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In DC, Bailout Bill Pushed Beyond US, to HSBC, Barclays, Deutsche Bank, Nomura, RBS - & Sovereign Wealth Funds?

Byline: Matthew Russell Lee of Inner City Press in DC: News Analysis

WASHINGTON DC, September 21 -- As the fast track proceeds toward rubber-stamp approval of the bail-out proposal by Henry Paulson and Ben Bernanke, changes are being made, and they are not pro-consumer. Rather, non-U.S. institutions involved in subprime lending, such as HSBC, Deutsche Bank, Barclays, Royal Bank of Scotland, Credit Suisse, Nomura and even Sovereign Wealth Funds have gotten themselves included in the bailout. Their access can be documented. Paulson's initial proposal as issued on September 20 was

"The Secretary is authorized to purchase, and to make and fund commitments to purchase, on such terms and conditions as determined by the Secretary, mortgage-related assets from any financial institution having its headquarters in the United States."

  This phrase, headquarters in the U.S., caused agita. Lobbying was done and concession were made.

Paulson and Bernanke: let's thrown some billions to HSBC and Barclays

 Later on September, Paulson's Treasury Department issued a clarifying fact sheet:

"To qualify for the program, assets must have been originated or issued on or before September 17, 2008. 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."

  The switch no longer requires a U.S. headquarters, only "significant operations" in the country. Surely HSBC, based in London and Hong Kong, considers its Chicago-based subprime lender significant. So too Deutsche Bank's two subprime lenders.

   Also significant, in terms of supposed concern about moral hazard, is the cut-off date of September 17. Weren't people on notice at least since February 2008 about the problems in the subprime market? Why should investments made after that still be in line for a Federal bail-out? In Washington, the sleaze is moving faster.

Watch this site, and this debate, mostly about UN but also Sarah Palin.

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These reports are usually also available through Google News and on Lexis-Nexis.

Click here for a Reuters AlertNet piece by this correspondent about Uganda's Lord's Resistance Army. Click here for an earlier Reuters AlertNet piece about the Somali National Reconciliation Congress, and the UN's $200,000 contribution from an undefined trust fund.  Video Analysis here

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