Day: December 13, 2009

The New Finance Bill

Once again I bow to the wisdom of the AP….they do it so much better than the rest of us…..I will post the entire report:

Q. Who does it affect?

A. Financial institutions, both banks and nonbanks; homeowners, borrowers and credit card holders; insurance companies; hedge funds; traders in complex derivatives; and securities rating companies.

Q. How would it avoid another Wall Street crisis?

A. It creates a Financial Services Oversight Council made up of the Treasury secretary, the Federal Reserve chairman and heads of regulatory agencies. The council would monitor the financial markets to watch for potential threats to financial system. It would identify firms and activities that should be subject to heightened standards, including requirements that they place more money in their reserves. Companies would have to plan for their own demise, detailing how they would be dismantled if they fail. The government could dismantle even healthy firms if they are considered a grave risk to the economy.

Q. Who would pay for a failing firm?

A. Failing banks are dissolved now by the Federal Deposit Insurance Corp. The legislation proposes that the costs of large nonbank institutions that fail first be paid for by shareholders and creditors. Even secured creditors would have to take a hit, losing up to 10 percent of their security. If the failure still has damaging financial repercussions, the FDIC would tap a special $150 billion fund paid for by large institutions with $50 billion in assets or more, or hedge funds with at least $10 billion in assets.

Q. What are consumers likely to see?

A. The legislation creates a Consumer Finance Protection Agency that would oversee consumer lending — mortgages, credit cards, payday loans and terms on savings accounts. It would take consumer regulation and enforcement powers away from bank regulators. Under current law, states cannot supersede federal consumer laws, but the legislation would permit states in some instances to impose tougher consumer laws on financial institutions. Banks could escape state laws by claiming they “materially” impair the business of banking. Several industries would be exempt from CFPA oversight, including retailers, auto dealers, lawyers and accountants.

Q. What else does it do?

A. It brings the unregulated $600 trillion derivatives market under government oversight. Derivatives are complex financial instruments, such as credit default swaps, blamed for accelerating the Wall Street panic last year. Some companies that use them to hedge against risk from new requirements in the overhaul legislation would get exceptions. Hedge funds, which operated in shadow financial markets, would have to be registered with the government.

Q. What about those executive salaries?

A. Company shareholders would get a nonbinding vote on the pay of top executives. Federal banking regulators would have to approve compensation practices, though not actual pay, at banks and bank holding companies.

Once again the AP did a masterful job of explaining the bill as simply as possible making it understandable to anyone willing to read and learn…..

The Cost Of Health Care

I would like to say before I start that the AP is a genius….I am gonna post their entire article….why?….most people do not want to click as often as you would think….I would like to thank them for their expert analysis…..

THE ISSUE: How much do Americans who have employer-sponsored health insurance pay in premiums? What do their employers pay? Would that change if the system is overhauled?

THE POLITICS: Health care costs have been increasing. For Americans and the businesses that insure most of them, that translates into higher insurance premiums. The average premium cost for employer-provided insurance has doubled since 2000. These days, coverage for an individual with employer-provided insurance costs on average $4,824 a year, with the employee paying $779 of that amount, according to a 2009 survey by the Kaiser Family Foundation and Health Research and Educational Trust. For a family plan, the premium is $13,375 with the employee paying $3,515. Under current law, the Congressional Budget Office estimates that in 2016 average premiums for employer-based insurance will rise to about $7,500 for a single policy and about $19,000 for a family policy.

WHAT IT MEANS: Numerous factors will affect the cost of insurance under proposed health care bills, making their impact hard to predict. But President Barack Obama has vowed to lower the cost of health care. The legislation would set up exchanges where companies would compete for customers. It also would provide subsidies for lower-income people.

There you have what the bill as proposed will cost you if it is not changed in the process….read it and weep…….Good plan and is a FAR cry from the stuff dreams were made of……Progressives lose again….now are you not glad you voted the way you did…..