powers?

That and I'm getting a huge populist undertone from that article above.

It must be because I'm reading this on a blackberry.

:help:

Like this type of more power?

U.S. Seeks Expanded Power to Seize Firms
Goal Is to Limit Risk to Broader Economy

By Binyamin Appelbaum and David Cho
Washington Post Staff Writers
Tuesday, March 24, 2009; A01



The Obama administration is considering asking Congress to give the Treasury secretary unprecedented powers to initiate the seizure of non-bank financial companies, such as large insurers, investment firms and hedge funds, whose collapse would damage the broader economy, according to an administration document.

The government at present has the authority to seize only banks.

Giving the Treasury secretary authority over a broader range of companies would mark a significant shift from the existing model of financial regulation, which relies on independent agencies that are shielded from the political process. The Treasury secretary, a member of the president's Cabinet, would exercise the new powers in consultation with the White House, the Federal Reserve and other regulators, according to the document.

The administration plans to send legislation to Capitol Hill this week. Sources cautioned that the details, including the Treasury's role, are still in flux.

Treasury Secretary Timothy F. Geithner is set to argue for the new powers at a hearing today on Capitol Hill about the furor over bonuses paid to executives at American International Group, which the government has propped up with about $180 billion in federal aid. Administration officials have said that the proposed authority would have allowed them to seize AIG last fall and wind down its operations at less cost to taxpayers.

The administration's proposal contains two pieces. First, it would empower a government agency to take on the new role of systemic risk regulator with broad oversight of any and all financial firms whose failure could disrupt the broader economy. The Federal Reserve is widely considered to be the leading candidate for this assignment. But some critics warn that this could conflict with the Fed's other responsibilities, particularly its control over monetary policy.

The government also would assume the authority to seize such firms if they totter toward failure.

Besides seizing a company outright, the document states, the Treasury Secretary could use a range of tools to prevent its collapse, such as guaranteeing losses, buying assets or taking a partial ownership stake. Such authority also would allow the government to break contracts, such as the agreements to pay $165 million in bonuses to employees of AIG's most troubled unit.

The Treasury secretary could act only after consulting with the president and getting a recommendation from two-thirds of the Federal Reserve Board, according to the plan.

Geithner plans to lay out the administration's broader strategy for overhauling financial regulation at another hearing on Thursday.

The authority to seize non-bank financial firms has emerged as a priority for the administration after the failure of investment house Lehman Brothers, which was not a traditional bank, and the troubled rescue of AIG.

"We're very late in doing this, but we've got to move quickly to try and do this because, again, it's a necessary thing for any government to have a broader range of tools for dealing with these kinds of things, so you can protect the economy from the kind of risks posed by institutions that get to the point where they're systemic," Geithner said last night at a forum held by the Wall Street Journal.

The powers would parallel the government's existing authority over banks, which are exercised by banking regulatory agencies in conjunction with the Federal Deposit Insurance Corp. Geithner has cited that structure as the model for the government's plans.

http://www.washingtonpost.com/wp-dyn/content/article/2009/03/23/AR2009032302830_pf.html

[Clove]

Sad but true.

[Clove]

No more tinfoil hats comments?

http://punditkitchen.files.wordpress.com/2009/03/political-pictures-barack-obama-paid-taxes.jpg