Banks want “an epic rescue plan”

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Weekend reading, worth checking out, though I am sure it will not sit well with many of you:

--The New York Times notes the banks are now pushing ‘an epic rescue plan’: ‘A confidential proposal that Bank of America circulated to members of Congress this month provides a stunning glimpse of how quickly the industry has reversed its laissez-faire disdain for second-guessing by the government — now that it is in trouble.’

More: ‘Bank of America suggested creating a Federal Homeowner Preservation Corporation that would buy up billions of dollars in troubled mortgages at a deep discount, forgive debt above the current market value of the homes and use federal loan guarantees to refinance the borrowers at lower rates. ‘We believe that any intervention by the federal government will be acceptable only if it is not perceived as a bailout of the bond market,’’ the financial institution noted. In practice, taxpayers would almost certainly view such a move as a bailout.

The NYTimes reports that the Bush administration -- yes the same crowd that said ‘absolutely not’ to a bailout earlier in the week -- ‘has expressed interest’ in hearing about bailout plans.

Meantime the ever-alert Westside Bubble links to reports of another bailout in the making: This one for the homebuilders, in the form of a $10,000 tax credit for buyers of brand-new homes. You may recall the homebuilders’ lobby has been sulking, and withholding political donations, because it didn’t get what it wanted in the first stimulus package.

‘A substantial tax credit for home buyers is likely to be part of any second economic stimulus package enacted by Congress,’ Marketwatch reports. Who knew there is already a second stimulus package being discussed?

Your thoughts? Comments? E-mail story tips to peter.viles@latimes.com.