Dear Friends,

We need your help to make sure average Americans are represented in the $700 billion Wall Street bailout Congress is considering.

House Speaker Nancy Pelosi and other House and Senate leaders are meeting with President Bush at 4 p.m. EST today to negotiate terms of this package. The latest bailout proposal includes a provision to amend the bankruptcy law that will allow people to restructure their mortgages in bankruptcy court and save their homes, just like wealthy Americans can with vacation homes and yachts.

We need to keep the bankruptcy provision in the bill.

PLEASE call your Representative before 4 p.m. EST today.

This may be our last opportunity to have any impact on this bailout.

Call the ACORN Toll-Free Hotline to Congress at (866) 888-9292. Ask to be connected to your Representative's office and urge him/her to tell Rep. Pelosi to hold strong and demand that bankruptcy and other provisions to help homeowners be included in any final bailout package.

As it stands, a homeowner post-petition has to make all payments as they come due according to the loan documents, and also must effect a reasonably prompt cure (over 3-5 years) of all arrearages....that means the monthly payments go up after filing bankruptcy....

The scale of the American authorities' response reflects both the violence with which this crisis has spread, and the determination of the American authorities, most importantly Mr Bernanke, to learn from the mistakes that made the Depression so deep and long.

Not doing anything isn't an alternative.  Frank and Dodd recognized this and have improved on the Paulson/Bernanke framework to make the plan politically viable.  BTW I don't think Paulson was trying to do a power grab.  The political details needed to be left to the political body.

That week, no investment-grade bonds were issued, for the first time (holidays aside) since 1981.

How serious this is should it continue can not be overstated.

In responding with such speed and vigour, they run several risks. One is that they overdo it, paying far too much for assets, sending the deficit into the stratosphere and triggering a run on the dollar. The risk of underdoing it may be even greater. Politicians, determined not to be seen as doing favours for Wall Street, might blunt the programme's effect in the name of protecting the taxpayer. Then there's the logistical nightmare of fixing a market whose very complexity is central to the crisis.

It is on http://coinage.me . where the flaws are articulated in detail unlike anything you see on the news, and a detail solution is provided to fix the foundation. Which everyone else seems to lack.

Bernhard at Moon of AL links to Mark Faber who predicts currency restrictions, among other other not such fun stuff.

As in, you can't take money out of the country bcz the Paulson Fix won't work, money becomes even more illiquid, and then the money which hadn't already gone overseas tries to do so. That would mostly the little people, btw, bcz the Big Banker Boiz will have done all they can to preserve their fortunes.

"About 15 percent of U.S. households have negative equity. Who supplied the leverage into the system? It's called the Federal Reserve Board," Faber said.

"If I'm the drug dealer I'm not responsible that everybody takes drugs, but I facilitate it, especially if I give it out free of charge, I can enlarge the market share, and that's what the Fed has done."
...
"Short sellers are not responsible for current problems. The current problems are caused by the US Fed (Federal Reserve), that was sitting there and letting credit growth go out of bounds," Faber said.

"We have to see very clearly that the cause of the problem was excess leverage. The biggest hedge funds were Fannie Mae [FNM  1.94  ---  UNCH  (0)   ] and Freddie Mac [FRE  1.86  ---  UNCH  (0)   ], they had the leverage of one over 150 and under the eyes of Congress, under the eyes of the SEC and everybody... and nobody did anything about it. Then, people go and bitch about the short sellers," he added.

The fact that the rules on short-selling are changing nearly daily, with new names added to the list of securities in which short-selling is banned or with specific rules regarding hedging and confidentiality contributes to adding uncertainty, he said.

The problem is also exacerbated by the fact that nobody knows how long the emergency measure will last or what is next.

"The next emergency measure will be that Americans are not allowed to buy foreign currency and transfer money overseas, and the next measure will be not permitting Americans to buy gold and so on and so forth.... It creates even more uncertainty in the market place when you continually change the rules," Faber said.

So...Email tonight; call tomorrow.

They must not give all the money away to Paulson--we're going to need it for the worse times ahead. If they don't do HOLC now, don't do some other things now, they will have to be done later, at greater cost.

And where will the money come from???

Bernhard is not terribly upbeat, to put it mildly.
~~~
Listening to Dodd right now, who seems to believe the doom and gloom Paulson is putting out. Does he realize there's worse to come??

Under the bailout, the mortgage holder would have to declare banckruptcy and hope the Judge is willing to save the house and rewrite the terms.  If this provision stays in.