The Obama administration is considering asking Congress to give the Treasury secretary unprecedented powers to initiate the seizure of non-bank financial companies, such as large insurers, investment firms and hedge funds, whose collapse would damage the broader economy, according to an administration document.

The government at present has the authority to seize only banks.

Giving the Treasury secretary authority over a broader range of companies would mark a significant shift from the existing model of financial regulation, which relies on independent agencies that are shielded from the political process. The Treasury secretary, a member of the president's Cabinet, would exercise the new powers in consultation with the White House, the Federal Reserve and other regulators, according to the document.

according to an administration document.

Treasury Secretary Timothy F. Geithner and Federal Reserve Chairman Ben S. Bernanke pressed Congress yesterday to give the federal government unprecedented new power to seize financial firms beyond banks whose collapse could jeopardize the world financial system.

Unless there is new legislation expanding the government's control over non-bank entities, Geithner said, the current laws would "continue to constrain our capacity to address future crises."

Q Thank you, Mr. President.

Your Treasury secretary and the Fed chair have been -- were on Capitol Hill today, asking for this new authority that you want to regulate big, complex financial institutions. But given the problems that the financial bailout program has had so far -- banks not wanting to talk about how they're spending the money, the AIG bonuses that you mentioned -- why do you think the public should sign on for another new, sweeping authority for the government to take over companies, essentially?

PRESIDENT OBAMA: Well, keep in mind that it is precisely because of the lack of this authority that the AIG situation has gotten worse. Now, understand that AIG's not a bank, it's an insurance company. If it were a bank and it had effectively collapsed, then the FDIC could step in, as it does with a whole host of banks -- as it did with IndyMac -- and in a structured way renegotiate contracts, get rid of bad assets, strengthen capital requirements, resell it on the private marketplace.

So we've got a regular mechanism whereby we deal with FDIC-insured banks.

We don't have that same capacity with an institution like AIG, and that's part of the reason why it has proved so problematic.

I think a lot of people understandably say: Well, if we're putting all this money in there, and if it's such a big systemic risk to allow AIG to liquidate, why is it that we can't restructure some of these contracts? Why can't we do some of the things that need to be done in a more orderly way? And the reason is -- is because we have not obtained this authority.

We should have obtained it much earlier, so that any institution that poses a systemic risk that could bring down the financial system we can handle, and we can do it in an orderly fashion that quarantines it from other institutions. We don't have that power right now. That's what Secretary Geithner was talking about.

And I think that there's going to be strong support from the American people and from Congress to provide that authority so that we don't find ourselves in a situation where we've got to choose between either allowing an enormous institution like AIG, which is not just insuring other banks but is also insuring pension funds and potentially putting people's 401(k)s at risk if it goes under -- that's one choice -- and then the other choice is just to allow them to take taxpayer money without the kind of conditions that we'd like to see on it. So that's why I think the authority's so important.

Q But why should the public trust the government to handle that authority well?

PRESIDENT OBAMA: Well, as I said before, if you look at how the FDIC has handled a situation like IndyBank, for example, it actually does these kinds of resolutions effectively when it's got the tools to do it.

We don't have the tools right now.

I think a lot of people understandably say: Well, if we're putting all this money in there, and if it's such a big systemic risk to allow AIG to liquidate, why is it that we can't restructure some of these contracts? Why can't we do some of the things that need to be done in a more orderly way? And the reason is -- is because we have not obtained this authority.

The Obama administration is considering asking Congress to give the Treasury secretary unprecedented powers to initiate the seizure of non-bank financial companies, such as large insurers, investment firms and hedge funds, whose collapse would damage the broader economy, according to an administration document.

The word "seize" is being thrown around a lot here. Is that effectively what Geithner is asking for? Or, is he, as I suspect, asking for more regulation over businesses that have received bailouts already -

In addition to problems with executive compensation, the financial crisis has revealed systemic gaps in the regulatory structure governing our financial markets. The lack of an appropriate regulatory regime and resolution authority for large non-bank financial institutions contributed to this crisis and will continue to constrain our capacity to address future crises. I will testify before this committee on Thursday to discuss our regulatory reform proposals - particularly those relating to mitigating systemic risk - in more detail.

As we have seen with AIG, distress at large, interconnected, non-depository financial institutions can pose systemic risks just as distress at banks can. The Administration proposes legislation to give the U.S. government the same basic set of tools for addressing financial distress at non-banks as it has in the bank context.

The proposed resolution authority would allow the government to provide financial assistance to make loans to an institution, purchase its obligations or assets, assume or guarantee its liabilities, and purchase an equity interest.

The U.S. government as a conservator or receiver would have additional powers to sell or transfer the assets or liabilities of the institution in question, renegotiate or repudiate the institution's contracts (including with its employees), and prevent certain financial contracts with the institution from being terminated on account of the conservatorship or receivership.

This proposed legislation would fill a significant void in the current financial services regulatory structure with respect to non-bank financial institutions. Implementation would be modeled on the resolution authority that the FDIC has under current law with respect to banks.

Before taking any emergency action, the Treasury Secretary would need to determine that resolution authority is necessary upon the positive recommendations of the Federal Reserve Board and the appropriate federal regulatory agency.

We should have obtained it much earlier, so that any institution that poses a systemic risk that could bring down the financial system we can handle, and we can do it in an orderly fashion that quarantines it from other institutions. We don't have that power right now. That's what Secretary Geithner was talking about.

"The AIG situation highlights the need for a strong, effective, consolidated supervision of all systemically important financial firms," Bernanke said, saying it was important to install a regulator to "look at the system as a whole, to look for weaknesses in regulation, to look for problems in payment systems, to look for buildups of risky positions, to look for issues with derivatives and so on, to try to provide an overview of problems, in the financial system as a whole, as opposed to focusing solely on each individual institution in isolation."

It's just one more part of the USA (Union of Socialist America) plan that all you Obama zelots said was not real and would never happen.

We will share the wealth... That is, as soon as we take over as many public companies as we possibly can...

"We should be looking more at why our (and others) entire economy hangs on the balance sheet of firms like AIG, rather than trying to prop them up and/or seize control of them.".

Socialism refers to a broad set of economic theories of social organization advocating public or state ownership and administration of the means of production and distribution of goods, and a society characterized by equality for all individuals, with a fair or egalitarian method of compensation.[1][2] Modern socialism originated in the late 19th-century intellectual and working class political movement that criticized the effects of industrialization and private ownership on society.

Socialists mainly share the belief that capitalism unfairly concentrates power and wealth among a small segment of society that controls capital, creates an unequal society, and does not provide equal opportunities for everyone in society. Therefore socialists advocate the creation of a society in which wealth and power are distributed more evenly based on the amount of work expended in production, although there is considerable disagreement among socialists over how, and to what extent this could be achieved.

I grant you that the right wing fucknuts are demonizing it, but people like you are advocating the other extreme and refuse to even acknowledge that the government's agenda has been at least moving in the direction of socialism.

We aren't talking about bob's hardware down the street. We are talking about companies that are so large that when they are driven into a ditch they affect everyone, investor or not.

Unfortunately, no one wants to even discuss it because we're divided right through the middle. And your kneejerk over-reaction is just as stupid as Khan's.

Too big to fail implies that people who are not executives, investors, workers, costumers, or in any other way directly affiliated with a company will suffer if that company fails. Any company that achieves such a label should be monitored to insure that people who choose not to affiliate with such a company don't end up suffering in any way shape or form through no fault of their own.

and doesn't take into account reality

I completely disagree. But then, we seem to be fundamentally different camps on this. I think the nation should take it's lumps now before they get worse. You seem to think it is better to delay any discomfort NOW in return for more pain LATER.

Jesus, fucking relax man. Can't you spot levity without a casting message.

Bad assets do not become better over time, they become worse. Doing this slowly increases the total impact.

This is not a problem that developed over time. It developed quite recently and because of derivatives and deregulation. Greed on the part of Wall Street and Congress, members of which made a great deal of money off of the sale of bad investment.

There was so much 'money' being made that the firms didn't diversify as much as they should have, in order to have a more attractive quarterly report. Then folks realized they were investing in ridiculous shit, and it all blew up. Investment brokers were even selling shares in 'how many games the Cubs will win this season'.

WASHINGTON - The National Security Agency intercepted private e-mail messages and phone calls of Americans in recent months on a scale that went beyond the broad legal limits established by Congress last year, government officials said in recent interviews.

Several intelligence officials, as well as lawyers briefed about the matter, said the N.S.A. had been engaged in “overcollection” of domestic communications of Americans. They described the practice as significant and systemic, although one official said it was believed to have been unintentional.

Ackerman, so far, has found the following men in Congress to have gone on codels in 2005 and 2006. We'll continuously update the list and will be calling members of Congress to see what leads they may have.

House members
Darrell Issa (R- Calif.)
George Miller (D-Calif.)
Edward Markey (D-Mass.)
Henry Waxman (D-Calif.)
James McGovern (D- Mass.)
David Dreier (R-Calif.)
Lincoln Diaz-Balart (R-Fla.)
Phil Gingrey (R-Ga.)
Doc Hastings (R-Wash.)
Ander Crenshaw (R-Fla.)
E. Clay Shaw (R-Fla.)
Jon Porter (R-Nev)
Michael Fitzpatrick (R-Penn.)
Dave Weldon (R-Fla.)
Collin Peterson (D-Minn.)
Thaddeus McCotter (R-Mich.)
Kenny Hulshof (R-Mo.)

The really egregious part of that is that they spied on a member of CONGRESS without a warrant. I just don't get how that's not front page on every single news site.