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Old 10-05-2008, 06:12 PM   #21
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Yes, where there is a will money there is always a way.
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Old 10-05-2008, 07:38 PM   #22
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Originally Posted by . . . Yrs to Go View Post
Nothing is actually going to happen on bailout implementation for months. So, we won't know the rules and we won't know who participates or not.

Nevertheless, I have a strong suspicion that just the expectation that a dumb money buyer with $700B to spend is about to enter the market will be positive for asset prices.
I think this is right, and given that it will take month to get things rolling, I expect to see a lot of posturing by the buyers (Treasury) and sellers. Confidence that the markets are still working is worth more than 700 billion.
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Old 10-05-2008, 07:49 PM   #23
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Confidence that the markets are still working is worth more than 700 billion.
It sure does beat the alternative.
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Old 10-06-2008, 07:16 AM   #24
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Don't know about the US rejection but the rest of the World seems to have today.
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Old 10-06-2008, 07:26 AM   #25
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Now Wall Street may shun $700bn bail-out | Business | The Observer

Word has it that many wall street companies dont like the rules and regulations of the bailout bill, and in particular the ceo's arent excited with not getting their bag of money on the way out, so many may tough it out and not take the bailout bill.

all you need is one bank to participate. once they sell some loans to the government they can buy more from other banks and so on.

the government can then have the mortgages modified to prevent foreclosure and then sell them back to the market
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Old 10-06-2008, 07:40 AM   #26
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Don't know about the US rejection but the rest of the World seems to have today.

Yes, it does which is really depressing. Realistically, nothing concrete (no security actually bought) can happen for several weeks until the Treasury gets the contracts/manpower in place. I hope there will be pieces still in place by then. The good news is if it not the assets the Treasury buys will be even cheaper for the taxpayers.
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Old 10-06-2008, 08:01 AM   #27
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I've stopped believing in "capitulation."
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"Hey, for every ten dollars, that's another hour that I have to be in the work place. That's an hour of my life. And my life is a very finite thing. I have only 'x' number of hours left before I'm dead. So how do I want to use these hours of my life? Do I want to use them just spending it on more crap and more stuff, or do I want to start getting a handle on it and using my life more intelligently?" -- Joe Dominguez (1938 - 1997)

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Old 10-06-2008, 08:04 AM   #28
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I've stopped believing in "capitulation."
So you've capitulated on capitulation?
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Old 10-06-2008, 08:08 AM   #29
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So you've capitulated on capitulation?
Let's just say I'm starting to understand why many in the Depression generation spent the rest of their life with all their money under the mattress.
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"Hey, for every ten dollars, that's another hour that I have to be in the work place. That's an hour of my life. And my life is a very finite thing. I have only 'x' number of hours left before I'm dead. So how do I want to use these hours of my life? Do I want to use them just spending it on more crap and more stuff, or do I want to start getting a handle on it and using my life more intelligently?" -- Joe Dominguez (1938 - 1997)

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Old 10-06-2008, 08:17 AM   #30
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Let's just say I'm starting to understand why many in the Depression generation spent the rest of their life with all their money under the mattress.
Yep. My dad was a big believer in the Bank of Beautyrest.
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Old 10-06-2008, 09:42 AM   #31
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Let's just say I'm starting to understand why many in the Depression generation spent the rest of their life with all their money under the mattress.

Hey, it is just numbers on a bank and brokerage statement.

Uncle Sam will be along to bail out us early retirement investors in moment. Although, I think it would be helpful if we got together and started drafting the legislation for the Congressman to introduce.

I submit that early retirement won't get much sympathy, so how about the
Prematurely Unemployed Assistance package, we shouldn't be greedy how about 100K a piece and a 1000 barrels of oil.
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Old 10-06-2008, 09:50 AM   #32
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And some wooden arrows. Those are essential.
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Old 10-06-2008, 10:41 AM   #33
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The compensation restrictions in the bill are actually pretty mild.

If the company just participates in the auctions, then the law prohibits NEW golden parachute contracts.

If the gov't buys securities outside the auction process, and gets a "meaningful equity or debt" position, then there is
an unstated limit designed to "exclude incentives" for "excessive risk";
recovery of bonuses paid due to "materially inaccurate" past financial statements;
and prohibition of payout on existing golden parachutes.

So, if you've got an otherwise healthy institution and you just want to participate in the auction, the only thing you're giving up is the ability to negotiate a new golden parachute deal.

If you are in bad enough shape that you are going to sell part of the company to the gov't, then you get stuck with some limits, which don't seem all that onerous if you've been honest in the past and don't plan to be taking "excessive risks" in the future.
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SEC 111. . EXECUTIVE COMPENSATION AND CORPORATE GOVERNANCE.

(a) APPLICABILITY.—Any financial institution that sells troubled assets to the Secretary under
this Act shall be subject to the executive compensation requirements of
subsections (b) and (c) and the provisions under the Inter nal Revenue Co
de of 1986, as provided under the amend ment by section 302 , as applicable.

(b) DIRECT PURCHASES.— () IN GENERAL.—Where the Secretary deter mines that the purposes of this Act are best met through direc
t purchases of troubled assets from an individual financial institution w
here no bidding process or market prices are available, and the Sec retar
y receives a meaningful equity or debt position in the financial institut
ion as a result of the trans action, the Secretary shall require that the
financial institution meet appropriate standards for executive compensat
ion and corporate governance. The stand ards required under this subsectio
n shall be effective for the duration of the period that the Secretary h
olds an equity or debt position in the financial in stitution.

() CRITERIA.—The standards required under this subsection shall include—

(A) limits on compensation that exclude incentives for senior executive officers of
a financial institution to take unnecessary and excessive risks that
threaten the value of the financial institution during the period that the
Secretary holds an equity or debt position in the financial institution
;

(B) a provision for the recovery by the fi nanc
ial institution of any bonus or incentive compensation paid to a senior e
xecutive officer based on statements of earnings, gains, or other criter
ia that are later proven to be materially inaccurate; and

(C) a prohibition on the financial institu tion making any golden parachute payment to
its senior executive officer during the period that the Secretary holds a
n equity or debt posi tion in the financial institution.

() DEFINITION.—For purposes of this section, the term ‘‘senior executive officer’’ means
an indi vidual who is one of the top 5 highly paid executives of a public
company, whose compensation is required to be disclosed pursuant to the S
ecurities Exchange Act of 1934, and any regulations issued thereunder, and n
on-public company counterparts.

(c) AUCTION PURCHASES.—Where the Secretary de termines that the purposes of this Act are best met through auction
purchases of troubled assets, and only where such purchases per financial
institution in the ag gregate exceed $300,000,000 (including direct purchases),

the Secretary shall prohibit, for such financial institution, any new empl
oyment contract with a senior executive officer t
hat provides a golden parachute in the event of an involuntary terminatio
n, bankruptcy filing, insolvency, or receivership. The Secretary shall is
sue guidance to carry out this paragraph not later than 2 months after the
date of enactment of this Act, and such guidance shall be effec tive upo
n issuance.

(d) SUNSET.—The provisions of subsection (c) shall apply onl
y to arrangements entered into during the period during which the authori
ties under section (a) are in effect, as determined under section .
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Old 10-06-2008, 11:22 AM   #34
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Originally Posted by ziggy29 View Post
I've stopped believing in "capitulation."
We need to resurrect bestwifever's "copulation" thread.

I think most of us would agree with that.
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Old 10-06-2008, 11:29 AM   #35
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We need to resurrect bestwifever's "copulation" thread.

I think most of us would agree with that.
Make love, not despair...
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"Hey, for every ten dollars, that's another hour that I have to be in the work place. That's an hour of my life. And my life is a very finite thing. I have only 'x' number of hours left before I'm dead. So how do I want to use these hours of my life? Do I want to use them just spending it on more crap and more stuff, or do I want to start getting a handle on it and using my life more intelligently?" -- Joe Dominguez (1938 - 1997)

RIP to Reemy, my avatar dog (2003 - 9/16/2017)
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