Update: A bailout deal is reached; will it hold?

Two headlines from Washington, one from this morning, one 16 months old.

Today: Congressional leaders (pictured) announced today that they had reached an agreement in principle on the framework of a plan to fix Wall Street's financial crisis that would provide protections for up to $700 billion in taxpayer money at stake.

May 17, 2007: Key senators in both parties and the White House announced agreement Thursday on an immigration overhaul that would grant quick legal status to millions of illegal immigrants already in the U.S. and fortify the border.

What's the point? Deals are not votes. There is widespread opposition to the bailout deal, and it's not a done deal.

Update: Reports this afternoon indicate the deal could be coming undone. A couple of afternoon headlines. First, the L.A. Times:

In a roller-coaster day of hopes raised and hopes dashed, efforts to negotiate a compromise on the $700-billion plan for rescuing the nation's financial system bogged down Thursday, with conservative Republicans denouncing the strategy as ill-conceived and Democrats accusing GOP presidential candidate John McCain of encouraging the revolt.

The New York Times:

The status of a rescue plan for the nation’s financial system was in doubt on Thursday, at least for the moment, as lawmakers emerged from a meeting with President Bush to say that negotiations had a ways to go.

-- Peter Viles

Your thoughts? Comments? E-mail story tips to Peter Viles, or follow L.A. Land on Twitter.

Photo: Associated Press

Comments

[jb]

I am a democrat and Dodd is the first to go... immediately followed by Boxer and Feinstein. We will not listen to how you did not want to vote (but were deep in bed with the financial industry). Out you go.

[CompaJD]

We have to get a list of who is voting for this bail out so that we can get them out of office ASAP.

[LieDetector]

Since congress will be voting on this before returning home I have little hope that this deal will get voted down.
Meanwhile the house of reps just approved $25 billion in loans to the auto industry. The money is just flying out the door.
What is really needed is a strong 3rd party to challenge the entrenched, corrupt 2 party system we now have. Sadly that is not likely to ever materialize.

[mike]

WELL ADOPTIVE FATHER NOW THAT YOU HAVE RAMBLED ON AS USUAL ABOUT NO IMPORTANT ISSUES I WILL TELL YOU THAT ANYONE COULD" AFFORD " ANY MORTGAGE AT ONE TIME BECAUSE THE PRICES KEPT GOING UP. IF YOU READ THIS BLOG THAT IS ONE OF OUR MAIN TOPICS IS PEOPLE BUYING HOUSES WHO COULDN'T AFFORD THEM...

[Dave]

I have a question, if this is plan is not to 'bailout' wallstreet, why not direct the $700 Billion toward the root of the problem (homes purchased in 2005 & 2006)?

If my math is correct, $700 Billion / 14 million homes (# homes sold in 2005 AND 2006), you get $50,000 per home.

Average home price in 2005 & 2006 - $220,000. This will bring the cost down to $170,000. Assuming $170,000 loan at 6% interest rate for 30 years.

Annual payment: $12,231.
Average household income: $53,000
cost of payment: 23% of income - below cap of 32%.

Banks can then balance their books because the # of defaults will drop close to zero and they can then continue to loan $$.

I'm not suggesting bailing out the stupid home owners thinking their annual $50,000 income can support a 1,000,000 home. They should all go to hell.

Just throwing another idea out there.

PS, I'm against any bailout. wallstreet, home owners...etc.

[TakeFive]

Thanks to government meddling, we're going to smash billions in bad loans with billions of bailout dollars.

Our congress is like the supercollider of stupid.

[Frank]

call your congressman and senators
202-224-3121. Tell them if they vote for this bill in any way shape or form, don't bother returning to their home state ever.

This is not a bill, this is a financial Coup De Tat

The false sense of urgency should be a tip off, as is the fact that Secretary of the Treasury Henry Paulson, was the president of Goldman Sachs who packaged bad mortgages into bonds and sold them to investors, then created an index and shorted them, making a fortune in the process. I don't remember any of us getting a check from Goldman Sachs when the going was good, but now that their fraud is about to blow up in their faces, they want us to bail them out, this is madness.

Paulson will make sure Goldman gets bailed out, and Goldman is now a commercial bank so they can get Fed funds and FDIC accounts, this stinks to high heaven.

Stop this 700 billion dollar liar loan before it bankrupts the currency and the taxpayers.

[vilmosz]

By the guys who brought you the bankruptcy overhaul bill that sold the American taxpayer down the river.
Here's my question: What is achieved by having the President of the United States "appeal" to the American public with an address that is alarmist and features the worrying phrase, "Financial Panic"? If that is not yelling "fire" in a crowded theater -- by the theater owner no less -- I don't know what is. To say nothing of the fact that this is the President who cried wolf one too many times when he shouldn't have, and never cried it when he should have.

[Mucker]

Take five

I almost spit up my lunch laughing, what a great phrase "supercollider of stupid"

How apt. They go spinning around and around and smash things with no practical use at all. Ooops unless practical is socialism for elites.

[Mucker]

adoptivefather

stop already. Go start a blog for your long winded posts.

[adoptivefather]

Bank of America and Wells Fargo are making home loans to illegal aliens knowing that those illegal aliens are using false or stolen social security numbers to gain employment.

The repayment of the loan is based on income earned using false and stolen social security cards.

Using false or stolen social security card is a felony.

The banks aren't stupid. They know this too.

Making profits circumventing the laws of the US should get your butt put in jail.

Why isn't Ken Lewis, CEO of Bank of America, a big participant in home loans to illegal aliens, rotting in jail today?

Instead he is gorging at bailout headquarters.

Ironic that any Westsider knows you can't get the tiniest of breaks on a parking ticket BUT circumvent US immigration and banking laws to pocket billions in profit and you're a folk hero.

Way to go Ken!!!!

[adoptivefather]

Please call Mr Maloney at Mitchell Bank and let him know what you think him profiting on home loans to illegal aliens.

You can reach him at 414-645-0600.

Ask for his outside line and sometimes you reach him and sometimes you get his voicemail.

He would love to hear from you!!

[Chris Finley]

Why is the LA Times blog allowing posts in the comments section which are not original comments, but simply copies of very long news articles? You are destroying the comments section by allowing this. The first posting was over 1,200 words and the second posting was almost 2,220 words. I don't have a problem with people writing very long posts if they are original works, but the comments section is not the place to post copies of in-depth news articles.

[D]

I agree with Chris Finley

[mike]

someone please moderate adoptive father. can someone else have some space please????

[peteviles]

Chris Finley wrote, "Why is the LA Times blog allowing posts in the comments section which are not original comments, but simply copies of very long news articles? You are destroying the comments section by allowing this."

Thanks, Chris, you are correct. I was asleep at the switch. In response to your comment, I just removed the long posts I could quickly find. Sorry about that, my bad.

Pete

[Chris Finley]

Thanks for so quickly removing those 1,200 and 2,200 word long copies of other news organizations' articles. It was getting to be a pain to have to roll through such long postings.

[Wot? Taxation without representation?]

What happened to the American rallying cry of "no taxation without representation!"?

There is almost universal taxpayer outrage at this bailout that cuts across party political lines and the working/middle class divide. Why are our elected representatives not heeding our voice when we say no bailout of investment bankers, overleveraged loanowners or any other scrounging deadbeats.

I second the opinion that we find out who the greedy and spineless characters are who approve this bailout and run them out of office. Voting for this bailout should be as toxic to a politician's career as the bad paper is to the bank's balance sheet.

[Chris]

Hello meaningless masses!

Krook from K street calling!

It is really cute and funny all your little comments...

lobbyist impaired jb says
"I am a democrat and Dodd is the first to go... immediately followed by Boxer and Feinstein"

poor pathetic CompaJD blabs
"We have to get a list of who is voting for this bail out so that we can get them out of office ASAP."

Penniless Funny man Take Five quips
"Our congress is like the supercollider of stupid"

I don't care who posted
"What is really needed is a strong 3rd party"

None of the above will happen my little non influential munchkins!!!
Unless you go to this website
http://www.votenader.org/index.html

On second thought don't go to that website. Just get back to work so you can pay your taxes at twice the rate of those brave underpaid financial executives and hedge fund managers. Voting won't change anything. If it could it would be illegal! I would write that piece of legislation - just like I write all the others.

- Krooked man from Krooked K St.

[Sinde]

If this bailout does go thru it will only delay the inevitable crash we're facing because of all the GREED that's been rampant in America.

My family waited 4 years to buy a home after our last one because of inflated prices. We bought this summer and have a payment we can afford. Another house on my block sold LAST MONTH to an investor, a Limited Liability Corp, for $168,000 and IS NOW FOR SALE again for $259,900. They got it at a foreclosure auction, the bank was owed $347,773. Yes, low prices by California standards - I am in Las Vegas now. So they're trying to make a $90k profit in a month's time and the proposed bailout is supposed to help the bank recoup their loss and reward greedy investors - all at our expense.

Furthermore, I have a friend who is a realtor and bought more house than she could afford. She has already been helped by our government and owns a waterfront home with a reduced monthly payment of approx. $800 month. Nice. Wish I'd been greedy and had bought more house than I could afford too.

I propose they take the $700billion and divide it up among all Americans who are not investors, who did not buy more house than we can afford and who are not bankers or CEO's. We'll fix the economy!

[Nick]

This whole bailout process is interesting to watch, in a historical context. We have a clear insider payoff, with obviously false pretenses, which nobody in the entire country is in favor of. Yet, at the end of the day, everybody knows Congress will approve it, because they are corrupt to the core, and no amount of popular opinion, common sense, foresight, or thought of actually doing what the people they purportedly "represent" want enters their collective mind.

I say make every single person voting for this BS get on TV and explain why they're taking $700 billion of your money and giving it to the people who created the housing crisis and already made billions from it. Preferably in front of a live audience of distressed home "owners", preferably armed. ... and justice for all.

[desi dude]

"Thanks, Chris, you are correct. I was asleep at the switch"

Hi Peter,

That was just like the decider who talked to his flak yesterday evening or the wrestler who pushed throught the "deal" last friday.., :0 :), just asleep.....

I was kidding .. no, dont worry , you do a very good job

[Big Fella]

Allowing the bailout to proceed as it is currently conceived is akin to giving the fox (Henry Paulson and Wall St) the keys to the hen house: http://thebfdblog.com/2008/09/25/the-bailout-compounding-greedy-misbehavior/

[I Live in L.A., Too]

Don't give up on the bailout protests just yet. Read this from the NYT this afternoon:

http://www.nytimes.com/2008/09/26/business/26bush.html?_r=1&hp&oref=slogin

[MyLessThanPrimeBeef]

From CNN website:

Sen. Shelby: "It (the bailout plan) will not solve problems. It will create more problems."

That alone is worthy of write-in consideration for the presidency.