Well, it appears the NY Times has the scoop on TARP II, as U.S. Treasury Secretary Tim Geithner will outline it in a speech tomorrow. Essentially, Geithner has prevailed. What this means is Wall Street has just won a big one, and Main Street just got screwed...huge.

According to the NY Times, here's the deal: "Geithner Said to Have Prevailed on the Bailout."

Geithner Said to Have Prevailed on the Bailout
By STEPHEN LABATON and EDMUND L. ANDREWS
Published: February 9, 2009 (late today)

WASHINGTON-- The Obama administration's new plan to bail out the nation's banks was fashioned after a spirited internal debate that pitted the Treasury secretary, Timothy F. Geithner, against some of the president's top political hands.

In the end, Mr. Geithner largely prevailed in opposing tougher conditions on financial institutions that were sought by presidential aides, including David Axelrod, a senior adviser to the president, according to administration and Congressional officials.

The article continues, indicating:

(Generally speaking, diarist's comments are in italics, throughout.)

--The "anti-nationalization" folks, led by Geithner, have won a big victory, for all intents and purposes.

--Geithner was able to curb "severe limits on executive pay for companies receiving government aid."

--The government will not be dictating how banks spend their rescue money; and shareholder's equity at large institutions receiving TARP II funds will not lose their investment via nationalization.

--Some issues still remain unresolved, however; but the article really didn't get into much detail on that statement. (This reminds me of TARP I, frankly.) But, here's the broad-strokes:

    "BAD BANK" REDUX: Geithner will call for a joint Treasury and Federal Reserve effort, which will cost somewhere between $250 and $500 billion; it will "encourage investors to acquire soured mortgage-related assets from banks." The funds will come out of the Federal Reserve, and the F.D.I.C. might provide guarantees to those participating, private sector investors. As the NY Times noted, This is "the Bad Bank," and/or the quintessentially dressed-up pig, lipstick and all, just a  couple of degrees of separation removed, so they don't have to call it that,  for all (im)practical purposes.

    FED CREDIT FACILITY: Another $500 billion to $1 trillion will be committed to expand the Fed's current $200 billion program to unfreeze credit markets for commercial, student, auto and credit card loan products.

    REVIEW OF CAPITAL LEVELS OF ALL BANKS: A determination will be made on how much additional capital needy banks will actually get. (So, let me get this right, we really are going to piss away truckloads more of taxpayer's perfectly good money to follow-up all the bad disbursements we made to the truly failing banks in TARP I? Could Rove, himself, have delivered more cannon fodder to the GOP?) Funds for this aspect of the program will come from the second-half of the TARP I money (the second $350 billion of the $700 billion authorized by Congress this past Fall).  

    CRUMBS FOR US: $50 billion will be budgeted to support homeowners "facing imminent foreclosure."(Let me put this in perspective: A typical home, being generous with the numbers, has a value today of--very--roughly $150,000. $50 billion will cover the mortgages of, approximately, 300,000-350,000 homes.  If a home's decreased in value by 30%, which isn't that far off from the average decrease in value of a typical U.S. residence, this will cover the lost equity in roughly 1,000,000 households. Problem here is that approximately 3,000,000 homes are already in various stages of foreclosure, at the moment, if my memory serves me correctly.)

Other highlights of tonight's NY Times' scoop on tomorrow's speech by Geithner and the drama leading up to it:

--There was dissent among Obama's inner circle. Axelrod's concerned about public reaction, and general perception.  And, there's this unattributed, general comment regarding concerns about the public's perception of Tuesday's speech:

"...the poor management of last year's bailouts could feed a potent political reaction if the administration did not demand enough sacrifices from the companies that receive federal money."

No shit!

And, the rest of the NY Times piece really makes me want to....scream...yep...that's the word. As it gets into more of the details:

--Geithner will blame corporate management for the economic crisis;

--He'll demand--without getting into specifics of course--"rules that require all banks receiving capital from the government to submit plans that describe how they intend to strengthen their lending programs and generally restrict them from using the money to acquire other banks until the government money is repaid."

And, here's what made my stomach just turn...

But officials said Mr. Geithner worried that the plan would not work -- and could become more expensive for taxpayers -- if there were too much government involvement in the affairs of the companies.

Mr. Geithner also expressed concern that too many government controls would discourage private investors from participating.

--SNIP--

But as intended largely by Mr. Geithner, the plan stops short of intruding too significantly into bankers' affairs even as they come onto the public dole.

The article closes out by saying it's really quite similar to the Bush plan; in fact, the Times piece comes out and just about says that, verbatim.

And, Chuck Schumer (D-Wall Street) loves it. (Which, to me, is the kiss of death. )

Under-freakin'-whelming, or just plain outrageous?

*=NOTE, JUST AS I WAS POSTING THIS: The Wall Street Journal is out with their coverage of this now, and it pretty much mirrors the NYT piece. The slight difference between the two articles is that instead of discussing the Treasury Dept's and the FDIC's efforts to "insure" private investment in toxic/"bad bank" debt, the WSJ's article downplays that reality (but still mentions it), attempting to frame it as if it's a private funding deal, exclusively, and then referencing the FDIC/Treasury support for the program in passing.

More on the WSJ corroborating piece here (NOTE: MSNBC is running a piece exclusively about the original NYT article): "Banks to Get Stress Test Before Aid."

The expanded effort could see as much as $2 trillion in financing flowing through the system, according to Congressional officials briefed Monday night. The expanded Fed facility and the "bad bank" could each reach $1 trillion in size, both of which would be seeded with bailout funds.

The administration is discussing spending between $100 billion and $200 billion investing new funds in banks, up to $100 billion to expand the Federal Reserve facility and $50 billion to help homeowners. The Treasury wants to keep some money available in case of emergencies. These commitments could eat up much of the second half of the $700 billion bailout fund.

The Obama administration's initial attempt to sell the plan got off to a rocky start on Capitol Hill Monday evening in briefings with House and Senate staffers. Officials told packed meetings Mr. Geithner would lay out a framework Tuesday for the financial rescue. But a lack of detail was met with skepticism as staffers pressed for more information.

Rep. Brad Sherman (D., Calif.) asked officials how much taxpayers could be on the hook if the situation in the financial system was to further erode. "I appreciate your filibuster, but that's the other side of the Capitol," Mr. Sherman told the Obama officials, according to a person at the briefing.