"Bailout Bill" or H.R. 1424

I spent most of yesterday morning reading through the 451 page document trying to decipher exactly what this bill encompasses. I have a desire to be more educated and a scholar of my trade, therefore the right thing to do was to "brush up" on my Washington lingo. Reading through this bill accomplished three things. First, it gave new meaning to the word boredom. Second, it truly opened my eyes to just how scary these types of powers truly are. Third, it uncovered what kinds of "little" (very loose term) laws our congressman threw into the bill.



We all know the big points of the bill? The $700 billion at Paulson's disposal, the increase in insured deposit limits from $100K to $250K, and congressional oversight throughout the whole process. However, did you know that the $250K limit expires on December 31, 2009? Did you know that although there is a ton of oversight and monthly, quarterly, and annual reports due but that the Treasury Secretary or in this case Henry Paulson basically has TOTAL autonomy on who he hires to oversee the buying and selling of the "toxic" debt? These hedge fund managers although much smarter than I will be spending billions of dollars both in valuing the "un-valued" assets and spending the money to get them off balance sheets of investment banks and other financial institutions. Mr. Paulson has total autonomy with whom, when, how much and who is involved in these transactions. To put it bluntly folks Mr. Paulson has unlimited power to do and practice as he best sees fit to free up liquidity in the market place.



Did you know that there is verbage in the bill, specifically Sec. 308 "Increase in limit on cover over of rum excise tax to Puerto Rico and the Virgin Islands"? I bet you didn't know that there are "tid bits" or "amendments" to things like tax law, motor racing tracks, railroad tracks and disaster relief? Although the majority of this bill was to address the "toxic" debt and liquidity issues there was also a ton of changes to tax law, tax code and accounting practices; not to mention research and reports due on the "mark to market" accounting rule that many believe is the root cause of disguising balance sheet woes.



I was and still am a big proponent of this bill (H.R. 1424) however, I will say by reading this "monster" it truly opened my eyes to the fact that the United States and for that matter the worlds economies are in the hands of one man; Treasury Secretary Henry Paulson!



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