Obama To Help Treasury Secure Second Half Of $700 Billion Bailout

Washington Post:

President-elect Barack Obama's transition team has agreed to accompany Treasury Department officials to meet with Capitol Hill leaders to help the Bush administration gain access to the second half of the $700 billion financial rescue package, government sources familiar with the matter said.

With lawmakers on both sides of the aisle expressing heated opposition to granting such a request, Treasury officials have come to realize that they need the president-elect's help to obtain the rescue money and are actively engaged with his aides, the sources said.

Separately, the sources said, Treasury staffers are working on several proposals to unfreeze the troubled credit markets. But these initiatives would not be possible without the next installment of the rescue package. Transition officials want to see the Treasury's plans before they agree to support tapping the rescue package.

Read the whole story: Washington Post

Comments

[marijam]

Obama is not president yet. When he is, I would advise him NOT to give them the money - at least not without stipulations that have to be met BEFORE the money goes out. Period.

[parrotkisser]

Are they now asking Obama to work without pay?

[anastasiabeaverhousen]

No, but he'll get a lot of criticism if he flies from Ohare to National.....I suppose they want him to DRIVE and stop at Shake and Steak along the way.....

[mgray34]

So then the Bush Admin gets a free pass again. For crying out loud, HE'S THE PRESIDENT!! What kind of crap is this? Since when does the P.E. have any power?

[shystar]

Since Bush abdicated his powers as President.

[WLA]

It appears as though Treasury has asked the O team to help them get Congress to authorize the additional funds. So they are asking O for support and allowing him to decide. Better than leaving the cash register empty for him when he checks in.

[Shaddup]

So they finally admit B u Sh is guilty of dereliction of duty.

[LadyVlad]

Well, it's about time Obama stepped up and offered some of that oft-praised intellect along with his stellar all-star economic team instead of holding press conferences talking about the dog he wants to get when he moves into the White House.

Ready on day one?

[indypete]

How about waiting till day one to find out? Bush is in day... what.... 2875 and he's STILL not ready.

[ErnestineBass]

Day one is January 20, 2009.

Try to keep up, eh?

[chuk98death]

That would be called usurping of power or treason!

[roshni]

And rethugs like Palin and Jeb Bush are better at treason.........

[nellie]

Day one??? When do you think day one is???????

[KO4Pres]

You seem bitter.

[Dave01]

Hey du.mb.a@@, try reading the Constitution, we have only ONE president at a time.

[LadyVlad]

No kidding? How about an inspiring idea from "The One" or a suggestion... or even just talk about it. The guy has held umpteenth press conferences at his alter at the official looking "Office of the President Elect" and talked about nothing. The crisis is happening now.

[MichiganJFrog]

And your idiot hero caused it, and is in charge until January 20th.

It's yours, OWN it.

[Liberalicious]

"Crisis is happening now"....so where's your President, the one whose ass you seem to tongue wipe? Go away nasty troll.

[Dave01]

He has already given them inspiring ideas.....­..........­as usual they AREN'T listening.­........ju­st as you aren't. Now go read the Constitution. You MIGHT learn something.

[atila]

Day One is January 20 little tr0ll....

[Wendigo3]

Helllooooo­..........­..........­..........­..........­..........­..over here!

[Nochnoi]

Uh... day one isn't until January 21st....

[WLA]

How intellectually dishonest to try and pin ANYTHING on a POTUS that isn't even sworn in yet. You ssuucckk.

[curocat]

A lot more ready than GW Bush apparently...

[Shaddup]

So now they all of a sudden realize pResident B u sh hasn't been doing his job for eight years.

[CalculatedRiskTaker]

Obama needs to call up the CEO of Bank of America and tell him to loan GM and Chryler their needed money for 60 days. Than call up Paulson and tell him to F himself.

Next problem

[ThunderclapNewman]

That's not how it works.

[indypete]

Wouldn't it be nice if it were that simple though!

[CalculatedRiskTaker]

What, like the CEO of Bank of America going to say no. I don't think so.

[Dave01]

Of course they would say no. They took on tons of crappy debt over the past decade, why would they take on more?

[Carolab]

Bank of America/Citi are the biggest culprits of all.

Citibank was the biggest, and was considered one of the most stable, banks a little while ago. But its derivatives exposure killed it.

However, Citibank was only the third largest holder of derivatives as of June.

Who were number 1 and 2?

JP Morgan holds around three times more derivatives than Citigroup. And Bank of America is number 2.

As Martin Weiss, PhD writes:

Bank of America was a somewhat bigger player, holding $39.7 trillion in derivative bets, with 93.4% traded outside of any exchange.

But JPMorgan Chase was, by far, the biggest of them all, towering over the U.S. derivatives market with more than double BofA’s book of bets — $91.3 trillion worth. This meant that JPMorgan Chase controlled half of all derivatives in the U.S. banking system — a virtual monopoly that tied the firm’s finances with the fate of the U.S. economy far beyond anything ever witnessed in modern history. Meanwhile, $87.3 trillion, or 95.7% of Morgan’s derivatives, were outside the purview of any exchange.

One bank! Making bets of unknown nature and risk! Involving a dollar amount equivalent to six years of the total production of the entire U.S. economy! In contrast, Lehman Brothers, whose failure caused such a large earthquake in the global financial system, was actually small by comparison — with “only” $7.1 trillion in derivatives.***

http://www.globalresearch.ca/index.php?context=va&aid=11145

[Carolab]

Plan to save Citigroup could be "model" for BOA Plan:

http://www.huffingtonpost.com/2008/11/24/plan-to-save-citigroup-co_n_145931.html

[marijam]

Well, if not BofA, then why not Exxon Mobil, et al?

[lornejl]

lol ! I like how you think.

[shystar]

Great solution.

[MIVOTE]

Sounds like a plan to me.

[one4obama]

Can anybody else see Dubya's ratings going into the minus figures?

[VPN]

If the truth were known it would probably already be a minus number.

[Bullwinkie]

america first my arsenope, look at these postings.
There are total nutcases that will still support Br=ush out of spite for Obama.

[macbabe]

Boeing is going to need the next bailout... it's getting pretty serious!

[CheshireCat2]

Wait let me check my stock.

[marijam]

Me too. I guess I should have sold all of it last December.

[Bullwinkie]

Bush spoke publicly again, I wouldn't

[roshni]

Did you see him run away after mumbling his statement. He had this look of horror that someone may actually ask a question. Loser coward!

[CheshireCat2]

OOPS there goes another 52%

[marijam]

Really? I've had a chip on my shoulder against them since the sold the Wichita plant to Canada. All of the workers were pink slipped and hired back at lower wages. Now, its almost impossible to get a long-term job there, everything's through contract agencies that have little to no benefits and don't want to keep you on for more than six months at a time because if they did, then they'd have to pay you more.

[PATina]

I've been thinking about this since I read the earlier article about the Dems wanting President Obama to get involved. One thing I do agree w/ Barney Frank on... right now we are devoid of leadership. I think this is a lose-lose situation for Obama. If doesn't get involved... he gets slammed for not doing anything. If he does get involved... there are two outcomes. If it's successful... the media and his supporters will be overjoyed... if not successful... he will get slammed, but he'll get slammed anyway for not doing anything.

The biggest problem I had earlier was trying to figure out what President Obama could do since he's not officially in office yet. This article helped w/ that as it gives some options as to what he could do. He could work w/ Congress to free up the money provided that Treasury publishes where the first installment went, and they agree to use the money to help homeowners (which will still give money to the banks as the homeowners will be able to pay their mortgages)... and give the requested $34M to the auto industry.

Again if it works... it will be a big coup for the beginning of his admin.

[abigail1]

fine. but Obama's team needs to be in on every decision and the first 34 billion goes to the auto industry.

[donaldw6]

Obama's team needs to be making the decisions, and performing the follow-through.

[Wendigo3]

Pro-business conservatives (demonstrated by Rudy Guilliani and Mit Romney in the US) would rather see them bankrupt and hopefully re-emerge with crushed unions and lower wage/benefit packages. On the other hand, the pro-worker left would rather pay the big three to maintain those good middle class jobs.

How about a more liberal and forward looking POV? Why not a $30-billion stimulus focused upon New Energy, emerging technologies, education, and support for emerging new transportation technologies.

That means that if Toyota offers the best automotive plan, that they get the subsidies to retool the bankrupt Ford and Chrysler plants. That means that GM is rescued for its daring Volt technology and that the US Government owns a nice chunk of the Chevrolet Volt in exchange.

[donaldw6]

No.

[Wendigo3]

Why?

got reasoning?

[donaldw6]

There's no reason under the sun to bring Toyota into this. They're not even an American company. I'll be happy to hire some of their engineers to consult.

[abigail1]

you do not have to choose between jobs and new technology. you can have both.

But I am done discussing this. there are so many people making arguments based on ideology without a grasp of the facts. (Like for example that hybrid sales have shrunk by half and Ford's sales are holding up better than Toyota's.)

the fact of the matter is that there is no choice. With the economy how it is the big three cannot be made to fail. period.

[Wendigo3]

-If Americans donut want it to fail, they will buy their products.

-growth will come from New Energy, New Auto, New Tech, not these stumbling obsolete behemoths still trying to sell us horseshoes

[RadCenter]

You don't get it, do you? Americans are not buying ANY auto products right now, domestic or foreign, because they are SCARED and BROKE. You can't get any more "New Auto" than the Toyota Prius, and sales of those have dropped 48 percent (http://www.bloomberg.com/apps/news?pid=20601087&sid=aSV3RjQXwyqU&refer=home). American automakers are not to blame for the fact that the bottom dropped out of the credit market. We need them to keep afloat so they can come out on the other side with enough skilled workers remaining to build these Futurama vehicles we all want to see.

[BuzzingAlong]

This, while george bush and his familiar, karl rove, are hiding out in the white trying to rewrite history to make bush look better.

[whatsthatsound]

Great word, "familiar"!
Here's the wiki def. for those who aren't, ahem, familiar with it.
http://en.wikipedia.org/wiki/Familiar

[PATina]

thank you... that was a PERFECT definition for Rove !!!!!

[ErnestineBass]

Bad idea...but certainly not the first one Obama's made so far.

Clinton...­Geithner..­.Summers..­.ugh

[Carolab]

Sshhh, don't you know you can't criticize? Even though Geithner apparently has been fighting Bair on doing anything to stop foreclosures.

[ErnestineBass]

God forbid ANYONE in D.C. should listen to Bair.

She's the only one in Washington that has a workable plan.

[Carolab]

I know...this sux

[chuk98death]

Shove it! Can you honestly look at the situation we are in right now and the continuing sprial downward and still hold on to such triviality? Simply pitiful.

[Carolab]

Tell it to Kuttner:

http://www.huffingtonpost.com/robert-kuttner/team-of-rubins_b_145879.html

[ErnestineBass]

Obama's choice of Clinton, Geithner and Summers can hardly be considered a "triviality".

All three contributed to the current "spiral downward"...and yet, here there are, back again.

Just wait until the scales fall from your eyes.

[CheshireCat2]

Ernestine A$$ weighs in.........

[Carolab]

As is Ernestine's right to do.

[MichiganJFrog]

http://www.youtube.com/watch?v=66COez-8jpk

[Nochnoi]

Your a real pric.k....

[MIVOTE]

He will only help if there is a special law for this time in crisis, that makes GW step down. Then and only then, O will unleash the money, but it will help the people not the banks. They should have developed a plan for the 350 bil they already wasted.

[Wendigo3]

We are all to blame;
this monster is the
product of our procreation:
our desire for excessive consumption.
WITH NO SACRIFICE

We are all to blame
we have gone too far
we were hopelessly blissful and blind
to all that we are.
We want it all;
everyone wants it all
WITH NO SACRIFICE

after Sum41: "We're All To Blame"

[Carolab]

Nah, it was the bankers.

[Wendigo3]

-excessive consumption driven by the wildfires of Market Fundamentalism.

[Carolab]

As far back as 1990, Stiglitz argued in a paper (it can be found on The Economist's Voice Web site at www.bppress.com) against securitizing mortgages and selling them because "when banks retained the mortgages which they issued, they had greater incentives to screen loan applicants." He asked, again with startling prescience: "Has securitization been a result of more efficient transactions technologies, or an unfounded reduction in concern about the importance of screening loan applicants?"

http://www.newsweek.com/id/172092

Deregulation and over-leveraging through securitization.

[Carolab]

STIGLITZ on the bailout:

http://www.youtube.com/watch?v=LrMA5vitNqQ

[donaldw6]

Excellent. The point isn't made often enough that Paulson's approach is just more trickle-down.

[Wendigo3]

agreed

[Carolab]

And consider, as Greg Palast pointed out, HIGH-INCOME minorities were deliberately STEERED into risky subprime loans.

[PATina]

That's the thing that makes me the most angry. Now the people who got the subprime loans are getting blamed... when it was the banks that LIED to them about which loans they qualified for in order to make more money off the interest. Since there is no real standard on what credit score qualifies for a prime loan... there was no way for these people to know if the banks were telling the truth or not.

[donaldw6]

Fine. Now let's assign blame in order of importance.

[Wendigo3]

-we get the governments WE elect

[Carolab]

And those governments are ruled by the bankers.