"It is impossible to predict the final cost of the bailout but officials insist it will be far less than $700 billion. Because the Treasury will purchase and then resell assets, potentially at a higher price, there is a chance the program will break even or perhaps turn a profit.
The deal provides for tight oversight by two boards, including an independent Congressional panel. And requires the government to use its status as an large-scale owner of distressed, mortgage-backed securities to take more aggressive steps to prevent foreclosures.
The bill also seeks to limit the pay of executives of some companies that sell bad debt to the government, including restrictions on so-called “golden parachute” retirement plans.
It also provides several taxpayer protections, including a mechanism for the government to take an equity stake, in the form of stock warrants, in some of the firms that seek government help, which will give taxpayers a chance to make money should the companies profit in the months and years ahead.
And, if the rescue plan has lost money after five years, the bill requires the president to submit a plan to Congress for recouping the losses from the financial industry, perhaps through fees or a tax on securities transactions. " NY Times
With the provisions described in the last two paragraphs above, the bill is minimally aceptable.
Let us all hope that it does act to "unstick’ the credit markets. The passage of the House version of the bill was immediately followed by admissions on the part of many of those who had led the hysterical demands for the bill that they were uncertain that the new law would affect very much.
In the last few days there have been more and more indications that the claims that "main street" was deeply threatened have been exagerated or at least anticipatory rather than actual.
The financial media have done very poorly in all of this. Very poorly indeed. pl