Chairman Frank is happily reassuring his colleagues that the bill gives Treasury the power to buy mortgages and reset their principal and interest rates, and that the Secretary has been told that the bill is passed with the understanding he will do so.
It would be hardly surprising if any gains the fund makes on some investments were diverted to marking down the principal on other mortgage investments. If there are losses, those go to the taxpayer. If there are gains, they will go to Democratic constituencies.
It's a remarkably bad bill, and Chairman Frank is promising he'll be back to work on regulation next year. Certainly the Democrats don't sound unhappy that this is passing. It's depressing to see so little understanding of our financial system, and so little resistance by confused members against the social pressure for this.
It's a landmark event, the beginning of a new era of Democratic leadership and progressive policies.
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