Bailout plan gets bigger

There's a guy named Don who still owes me $800 from about 15 years ago. I had given up hope of ever seeing any of that money, but now I'm hoping to convince Secretary Paulson to roll it into the big Wall Street bailout plan. It wouldn't be any more ridiculous than what's already on the table.

Just two days ago, the Bush administration's Cash for Trash buyout was restricted to mortgage-based assets held by American companies.

Today, after Wall Street lobbyists have had a chance to weigh in, the scope of the bailout has expanded to any kind of debt.

Officials now propose buying what they term troubled assets, without specifying the type, according to a document obtained by Bloomberg News and confirmed by a congressional aide.

The change suggests the inclusion of instruments such as car and student loans, credit-card debt and any other troubled asset. That may force an eventual increase in the size of the package as Democrats and Republicans in Congress negotiate the final legislation with the Bush administration, analysts said.

``The costs of the bailout will be significantly higher than originally considered or acknowledged,'' said Josh Rosner, an analyst with independent research firm Graham Fisher & Co. in New York. ``How, given these changes, can the administration and Federal Reserve believe they are being forthright in their unrevised expectation of future losses?''

Oh, and the bailout is no longer restricted to American companies, by the way.

In a change from the original proposal sent to Capitol Hill, foreign-based banks with big U.S. operations could qualify for the Treasury Department’s mortgage bailout, according to the fine print of an administration statement Saturday night.

[...]

The legislative outline that went to Capitol Hill at 1:30 a.m. Saturday had said that an eligible financial institution had to have “its headquarters in the United States.” That would exclude foreign-based institutions with big U.S. operations, such as Barclays, Credit Suisse, Deutsche Bank, HSBC, Royal Bank of Scotland and UBS.

But a Treasury “Fact Sheet” released at 7:15 Saturday night sought to give the administration more flexibility, with an expanded definition that could include all of those banks: “Participating financial institutions must have significant operations in the U.S., unless the Secretary makes a determination, in consultation with the Chairman of the Federal Reserve, that broader eligibility is necessary to effectively stabilize financial markets.”

So, UBS, the Swiss banking conglomerate where Phill Gramm is a board member, could get a piece of the $3,000 that you are ponying up to rescue Wall Street from its folly. Yes, that would be the same Phil Gramm who caused this whole problem in the first place.

Viva, capitalismo!