Bits Bucket For September 26, 2008
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Washington Mutual gone. Who’s next?
Did anybody see how Rick Santaili (sp?) on CNBC just got INTO it with some Wall St. ‘tard trader? The trader kept pushing “We need to pass it [bail out] NOW!!!” And Rick was so angry about it that at one time, he WHISTLED to let the trader know to STFU!
Never seen that on TV before.
It’s posted on the network site - I’d link it but my computer didn’t like the site and coughed up a furball.
About the 8 minute point, if anyone is interested.
No - I’ve never seen that before!
To funny,
Leigh
Rick is one of the sane people on CNBC.
Hey, I can’t find it. What is the title?
Roidy
Here ya go Roidy.
http://www.cnbc.com/id/15840232?video=868551308&play=1
Leigh
God, I LOVE that man!!!
This was highly expected by everyone. It’s a good deal for the US Taxpayers in that FDIC pays nothing to bailout WaMu and actually gets $1.9 billion from JPMorgan. I knew this was highly probable so as mentioned before I opened a 12 months 5% CD at WaMu just 3 weeks ago. Actually that deal is still available at the WaMu website and if JPMorgan decides to honor existing CD rates of WaMu, you get a heck of a deal and no longer have to worry about WaMu going under.
WAMU isn’t now WAMU fed right? How is thad cd safe at this point. I look at this as a move of additional insecurity for my money at WAMU.
JP Morgan is too big to fail right? Wasn’t Bears Sterns, Lehman, F&F, etc. also too big to fail.
JPM has north of 30:1 leverage last I checked.
I need to make some moves, what are they?
JPM can’t fail. It’s the private sector incarnation of Federal reserve. If JPM fails the entire fiat ponzi scheme fails. Its stock is probably a decent inflation hedge.
As far as I know, WaMu accounts go directly to JPMorgan and not to FDIC, unlike IndyMac. I expect to have access to my cash shortly but since it was a 12-months CD I didn’t really need this money for a long time. I would not suggest doing this with money you need the money in 4 weeks.
Look, if you believe the entire US Banking system will collapse and FDIC will go kaput, then no don’t do this and keep your money somewhere else other than a bank (but as I mentioned many times before show me a place where you can park $100K without any risk whatsoever).
“I expect to have access to my cash shortly”
STILL waiting for funds from Lehman Bros. to be “unfrozen”. (Would that be thawed?) Sold some options mid last week, they went belly up, but wired the money to my BofA account - received written confirmation. But alas, the funds are stuck in limbo somewhere…
Maybe today….
On the bright side, at least I wasn’t having the money transferred into a WAMU account like my colleague.
Over last few weeks I had been pulling money out of Wamu and I opened a new account at…Chase
Guess I could have saved a lot of time by doing nothing
(still feel good about being safe on that one, if FDIC would have had to take over who knows what the cash situation would have been)
Yeah, but you helped push them under the bus, man!
You should be justifiably proud of yourself.
Still got a big chunk of change locked up in “The Reserve Fund”. go go MMF…
I suspect the reason the FDIC didn’t close down WaMu, was the harrowing prospect of coming up with 10,000 people that knew what they were doing, to take over WaMu’s 2,000 branches.
As if JP Morgan really wanted a bank with one foot in the grave and the other one chopped off…
Well Dimon aren’t no dummy. In this case ALL of Wamu’s equity, preferred, debt/bond and swaps obligations are wiped clean so all holders and counter-parties of those instruments are wiped out. Guess that is what Dimon wanted in order to take WaMu from FDIC’s hands.
False bravado about the acquisition of propriety disguised as losses is to be expected…
If I was in your paws cougar, i’d be more worried about the return of my money, rather than the return on your money.
FIFO, or FOFI.
FIFI, the dog.
Wiped clean? Like the old man’s @$$ in the retirement home? Nothing personal coug (I really mean that, I was just being “funny”), there are no clean hands in the money biz at this point. I forsee the runs within 30 days for banks barring some major stabilization. My local credit union is leveraged 10:1 and doing well (so they say). I have been systematically removing some cash here and there just in case things get silly…
Aladinsane- I have been seeing more silver for sale in coin shops around here… way over spot (of course) but they still have some (10’s of ounces rather than the 1000’s like normal) one in particular though has been taking orders- for delivery in at least 8 weeks. Gold is everywhere. It is too easy to reclaim gold as most of it is in jewlery form. I’m not being arguementative, just hoping to spur you into looking at both Ag/Au. Maybe you are? I notice you have been posting about a buddy in the coin biz in LA. I live at the edge of the “Silver Valley” in Idaho. CDE and HL are located here, not that means squat, just more proof that metals are getting harder and harder to find. This is going to make the Hunt Bros. episode look like a joke unless there is an about face in, well, about 3 years ago… ooops.
I’m not a fan of Silver because it’s bulky and didn’t fit into my mobility plans, but I can plainly see it’s the next best thing to Gold, as far as the public concerned.
Everybody can afford $15 for an ounce of prevention, but very few in our country can afford $950 for the real deal.
The shortage of Silver are all too real, I keep in contact with a number of coin dealers and the story is the same everywhere, nobody has any, and more importantly, the public isn’t selling them any over the counter, NONE.
Many people get tripped up over biblical/ancient Roman Gold to Silver ratios of 16 to 1, thinking silver is a screaming buy @ 75 to 1, but the ancients had no idea just how much Silver was in the New World, a veritable s-lode of it.
Supplies of Gold bullion will disappear in the same fashion that Silver has, but it will take a bit longer, but time is on my side, yes it is.
Oy vey, aladinsane!
Silver since biblical times is 95% consumed, whereas 95% of known gold reserves are stored above ground.
Silver is much scarcer than gold.
Silver is the best conductor of heat and electricity, and the best reflector of light, known to man. Which gives it thousands of industrial, mercantile, military, research and monetarist uses.
There is a shortage of silver at current fictitious “spot” prices. So do some arb.
Buy SLV under $14 and sell later at $25.
Best of luck my friend.
Let me explain how common Silver is…
Take just one year of 170 continuous years of production of American Silver coins, 1964.
In just that one year, the U.S. Mints in Philadelphia and Denver produced Silver coins that consumed over 500 million troy ounces of Silver.
What about the other 169 years of Silver coins?
These coins didn’t disappear, they were just turned into other forms of Silver, after we went off the Silver Standard in 1965.
The biggest industrial user of Silver used to be the Silver Screen, but along came a digital spider…
I loved your post about silver- but one thing makes me nervous. SLV very well may not have the physical holdings they are touting, which could bring the ETF to its knees. Physical holdings are the best bet.
I have read many posts about “you can’t eat gold”, who’s going to accept it, etc. I use gold and silver for glass blowing on a daily. Scale & tin snips is all you need to get the weight needed. I have said for years that the first cell phone company that makes the screen into a scale wins. Digi scales built into cell phones. Dealers would go nuts for a phone like that. Patent anyone?
“The shortage of Silver are all too real, I keep in contact with a number of coin dealers and the story is the same everywhere, nobody has any, and more importantly, the public isn’t selling them any over the counter, NONE.”
That’s not true. I recently sold a bunch of old radiographs to a couple that are going to extract the silver from them for 25 cents a pound and I was stoked to get the money. Made about $25. Previously, I had to pay a hauler to take this off my hands.
There’s a lot of silver lying around that is available for recycling once there’s a little money in the system for incentive. I wouldn’t be betting that silver is going to rise much more unless it’s purely a bubble.
I’ve got a bucket of 1940’s silver half dollars, I guess I should figure out how many and what they are worth.
9.5 times face value is what I hear coin shops are selling them for…
The biggest industrial user of Silver used to be the Silver Screen, but along came a digital spider…”
Actually there is one oz in every flatscreen..500 million sold last year. We have been in a supply deficit for the past 7 years. As in we are using more than is produced. Much of that was reclamation,and over the counter selling..That is coming to a rapid halt. Silver is used up, and mostly unrecoverable unlike gold. Harder to mine as the easy mines of yesteryear are dwindling not to mention oil, and mfg.costs. Stop quoting data from last year..AMpmex, Kitco etc etc are out of most all products.Back ordered by a month and a half, and there is no real rush as yet…Go search the internet except ebay,and I cannot find much if any.
Timing of this is weird. I thought the FDIC always tried to do this stuff on Friday to allow for a ’smooth’ weekend transfer. I think they’re attempting to use this as added leverage for pushing the bailout through. Like I said early this week, look for a big down day today and then it’s even more likely that our week willed con-gress will push this thing through.
My take on it was to allow time to complete the transaction. The whole Thursday thing is wierd, but considering the FDIC didn’t have the cash to fully insure all the accounts I suspect had the takeover been of the tradditional type a WaMu run would have occured.
So by doing the takeover on Thursday and doing an immediate about face shows a couple things:
1) The Fed knew WaMu was in trouble a few weeks ago.
2) JPMC knew WaMu was in trouble a few weeks ago.
3) WaMu knew WaMu was in trouble a few weeks ago.
By selling the accounts at face value to JPMC the FDIC doesn’t have to do an immediate insurance coverage of the deposits. I really doubt it was political; I think it was just far more practical to do this on a Thursday than a Friday. The whole reason for the normal Friday takeover is to allow the FDIC 48 hours to step in and get things running, in this case, JPMC is the bagholder, and apparently, they were willing to hit the ground running.
The fact that WaMu stock was trading at over $2.00 a share is only a testament to how undercover this whole thing was…
And, interestingly, just for the record:
4) Any regular readers here and of Russ Winter for the last couple YEARS knew WaMu was in trouble.
And more recently, appearing to be in “Big, Fat, I Can’t Believe They’re Still in Business” trouble…
I’m leaning towards thinking it was done on Thursday, so we can be reassured on Friday that everything is OK — thus no bank run today and tomorrow morning.
I agree.
The failure today was part of the move to ramrod the Bailout Out Bill through Congress.
“Give us all your money or you’ll lose all the money,” which is the basic idea of the Bailout Bill. WaMu was just an example of this - a thread to get Congress to cave to King Henry Paulson and his cronies.
I was thinking about this Thursday takeover too.
I can’t help but think it is intentional as a confidence builder. If the transfer of accounts from Wamu to Chase goes off without a visible hitch seen on Main Street, it sort of makes it a non-event.
Good for depositor confidence. “See! No big deal! Now move along…”
RE: Washington Mutual gone. Who’s next?
From the stories contained in this morning’s Beantown Glob’s biz section, it sure looks like the wheels are comin’ off.
WAMA down the tubes; short sellers on the warparth sayin’ the game is now completely rigged; Sheila Blair up to her wazoo with 60k and growing IndyMac foreclosures; FDIC has $45bil in the till or only 1% of all insured deposits-projected bank bust coverage estimated @ $200 bil; Boston Fed sending $72.5 billion out the door to prop up a variety of commercial banks; GE’s financial unit forecasting a big hit; Mazzland highway tolls goin’ up by 100% …and ta-da the R(D)epression has finally arrived.
And the weather forecast is for 48 hours of heavy rain….
Everything’s just fine and peachy keen here, Warren.
Wachovia’s next. Just a feeling….
I agree laughingboy.
Don’t forget the recent kick in the sack from China either… Weren’t they loaning us approx $3B a day +/-?
My money is on Wachy-ovia as well.
My understanding is that Wachovia has more option arm exposure than WaMu. I think they in deep huey. I closed a small account this week, not enough to bring em down, but enough for a nice vacation.
Strange clouds blowing in from the southeast; we rarely get storms from that direction. Must be the double hurricane pushing up through DC…..
Film crews wandering Seattle taking shots of WaMu bank buildings. Sidewalks empty around the banks, so no run on deposits at least.
Looks like the Texas Pacific Group took it in the shorts with the Wamu take over. $7 Billion dollar investment gone. David Bonderman and the Bass family must be crying in their champagne today.
Oddly, even though they are one of the largest banks in the Southern California area, this story DID NOT LEAD in the local news! Largest Bank Failure-EVER! It was a less than twenty second blurb. They spent more time on some story about teenagers who caused an accident running from the police. I don’t think that story was even LOCAL. I do not get it. LARGEST BANK FAILURE EVER=20 second of air time?!?!?
Stars End
Nothing to see here. Move on people….
No recession, no depression. Just smilies, rainbows and unicorns. Is that Stawberry shortcake over there?
RE: Nothing to see here. Move on people….
No recession, no depression. Just smilies, rainbows and unicorns. Is that Stawberry shortcake over there?
Guess I ain’t the only one sayin’ NO MORE NUMBA #1 GI!
Memo from Krautland…
http://www.ft.com/cms/s/0/1d6a4f3a-8aee-11dd-b634-0000779fd18c.html
Last night, at the 24/Hour Fitness gym in Carlsbad, even the GenZ front desk clerks were talking about WaMu. The flat screen TVs were switched from sports to CNN. Everyone is waiting for the next shoe to drop.
a Bruno Magli size-12, just fell from the heavens…
Wait, those are the infamous O.J. shoes, right?
Yeah, it all revolves back to him…
Shouldn’t be surprised, should we?
Wachovia could be next.
http://www.marketwatch.com/news/story/wachovia-shares-fall-after-wamu/story.aspx?guid={1F265D96-B8C0-4A9D-B2A2-1BEA35F146B0}
Shoot first
Sep 25th 2008
From The Economist print edition
Regulators—and just about everybody else—gun for speculators…
IN 1918 Vladimir Lenin told the Petrograd Soviet that “speculators who are caught and fully exposed as such shall be…shot on the spot”. There are as yet no firing squads on Wall Street or in the City of London. But a backlash against financiers has begun. It is partly political—leaders of all stripes are now demanding blood. Reflecting the mood, America’s Federal Bureau of Investigation is probing 26 firms for possible accounting fraud, reportedly including Fannie Mae, Lehman Brothers and American International Group (AIG).
Regulators, meanwhile, are now prepared to use almost any tool to try to stabilise financial firms and prevent the kind of death spiral suffered by Lehman and AIG. To this end, authorities across the developed world have introduced blanket suspensions on the short-sale of financial firms’ shares, and are eyeing curbs on credit derivatives.
http://www.economist.com/finance/displaystory.cfm?story_id=12305738
The American Kulaks are letting their voices be heard and the Paulson Politburo doesn’t like it one bit. He said, “give me all your money.” And the peasants have replied with a resounding, “nyet”.
I wonder how many of them stopped to think this morning that the headlines are full of prominent d’s chastizing house r’s for revolting against the decider’s dictates? I wonder if that sinks in at all?
“Change” my azz!
Peasant revolt!
Pleasant revolt.
Peasant revulsion.
HIC.
And it’s only 11am yet!
Unfortunately in pidgin English spoken by most ‘mercuns now n’yet is a contraction for, “not yet”.
Bah, these days on Wall Street I am surprised if one can even walk in the front door of any of these buildings and not trip over fraud. I shudder to think how many armies of undead skeletons are filling up their closets!
Wall Street and fraud? Who’d have guessed!
It would be easier to just find the handful of non-crooked people on the street and combine them all into one bank… one small bank… and put the others in prison.
Good Morning Bank Failure Amerika:
So i guess this means Morgan buys the Deposits from WAH Mooo, and closes all their branches adding to the commerical real estate glut in NYC.
I know of 5 chases within a block or two of wah moo, and a few more litterally on opposite corners.
Oh boy is this getting wacky or what?
The amount of corner bank branches in Manhattan just boggles the mind.
And none of them are open past 3:00 pm. Plus, the lines are long and the tellers are rude. When I lived in NY, the financial capital of the US, I was appalled at the state of the retail banking industry.
The hours were really inconvenient, like 10-4 or something. It was well-nigh impossible to find a bank open until 7:00 pm, or a branch that was open on Saturday mornings. There were fees for everything, and the banks would not count coins for you; they’d actually give you a bag full of those paper tubes and make you stuff individual coins in them one by one, even though they had a big coin-counting machine right behind the tellers. A cashier’s check cost like $9:00 or something — it was terrible.
Has any of this improved?
I use ATMs for everything. They are open 24 hours per day, even though I’m usually in bed by 10. Most branches are open until at least 6 and Commerce tries to be open 24/7, I think. I have never had an ATM be rude to me.
I’ve had ATMs refuse to serve me. Never seen a teller do that.
“The hours were really inconvenient, like 10-4 or something.”
The shortest lobby hours I ever remember were in the DC area in the early 90’s following the S&L bailout. They were doing anything and everything to cut expenses. Mostly relying on ATM’s, I wouldn’t care except I’d just moved there and needed to open an account. I remember driving around during the mid afternoon on a weekday and couldn’t find a single bank that was open in which to open an account. It was worse than “bankers hours”. Closed for 2-3 hours around midday, closed some mornings or afternoons, no Saturday hours, etc. I wonder if this will be coming back soon after a wave of bank failures.
For exactly those reasons, I de-selected from retail banking back in the 80s. After that, it has been credit unions all the way. They are the co-ops of the banking industry. No fees, all the services you’d want, run by members, pay dividends instead of interest, always a year-end dividend. Not enough to make you rich, but it’s the thought that counts. The bigger ones have working jane hours. ATM fees are VERY low, and are free for alliance partner members.
There’s always some way you can wangle your way into a qualifying member group. It’s worth burning a brain cell or two, as virtually any affiliation qualifies. Some are set up by geography.
There are at least three national credit union associations with member lists (member credit unions, that is) on Google.
Credit unions also have regional centers - servicing any and all credit unions - which have evening and weekend hours. They must be funded with a member fee or some such, as the facilities are always bare bones, though the service is fine.
I am a very happy credit union member, and will never again subsidize the treatment I used to receive from the mainstream financial interests.
Actually $iti just extended Sat hours till 3pm from 1 when i first moved into my apartment 8 years ago, they were closed on Saturdays Most of the tellers are still there, this branch seems to hire people who walk from home….
Plus everyone speaks a 2nd language, hard to fire those people…in fact they were offering a Bonus to come to work for $h$ttybank…
They deliver a substandard, indifferent service.
Just like Detroit did with cars.
Result = long term poverty
The Toronto Dominion bank in Canada has the best hours of operation hands down. Details vary by branch I think, but they’re open as late as 8 PM some evenings.
I use a credit union that shares branches with other CU’s. Looks like my local one has both Sat. and Sun. hours.
What next? Peet’s takeover of Starbucks?
One can hope
I will most definitely party like a mad demented monkey were that to happen.
(Not holding my breath though.)
“mass hysteria, cats living with dogs”
Ghost Busters
The JP Morgan garbage man eats another one. Hooray for the garbage man!
Does that landfill ever get full, or do they use and incinerator?
They paid $2 for $300 of assets. They ought to be able to find $2 in there. They just ate a really big pig.
As long as they can burn those liabilities, or throw them in the toxic waste pile called government.
Still, JPM is the cleanest smelling garbage man out there.
Bulimia
might be the answer, so what form is the ‘Intake’ going to come out as?
******************************************************************
The JP Morgan garbage man eats another one. Hooray for the garbage man!
Does that landfill ever get full, or do they use and incinerator?
I’m curious to see what happens to the WAMU branch being built in San Francisco Castro district. This was a location that was battled over by many firms. Trader Joes wanted in - (TJ is a grocers, something the area really needed) - and the locals revolted because of possible parking and traffic problems. WAMU bought the lot and are/were in the middle of building a new branch. Wonder what’s going to happen to it now?
I just drove by there this morning and wondered the same thing. There were construction crews still working. Personally, I’d prefer TJ’s.
Hanky P. and Benny B. must wondering why the hell they took the job.
No. I’m wondering why they were ever offered the job. They know exactly why they took those jobs.
How about that John McCain, eh? Right now I’m guessing there are more than a few people in Washington who’d REALLY like to throttle him. I’m no McCain fan, but at the moment I’m getting a kick out of his antics. First, he leaves everyone to sort of twist in the wind over the debates in Mississippi. Then he goes to Washington to bollix up the bailout deal (which is just fine by me). LMAO! When you think about it, this is a real two-fer for him. He gets to poke Bush in the eye (payback for Bush’s evisceration of McCain in the South eight years ago) and he gets to really throw the Dems off kilter. Maybe it’s even a three-fer, since the media is deprived of one of their players in the debate. I love it. You go, McCain. You may not win the election, but you’ll sure have fun sticking it to those who stuck it to you.
I also seem to remember some squabble that McCain had with Obama a while back, over some legislation, where Obama had led McCain to believe one thing and then went in the opposite direction. McCain sent him a blistering letter that was all over the news. So this debate thing is a nice payback for Obama.
He didn’t manage to bollocks anything, he showed up late for his big photo op. It was conservative GOPers like Richard Shelby who did the doubt-sowing and heavy lifting. Give credit where credit is due.
While the results may work out in The Mav’s favor in the end (I think it’s way too early to tell) I get the sense that this is the McCain camp flailing around in a tizzy, not some master stratagem on their part.
I can’t stand McCain either, but even if he screwed up this deal unintentionally he deserves kudos.
McCain, in the meetings yesterday, just sat there with a glazed look over his face thinking to himself… “Wow, I shouldn’t have taken that 2nd bong hit, what’s going on here is really cool.”
OK, after a very long time, I spewed coffee again.
Thankfully, I averted my face, and “nuked” the floor rather than my laptop.
Sigh.
Thanks for your insights Palmetto. I am grateful for the smiles and “ah ha” moments when reading your posts.
Trapper
Letterman ain’t too happy with McCain, who called him an hour before appearing on Wednesday night’s show, to say that due to the economic crisis he had to fly out immediately to Washington. Letterman was happy to oblige, doing his patriotic duty, only to discover that McCain not only traipsed over to Katy Couric’s studio for an interview (which again, was fine with Letterman, since it’s “news”) but then proceeded to make the rounds of NYC, and not fly out to Washington until the next day. If you know anything about Letterman, he has some bizarre Howard Hughes traits, and really holds a grudge if you cross him. He thinks a little too highly of himself, though it was funny when he said he felt like “an ugly date.”
http://www.cnn.com/2008/SHOWBIZ/TV/09/26/letterman.mccain.rant.ap/
Let’s all cheer for the House Republicans!
Hooray for republicans lining up behind their leader!!!!
Are you that much of a partisan? Really? Is your mind really that shut that you can’t admit what’s going on? Really? The only ones lining up behind Paulson were Dodd, Frank, Pelosie, Schumer, etc. What was that I just saw fly by the window? Oh, it’s exeter’s credibility. Bye bye.
Yes, he/she really is that partisan.
So are about 10-15 others on this board who can’t resist trying to turn EVERY discussion into an anti-whomever political diatribe.
It’s very tiresome.
But REPUBLICAN senators Bob Corker and Judd Gregg who wrote the bailout language in conjunction with Paulson and Bernanke has nothing to do with it right?
It’s really is time for you to lay off the wobble juice.
And the rest of the Republicans standing up against this mess deserves no credit? Right? I loved what I saw from Senator DeFazio and he is a Democrat. Not being a partisan I can given anybody a compliment when they deserve it. The rest of the Dems seem to have lost their minds. But keep firing those partisan shots. Your gun sight is broken.
The plot thickens. If the Dems try to save the banks, they are typical liberal bleeding-heart bailers. If they don’t do the typical liberal thing, then they kill economy.
Obama and McCain are trying to thread their respective needles. McCain is trying to look like a Maverick, Obama is trying to get in the action enough to show he cares but not enough to gum up the works. Luckily, both of them have to catch a plane to Alabama sometime today.
Meanwhile, the public is livid, calling their Members of Congress and expressing their opinion. One figure I heard was 300-1 against the bailout.
All this baloney has bought the one thing needed most: time. Apparently, it’s still an emergency, but not as much as originally thought. I still like the intallment plan. Match a small slow emergency with a small slow bailout. There’s still a chance for a “soft landing.”
I hope it doesn’t pass, but even if it does I’m cheering on the Dems to eliminate that Section 8 BS where the Secretary isn’t accountable to anyone.
Its all a bunch of posturing…These bastards have nothing at risk…Their incomes and benifits are garunteed by US !!
Dodd, Frank, Pelosi, Bush, Bernanke and Paulson seem to be in cahoots to fleece the taxpayers, but for different reasons.
I’m certainly more impressed by the conservative Repubs response than by the Dem power brokers, who’re mystifyingly cuddlin’ up to the central premise of this bailout, which I think most of us believe is wrong.
Take note that the real righties and real lefties have each turned tail on this proposal — for different reasons, obviously. Dennis Kucinich, for example, said this: “This bailout will not bring real jobs back to America … The major product of this financial economy is now debt. Industrial capitalism has been destroyed.”
I agree. The most disgusting part of this whole debaucle is how Pelosi, Frank, Dodd and Reid cuddle up to the President. Do these folks have any memory or are they that out of touch? I can’t wait to see these dems explain this (a la the war) in about a year when it doesn’t fix anything, but Wall St. CEOs are still pulling in 8 figure salaries.
Who thought we’d be saying that? Who thought the Democrats would decide to practice immolation over this issue? Barney Frank and Chris Dodd have looked like Paulson’s puppets. Once again they steal defeat from the jaws of victory. That DeFazio letter sure is great, though. One Democrat gets it.
I see a huge downward spike in the markets this morning. We could see DOW down 400. I believe that may be a buying opportunity as something will be leaked later today to cause it all to shoot right back up, if only temporarily.
Yesterday was really weird, I briefly put on Air America, that left wing talk radio station, and they were screaming against the bailout and in favor of letting the market sort it all out, then I put on Michael Medved, the conservative commentator, and warched the supposed pro-capitalists on CNBC, and the were crying for a bailout!
Bill O’Reilly is all for the bailout. Apparently his whole argument was, “they need to get it done”. How can you argue against such a convincing argument? The Rightie talk show hosts want it but the Repubs are fighting it. The Leftie talk show hosts don’t want it but the Democrats are all for it. I gotta stop hitting the bong.
The government equity stake is de facto nationalization — socialism.
We have one S.C. Senator standing against the current bailout proposal. Jim DeMint(R) Of course our spineless water boy Lindsay Graham(R) is repeating the same old pablum… We must do this for the good of the country crap.
Which all to me shows that nobody really knows what “IT” really is.
Pretty scary, if you ask me.
Didn’t dumb Bill hear the Republicans have pulled the plug on the Republican bailout plan?
More National news
Bailout deal stalls as GOP lawmakers revolt
By Jennifer Loven and Julie Hirschfeld Davis
ASSOCIATED PRESS
7:32 p.m. September 25, 2008
WASHINGTON – A Republican revolt stalled urgent efforts to lash together a national economic rescue plan Thursday, a chaotic turnaround on a day that had seemed headed for a success that President Bush, both political parties and their presidential candidates could celebrate at an extraordinary White House meeting.
‘Which all to me shows that nobody really knows what “IT” really is.’
Which to me shows that some Republican Congressmen are doing the right thing under fire (e.g. Shelby).
The predictable neo-goebbels on righty-tighty talk radio and television were all in favor of following our dear leader’s henchman’s plans to their culmination, despite the consequences to the nation…
After the hoi polloi is done sharpening the points of their pitchforks and heating up the ends, I hope these clowns are the very first recipients of their ire.
“The predictable neo-goebbels on righty-tighty talk radio and television were all in favor of following our dear leader’s henchman’s plans to their culmination, despite the consequences to the nation…”
Yep. I keep having people tell me, “you need to listen to so and so (fill in rightie talk show host)”. I just roll my eyes and walk away.
NYCB:
My wife and I were on a month-long roadtrip through the Southwest a few years ago, and in many smaller locales, right-tighty radio was the only thing on the airwaves.
Of all the neo-goebbels, sean shows the most promise in emulating his predecessor, as he has pure deceit coursing through his veins.
I suggest you listen in sessions of no longer than 15 minutes @ a time, for your own safety.
Just for the record, Senator Bunning from Kentucky has been outspoken about opposing the bill.
From his web site,
“This massive bailout is not the solution, it is financial socialism, and it is un-American.”
Glen Beck, Neil Bortz and Michael Weiner (Savage) should only be listened to in 3 minute increments unless you have a barf bag at hand.
Nothing wrong with defeating whats become known as the Mccain Bailout Plan. I suppose I’d try the same thing if I were drowning in my own seething pot of BS and mistakes.
Were you for what Paulson was proposing or against it?
Frank, Whether the bailout passes or fails won’t matter. The banking model is broke. Period. It will require cash in the hands of J6Pak to keep prices of assets(not just houses) and manufactured goods inflated. Bernanke knows this, hence is nickname helicopter Ben. Disposable income is non-existent, credit scores in the gutter and unemployment rising. Can you name any cashflow on Main Street that will keep this thing inflated?
“Nothing wrong with defeating whats become known as the Mccain Bailout Plan.”
I have yet to see anybody, other than you, call anything “The McCain Bailout Plan”.
If I recall correctly, it is McCain who wants to postpone debates, delay the election and in fact shutdown his campaign to take credit for something he might regret.
“McCain: Time is short to get bailout plan”
“McCain said a deal must be achieved by the time financial markets open on Monday to avoid economic calamity in the United States.”
http://www.reuters.com/article/topNews/idUSTRE48O69R20080925
I agree with your general premise, that there is not much that can be done stop the general trajectory we are on. I think Bernake has tried to re-inflate this thing a number of different ways and has failed.
I also think just on the basic principles of good governance the Paulson plan should be defeated. It is handing way to much to power to the treasury department. I would rather see the government assist in the orderly liquidation of these assets and the institutions that are no longer solvent. I am puzzled that an opposition party would line up with a hideously unpopular lame duck president to assist him in consolidating power in the executive branch. I don’t understand why Pelosi, Reid etc. feel it is in the democratic party’s interest to vote for this bill.
RE: Can you name any cashflow on Main Street that will keep this thing inflated?
An -ex HS football teamate of mine owns the local corner pub. 50/60 seat capacity-serves beer, wine, and varying priced pub grub.
It’s always full…middle-aged diners at noon; the construction crowd for happy hour; and the regulars at night.
Payment is accepted in one form-CASH ONLY! which is noted in big letter on the wall and the set mats.
I snicker when I see an out of town group run up a triple digit tab and reach for the plastic when bill time come. Usually, they draw straws to see who has to make the run to an ATM machine. Double funny, if it’s raining cats and dogs.
But it’s MAIN STREET businesses like this that will survive in this credit bust. If you’re a small biz and have to rely on plastic and personal checks…good fookin’ luck.
The underground economy is gonna become huge now that JSP is waking up to the fact that the government is
for the rich and by the rich.
The underground economy is gonna become huge now that JSP is waking up to the fact that the government is for the rich and by the rich.
It’s funny you mention this, hd74. I’ve been thinking about underground/gray market/black market economies a lot recently: in light of all the talk we’ve heard here about the difference in street v. paper prices for gold and silver, in periodic discussions of the underground Weed Economy, and my own observations in my weekly trips to the flea market (which is obviously cash-only, and absolutely booming for both buyers and sellers).
The other day, someone returned my loaned copy of the Eric Schlosser book “Reefer Madness,” which examines the underground/gray economy in terms of drugs, illegal labor, and pornography. (It’s not a bad book.)
I re-read the introduction while I was waiting for the train. It was interesting to revisit after several years. Schlosser sets up the whole book by talking about how when an economy is unstable or people lose faith in the government, the underground economy booms. In countries with marginal economies, the underground markets sometimes contribute very high percentages of GDP, and of course that’s where all the action is.
I wonder if we’ll see a similar movement here?
The underground economy is gonna become huge now that JSP is waking up to the fact that the government is
for the rich and by the rich.
The underground economy has always been huge. Have you ever wondered how all the drug money makes it down to S. America?
Once upon a time, not too long ago (like early 1990’s), the “conservative” estimate of the Indian “black” economy was equal to their GDP. (These were the government numbers.)
The “realistic” estimate was that it was 10x the size of GDP.
The “realistic” estimate was that it was 10x the size of GDP.
That’s insane!
Shadow markets, here we come … (?)
RE: I wonder if we’ll see a similar movement here?
Well ET…numerous posters here on this blog consistently
refer to our current plight and financial affairs as that of a 3rd world “banana republic”
Black markets literally keep these economies afloat.
My guess, the underground economy here is gonna become enormous.
Betcha this fiasco spells the end of the drug wars.
Government will be so broke they’ll want the tax revenue from legalization.
Plus this will free up the DEA goons to work for the IRS to hassle Mr. and Mrs. Corner Store person who’s sellin’ all sorts of contraband smuggled tariff free over the Mexican & Canadian border.
“I don’t understand why Pelosi, Reid etc. feel it is in the democratic party’s interest to vote for this bill.”
Perhaps they saw the trap: Voting it down was the only way democrats would be blamed for the crash. Now they are stuck out there on the limb though.
Too bad they’re going to be the ones left twisting in the wind though.
“It’s better to die on your feet than to live on your knees.”
- Winston Churchill
Agreed.
Definitely. If it ever comes down to it, I’ll fight side by side with you two in a foxhole.
I’ll bring the Jack Daniels and gummy bears.
That is actually a quote from Emiliano Zapata.
¡Prefiero morir de pie que vivir siempre arrodillado!
“It’s better to die on your feet than to live on your knees.”
- Winston Churchill
Can I sit down and live?
In a foxhole? No way, Jose. I’m a direct descendent of Paul the Man Revere, we keep ‘em running, no sitting in holes.
Good - we’ll need you.
Conversely, my grandfather was a scout on the French/German line for 1.5 years during WWI. Sometimes running from foxhole to foxhole (well, to be more precise, from trench-to-trench).
They look like a party of mavericks. What’s more, if the plan passes, the Republicans use it to run against the Democrats in November. If the plan fails, the Democrats are responsible for the market crashing and subsequent re-rectified recession. It’s great theater.
It’s the democrats falling for yet another carefully orchestrated power-play, no doubt dreamt up by Karl…
Darkmouth Hank warns financial armageddon will happen unless this bill is passed, which was so loaded with landminds, giveaways and other badness, but the cherry on the top was giving Hank the powers of a dictator.
Now as things unravel in the next 5 weeks, righty-tighty radio goes on full court press,
blaming everything on the democrats (wrongly of course, but ideological bounds know none) for not getting it passed, and Geritol Johnny gets elected.
And who loaded it? What started out as a fairly straightforward bill is turning into a giant coupon book with freebies for everyone, thanks to Dodd, Frank, Pelosi, & Co. V-O-T-E-B-U-Y-I-N-G has reached a new high and low simultaneously.
If the idea is to free up credit, why can’t politicians focus ONLY on that, and leave their self-promoting schemes at home?
And as they squabble, the actual need for the plan appears to be diminishing somewhat, rendering this entire circus more moot by the minute.
I think the ultimate solution is going to be a plan, but a much smaller plan.
And as they squabble, the actual need for the plan appears to be diminishing somewhat, rendering this entire circus more moot by the minute.
Yes indeed.
We can squabble our way back to relative stability.
Exactly !!!
Weird as it may seem, I reckon the almost bloodless takeover of WaMu might be the arrow to the heart of the Bailout, at least for the ‘pleb in the street’.
Because no one (other than shareholders) has lost out on the JPMC/WaMu shift, its obvious that the eye-popping $700 billion Paulson plan isn’t really neccessary.
Or, at least that’s my take on it.
But then, I know nothing.
I’ve just e-mailed my senators, my congressman, McCain and Obama with the idea that a major bank failed and the Dow is UP! Obviously no bailout is needed, period.
My second rounds of e-mail today and I’ve been e-mailing all week. With only 16% of the people approving a bailout, the sane squeaky wheels may actually win on this one. Go forth and squeakify.
Bailout plans falling apart? Or just a momentary setback?
The fate of the Bush administration’s $700 billion bailout package was thrown into doubt Thursday evening, after congressional leaders left a landmark White House summit on the economy hurling accusations at each other and declaring there was no deal.
McCain rescue plan in limbo… Is the WH in on the deal?
Debate in limbo as blame passes back and forth
Candidates trade barbs as they shuttle between White House and meetings
Will McCain, Obama debate tonight?
…
“What this looked like to me was a rescue plan for John McCain for two hours,” said an angry Sen. Christopher J. Dodd (D-Conn.), who had all but declared the deal done earlier in the day. “To be distracted for two to three hours for political theater doesn’t help.”
“Will McCain, Obama debate tonight?”
I hope not. Waste of time. I hope the “Maverick” sticks to his guns and stays in Washington to “rescue the financial system”.
Like he is qualified (snark)…
McCain admitted he knows nothing about economics, so him going to D.C. to be the white knight and save the day, would be like me being pressed into service to perform brain surgery on a cadaver.
I like you aladin. But do you honestly believe that this crap is even workable and not just pie in the sky political BS?
http://my.barackobama.com/page/s/economyplan
Both of these guys suck harder than (a) Hoover.
Obama sucks a lot less than McCain.
Those are our choices, and we have to deal with the house of cards dealt us.
Bob Barr is a choice. If you vote for Obama or McCain, you are throwing your vote away and sanctioning socialism.
Bob Barr’s got a Chinaman’s Chance of getting elected, but don’t let reality bite, Bill.
Bob Barr’s mustache makes me think of a bad 70’s porno actor.
How he can be a strong proponent of the War on Drugs (WoD) and the Global War on Terrorism (GWoT) and then change his mind a couple of years later makes him seem all too much like the Maverick(Old Spice).
Is Bob more Mannix or Longstreet looking?
Of course Dodd is pissed. This whole disaster in the markets was sparked by the collapse of Mae and Mac. Dodd is SO mixed up in those two that he needs to get those bodies buried as fast as possible. Parties don’t matter when there is this large a level of money and corruption involved.
He is good at injecting himself for a good photo-op. Count on him to make a lot of distracting squawking noises that keep the real power players from making any real progress in their negotiations.
His campaign has made the same distracting pre-emptive strike in Juneau to protect Ms. P from being investigated by the Alaska legislature. The latest tactic involves the Maverick’s “interpretation” of the Alaska Constitution.
Give it a break. Palin’s supposed transgressions are literally nothing compared to Obama’s and Biden’s. All this political mud-slinging is becoming tedious in the extreme. She has a Downs Syndrome baby; Democrats throw a fit. Her mayoral opponent possibly invents, but certainly perpetuates, a story about her having asked a librarian how a citizen MIGHT have A book removed from the shelves; Democrats send out made up lists of books they claim she wanted banned (including some that hadn’t even been published yet at the time). A local minister from Kenya blesses her against “witchcraft” (a common religious blessing in Kenya); Democrats go to town claiming she is scared of witches. Ninety-nine percent of everything Democrats claim about her is fiction they maliciously concoct, then believe by the time it circulates back (they even cite each other as references; how cute).
I dislike Palin’s hunting and sanctioning of hunting, but that’s part of the culture she grew up in. John Kerry is a hunter. Jimmy Carter authorized the use of monkeys in laboratory neutron bomb simulations (the monkeys died from radiation; the news filmclips at the time were horrifying), and let his Secret Service agents beat to death a poor rabbit trying to swim to, and climb in, his boat. Carter was and is a bible-thumper; Obama, till a a few months ago, belonged to a bible-thumping nutcase church.
I’m tired of having to go to snopes and other sites to fact-check all the nonsense Ds and Rs keep sending me. Some of the stuff about Obama is ridiculous, laughably so, but when it comes to slander and “bearing false witness” to destroy those they perceive as enemies or potential enemies, Democratic rumormongers have no equals. Their philosophy, “the ends justify the means,” is the exact opposite of one I was taught.
Hey Incredulous, a relative of mine operates the American Power Blog. You should see the wild, incomprehensible lies spewed out on this thing from the far right. I think we should all agree that no party has a monopoly on mud-slinging.
I’m sorry…do you live in Alaska and follow the news here daily? What particular qualifications do you have that make you feel like lecturing me about Alaska politics when I’ve lived in Anchorage for 5 years?
Unlike you, my knowledge of her strengths and transgressions don’t come from reading the approved puff-pieces over the last 3 weeks, but knowing details about her governorship and talking to people who know her or her staff very well (this is a small state).
Let’s hear your qualifications to argue about this particular topic, and then I’ll take your opinion seriously.
I’m not arguing for or against Palin. I don’t like hunting, and that’s the only thing I mentioned that she actually is involved in.
What I indicated was that I was fed up with all the crap being sent to me by fanatics. The fake pictures of her in a bikini with a rifle, the book banning stories, etc., are utterly annoying, and my Democratic friends actually call me to tell me the latest nonsense as “proven fact,” when, in fact, it’s more of the same.
Biden has a known history of serial plagiarism (a huge negative) and egomania (an even bigger negative). Obama has a long history of associating with hideous people to further his career. Focusing on the imagined faults of an opponent while ignoring the real faults of ones own idol stikes me as ridiculous.
I’ve said for years on this blog that I am neither Republican nor Democrat, but an observer in the middle, and what I’m observing makes me sick. As for right wingers spewing rubbish, nobody denies it. But, why is it morally superior for left wingers to do the same? And I guarantee you, I have NEVER in my life observed the kind of orchestrated character assassination against so called Liberals that I have observed against so called Conservatives. As a gay man surrounded by “Liberals,” I can assure you that what THEY say about “Conservatives” is so vicious and cruel, there is no way on Earth that Conservatives could come close in response. Again, the philosophy of the ends justifying the means is, to me, a major problem. It is a terrible throwback to primitive thinking. What my self-styled enlightened “Liberal” friends cannot grasp is that the ends and the means are part of the same package.
I happen to believe in Karma AND reincarnation, and I truly believe that those who throw mud and destroy lives will eventually be on the receiving end. Maybe not in this lifetime, but definitely.
Incredulous (the original):
I’m another Alaskan (Arctic Roadrunner customer x15rs (not long enough to get my picture on the wall)); have a real estate biz partner in Wasilla; SIL - bartender in downtown Anchorage and knows about the ‘real stories’ circulating; biz associates in the mining and medical community; what appears in the ‘Outside’ national press is nowhere close to the pros and cons perceived by the locals here.
Beautiful and well-written post, Incredulous.
I’ve really nothing to add, though I agree with you 100%. Keep fighting the good fight and don’t let the bastards who surround you get you down. You have better and more important things to do.
Thanks.
Thank you back Eudemon.
I just watched the debates, and decided that a choice between a pompous frog and a pompous cadavar is beyond my evolutionary level to make.
Meanwhile, the partisans are at it again, each claiming victory and trashing the opposition. What I want to know is where the nice people, and why aren’t they speaking up?
OT, but I was in the Westside Pavilion today (west L.A. mall), and I have never seen it so empty. The few people walking around looked like retail employees on their breaks.
Are you still buying your west side investment properties?
I wish I could, but there’s been no reduction in price. Haven’t bought in LA since 2001. The big price decreases are in sucky areas like the ghetto or the San Fernando Valley. I didn’t wait this long for that crap!
It’s only a matter of time.
And money.
LOL, combo.
And PMs.
Back when I was married, that PM time of the month was really crappy.
Did i really have to know that? Oh wait hmmm that is a good thing …marriage brings on that crappy feeling…don’t want that to happen to you again…right?
For the woman in my life these days, P stands for Post.
JFYI; marriage = good. I lost her after 32 years, menstral jokes aside.
Other than the fact that I bought GLD last week ;-), why the h*** isn’t Gold going thru the roof? It seems like this is the perfect time for it to be the ultimate safe haven play but nothing? As soon as I sell, I am sure it will surge.
hold onto it until I post that I am making a buy. That is when the market will tank.
“hold onto it until I post that I am making a buy. That is when the market will tank.”
LOL, that’s what I told my then boss during the dotcom boom. When I capitulated and bought mp3.com, I straightaway told him, sell all your stock I just bought a tech stock. He didn’t listen to me; the market crashed soon after.
Hang tight, sister. I see signs that the plan to rescue high-end coastal real estate owners from their bad loans is in question.
Why would J.P. Morgan’s share price go up just as they are about to buy an underwater thrift? Remember what happened to West Germany after unification?
J.P. Morgan says California home prices face further drop
By Greg Morcroft
Last update: 8:38 a.m. EDT Sept. 26, 2008
NEW YORK (MarketWatch)
J. P. Morgan (JPM 44.05, +3.55, +8.8%) , which late Thursday bought Washington Mutual (WM 1.69, -0.57, -25.2%) , said the peak-to-trough average home price in California could fall as much as 58% if the country enters a severe recession. The estimate was included in materials prepared for a conference call on Thursday evening outlining the Washington Mutual purchase.
I thought it sounded like they’re just buying deposits and branches and aren’t touching the loans.
They’re down in the premarket, but maybe they’ve just confirmed their “too big to fail” status.
I didn’t wait this long for that crap ??
Same problem here in Silly Valley….
To reinforce what LAIG says, my realtor just sent me a listing for a 20-year-old crappy condo near the 10 Freeway, which had its listing price reduced from $699 to $599K. Whoop-dee-frackin’-do!!!! And this was supposedly a short sale contingent on the bank’s approval. I’m renting a really nice house in Westwood for about half the mortgage costs on something like that.
. I’m renting a really nice house in Westwood for about half the mortgage costs on something like that.
Mmmmmmm. Westwood.
Hey, I was there too, on my lunch hour. Were you the brunette wearing all black on the escalator?
Chris Whalen on CNBC today. “The government shouldn’t be in the business of managing assets. The only thing they do well is to transfer money between parties.” The CNBC shills, especially Lisman, were stink-faced over that one. It was a great start to this rainy day.
I guess my game show will now have to include Thursday as well.
I missed the, ahem, bailout debate yesterday. What happened?
Mike
Can Chris Whalen host tonight’s possible debate?
The republicans are stopping the bailout?
Great strategic move if they kill it- they will probably retake congress in November
According to the NYTImes:
The day began with an agreement that Washington hoped would end the financial crisis that has gripped the nation. It dissolved into a verbal brawl in the Cabinet Room of the White House, urgent warnings from the president and pleas from a Treasury secretary who knelt before the House speaker and appealed for her support.
“If money isn’t loosened up, this sucker could go down,” President Bush declared Thursday as he watched the $700 billion bailout package fall apart before his eyes, according to one person in the room.
“If money isn’t loosened up, this sucker could go down,” President Bush declared Thursday
Boob!
…this sucker could go down.
Articulate!
Gawd, that man makes me cringe.
Leigh
This sucker could go down
Is he referring to himself or Paulson?
Bush is the complete opposite of great leaders like Winston Churchill. He must study their speeches so he’ll know what not to say.
He does SO remind me of Alfred E. Neumann.
Roidy
Nope, It Barney Frank that said “this sucker can go down”!
Barney Frank is the complete opposite of great leaders like Winston Churchill. He must study their speeches so he’ll know what not to say.
Barney Frank did not say that.
No, but I’m sure he thought it.
Bush sure could use some of his Investor Angels from his oil man days. Maybe they could bail us out, too. Read it and weep:
http://www.washingtonpost.com/wp-srv/politics/campaigns/wh2000/stories/bush073099.htm
Should we keep trying to avoid reality?
“F.A. Hayek won the Nobel Prize for showing how central banks’ manipulation of interest rates creates the boom-bust cycle with which we are sadly familiar. In 1932, in the depths of the Great Depression, he described the foolish policies being pursued in his day – and which are being proposed, just as destructively, in our own:
“Instead of furthering the inevitable liquidation of the maladjustments brought about by the boom during the last three years, all conceivable means have been used to prevent that readjustment from taking place; and one of these means, which has been repeatedly tried though without success, from the earliest to the most recent stages of depression, has been this deliberate policy of credit expansion…”
I wish Ron Paul was running.
Sub-prime was a bad idea. Why spend a trillion dollars to prop up a bad idea?
Nobody is talking about that just yet, as they are too busy rescuing the world financial system to figure out what works and what doesn’t.
Sub-prime was a bad idea. Why spend a trillion dollars to prop up a bad idea?
Wait. I thougth sub-prime was “contained”. What happened?
Sub-prime is contained………………………………
to planet earth.
Mike
“Treasury Secretary Henry Paulson begged Democratic participants not to disclose how badly the meeting had gone, dropping to one knee in a teasing way to make his point according to witnesses.”
Now there’s a mental image picture, Paulson dropping to his knees in front of Barney Frank.
Whose idea was it to hand McCain a bazooka?
Barney was encouraged because he heard Hank had a bazooka. He’s now disillusioned to find out it was only a pee-shooter.
pee-shooter
LMAO
(pea shooter)
Ha ha. Paulsen does look like he’d have a bazooka, but his once deep manly voice has curiously morphed into mine.
Is there any precedent in American history for letting candidates into the WH to participate in a momentuous executive-level decision before an election is held? What if neither of them ends up becoming the next CIC? Or is it already somehow decided that one of them will be elected?
It was a photo-op gone very wrong.
is it already somehow decided that one of them will be elected?
Have you been living in a cave your entire life?
Question: How do you know about the internet?
lmao.,
I don’t remember anything like it. I can only wonder if this was an attempt by Bush to bring the man on the street into his office via the candidates.
I also don’t remember mere candidates making victory tours in Europe before the election.
After FDR won the Presidential election in November of 1932, Hoover desperately wanted to confer with him about the economy and what to do about it?
FDR pretty much avoided Hoover because as president, Hoover had shown he had no idea how best to move the country forward.
Obama would be best advised to follow FDR’s course, after he is elected…
Another mental picture for you Palmy:
This morning Neil Boortz made a coffee spewinging comment about Barney Frank. He said ” Barney Frank always talks like he has something in his mouth.”
Barney Frank has a combination of several speech defects. He misses all of his L’s, most of his R’s, slight lisp, and little breath control.
It surprises me that public figures don’t get some speech therapy.
please. Not before lunch….
I guess the homebuilder stocks will be going up today, as a bottom in new home sales is obviously at hand?
Drop in new home sales is biggest in 17 years
U.S. median price falls 5.5% to $221,000
By Alan Zibel
ASSOCIATED PRESS
September 26, 2008
WASHINGTON – New home sales tumbled in August to the slowest pace in 17 years, while mortgage rates spiked this week, increasing pressure on the new chief executives of Fannie Mae and Freddie Mac to help stabilize the housing market.
Governor vetoes bill prohibiting loan practices
STAFF AND NEWS SERVICES
September 26, 2008
SACRAMENTO – Gov. Arnold Schwarzenegger has vetoed a bill that would have prohibited some of the lending practices advocates say contributed to the downturn in California’s housing market.
The legislation would have banned negative amortization loans, in which homeowners pay less than the interest on their loan and can end up owing more than their homes are worth.
It also would have prevented mortgage brokers from steering borrowers into more-profitable but higher-risk loans if those buyers qualified for lower-cost mortgages. In addition, prepayment penalties would have been capped.
Schwarzenegger says the bill would have applied only to state-regulated brokers, leading to unequal protections for consumers. He also says it could have prompted unfair lawsuits against brokers.
The bill’s author, Assemblyman Ted Lieu, D-Torrance, said he will push the legislation again next year.
BUSINESS BRIEFING
Mortgage rates climb amid markets’ turmoil
September 26, 2008
Rates on 30-year mortgages, which had been falling for five weeks, jumped sharply this week, reflecting the turbulence in global credit markets.
Thirty-year, fixed-rate mortgages rose to 6.09 percent this week from 5.78 percent last week, Freddie Mac reported its weekly nationwide survey.
6.09% does not sound like a $700 billion crisis to me. The DOW down 150 this morning does not sound like a $700 billion crisis. I guarantee that I could leave my desk right now, and within 1 hour could buy and finance a new car with no money down. I could be approved for another credit card in about 60 seconds. So could everyone I know. Where’s the crisis? Is it that they cannot lend money anymore to people who cannot, or will not pay it back? GOOD!!
Right, they are saying LIBOR “soared” to 3.8% or something.
They can’t get their heads around the fact that in a country where everyone wants to spend now and no one wants to save, interest rates have to be higher to discourage the former and encourage the latter. It’s like the housing market where the sellers won’t sell at market.
No no you don’t understand Wall Street Investment bankers could loss billions in Bounus right before the important Holiday season
What bonuses?
Last year, there were 5 investment banks. Today, there are 0.
The bonus cavalry ain’t gonna be comin’ around the hill this time. It’s over.
Good point….Are we just selling fear again with this deal ??
thats the way i look at it. the PTB always use that fear tactic to get what they want. i think they want that 700bln to keep giving credit to the i want it but i dont want to pay it back scum.
They’re afraid of the American people hunkering down Depression-style. If Americans were forced to revert to the pre-1982 idea of living within their means, they’ll cut up the plastic and quit buying everything except food, health insurance, gasoline, and electricity. And rely on their families and free TV/radio for entertainment.
Americans did a prototype of hunkering-down in the post 9/11 shock, and the economy dove. That’s what happens when your GDP is 70% consumer spending. Bush managed to slow the 2001 panic by sending us to the mall. It won’t work again.
back in 2005-2007 when I lived carless and spent only cash-money, (mostly on farmer’s market veggies), a friend told me “Oxide, if everything lived like you, the economy would crash within a month.” He’s right.
Its diving! I have received cold calls from car dealers. Yesterday we got an offer in the mail from Disney for $59 rooms at Disneyworld and free meals!
If Americans lived within their means & saved sensibly, the economy would crash immediately.
Then the economic model which we are running on is fatally flawed. Let it crash if the alternative is everyone living over their heads as debt-serfs while savers and productive people are abused for the benefits of scammers.
Part of the “crash” in this scenario is b/c the measure of economic health (increased spending = better health) is flawed.
If we measured economic health in terms of something more reasonable, like savings rate, then we would see the economy has been crashing for decades.
It comes down to this: the earth, and the resources on it, are finite. The economy - the US economy or the world economy as a whole - can’t continue to “grow” forever, it’s simply not possible. Capitalism is inherently flawed in this regard, unless it was inverted to emphasize conservation instead of consumption. Let me think out loud on this for a moment…
Perhaps it is possible to re-wire capitalism in such a way that sustainable use of resources is rewarded, and wasteful use of resources is penalized. Part of this would be rewarding people for savings, rather than for profligate consumption. Environmentally, it would mean charging companies that currently externalize their costs to society at large, such as those that pollute, poison water, create extra waste, etc. You would have to make it more cost effective to be sustainable than it is to be wasteful, which is currently the opposite of everything that happens in modern capitalism.
What would this look like? Well, say, instead of a fast food place using paper wrappers (cheaper for them) which pollute the environment and end up in landfills (a cost for society, which the burger place escapes paying for), they have to use actual plates, which they wash and re-use. This is more expensive for Burger King, but less expensive for society as a whole. Companies that produce such waste could be penalized in the form of additional taxes, while those that absorb the (previously) external costs are rewarded by a lower tax rate. Of course this would require actual honest application and regulation. I know, fat chance.
This is just a simple example, but I’m sure it could be applied to more complicated situations and industries.
Ideas, I got a million of ‘em.
You would have to make it more cost effective to be sustainable than it is to be wasteful, which is currently the opposite of everything that happens in modern capitalism.
There’s nothing about capitalism that promotes “wastefulness” any more than is already prominant in human nature. (we don’t really have a capitalist economy or free-market or whatever you want to call it)
Socialism on the other hand, certainly has some attributes which promote wastefulness (i.e. the tragedy of the commons).
to re-wire capitalism in such a way that sustainable use of resources is rewarded, and wasteful use of resources is penalized.
This is generally already the case. You have to consider first that “wastefulness” is a subjective term. What you perceive to be wasteful another may perceive to be efficient. But what two people are more likely to agree on is trends, “x” is more efficient than “y”, so it’s better to steer the conversation in terms of trends instead of absolute terms like wasteful or efficient.
Anyway, “capitalism” only means that individuals own the sources of production, nothing more really. Owners tend to be more interested in efficiency of use than non-owners. Non-owners frequently appear to be more interested in conservation than they really are, because they don’t have any “skin in the game”, so to speak. That gives them the freedom to only focus on a single aspect without taking the whole picture into consideration.
which pollute the environment and end up in landfills (a cost for society, which the burger place escapes paying for)
This is a good example of how you are disconnected from the words you are using. Assuming all the facts in your story are correct, what you describe here is not a failure of capitalism but rather a tragedy of the commons. The burger joint doesn’t have the power to offset the costs of the garbage on it’s own. That is a function of government.
And the burger joint isn’t the only “abuser” of the good, common landfill. No doubt residents purchase goods without regard to what kind of waste may be generated by their purchase decision.
Additionally, because landfills are pretty much a fixed cost to all of us (we don’t have much choice but to pay those fees or taxes or whatever) there is no incentive on the margin, where incentive tends to be most effective, to “save money” by reducing garbage. If instead there were no public landfills, garbage collection/disposal costs would have a better chance of being charged on the margin (e.g. by weight, or volume or some other qualification) instead of being socialized and spread out amongst everyone regardless of waste production.
Paper polution is made from trees (that grow in Nature.) Trees create oxygen. Gotta get rid of them since oxygen and carbon dioxide are both pollutants now.
Great post
This is what those who support globilization fail to understand.
The earth is finite and at the current population cannot sustain the constant growth that capitalism requires.
A massive downturn requiring people to buy less crap and use less is ultimately a good thing. Hyper-consumerism is trashing the environment, and people in India and China are just starting to be able to buy stuff.
Now I am confused… is there a financial crisis or not? There are plenty of people on HBB who said FDIC / US Banking system will go kaput and US is facing a second coming of Great Depression or at best the most severe recession since the 30’s and then I hear other people saying there is no crisis at all and this is all made up by Wall St. bankers to save their butts.
Who is right?
I haven’t seen or heard of anyone being denied credit around me either. In fact just the opposite. Two different families got loans that were somewhat risky if you ask me. 1 family closed on a $410,000 house a week ago. THe husband is a UPS driver wife stays home. They put down 3% that was taken from his 401k…that 3% completely wiped out his 401 k BTW. Anyway, I doubt he makes enough to afford the house, but was approved for a 97% loan anyhow. They had decent credit, scores in the 700’s. Another family I know bought a brand new shiny car last week. mid 600 scores, hardly close to the 720 requirement they keep referencing on CNBC that is supposedly required for a car loan. The vehicle is nice to must have cost close to 30k. I’m just not seeing this dire credit squeeze.
Oh and one more thing, I get sooooo frustrated when the politicicans and news reporters say that Bernanke knows what he is talking about because he is an expert on the Great Depression. He knows a crisis when he sees it. Oh yeah? Well then why the heck didn’t he see this coming? Partying like you’re in the 1920’s leads to paying the piper like you’re in the 30’s, no?
“Oh and one more thing, I get sooooo frustrated when the politicicans and news reporters say that Bernanke knows what he is talking about because he is an expert on the Great Depression. He knows a crisis when he sees it. Oh yeah? Well then why the heck didn’t he see this coming? Partying like you’re in the 1920’s leads to paying the piper like you’re in the 30’s, no?”
THANK YOU!!!!!!!!!!!!!!!
Yes, Bernanke’s expertise on the Great Depression always reminds of the theory that Generals always know how to fight the last war. Not the one they have to fight today.
Rear view telescope shows SD growth slowed in ‘06
County economic growth slowed in ‘06
Latest data show dip before housing bust
By Lori Weisberg
STAFF WRITER
September 26, 2008
After years of outpacing the rest of the country in economic growth, San Diego County had fallen nearly to the national average even before the local real estate industry went into free fall.
New Commerce Department figures released yesterday showed that local economic expansion slowed in 2006 to 3.3 percent, the lowest level since the government started tracking the data early this decade.
While the numbers do not reflect current economic conditions, they underscore the effect that real estate has had in both powering the economy and slowing it down. A major factor in the 2006 slowdown was a decline in construction output.
With housing and construction accounting for a quarter of the county’s economic output, it is likely the region can expect tougher times ahead as real estate activity continues to stagnate, economists say.
“Normally, as long as the rest of the economy is strong, the housing market follows along, but now it’s been the opposite,” said economist Kelly Cunningham of the San Diego Institute for Policy Research. “The housing market has dragged our economy into a recession.
“In 2008, you’ll probably see (from future GDP numbers) that we weren’t keeping pace with the country and that we were continuing to slump.”
The 3.3 percent GDP growth followed two years in which it rose by 6.5 percent and 4.2 percent. Meanwhile, the average metro area in the country grew in 2006 by 3.2 percent, not that much different from the two previous years.
Is this a good time for investors to take a wait and seethe attitude?
Wall St. investors play wait and seethe
Anxiety over bailout binds credit markets
By Michael M. Grynbaum
NEW YORK TIMES NEWS SERVICE
NEW YORK – As Washington dickered, Wall Street waited. Nervous investors stayed on the sidelines yesterday, awaiting signs of progress on the government’s bailout plan. While stocks rose, the anxiety gripping the credit markets barely abated.
September 26, 2008 8:43 A.M.ET
BULLETIN U.S. GDP REVISED DOWN TO 2.8% GROWTH IN SECOND QUARTER
Futures point to sell-off as rescue plan hits wall and WaMu bites dust
Bears sharpen their claws
Stock futures take a hit following WaMu’s failure and new hiccups in the stalled $700 billion bank-rescue package.
marketwatch dot com
Wachovia off -18%
National City off -19%
What (who) is next?
Leigh
SO, McSame is focusing on the “crisis”…Why can’t McDame step up to the podium to debate Mr. Obama?…She’d have to take charge if McSame goes arrhythmic…it’s a wonderful opportunity to display her “qualifications” & “experience” 40 days before the election. I wonder what she thinks of Chavez “Nationalizing” the Venezuela oil industry?…I mean, it’s not like he makes them suddenly have to go out an do an environmental impact report before they drill right?
When your strategy is failing and there is no hope, keep hitting the re-set button.
Exactly….Its all about winning…
“Now there’s a mental image picture, Paulson dropping to his knees in front of Barney Frank.”
I almost lost my cheese grits over that one.
My mom has been saying for years that she believes the International bankers really control everything. I would just tease her and ask, “Mom, have you been listening to late night talk shows again?” I recently called her to apologize…
“If money isn’t loosened up, this sucker could go down,” President Bush declared Thursday…
Did he really say that???
why are you surprised? Paul Begala nailed it when he called Bush a “high functioning moron, both parties treat him that way”.
lmao.
LOL!
The problem is…when you’re raised Kennebunkport Maine and then you try talkin’ like the the “Duke” in a Texas shoot’em up movie.
I hate to say “I Told you So” but I’ll say it anyway, “I Told you So”. Why anyone voted for this faux cowboy on his faux ranch, Twice!, is beyond me. All hat and no cattle.
I’ve got a good friend who lives in Texas. I always refer to GW as “your governor”. To which he replies “he’s from Maine not Texas”.
Mike
RE: Paulson dropping to his knees in front of Barney Frank.”
Nah, it was in front of “Nana” Pelosi…big dif!
Yes. Paulson kneeled before Pelosi. Today’s NYT:
“In the Roosevelt Room after the session, the Treasury secretary, Mr. Paulson, literally bent down on one knee as he pleaded with Ms. Pelosi not to “blow it up” by withdrawing her party’s support for the package over what Ms. Pelosi derided as a Republican betrayal.
“I didn’t know you were Catholic,” Ms. Pelosi said, a wry reference to Mr. Paulson’s kneeling, according to someone who observed the exchange. She went on: “It’s not me blowing this up, it’s the Republicans.”
Mr. Paulson sighed. “I know. I know.”
…..
W’s penetrating analysis is in the same story:
“If money isn’t loosened up, this sucker could go down,” President Bush declared as he watched the $700 billion bailout package fall apart before his eyes, according to one person in the room.
http://www.nytimes.com/2008/09/27/business/27reax.html?hp
Ok, calling the brain trust. So what happens today and over the weekend?
Option 1- more last minute brinkmanship eventually everyone comes to the table and gets something out by monday
Option 2- Bank holidays next week
Option 3- Nothing happens, no bill, no bailout but no armageddon either
What does everyone think? any other possiblities?
How many times will these words be uttered over the weekend? “We must get a deal done before Asian markets open.”
Asian and Middle East Banks will pick up the pieces. Corporate loans will still get done but at higher rates.
Thems with the moneys rule and the moneys are held by not so friendly foreign countries.
“Thems with moneys rule …”
Welcome aboard.
It is my ship, I may not be good enough to be captain; I better be allowed on board.
We reserve the right to discriminate: “Please convert your dollar currency to a fungible means of payment. Dollars will not be accepted for payment of any or all debt.” Said the captain, inflatingly.
This is the same inflation that Japan tried and succeeded magnificently at, isn’t it?
Crap Diem!
The credit market will dictate what happens. If the market complete freezes up then something will happen. If it doesn’t freeze up then little will happen.
Do we punt or go for it ?? We will find out about one hour before the close…
You don’t actualy need the $700 billion to calm the markets. The belief that Uncle sam will come to the rescue is really all that is needed.
The $700 billion proposal was enough to sell the market that the market would be saved. Now that the market thinks it will be saved the $700 billion is no longer needed. If the market changes its mind and begins to freeze up then the proposal will needed to be trotted out again.
option 2
I don’t think that a bluff is going to work . Paulson already tried the big Bluff ,and it didn’t work . If other Countries don’t want to invest is would be because they haven’t seen any heads roll and so they know the corrupt system has not been addressed . The fact that Paulson was not addressing the corruption and just wanted the
money tells me that there is another hidden agenda .
Asking taxpayers to pay another 700 billion after already putting out
about a trillion already ,is a tall order to ask especially if the intent is different than what is being marketed .
Ireland officially in recession…The Department of Finance pointed to the crumbling property market and the international credit crunch for the alarming figures.
A Government spokesman said: “As expected, lower levels of new house building had a major restraining influence on growth in the second quarter, as is evident from the very weak investment figures.
http://www.telegraph.co.uk/finance/financetopics/financialcrisis/3079328/Ireland-officially-in-recession.html
On CNBC this morning, the same congressman that said it was a done deal yesterday, today said public support is 50-50. 50% no and 50% he ell no.
But then asserted it is because the people just don’t get it.
Oh, we get it. We just don’t want it. We don’t want to waste $700 billion on a failed attempt to return to “normal”… when normal is defined as the insanity we had the last 8 years.
Well said, Darrell.
I lived it when he said the emails and phone calls from his constituents break out 50/50. 50% say no, 50% say HELL no.
I liked Bush’s briefing a few minutes ago, and I do mean brief. He’s backed off too. King Henry has been demoted to Duke, or perhaps court jester.
Note to the pols:
Those who get riled up enough to interact with you on a day other than election day - are the most likely to actually vote.
The FBs are not a voting block. If they couldn’t take charge of their lives they’ll find excuses not to show up at the polling place.
By wary, pols, make sure to ask yourself and your staffers who really will show up to the polls on November 4th.
Besides, FBs are all moving and won’t bother to get re-registered in time.
Who is this moron on CNBC right now….
The fed is injecting liquidity, but liquidity is not enough. We need solvancy and that takes capital…
WHAT?? Solvancy requires someone else eat your losses. No thanks!
Just FYI for those CA people with large down payments ready to go…Fidelity California Muni money market funds FCFXX e.g., are now yielding over 5% because they are variable rate demand notes (VRDN based on LIBOR, which has skyrocketed). That’s a tax-free yield. Who knows how long it’ll last. I guess you have some muni bond risk, but there has not been an exodus from the bonds.
Thanks Cap’n, just moved 40K over to FCFXX, hopes it lasts.
http://www.bloomberg.com/apps/news?pid=20601068&sid=au2e.vPTWKK8&refer=economy
Economists Urge Congress Not to Rush on Rescue Plan (Update1) 166 Economist sign letter.
“Now there’s a mental image picture, Paulson dropping to his knees in
front of Barney Frank.”
Well that strikes me as vaguely…..hot.
Now just throw in Jeff “Power Top” Gannon.
Cup of mayo to go?
France is such a beautiful country, alas the French have to live there.
Sarkozy Advocates Systemic Change After Crisis
“…Sarkozy, who also holds the European Union’s rotating presidency, said he would propose swift action by the 27-nation bloc at its next meeting to tighten controls over European banks. But beyond Europe, he said, the leaders of all the world’s major industrial powers should gather at a special summit before the end of the year and start to construct from scratch a new financial and monetary framework to replace the U.S.-dominated system set up at Bretton Woods, N.H., in 1944.
“We can no longer manage the economy of the 21st century with the instruments of the economy of the 20th century,” he declared. The U.S.-inspired lack of regulation in recent years, he added, “was a folly whose price is being paid today.” …
WaPo
http://www.washingtonpost.com/wp-dyn/content/article/2008/09/25/AR2008092504285.html
Ok FPSS will Italy pull the plug first or will France be first?
Italy.
France has too much at stake.
Who gets to behead Spain, Greece and Ireland though? That’s what I wanna know!
I can’t believe I’m going on vacation right now. Oh well! No real choice here.
Aladinsane,
Went yesterday afternoon to check out some bullion, american eagles gone, no mapleleafs, but a few pandas. Question, when the shtf, does it really matter what type of bullion you hold? I noticed that the american minted bullion carried a $15-20 premium over the others.
TIA
It really doesn’t matter what you buy, quite honestly.
Asians prefer their bullion to be 24k, the rest of the world is ok with 22k, which was the traditional alloy of monetary Gold coins in many countries for many centuries (our standard was 21.6k), as 24k is too soft to be used in everyday commerce.
The most important thing to consider, is to acquire no-brainer bullion, meaning buy it in 1/10, 1/4/ 1/2 or 1 oz weights.
I like British Sovereigns, but how do I convince somebody that each has .2354/1000’s of a troy ounce of pure Gold, when I can show them on a Canadian 24k Gold 1/4 ounce Maple Leaf, that in the wording it plainly tells how much content there is.
Keep it simple…
Why haven’t maple leafs and such moved in to fill the retail void?
Isn’t there a rule that you don’t get taxed on Gold Eagles?
I think the only bullion coin exception to the NY sales tax exemption was the Krand.
I am admittedly more of a gold watcher than gold buyer, but I am a Maple Leaf fan (’cause I like Canada, and I like the way they look, too). They are my coin of choice when I do pick up physical.
Far as I can tell, they’ve been out there filling the “retail void,” but they disappear just as quickly as the Eagles and Buffaloouies do.
Also keep in mind our government has confiscated gold 4 times before, and they will not hesitate to do it again, if they feel their paper pyramid is threatened.
Check out BullionVault.
Please excuse me for trying to lighten the mood, but after quite some thought, I think I’ve figured out what we should do with the $700 Billion dollars.
Build a space ship. (stay with me here…)
This could be a real solution. Build a giant space ship - a giant ONE WAY space ship. But the thing is, WE get to decide who goes on the ship. Kind of a Noah’s Arc, but in reverse. Instead of taking animals, two by two, and saving them to repopulate the world when it’s safe, we just take the sucky element, put it on the arc and send it away.
So, who do you want on the ship? There are lot’s of seats, cause $700 billion makes for a really big space ship. Give a brief reason, too.
(Leave Obama and McCain - because I want to see the debates.)
—-
Sarah Palin - if seeing Russia from Alaska is reason enough to boast of foreign policy experience, then think what she could achieve if she could see the entire planet from her little space ship window.
Tim Burton - he must be stopped from making any more films. No more. Make them in space.
Angelo Mozillo… in steerage class.
Nah, steerage would be too good for him. Just duct tape him to the outside hull. Then tape Greenspan next to him.
Kind of like the B ARC of space settlers in Hitchhiker’s Guide to the Galaxy? Full of hairdressers, telephone sanitizers and the like?
Stars End
They did that on the Simpsons (one of the Halloween specials). The earth is being consumed by Y2K disasters and the elite (which includes Lisa) are being evacuated to Mars.
Homer and Bart find another ship, which they borad, only to find out that its taking Earth’s rejects on a one way trip to the Sun.
It is something like 70 years worth of NASA’s space budget.
Voz
Swedbank tumbled today
As the Wall Street Journal (Motto: Worst Financial Newspaper in the World) reported:
“…Shares of Swedbank AB fell as much as 9% after the bank said the collateral that backed a $1.35 billion loan it made to Lehman was risky. Swedbank’s shares ended down 3%, to 98 Swedish kronor ($14.81), in Stockholm Thursday….”
Because of Lehman. ROTFLMAO
Not one word about their loans to Estonia, Lithuania or Latvia. Not to worry, as long as we don’t mention it nothing bad will happen.
LOL
You kill me, you really do.
10-4
Roger that.
now quiet down, Im beating my insurance agent senseless this morning. poor stupid bastard, looks like he just swam out a jack daniels bottle.
Can I watch?
Please, pretty please, with a cherry on top?
I never get to have any fun like that any more.
NYCityBoy’s now selling insurance???
LOL (just a joke, the Boy’s far from stupid)
under a hundred of the nordic.
thats a commodity currency.
commodity crash takes that one out.
if deflation and liquidations of future profit takings is to not be.
short the currency and the bank.
Oh geez guys! Can’t we all just get a loan???
Tee Hee!
That’s a good point - Why doesn’t Paulson just apply for a few billion Visa cards? He’ll be long gone before they figure it out.
Here in Atlanta we still only have a limited amount of gas. I go past 20 stations on my way to/from work (I counted). All week there have been various stations with gas, but never more than 3, and never more than 1 with premium, which I have to use in my car.
Ou governor, Sonny Perdue (aka the happy chicken), said yesterday that we have an “adequate” supply. A few weeks ago, he “forgot” about his $550K lake house, when making financial disclosures, so I guess his stance on the gas shortage is understandable.
That’s what happens when you live at the end of the pipeline. Problem should resolve once the Houston refineries get up to full speed again, unless they get hit by another hurricane.
Kid, my car’s supposed to be run only on premium, but I’ve had several very knowledgeable mechanics say it’s just fine to use mid-grade, which I have since I bought it with no problems yet. Just had everything checked, A-OK, 36k miles.
Lost -
You’re usually running at 6000+ ft altitude. You could probably run diesel and be OK…
Seriously though, the altitudes you typically drive at effectively lower the cylinder pressures your engine sees. Your circumstances are the exception to the rule. I wouldn’t recommend your situation as an example to someone below roughly 4000 ft. or so.
The Diebold Conspiracy theory:
Certain elements of the ultra-right have secretly reprogrammed the Diebold computer system to be used in the Elections in November.
It’s McCain in a squeaker.
BWAA HAAA HAAAAAAAAAA AHAAAAAA!!!
I’m turning into one of those old coots who yells at the TV. Well, this morning it was the radio.
NPR covered a story about some people protesting the Wall Street Bailout. So far so good, I’m opposed to it to.
But they didn’t oppose it for moral, logical, or economic reasons!
These folks just wanted a handout of their own! “How can you give all this money to Wall Street when we can’t pay our mortgages?” they asked. I guess it didn’t occur to them that if they paid their mortgages, Wall Street wouldn’t need the money?
Then they said what got me mad: “We’re Taxpayers! We deserve something!”
Sorry, but if you’re paying the majority of your income on deductible mortgage income, you’re hardly a taxpayer! And when you eventually lose the house, you’re not going to be charged tax for forgiven mortgage debt! You’re *already* getting a handout that’s probably larger than the median income in the United States.
Of course, NPR didn’t challenge their statements, or offer another view.
reuven
Like the the guy told Forest Gump at the Vietnam protest
” you said it all man “
Excellent point, reuven. The argument was that Wall Street was getting a deal and screwing Main Street in the process, but these protests show that there is little difference between Wall Street and Main Street, since they both want something for nothing.
Groovy post, reuven!
“…WaMu’s deal team, including Mr. Fishman, left New York on Thursday night and caught a plane back to Seattle, not knowing that the company was about to be taken over by the OTS and sold to J.P. Morgan.”
If this is true, it is horrifying.
Why can’t the prez ask homeowners to lower the prices to get the fools to rush in.
Well that would be the “patriotic” thing to do!
j/k
But you don’t get it……the point of this bailout is to keep those insecurities at face value, thus purportedly keeping the housing prices from dipping further….
And this is going to work how?
The envelope for inking back of the envelope deals in the heat of the moment must be closing soon?
Whats really bad is the previous CEO turned down an offer @ $8/share from JP Morgan because it would have meant the unemployment line for him.
JP Morgan lucked out there. Wamu shareholders not soo much.
Must have been quite the shocker once they found out.
An historical moment might have occurred yesterday when congress started to balk at the bailout. Congress balked because of people calling in. Calling in was a very American thing to do. Sort of like the tea party in Boston, that trouble up near Concord, and others in a long list of Americans telling the gov who is the boss.
The entire argument for the bailout is that we are all going to pay but this way we pay less. I told the staff to my congressman and the Senators from South Carolina that perhaps we should go back to principals when we make decisions.
If lending is drying up, new lenders will be formed assuming we are still a free country.
Right ,very good point . If the toxic lenders can’t lend ,than new lenders should open up and start lending with more prudent standards. Why are we trying to Bail Out Companies that should fail ,just like FB’s will default because they are unsound to begin with ? These failing Banks and investments firms are just as bad as their fake borrowers who went for a real estate mania .
Whats funny about all this is Wall Street is demanding Bail Outs while at the same time the FBI and SEC is investigating fraud ,etc, regarding 26 companies . I usually don’t like to bail out companies that might be subject to investigations regarding true liability .
LMAO. They’ll get in line. The train has already left the station. They just need to create their own “We’re protecting the taxpayer” political cover.
I heard the term ’septic bank’ for the first time today (via Robert Beston, BBC)
gotta love it!
I read that Chase is only taking WAMU’s deposit accounts and leaving their assets (mortgages, other loans) to twist in the wind. I’ve got a VISA card thru WAMU. Does anyone have insight how it will be affected? Since CC’s are unsecured, short-term loans, I would think it would be lumped with the other assests and NOT assumed by Chase.
Jerry Howard, CEO of the National Association of Home Builders, said the Wall Street bailout is crucial, even though he doesn’t believe it will solve the credit crunch that was hitting his members before the crisis started.
For this reason, Howard said as soon as Congress returns to work from its upcoming recess, his trade group will be asking for another package of between $40 billion and $90 billion directed towards the housing market.
http://biz.yahoo.com/cnnm/080926/092608_bailout_impact.html
this is one more reason to stop this bail-out of wall street. when will the mania end?
Buy water, they’ve made all they’re going to.
Sextant Capital Management’s Strategic Global Water Fund (a Hedge Fund) up 97% so far this year. Invests only in pure water companies and water related technologies.
Thought you would like this one Private Aladin Sane.
hoz,
A 97% return is outstanding, but i’d rather be out standing neck-deep in my own river’s swimming hole, as you know how I like my holdings to be of physical nature.
Anybody know where I can get gold at somewhere near spot price?
Find aladinsane’s address and a handgun. The only spot price you will be talking about is the the cost to clean up the spot left on his carpet.
ha ha…
My lucre lies over the ocean
My lucre lies over the sea
My lucre lies over the ocean
And nothing is kept on our property.
By the way, we’re this (holds forefinger to thumb) close to vamoosing out of the country, going on extended holiday to visit our money.
Well, I’ll just have to glue myself to the airplane wing and follow along then .
I’m seeing gold shot for sale at near spot. Is that hard to sell when the time comes?
I’ve been buying krugers steadily for quite a while, but China suspending interbank lending to the US has me wanting to buy faster faster faster….and I can’t find any!
I want smaller chunks…the big bars are unwieldy to sell. Shot seems to fit the bill, but will people buy it?
Gold shot is a bad idea…
Don’t get too tricky, keep it simple.
Pretty much what I’ve been guessing….thanks for the confirmation.
“My lucre lies over the ocean”
What a deeeee-lightful little dittie!
Everbank.
If you want it delivered you’ll have to pay a fabrication fee, I think it’s around 2%, and w—a—i—t for about 2 months before it arrives.
Hey HBB’ers. Told ya’ a loooong time ago this was going to happen. Housing is soooo boring. Got ‘yer Au yet? Made a ton this year. Heard GS finally bought something and is now living in a van down by the river. What happened to Chick? She get tired of wawawawa exter whining? Reminds me of that guy from vermont. What was his name? Man, this is fun, bankers going down and all. If Govt gets its grubby hands on all that paper and real estate, get yer apps in for Sec8 housing faaast. Vouchers for all, the new American Dream! Kill all the realitors. Best to all, really. Fred.
OK, no more Maui Wowie for you.
That’s it, you’re going to rehab.
Lad told us to get numb to ride this out.
“Comfortably Numb”, eh?
Where are my Pink Floyd albums?!?
Time to dust off our guitars…
ARTIST: Pink Floyd
TITLE: Money
Lyrics and Chords
Money, get away
Get a good job with more pay and you’re O.K.
Money, it’s a gas
Grab that cash with both hands and make a stash
A new car, caviar, four star daydream
Think I’ll buy me a football team
/ Am7 - - - / / / / Em7 - - - / Dm - - Am7 /
Money, get back
I’m all right Jack, keep your hands off of my stack
Money, it’s a hit
Don’t give me that do goody-good bullshit
I’m in the hi-fidelity first class traveling set
And I think I need a Lear jet
Money, it’s a crime
Share it fairly but don’t take a slice of my pie
Money, so they say
Is the root of all evil today
But if you ask for a rise it’s no surprise that they’re giving
None away, away, away, away, away, away, away, away
‘…My hands felt just like two balloons.
Now I got that feeling once again.
I cant explain, you would not understand.
This is not how I am.
I have become comfortably numb….”
True FPSS, the formerly unimaginable happens and the world is immune. The only question is which banks next week?
Poor troll….. lmao
Nope, not poor or rich. Made it the old fashioned hard-working and saving way. I’ll throw you bone to feed your need for schadenfreude: after 30 years as a small business owner damn near working myself to death, I’ll shut it all down next year. Yep, goin’ out of business. I can assure you, excrement, I won’t be sitting on my leftist ass whining that I’m worth more than anyone is willing to pay me.
Boo hoo. So you had to “work”. Here’s a penny for your thoughts.
I won’t be sitting on my leftist ass whining that I’m worth more than anyone is willing to pay me.
???
I think maybe you got the wrong dude there, bub.
Fred seconds as the court jester from time to time. You know…. the guy with the goofy hat with little bells on it?
But that’s just it, fredhopper — he already IS worth more than anyone is willing to pay him.
He’s a federal government employee!
LOL!
Worth more than anyone willing to pay him - of course, he’s a government employee!
Oh, that was enjoyable.
And exeter = lingus (one and the same; from Vermont)
So it goes. The ones who can never have enough wealth, the insiders, the high financiers, all who gamble unwisely with America’s economic welfare and then bleat like sheep when things go very bad, they contribute their opinions as to how to engineer a bailout to save their investments (and further down their list) help the general public feel less economic pain. If and when the bailout billions flow, if and when the bailout works its magic, if and when the housing market rebounds, if and when we stop losing so many decent paying jobs, if and when the public stops believing in something for nothing, if and when some honest people surface in the sea of con men - it won’t matter much, because the very same people will start their games all over again. You can take it to the bank..er, make that ‘mattress’.
The reciprocal currency arrangements with the European Central Bank, and the central banks of Switzerland, England, Canada, Japan, Australia, Denmark and Sweden now totals $290 billion.
The influx of money from the central banks represents an effort to put more money into financial markets and fuel economic activity.
In the current economic climate, with major financial and insurance institutions teetering, commercial banks have tightened their lending policies and increased interest rates, taking billions of dollars out of the economy.
http://biz.yahoo.com/cnnm/080926/092608_fed_liquidity.html
Fed adds $13 billion to stabilize markets
Friday September 26, 9:38 am ET
http://biz.yahoo.com/cnnm/080926/092608_fed_liquidity.html
Apologies if this is a double post:
I heard the term ‘toxic bank’ for the first time today (via Robert Peston, BBC)
gotta love it!
Robert Peston is the m*ron of the century who wouldn’t be able to distinguish economic reality from his syphilitic grandmother’s gamahauching abilities.
my mistake - was supposed to be ’septic bank’
I haven’t heard Robert Peston’s name before (and wouldn’t have posted it if I’d known it would bring FPSS’s wrath).
http://en.wiktionary.org/wiki/gamahauch
I’m always surprised by how much I learn here
I interrupt this bailout show for some real estate news:
KB Home 3rd-quarter loss widens as housing downturn continues, co. says inventories excessive
http://biz.yahoo.com/ap/080926/earns_kb_home.html
Chief Executive Jeffrey Mezger said weak demand for new homes — half of the company’s homebuyers backed out of their contracts in the quarter — and falling home values don’t appear likely to improve significantly in the near term. He also blamed rising foreclosures and tight lending standards for the company’s poor results.
“These difficult conditions have now been exacerbated by the recent, unprecedented turmoil in financial and credit markets, and it is too early to assess whether the federal government’s proposed interventions will be effective,” Mezger said in a statement.
You are now being returned to your normal programming.
I tried to save WaMu, wiring them 34k to pay off my mortgage. I guess that didn’t quite cover the bank run, with account holders withdrawing 17 billion over a few days. Let’s just hope they don’t misplace my money in the confusion.
My 5-year ARM with WaMu was going to reset in November. This was the plan from the start, to pay it off before the reset. It was close, but I made it. There were a few of us who knew how to use an ARM intelligently.
I paid off an 8% second mortgage after we got the old house sold and the bank here (IBC) actually sent us a thank you and congratulatory note with their release of lien, and reminded us to record it. I thought that was nice of them, since we only paid them about $300 up front and $600 in interest, total. I hope they survive.
Platinum Spot price today. It’s 50% below its all time high, which was just about 3 months ago. Right in the middle of a monetary crisis! It’s running around $1090 per ounce while gold is at $880 per ounce. Usually Platinum is twice the price of gold. Either gold is priced too high or Platinum is priced too low.
I know most people here selectively believe in cycles. they believe in a real estate cycle. The very same people do not believe in any stock market cycle.
IMO, our economy will either race to the bottom in 4 years or hurry to the bottom in 8 years, depending on if Obama is elected or McCain is elected. But it could be as early as 2 years. I don’t want to be left out of equities when the cycle reverses. The S&P 500 yield is about 2.1%, which is the yield of a 2 year treasury note.
Asia had its monetary crisis in 1998 and their stocks fell 50%. They made a free market solution and the stocks recovered almost all the loss by gaining 98% the next year. Our solution is socialist for the short term, so we will take a longer time to recover. We will only recover when we realize we have to have a free market solution: Abolish the Fed, abolish all entitlement spending, adopt a hard currency, and not bail out any company or individual.
One by one, countries went off the Gold Standard in the 1920’s and 1930’s and one by one, countries will go back on it soon. (in alignment with oil reserves)
Owning precious metals bullon and voting for socialists don’t mix. Owning gold is a vote of no confidence in a strong central government. But then voting for someone who says government is the answer - now that contradicts what you are doing. And moving all your assets while voting for our faster sled ride down to the economic bottom.
Thanks a lot Alad. You are doing exactly as Ayn Rand would do.
Aladin,
Would that be paper oil or FOEB electronic credits? I suppose oil is easily divisible, but would you consider it malleable? Would we be able to grow our own oil-money at home or would that be a counterfeiting offense. Our currency would be backed by our stated “proven reserves”? Would small change be in lumps of Coal? Much to ponder.
Can we use the oil to cook with?
Perhaps some fried chicken with a shot of goldschlagger.
crude humor
Why “in alignment with oil reserves”, Aladin?
Interesting thought that the most stable world currency might be something minted in the middle-east, not generally a “stable” place.
I too am waiting to see who first goes back on the gold standard…
There’s not enough Gold, but plenty of Oil around to make whomever’s currency is backed by this dynamic duo, dominant.
Who was the last one off of the gold standard? France after the US?
The Another and Friend of Another (FOA) 1990’s missives from usagold - ‘The stars blink, and the oil is gone!’
I just bought some Gold, Platinum, Palladium and Silver. I took notice of the nosedive in Platinum and Palladium, as you mentioned.
I am either a hero or a zero. Place your bets.
Pt is an industrial metal; don’t confuse it with money.
dude, where’s my car business?
So you are saying that since it’s useful and rare it pales in comparison to Au?
Platinum is a johnny-come-lately metal, that although rarer than Gold, doesn’t have it’s storied history as functioning as money for thousands of years, all over the world…
I received a US platinum coin from a biz partner for my birthday today (and have for the past 10 years…) - dollar-cost averaging!
What’s the deal with that spike in the silver price yesterday and gold today? At exactly the same time….
PPT trying to get some suckers to run along before they kill them?
But platinum prices are falling substantially. At the rate it’s going, one ounce of platinum will sell at the same price as one ounce of gold.
dude, get a grip.
Pt & Pd’s only use is in catalytic converters, and you don’t expect car sales to be hopping during a depression, do you?
Pt is well used anywhere you could use gold’s noble properties, but need a material with good strength and flexibilty as well.
There is but a tiny difference in mechanical properties of steel wire and platinum wire, as an example, but Pt can go where no steel belt would dare tread.
My company uses it as an electrode in a corrosive environment. It’s quite common in the Biomed field.
Perhaps the candidates can start off their debate tonight by holding hands and explaining to all Americans on national television why it is in our collective interest to pass this hastily-designed rush job of a bailout measure at this particular moment in time, now that much of the banking system is already in ruins.
Bailout Talks to Resume After Impasse
Senator Christopher J. Dodd, chairman of the Senate banking committee, center, with Harry Reid, the Senate majority leader, heading to a press conference in Washington on Friday.
By SHERYL GAY STOLBERG, DAVID M. HERSZENHORN and CARL HULSE
Published: September 26, 2008
WASHINGTON — President Bush and two Democratic leaders in the Senate tried to assure Americans on Friday morning that lawmakers and the administration would be able to come together and reach an agreement on a proposal to rescue the country’s financial system.
President Bush made a statement outside the Oval Office on Friday.
“We are going to get a package passed,” Mr. Bush said, a day after an earlier agreement dissolved amid a flurry of political rancor. “We will rise to the occasion. Republicans and Democrats will come together and pass a substantial rescue plan.”
Almost everyone agrees that “something must be done,” but the case for why it must be done today or else is completely lost on me. Can anyone suggest convincing reasons (other than this is what we have been told by the smartest guys in the room)?
(…insert sound of crickets chirping….)
If so many Americans think this plan is stupid and are openly saying so, and our economy is so resilient, why not allow the various alternatives others have suggested to be considered?
CHUCK JAFFE
Stupid Investment of the Week
Commentary: Wall Street rescue plan is a high-risk, low-return proposition
By Chuck Jaffe, MarketWatch
Last update: 7:31 p.m. EDT Sept. 25, 2008
BOSTON (MarketWatch) — Watching legislators and politicians deal with the nation’s financial crisis this week has been a bit like walking into a room, surprising your kids and seeing them rush to hide their hands behind their backs.
No matter what they bring forward, you know you’re not going to like it.
BBC’s Robert Peston calls the 700bn bailout a ’stinking septic bank’
(third attempt - apologies if all show up now)
Adam Corolla, on his morning radio show, mentioned the financial crisis; he also suggested people check out some online mint (can’t remember the name), e.g. that moving into coins/PMs was a good way to protect your money (more implied than stated explicitly, but still). I can’t remember the name of the mint (anyone catch it?), but I thought that was pretty interesting.
With this kind of psychology become prime-time and more pervasive, things will likely only become more volatile.
Woah! Adam Corolla - is he the one in Phoenix? Or is he in Baltimore? I forget which city I’m in when I listen to his show. For some off-the-street talk show host who never discusses personal finance to say something like this - just wow! He’s a “hip” talk show host on an alternative rock station in one of those places.
I’m going to my usual airport bar at BWI this afternoon. Maybe the discussion around the bar will be bailouts. I will put in my 2 cents: Decentralize banks, get rid of the Federal Reserve, alllow full competition in currencies within the U.S. (private mints, etc).
I think he’s out of LA, but he syndicated all over the west coast…
Yeah, for a non-finance-every-man type of guy (he did The Man Show for chrissake), I thought this was an interesting data-point indeed.
perth mint?
I’m going to be attending Homecoming weekend at the University of Michigan in Ann Arbor. My weekend plans include attending this event:
1 p.m. Friday, October 3rd
Economic Forum
Lorch Hall Auditorium (Room 140)
Top economics professionals, including the former Chief Economist of Fannie Mae, will speak about the current state of the economy and what the future holds.
Any HBB-ers care to join me?
I have heard of market bulls, market bears and even market sheep, but what is a market cat?
September 26, 2008 12:51 P.M.ET
BULLETIN
Scrambling for a solution
President offers assurances that Wall Street rescue plan will be passed, saying there is no disagreement that something substantial is needed. Democratic senators Dodd and Reid report progress.
• Market cats wary eye on Washington
marketwatch dot com
the wall street cats done got your money and are partying in the cayman islands on your dollar.
This was taken from BB the other day…
“Senators, we live in a world that has bonds and bad
construction loans and those assets need to be bought by men
and women with balance sheets. Who’s going to do it - you,
Chairman Dodd? You, Senator Schumer?
I have a greater responsibility than you can’t possibly fathom.
You weep for Bear Sterns and curse the banks just trying to get
their collateral; you have that luxury. You have the luxury of not
knowing what I know: that Lehman’s bankruptcy, while tragic,
probably saved firms and that my existence, while grotesque and
incomprehensible to you, saves markets.
You don’t want the truth, because deep down in places you
don’t talk about at parties, you want me buying assets - you need
me buying assets. We use words like “foreclosure,” “Discount
Window” and “TARP.” We use them as the backbone of a life
trying to defend something. You use them as a punch line.
I have neither the time nor the inclination to explain myself to
a group of media hungry politicians who rise and sleep under the
blanket of the very liquidity I provide and then question the
manner in which I provide it. I would rather you just said “thank
you,” and went on your way. Otherwise, I suggest that you
purchase a defaulted option arm and pay par.
Either way, I don’t give a dang what you think the American
taxpayer is entitled to.”
Remember the movie A Few Good Men? The diatribe that Col. Nathan R. Jessep (Jack Nicholson) made at the end of the movie on the witness stand, it’s very similar to what BB stated to the Senate.
Funny chit
In August the US Mint ran out of gold American Eagles. Now they have suspended production of gold Buffalos. Too much demand from the public.
Of course, this does not mean you cannot buy a Canadian Maple leaf or several of them, or how about a handful of British Sovereigns?
Been awhile since I bought platinum, so that’s on my list for the next 6 months in place of any gold.
US Mint forced to suspend sales of American Buffalo 24-karat gold coins due to heavy demand
http://biz.yahoo.com/ap/080926/mint_gold_coins.html
When the “other side” uses your words, do you feel flattered? I cant believe the number of postings I read last nite that are misusing my “suck it up” comment towards taxpayers and not towards Yurtle & his turtles.
Question for more seasoned investors: I’ve never ridden a short to zero before. It looks like WAMU may go there. Is there any reason to cover at the current 15-cents or so? Can I just hold it forever? Am I forced to cover? Does it eventually get “settled” somehow and disappear from my account?
I’ve noticed before that stocks of companies that go bust often continue to trade for a while for pennies, and I’ve always figured that the buyers were short-sellers covering, but I never really understood the mechanics of what happens if you don’t…
Just cover. The future is unpredictable.
The bondholders may decide to buy the stock to get a seat on the table during bankrupty proceedings. While this changes nothing fundamentally, it’s pain for you in the short-term.
You can only make 0.15 x number of shares. Why bother?
There are far better places to deploy future capital.
Good point FPSS, that the up-side is clearly capped at a small value.
Of course, it isn’t really costing me any “capital”, since I’m deeply in-the-money on the trade and nowhere near broker or exchange limits.
Went to try to trade it, and it’s now showing N/A for bid & ask; I guess it isn’t trading today at all due to the JPM deal. Weird, though–I would expect it to trade until the settlement date of the deal, once it was announced. Strange.
Anyone understand this?
Sure.
Call your broker. It’s trading OTC (over the counter) so call them to close out the shorts.
You’ll probably get a trade price of 0.50-0.60 or so. That’s pretty normal.
Seems crazy to have to pay 60-cents to buy shares that are worthless!
I hate to throw good money away; I have enough shares that 60-cents/share isn’t trivial…
Any idea what happens if I don’t close it via OTC trades?
You don’t have a god-given right to buy shares.
Someone has to sell it to you. That would be that market-makers.
They’re not doing that out of the goodness of their hearts, I assure you. They’re doing it for profit.
Unless you are truly clueless, just do it.
Tried but can’t. Trading was halted on it today, scheduled to resume on Monday.
My guess is that it will be trading at less than 50 or 60-cents. It’s also not OTC; should resume on NYSE Mon.
They had to halt trading because they have disallowed short accumulation for a week. Who exactly was going to bid for this junk?
symbol
WM.PK
Trading at $0.06, at 0.15 It is a short, free moneys. Due to the SEC, I and most others are not now able to short BK stocks.
Listen to the Cat. Even if you sold at 1.50, 15 cents should be “good enough.” Just be done with it.
i am not trying to cause trouble here, but i have been wondering, what are people using to buy all this gold? are the people selling the gold accepting dollars for it? or do you have to switch the dollars to another currency before you can buy it? also, why wouldent they just keep all the gold for themselves if the dollar or other currency’s have no worth to them?
You can’t eat gold, so at some point those who hold it gotta at least barter it. At this point, the dollar is still fairly strong, and people are willing to fork over lots of ‘em for a bit of the shiny stuff.
That’s my 2-cents worth.
As someone whose grandfather bought silver after a bank scare, then had trouble unloading it (it is still in the basement), I would like to hear a more sophisticated answer.
In a normal market, I will sell as much gold and silver as my customers wish to buy. I know I can buy it back later. I sell for a few % more than my wholesale buy price and then replace my stock.
Bullion sellers have been reluctant to sell lately because it is getting increasingly difficult to ereplenish our stock. We keep selling at larger and larger premiums to spot because we need to pay larger premiums to replace it. We may get to a point where we do not wish to sell at all, because it may be irreplaceable at any price. This is the gold bug dream scenario where physical metal becomes effectively priceless. This happened in Weimar Germany where one could buy an entire city block for one gold coin. Even though this would benefit me greatly, I hope this never happens here.
“I hope this never happens here.”
Is that because you wouldn’t want to own a block of the motor city?
jim,
I have had older friends who lived through that time in Germany. They implied that the goldbugs of the day were some tribe from the middle east. Buying a block for one gold coin kind of made the have-nots pissed. Wasn’t long until most of that “tribe” were rounded up and shipped off to who knows where (one way).
“why wouldn’t they just keep all the gold for themselves if the dollar or other currency’s have no worth to them?”
Lol, good point.
Dollars are only good for buying things, they are totally useless outside of that. If you never ever need to buy anything then you can do quite well without dollars.
combotechie,
i think what puzzles me the most about it is why would all these people want to get stuck holding all these worthless papers? someone has to get stuck holding the bag somewhere. and what are they doing with all this paper they are collecting? putting it in the bank? i dont get it?
Just wondering….if the dollar is going to be worthless, and gold will be the standard, how much would a gun be worth?
Mobin
Through recent history, one ounce of gold would buy you a decent gun, or, a fine tailored suit, or, food for several months. That ratio still seems to hold true. The future is anyone’s guess. If youve got the duds, the food and the gun, I guess you wont need gold, as long as you stay healty.
As long as these “worthless papers” can be exchanged for goods and services then they are not worthless.
Certainly - $$ will never be worthless. They just might be a little tough to carry in the quantities necessary to buy things.
“Certainly - $$ will never be worthless. They just might be a little tough to carry in the quantities necessary to buy things.”
The printing press can handle this problem just fine: Either add more zeros and print smaller, or simply rename the currency at a suitable rate of exchange and phase out the old currency for the new one with a higher value (e.g., 1000 dollars = 1 bernanke).
Or 1 Amero perhaps?
Reuters
White House calls in big guns as bailout battle rages
Fri Sep 26, 2008 1:20pm EDT
Bush: Rescue plan will be passed
Related News
House Republicans may not back bailout plan
1:11pm EDT
House Republican leader says must protect taxpayer
1:20pm EDT
By Tabassum Zakaria
WASHINGTON (Reuters) - The Bush administration tried to tighten the screws on squabbling members of Congress on Friday as an increasingly bitter Washington debate over a $700 billion financial rescue held Wall Street in thrall.
…
Lawmakers began reviewing a 102-page proposal based on a consensus outline hammered out by members of the House and Senate on Thursday, but divisions remained over how best to shield taxpayers from losses that could reach hundreds of billions of dollars.
“Our efforts are toward reaching agreement (so) that we can stabilize the economy and make sure we don’t go deeper into recession or even into depression,” House of Representatives Majority Leader Steny Hoyer, a Maryland Democrat, told CNBC.
Anger among voters has made the political maneuvering particularly complicated. In addition to the presidential campaign, the entire House of Representatives and one-third of the Senate is up for re-election on November 4.
Some Congressional Republicans, whose party historically advocates less government involvement in business, have objected to what they see as the heavy hand of government interfering in a private-sector problem that ought to involve more of a private-sector solution.
Thursday bailout wrangling time line:
Steve Henn: 1 p.m. eastern — it looks like a deal. Then a House Republican leader began circulating a dramatically different set of ideas. The Republican plan is floated by Congressman Eric Cantor a close ally of John McCain.
Eric Cantor: It is a plan that allows for the taxpayers who did nothing wrong to be able to continue to look to their retirements, to look to their college savings plan without having to pay this tremendous price to affect this recovery.
This plan offers federal insurance to private corporations that agreed to buy up bad debt.
4 p.m. — House Republican leaders spring this proposal at the White House. Consensus on the bailout fall apart. Chaos ensues.
Shortly after 5 p.m.– Treasury Secretary Henry Paulson begs Speaker Nancy Pelosi to press ahead on bended knee.
6 p.m. Congressional Leaders hit the cable talk show to call each other names.
Meanwhile, life goes on.
Let’s see what the author of A History of the Federal Reserve thinks about the bailout proposal:
“They haven’t made a good case that this is going to solve our economic problems. Paulson at one point said they might need to go higher,” said Allan Meltzer, professor of political economy and public policy at Carnegie Mellon University and a leading authority on the Federal Reserve.
Meltzer said that after a TV news interview in which he opposed the bailout, he received 70 e-mails — all agreeing with him.
“The public doesn’t like this, and Paulson and Bernanke haven’t sold the public on this idea,” Meltzer said. “Bernanke has been predicting a crisis since January, and it hasn’t happened. … It’s not the best way to run a democratic process, to rush this through Congress.”
http://pittsburghlive.com/x/pittsburghtrib/business/s_590223 dot html
Cash Is King
http://www.forbes.com/2008/09/23/beyond-balance-sheet-biz-wall-cz_0924cashking_land.html
“Cash is King”
Careful, there are people on this blog who can’t stand such a bold statement.
don’t get rooked, king.
Cash is currently King. History is full of examples of Kings being assassinated and replaced by new Kings.
“Careful, there are people on this blog who can’t stand such a bold statement”
LOL! thats funny! just so i dont get flammed in the future, i posted that link because of its contents, and i had no influence on the writter in chosing the title.
I thought Cotton was King.
You’re right! US dollar bills (M-very-zero) -> 75% cotton, 25% linen.
Here’s a follow up to my comment from earlier today, saying that I don’t know any qualified people who cannot still get a loan. This is from an article in today’s CNN money:
“Another example comes from Savitt. One of his clients was buying a home for $205,000, putting down 20%. The buyer had an excellent credit score in the mid-700s, and the house was appraised at a little higher than the sale price.
The problem here: The borrower’s debt to income ratio would be at about 45 - slightly higher than what most banks like to see, but by no means excessive. And his other risk factors were great.
“The bank turned it down over excessive debt ratio,” said Savitt. “That’s crazy.”
So they want to use my $700 Billion to give people mortgages with 45% debt to income ratios again? Hell NO!! 45% isn’t excessive? Hell YES it is!!
Tightening of credit strikes nerve among consumers
http://biz.yahoo.com/ap/080926/financial_meltdown_credit_crunch.html
heres more examples of the scare tactic the media is using against the people complaining about the bail-out.
It is excessive for normal Americans. Someone who is frugal enough to come up with one of those unicorny 20% down payments might be a recent immigrant or something. First generation at least. So it is likely OK for them.
Time for me to watch the cliff divers of alcoholpulco ply their trades…
It isn’t the sudden plunge that gets them, it’s the abrupt ending.
Imagine the hoi polloi trying to wrap their pip-squeak minds around the Dismal Science, under duress?
yikes…
So the stock market is going up as I type, up over 100 points. Any news? Did someone leak the good news
Amazing, the dow ends up 125. I can only assume that the biggest bank failure in US history in WaMu and the end-times for Wachovia and National City are good news. Or maybe it was the better news that the Fed added $13 billion to stabilize markets and that 2Q GDP growth was revised down to 2.8% from 3.3%. I hope unemployment numbers are much worse in the next report, so the market can trend even higher!
Wachovia, Citigroup in early merger talks: report
maybe this?
Oil is down about a buck , the DOW is up about 87 points , WAMU
taken over without a run on the banks ,so what is the big emergency to pass a bill from Paulson in 2 days ?
Britain’s Brown wants new global financial order
He said the immediate priority was to stabilize financial markets and then work to rebuild the world financial system around clear principles, including increased transparency, regulation, responsibility and global oversight of international capital flows.
“For we must build a new global financial order founded on transparency, not opacity, rewarding success not excess, responsibility, not impunity, and which is global not national,” Brown said. “We must clearly state that the age of irresponsibility must be end.”
http://biz.yahoo.com/ap/080926/un_general_assembly_economy.html
Well it looks like something happened. The stock market closed at about 126 points positive.
When people are buying insurance on 10 year Treasuries the end is days away, not weeks. If you aren’t prepared by now, you are about to join the Roaving Hoardes of Starving Masses. Game over for you, man. Game over.
You are more confident about the outcome soon to come than BB and HP put together. I sure hope you are also wrong.
Me too.
“… the end is days away, not weeks. If you aren’t prepared by now you are about to join the Roaving Hoardes of Starving Masses.”
Lol.
Not to be a spell-nazi, but.. “horde”: a wandering gang. “Hoard”: a hidden stash.
Lemme try and use them both in a sentence..
“Gold hoarders were devastated when, upon the largest bank failure in US history, the expected panicking hordes of investors moving into gold as a safe haven failed to materialize.”
Lol.
Australia to Buy A$4 Billion Mortgages, Revive Market (Update2)
Swan said the package can’t be compared with steps under consideration in the U.S. where negotiations are underway for a $700 billion rescue of the U.S. financial system.
“The Americans are buying up bad debt to bail out a banking system that is in trouble,” Swan said. “This is the fine tuning of a system, not an overhaul.”
http://www.bloomberg.com/apps/news?pid=20601081&sid=aiq6KjGPa5Wc&refer=australia
so i guess in their eyes this is a done deal?
Just in Ridgway, Colorado, across the hill from Telluride and pricey.
Saw a sign next to the highway, fixtures and furniture for sale.
Pointing to the RE biz that just went under. And everyone here thought that being Telluride’s stepchild would save them.
Telluride Watch dead tree ed. for today has an article where the bank presidents in Telluride are assuring the public that their money is safe. Some quotes:
“We get several calls a day from people asking if their money is safe.”
“We are still making loans, but not to developers.”
“We haven’t been doing mortgages for some time.”
“Even if the entire financial industry shut down tomorrow, there’s no danger of anyone losing their deposit.”
“Commercial banks are safe havens.”
“We’re regulated like hawks.”
(Since when are hawks regulated? Excuse me, Mr. Redtail, can I see your license, that last dive was a bit on the fast side…)
(Sorry if this is a double post, found a link)
Telluride Watch (http://www dot telluridewatch dot com/pages/news)
article where the bank presidents in Telluride are assuring the public that their money is safe. Some quotes:
“I’me getting several calls a day from people who are worried.”
“We are still making loans, but not to developers.”
“We haven’t been doing mortgages for some time.”
“Even if the entire financial industry shut down tomorrow, there’s no danger of anyone losing their deposit.”
“Commercial banks are safe havens.”
“We’re regulated like hawks.”
(Since when are hawks regulated? Excuse me, Mr. Redtail, can I see your license, that last dive was a bit on the fast side…)
Farber says…
http://nl.youtube.com/watch?v=3-3PALhsZ3Y
Whadya say we all pool together like 30 grand and take Wachovia off of Sheila’s hands?
I’m in, if we can leave all the liabilities with the Treasury.
Look at this information, from the IRS in 2003:
http://www.irs.gov/newsroom/article/0,,id=118224,00.html
If only they had continued pursuing fraud, we wouldn’t be in this mess. I don’t think they bother anymore with Harry Houseflipper. The $30,000 or more in taxes your typical failed FB doesn’t pay is too small for the IRS to bother with.
“It’s hard to get people to focus on how cheap munis are,” said Chris Eckstrom, a Sarasota, Florida-based money manager for Comerica Asset Management, which oversees $8.6 billion. “People are going to look back on this and realize they missed a great buying opportunity.”
Institutions previously prone to taking advantage of the relative values are hoarding cash. Bond dealers are setting higher rates on variable bonds they are responsible for reselling each day or week in an attempt to ensure they don’t get stuck with too many low-yielding securities if there’s a dearth of demand.
The latest round of higher interest on variable-rate bonds is no less punitive for issuers. Rates on some of the $15 billion of debt sold by California in 2004 to plug a deficit soared as high as 10 percent last week from 2.9 percent during mid-month.
“We’ve seen huge spikes,” said Paul Rosenstiel, debt manager for California, which issues more bonds annually than any other state.
Bloomberg.
well i guess are taxes will be going up here soon.
25 years ago today the world came the closest to ending life as we know it.
Today is Petrov day
Tonight I will drink a toast to the retired Russian that refused to launch nuclear missiles against the US.
Stanislav Petrov from Wiki
“…Shortly after midnight, the bunker’s computers reported that an intercontinental ballistic missile was heading toward the Soviet Union from the US.[5] Petrov considered the detection a computer error…
Later, the computers identified four additional missiles in the air, all directed towards the Soviet Union. Petrov again suspected that the computer system was malfunctioning, despite having no other source of information to confirm his suspicions. The Soviet Union’s land radar was incapable of detecting missiles beyond the horizon, and waiting for it to positively identify the threat would limit the Soviet Union’s response time to minutes….”
Standard orders were to launch missiles on spotting any incoming missiles.
if you cant figure out the ultimate bottom call…
read,
do,
act,
believe,
trust,
produce,
plan,
save.
with honor,
aaron
Financial Times of London
In praise of free markets
Published: September 25 2008 19:02 | Last updated: September 25 2008 19:02
The financial system has reached the point of maximum peril. After years of profligacy, banks have all but stopped lending to each other as the US Congress decides whether to extend support. If the unravelling of the banking system continues, the economic consequences will be dire. Yet there is an even greater risk: that the politicians now contemplating Wall Street’s follies draw the wrong conclusions and take the wrong decisions, losing their confidence in markets altogether.
It would not be the first time. After the Wall Street Crash, markets were deemed to have failed and US lawmakers attempted to regulate short-cuts through the crisis. The widely-copied Smoot-Hawley Tariff Act quadrupled the effective tax rate on thousands of imports and deepened the “Great Contraction” of 1929 to 1933. The price of popular anti-market sentiment was much higher in some of Europe’s fledgling democracies: fascism.
If history didn’t repeat itself, we would have absolutely no idea where we were headed.
Among the multitude of layoffs this week, a few just stuck out.
Johnnie B Byrd Sr Alzheimer’s Center & Research Institute
Tampa, FL
The Johnnie B. Byrd Sr. Alzheimer’s Center & Research Institute has laid off 19 people to cut expenses after losing state funding this year, center officials said Wednesday. The move will save the center about $2-million. Of the 19 workers, 11 are full-time administrative staffers and eight are part-time or temporary workers, said Michael Hoad, a spokesman for the University of South Florida. The move comes just a month after the center signed an agreement giving control to USF and naming Dr. Stephen Klasko the center’s chief executive. Klasko is dean of USF’s medical school and vice president of USF Health. The cuts had to be made because the center was draining its reserve funds, Klasko said. “At the end of the day, we had to do what was right for the organization,” he said. “The financial fact is that they have no funding.” The center lost $15-million in state funds. “You can’t take $15-million out of an operation and not have something like this happen,” Hoad said. Employees will receive severance packages of 30 to 45 days’ pay. The people cut include communications staffers, assistants and a contract coordinator. Klasko has said that the affiliation agreement with USF would allow Byrd to cut administrative costs.
St Petersburg Times - September 25, 2008
Martha T Berry Medical Facility
Mount Clemens, MI
Macomb County’s Martha T. Berry nursing home — on the chopping block for several months as officials seek to plug holes in their budget — received a stay of execution Tuesday. During a Tuesday budget session, county commissioners voted to eliminate 13 positions at the nursing home but appeared willing to wait two weeks before deciding the facility’s ultimate fate. Those positions, which include four vacant posts, could save as much as $430,000 from the operating budget. But that’s a far cry from the nearly $8 million subsidy Macomb County will spend this year to operate the home. Many county officials are unwilling to spend that money and are considering options such as closing the home, selling it or partnering it. Nursing home officials have said they are drafting a proposal that might turn operations over the county’s social services committee and eventually reduce the annual subsidy. And as of noon, commissioners appeared willing to wait two weeks to hear that plan before making a final decision.
The Detroit News - September 24, 2008
Stratford Shakespeare Festival
Stratford, ON
The Stratford Shakespeare Festival yesterday announced that it has eliminated 11 of some 900 staff positions. Anita Gaffney, administrative director of the festival, said five employees left voluntarily with compensation packages and another six were terminated. The departures are said to include director of communications Leanne Perrault and director of marketing Ian Newbigin. The move comes amid unconfirmed reports that the festival will report a loss of several million dollars for the 2008 season - its first large setback in many years.
The Globe and Mail - September 20, 2008
Grampa Simpson: “If you ever travel back in time, don’t step on anything because even the tiniest change can alter the future in ways you can’t imagine.”
Plight of the Fortune Tellers: Why We Need to Manage Financial Risk Differently
Riccardo Rebonato
My weekend reading.
Let the crackdown on naked longs begin!!!
September 26, 2021
FINANCIAL authorities in America and Europe took sweeping powers yesterday to avert a financial crisis by imposing restrictions on markets. In their sights are a peculiar brand of speculators known as “long-buyers” who buy assets not to live off the income they generate but to profit from rising prices.
“Some of these people buy homes that they have no intention of living in,” said Lord Poohbah, chairman of Britain’s Financial Services Authority, “and others buy shares they plan to own for just days or weeks, rather than the prudent time period of several years.” Their actions force prices up above fundamental valuation levels, critics say, causing some British tabloid newspapers to call leading fund managers “greedy pigs”.
Particular criticism has been reserved for people dubbed “naked long-buyers”, those who try to buy homes without putting up a deposit. “Such people are in effect renters with a free call option on rising house prices,” said one financial analyst, “but they expect to be bailed out by taxpayers when house prices fall.”
Deleveraging
A fate worse than debt
Sep 25th 2008
From The Economist print edition
Consumers and companies may be forced to cut back
IT IS ugly, but deleveraging is the word of the moment. Financial institutions, desperate to repair the damage inflicted on their balance-sheets by mortgage-related securities, sell assets. In doing so, they exacerbate the problem. Forced sales push down the prices of assets, worsening the balance-sheets of other investors, forcing more asset sales, and so on. In the end, the government is the only entity left in the game with a balance-sheet strong enough to keep buying.
The Bush administration’s bail-out plan, even if it gets through Congress, may not be the end of the finance industry’s problems. The travails of investment banks will inevitably cause problems for hedge funds, which depend for their finances on institutions such as Goldman Sachs and Morgan Stanley.
We say Wachovia is next bank to go.
I have Treasuries, Municipal bonds, and a few Non-Wachovia bank CD’s with Wachovia Securities. I was AG Edwards.
I think even if Wachovia Securities got caught up in Wachovia bank default, my end creditor is not Wachovia Securities, but US goverment for t-bills, municipal goverments, and FDIC for CD. Are there any implications I should be considering? Not crazy about transferring my Wachovia securities to another broker.
Thank you,
DKNABNH
“The Oxford debate
After the last couple of days, McCain badly needed to win Friday’s debate. My immediate feeling was that he didn’t even manage a draw…
I thought the debate moved off the financial crisis too quickly, though it was not for want of effort by Jim Lehrer, who I thought did a superb job as moderator—relaxed, funny, courteous, self-effacing. (So it can be done.) I wanted to applaud as he cheerfully kept pressing his question about which aspects of their plans would have to change in order to pay for the bailout. McCain talked about a spending freeze (“it should be considered”). Obama acknowledged that some of his proposals might have to wait, but would not say which (and then listed all the main ones as so important they should go ahead regardless). Neither candidate, it seems, has given thought to the fiscal implications of the bailout. Perhaps this is a good thing. If either were to do that, they might wonder if they really want to win.”
Clive Crook
FT