Here's the REAL DEAL on the Wall Street Meltdown

[obamashow]

NO BAIL OUT!
http://www.roncorvus.com/no_bail_out.htm

Ron Corvus says: "Mark-to-market accounting and the short-selling of stocks is the root cause of this Wall Street Meltdown. Wall Street - NOT the American people - should pay for Wall Street's sins. Tell everyone you know, including calling your representative in Congress, that you REFUSE to bail out Wall Street and you DEMAND that the SEC IMMEDIATELY outlaw mark-to-market accounting and the short-selling of stocks. Let them know that YOU know the cause of this meltdown and what to do about it." 

http://www.roncorvus.com/no_bail_out.htm

Financial experts say that it is outrageous that Chris Cox REMAINS SEC Chairman, since Cox refuses to take action in this crisis; namely, suspending mark-to-market accounting rules for mortgage-backed securities. A group of Democrats, led by Ms Kaptur and Lloyd Doggett of Texas and Peter DeFazio of Oregon, have unveiled a "no bailout act,” which won the backing of a powerful labour group, the Service Employees International Union. The legislation incorporates Mr. Isaac's recommendations on net worth certificates, suspending mark-to-market accounting and naked short-selling.

Bill Isaac, former FDIC Chairman says:

This $700 billion is only a fraction of the $14 trillion market..............  The SEC was destroying capital for the past year; Isaac BLAMES the SEC for this meltdown. Isaac says this $700 billion bailout is for Wall Street only and the idea that American people will possibly profit from this bailout is absolutely ludicrious. Isaac also said: "We're operating under a system in the past 15 years called "fair value accounting." The Financial Accounting Standards Board put this into place....Isaac says this is the root of a lot of our problems right now. "Fair value accounting" is highly pro-cyclical; when things are going great it pours more gasoline on the fire; but when things are going poorly it really causes banks and financial institutions to take excessive losses as they "mark things to market" in a climate where there IS NO MARKET! Banks and financial institutions have been taking excessive write-downs. Financial experts say that it is outrageous that Chris Cox REMAINS SEC Chairman, since Cox refuses to take action in this crisis; namely, suspending mark-to-market accounting rules for mortgage-backed securities.

U.S. Congress bailout opponents turn to Bill Isaac
Jessica Holzer | October 01, 2008

BILL Isaac is becoming a point man for disgruntled members of Congress seeking fresh ideas on rescuing the US financial system.
Some of the 228 House lawmakers who bucked their leaders to oppose a $US700 billion ($870 billion) financial rescue package on Monday had heard the former Federal Deposit Insurance Corporation chairman pitch a different approach the day before.

There was a "very broad consensus" in favour of the core of his plan, Marcy Kaptur, a Democrat in the House of Representatives, told Dow Jones Newswires.

Mr. Isaac laid out a four-pronged approach to solving the financial crisis before back-to-back gatherings of lawmakers on Capitol Hill on Sunday.

Ms. Kaptur described Mr Isaac's demeanour as "so reassuring" to lawmakers flummoxed by how to respond to the financial turmoil.

Mr. Isaac, a financial consultant whose FDIC tenure coincided with the first phase of the 1980s savings and loan crisis, favours recycling a program from that time. He would have the FDIC issue "net worth certificates" to troubled banks to help them shore up their capital.

He also wants the FDIC to declare that it will insure banks' general creditors against losses, not just their depositors.

In addition, he wants the Securities and Exchange Commission to suspend mark-to-market accounting rules for mortgage-backed securities and redouble its efforts to end "naked" short selling.

The proposals are catching on with lawmakers who helped defeat the rescue package, which would grant the US Treasury authority to buy $US700 billion in soured mortgage assets from financial firms.

A group of Democrats, led by Ms Kaptur and Lloyd Doggett of Texas and Peter DeFazio of Oregon, have unveiled a "no bailout act,” which won the backing of a powerful labour group, the Service Employees International Union. The legislation incorporates Mr Isaac's recommendations on net worth certificates, suspending mark-to-market accounting and naked short-selling.

One of the House conservatives who opposed the bailout plan, John Shadegg, has also introduced legislation to direct the FDIC to start a net worth certificates plan.

Meanwhile, a bipartisan group of lawmakers sent a letter to the SEC chairman Christopher Cox demanding he immediately suspend mark-to-market accounting rules. The banking industry has been pushing for weeks for such relief, but now backers can claim a champion who is not an industry lobbyist.

The SEC and Financial Accounting Standards Board has issued new guidance that clarifies how banks value loans in troubled markets. But it doesn't repeal mark-to-market accounting. See, http://www.fasb.org/news/2008-FairValue.pdf


Lawmakers are turning to Mr. Isaac partly because they view him as a financial wise man who helped right the world’s biggest economy through one of its worst crises.

Mr. Isaac has also shown an eagerness to get involved. After lawmakers from both parties invited him to offer advice on how to respond to the financial crisis, Mr. Isaac hopped on a plane from Florida on his own dime "just to be helpful," he said.

As lawmakers on Sunday were wrapping up their negotiations on the now-defeated financial rescue package, Mr. Isaac was selling House sceptics on his own plan.

Early in the day, he spoke to 40 to 60 House Democrats, followed by a meeting with roughly 30 House Republicans, he said. Then, he appeared at the tail-end of a Democratic caucus meeting, after the leaders and all but 30 or 40 of the rank-and-file had left.

He stayed late into the night talking with House conservatives about his plan. On Monday, he returned to meet with a group of 60 Democrats and Republicans.

Mr. Isaac said his remarks generated applause from the lawmakers, calling the response of House conservatives "overwhelming." He expressed disappointment that no leaders of Congress attended the meetings. In the days since, he has been e-mailing and talking on the phone with lawmakers who rejected the industry bailout.

Mr. Isaac claims strong support for his plan.

"A very large percentage of the 228 people believe in the four items I described," he said.

"Offices are discussing changes to the Paulson proposal based on the ideas of Bill Isaac and others," said a congressional aide familiar with the matter. The aide said that both Republican and Democratic offices were involved in the discussions.

Mr. Isaac argued the defeat of the rescue package wasn't due to partisan politics. Instead, he believes lawmakers felt the Treasury's plan wouldn't work and it was being forced down their throats.

Mr. Isaac, who as FDIC chairman, oversaw the rescue of Continental Illinois National Bank and Trust, said none of his proposals require legislation, including the issuance of net worth certificates by the FDIC.

The approach, in which the FDIC buys subordinated debt in ailing banks, is aimed at helping only those banks deemed capable of weathering the current turmoil if given a dose of fresh capital, Mr Isaac said.

He admitted he resisted the idea when it first surfaced as a response to the thrift crisis. As the then-chairman of the FDIC, he waited until Congress acted by passing legislation to force his hand.

But he said the program ultimately rescued many ailing banks with little cost.

"I became a convert," he said. http://www.theaustralian.news.com.au/story/0,25197,24429568-20142,00.html