Since this is the most exciting thing happening in commercial finance as of right now, I will again this evening quote some CNN articles. We are still in for some real swings in the market place.
Lets see what happens tomorrow, with a 504 point drop in two day of the INDU.
Paulson, Bernanke urge immediate action on $700B plan - cite fear of meltdown. But senators from both sides voice more questions than support.
Lawmakers have criticized the Bush administration for asking for a "blank check." On Tuesday, Paulson and Bernanke argued that too many restrictions on the program would limit its effectiveness at a critical time.
"The financial markets are in quite fragile condition and without action they will surely get worse," Bernanke said. "This will be a major drag on the U.S. economy and be a major drag on the ability of the economy to recover."
While expressing concern about the economy, senators voiced wide-ranging doubts about the plan.
"You can't assure us this will work because you thought the other plans would work," Shelby said.
Paulson said he believes the new plan will address the root cause of the crisis because it attacks the credit crunch that has followed the collapse of the market for mortgage-backed assets held by banks and Wall Street firms.
"I share in your frustration, Senator" Paulson said. "This is not something I ever wanted to ask for. But it's much better than the alternative."
Some senators condemned the proposal as a bad idea, while others said they worried about taking fast action on such a momentous program.
The situation is fluid as Congress presses to craft a bill that addresses concerns from members of both parties. The key add-ons being debated are:
- Give the government an equity stake in the companies it helps
- Change the bankruptcy law so that judges can modify the mortgages of filers' primary residence
- Curb executive compensation on the companies participating in the bailout
- Impose oversight of the Treasury program
- Require the government to promote sustainable homeownership through loan modifications and use of the new HOPE for Homeowners Program on the mortgages underlying the assets it buys in the bailout.