The Bailout: Where We Stand (and where the mortgage and real estate industry's futures stand)
I was watching CNBC this morning as I have been throughout this whole crisis, and listened to Jack Welch, former Chairman of GE talk about the goings on, when news came out that apparently an agreement had been reached in principle in congress on the bailout plan that has been hotly debated for the past few days.
I can't be sure, but I think I then heard a congressman, who I believe was Paul Kanjorski of Pa. (although I could be wrong about the name), say something along the lines of "the cavalry has come to the rescue." That's like saying I deliberately broke a window but hung around to clean up the mess. I don't know for sure, but I think that this cavalry is somehow complicit in the problem that is hopefully being fixed by the "rescue" that they are working on.
In any event, I then heard that Bill Gross of PIMCO, an incredibly smart guy, has offered to work pro-bono on the process of taking these toxic investments off of the banks books at a fair price. That's some very good news.
What Are The Details
As of when this post went to press, we don't really know the details exactly, except that a final form will have some type of executive compensation limits that have become all the buzz on the campaign trail.
Here is a blurb that was written by Julie Davis of the AP:
"Senior lawmakers and Bush administration officials have cleared away key obstacles to a deal on the unprecedented rescue, agreeing to include widely supported limits on pay packages for executives whose companies benefit.
They're still wrangling over major elements, including how to phase in the eye-popping cost — a measure demanded by Democrats and some Republicans who want stronger congressional control over the bailout — without spooking markets. A plan to let the government take an ownership stake in troubled companies as part of the rescue, rather than just buying bad debt, also was under intense negotiation."
I am more hopeful that things will get resolved in the best possible way given the magnitude of the problem, and hope that we do get some of the best Wall Street minds involved in the process.
As I continue to reiterate, this is critical for my business and pretty much everyone else's business regardless of the industry. The United States financial leadership and credibility around the world is also at stake.
For all of our sake, let's hope that the cavalry is coming to the rescue, and that they bring all of the right ammunition.
Let's get this done and move on!!!