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| Buyout Footage Historic Stock Footage Archive | |||||||||||||||||||||||||||||||||||||||
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| keywords: senate banking committee, $700 billion bailout proposal, senator chris dodd |
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| Opening statement by Chris Dodd: “ I understand speed is important, but I am far more interested in getting this right. There is no second act to this”! The purpose of this hearing is to discuss if this is the right approach and how we can improve it if we need to. Senator Shelby: Over the last 10-years trillions of dollars have been poured into our mortgage finance market often with encouragement of well-intended government programs. First, the standard mortgages required standard down payments and verifiable income, but over time the number of homebuyers that met these standards dwindled. In order to fuel the housing market, mortgages became more exotic requiring less of a down payment and creating more risk. Wall street packaged and sold these mortgage-backed securities that the credit agencies had rated investment grade world wide. Senator Bennett: “We have had a housing bubble and the bubble has burst. The economy runs on credit, credit is granted on confidence and confidence is based two assumptions, the collateral is worth it or the cash flow will be sufficient. One way or the other the loan will be repaid. What we face today is finding a way to restore confidence in the system so that credit can start to flow again”. Senator Reed: The essence of the proposition is that the taxpayers will assume the risk of disastrous investment decisions made by highly compensation individuals on Wall Street. I believe the custom on Wall Street is when you assume the risk you get paid. Senator Enzi: In the past six months the Government has devised a dozen strategies to save America’s financial market with each plan being more costly, more risky, and less aligned with the free market. I am disappointed to say this latest plan puts all of the rest to shame. If approved this plan will cost every man, woman, and child in America approximately $2300.00 and comes with enormous risk. Senator Schumer: “who would have though the lowly home mortgage, long regarded as the safest of investments, would bring our financial system to its knees”. Additional comments by Senators Hagel, Capper, Bunning, Mendez, Crapo, and Dole. |
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