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Originally Posted by Von Tonner
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Originally Posted by AVGWarhawk
Read it again, the Treasury has the authority to use this money. I suspect the authority was granted by Congress.
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Not all would agree that the Treasury has the authority though AVGWarhawk
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But CNBC “Street Signs” host Erin Burnett explained this wasn’t something that was likely under the current rules. Burnett told viewers of her Sept. 30 program the toxic mortgages distressing many of the beleaguered banks hoping for a Congressional bailout aren’t the same mortgages the Treasury Dept. has the authority to buy.
“We’ve been looking into this,” Burnett said. “And there is room for Treasury to maneuver in many ways. The best sense of this that we have gotten, though, is that money – even if it is all available and not all of it still is – would have to be used to buy Fannie and Freddie-backed mortgages and as we know, those are not really the toxic mortgages that are the problem here.”
Burnett said one possible solution would be for the Treasury Dept. to have Freddie Mac and Fannie Mae purchase these mortgages from the banks to get them on their books. However, Burnett said that would be unlikely under the current rules that govern the two former government-sponsored enterprises.
“Now some might say the Treasury could tell Fannie and Freddie to go out and buy some of the bad stuff, but keep in mind – Fannie and Freddie are right now owned by the government in a conservatorship,” Burnett added. “They would have to take some insurance out to do that is our understanding. That would cost quite a bit of money – likely not be a business decision which would be approved by the conservator. So it doesn’t seem that that plan in its simplistic sense make sense. Bottom line, though, is that there might be some ways for Treasury to maneuver.”
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It does not matter if all agree or not. The Treasury apparantly has the authority to do this. Once the authority is bestowed on the Treasury, it does not really matter who agrees or not. As it states, the bottom line is there are other avenues that can be taken other than having the tax payer bend over once again for the Governments failings along with the banks failings. The rush to cut a check and forget about it is NOT good stewardship of the tax payers monies. It is reckless to be sure. This has to be looked at in detail. If it takes weeks, then so be it. So, if it found the Treasury does not have this authority, at least it was discussed.