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September 28, 2008

Tentative Deal Reached on Bailout

According to reports late tonight, negotiators have (re-)reached a tentative deal on the bailout of the financial system. Full story here, but the gist as follows:

• $700-billion in total
• $350-billion immediately, with some of that earmarked for the insurance initiative championed by House Republicans
• "Reasonable" limits on severance packages
• Warrant coverage
• Some sort of tithing of the financial sector in five years if the bailout isn't profitable
• Government must renegotiate bad mortgages it acquires to try to keep people in houses
• Full text Sunday, as is a House vote, and then a Senate vote Monday

I'm sure there'll be oodles more details later, but this is seemingly the gist. There is not enough here yet to know how to really feel, however, so I'm going to have to hold my own fire/praise/indifference until the morning. I will say that the insurance scheme still strikes me as unworkable -- how do you get undercapitalized banks to pay into a scheme to bail themselves out? -- as does the transparently political tithing idea. And don't even get me started about the total dollar figure, which is far lower than will eventually be required.

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