Bits Bucket For September 27, 2008
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The Housing Bubble
Examining the home price boom and its effect on owners, lenders, regulators, realtors and the economy as a whole.
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Money Rapture: 101
Silently without much ado 24/7, people are withdrawing funds out of banks and said banks are being pushed to the edge of the abyss, the Mouse Click scurrying away with their hunks of cheese, with nothing left behind.
Computers… can’t live with them, can’t live without em’
Now would be a good time to restore trust in the banking system, before these mouse clicks get out of hand. Is that on anyone’s agenda?
Not that I condone this sort of behavior, but it’d be dead easy to limit the mice and their friend Willard the rATM from access to their gouda.
They called us Chicken Little. Look at them now — falling like dominoes, on their knees, begging to be saved. Oh, the humanity. It’s ARMageddonning!
I agree Pbear…
The claim is that the $700 bn money toss will restore trust, but it looks like more hair of the dog stimulus from where I stand. If you want liquidity to come back to the lending markets, you have to stop suppressing interest rates to below-market levels; otherwise, a liquidity shortage is sure to develop (Microeconomics 001). Without bothering to even check, I am pretty sure the Bernanke undergraduate micro text has an example of how suppressing prices below market levels results in a shortage?
Could it be that this whole bailout scheme is one giant price-fixing attempt?
Just got back from weekend errands. Large group of people out front of WAMU this morning as I drove by. Most likely taking out money though I didn’t stop to ask.
I have been tempted all day to do my own stress test of WaMu’s ATM machine, just to see if there is any green paper within.
Stress test completed.
- No problem w/ ATM withdrawals.
- No problem w/ checking account balance.
So far, so good, even w/o any bailout agreement just yet…
So where are they putting it…other banks? Bullion? Mattresses? Safe deposit boxes?
Treasuries.
Now’s the time to get out of Treasuries and into Money market Funds, IMO.
Not to ruin your scheme king, but haven’t a few money market funds stopped redeeming?
You ok with that?
Not to worry. The Guvmnt will back the MM funds.
gotya, don’t they?
Opportunity abounds. Treasuries pay next to nothing because money is rushing into Treasuries. This makes money more expensive elsewhere. Nows the time to go against the flow.
Rook out what’s coming takes Red Queen, as Pawns can only watch in amazement and must plot their steps one at a time, as is their custom.
The Red Queen’s debt to the Black King is still outstanding, as the game continues on, the last redoubt for the Red King being the hopes of a $talemate.
The Red King has been in check repeatedly, but the Black King need no longer need advance him.
Money isn’t just “flowing into Treasuries.” It is flowing into the 3-mo Treasury, which has both a govt guarantee and inflation protection, due to short duration. The market is behaving as though it believes interest rates will have to lurch up, which would (in principle) make the liquidity problem disappear instantaneously if it were allowed to occur, if not for the fact that it would also cause asset price deflation on an unimaginable scale.
“The market is behaving as though it believes interest rates will have to lurch up…”
Hence MM funds are the places to put one’s money.
combotechie, I thought the only MM funds that were FDIC protected were ones opened before 9/18. Is that right?
The Guvment last week said they’d insure the MM funds. They have to, else there’d be massive run.
No worries, our government has never let us down recently.
I love the smell of fear in the morning. It smells like …
…opportunity.
The only losses I’ve suffered this year in spec. have been due to gov. manipulation.
MM funds are insured ONLY for deposits before Friday last. New deposits are not insured. It would have caused a run on FDIC institutions and to some extent a sell off in the stock market.
MM FDIC insurance has been expanded. Your safe enough!
Before and after Friday… lots of idiots posting today…
Must be the gold bugs…LOL!
Very soon, we will be going through It’s a Mad, Mad, Mad, Mad World, only in reverse.
Instead of madly looking for buried treasure under a mysterious big W, people will be hiding theirs from a mysterious big W.
http://en.wikipedia.org/wiki/It’s_a_Mad,_Mad,_Mad,_Mad_World
omment by JonB
2008-09-27 11:21:26
MM FDIC insurance has been expanded. Your safe enough!
Before and after Friday… lots of idiots posting today…
Must be the gold bugs…LOL!
I must be one of the idiots. There’s a very simple reason MM funds are only guaranteed if they were already in place — why would anyone keep money in a bank if they could get FDIC-backed rates in an MM? Think about it. If they guaranteed MM funds going forward, banks would get wiped out.
“…why would anyone keep money in a bank if they could get FDIC-backed rates in an MM? ”
Too-big-to-fail implicit guarantee (just recently made explicit)…
It smells like BURNT TOAST combo, and your cash is kinging into money market funds which broke the buck?
The U.S. Treasury Department’s effort to back up money- market investors announced Sept. 19 seems to be working in stopping withdrawals from the $3.35 trillion industry. Assets have grown by about $23 billion through Sept. 24.
Treasury said it would spend up to $50 billion to prop up money-market investors. After objections from the banking industry, which feared customers would flee banks in favor of higher yielding, government-backed money markets, the department said it would limit the guarantee to balances as of Sept. 19.
http://www.bloomberg.com/apps/news?pid=20601213&sid=a117zkbdHNUQ&refer=home
According to Bloomberg: Treasury said it would spend up to $50 billion to prop up money-market investors. After objections from the banking industry, which feared customers would flee banks in favor of higher yielding, government-backed money markets, the department said it would limit the guarantee to balances as of Sept. 19.
Cigarettes and hard liquor.
Seriously though, most are probably putting it into other banks. That’s what I’ve been hearing at least. Chase in particular seems to be perceived as a safe haven right now by the man on the street around here.
Chase in particular seems to be perceived as a safe haven right now by the man on the street around here.
Maybe that’s ’cause you can’t swing a dead cat without hitting a Chase Bank in Chicago. Replacing hot dog grills and Polish diners with bank branches: not my idea of Progress.
By the looks of things, there will be a lot of boarded up branches soon.
During the past year I have had to visit a bank in person only twice (to empty my change jar). I went to two different ex-LaSalle branches on the far northwest side. These were big buildings - but now they are uncomfortably empty. Maybe two or three windows were staffed with at least 20-30 standing empty. All the personal banker desks were empty too.
Needless to say, it didn’t look good.
Just this past week at least a dozen CITI bank sites were put on the market for sale here….
Regarding boarded-up bank branches — some time ago, the WaPo did an article on the land grab by retail banks, as a means to capture market share. IIRC, the number of branches reached historic levels, in terms of raw numbers and per capita penetration.
In other words, more good news for commercial real estate, coming to a vacant shell near you.
Once The Karachi Protocols are lifted off the stock market, SRS will take off like a bottle rocket.
I want to amend my comment about SRS going up [like a bottle rocket] — once the Pax Paulson is approved and all bad mortgages are tidied up and off balance sheets, I think this ETF will first hit a 52 week low. After which I have it as a buying opportunity.
After all, we the people can’t buy all the real estate.
Can we?
The thinking must be, JP Morgan Chase cleverly managed to bid too little for WaMu at a time when WaMu still thought it could survive; Chase got WaMu much cheaper after the Feds shut down WaMu. Ergo, Chase is smart and Chase will survive.
Az_lender, what happens when JP Morgan Chase fails? And isn’t the government allowing the same mistakes that caused this mess by enabling it to become so huge? Does the world really need another megalithic bank waiting to suck up, and endanger, every drop of money left?
My thoughts exactly.
What’s going to happen when it, too, gets ‘too big to fail’?
So Chase bought WaMu for $1.9 billion. 5000 branches. So a WaMu branch at $380,000 is worth about the same as a house in California. I want me a bank. Can I pay cash for one? (of course I also need to buy part of that $31billion
People appear to be pulling their cash out of regional banks and depositing their money into The Great American Land Bank…somewhere near fence posts # 7 and 23 of in grandpa’s south forty
Why did the FDIC close WAMU on Thursday?
Thursday night the Board of directors of WAMU are in NYC. They all get on their plane to Seattle believing everything is fine - they have spent the entire day with the FDIC and with JP Morgan. Land and then find out: gone.
WAMU lost $20 B in deposits, but was in better shape than Wachovia. There have been plenty of banks that the FDIC has kept open that are in worse shape. Because there is a run on deposits is not reason enough to close a bank.
WAMU was a victim of the Paulson/Bernanke plan - a symbol to show congresspeople that this could get really ugly. A carefully orchestrated event timed for political effect.
Totally agree.
So why isn’t one party (A) shooting another party (B) dead?
Because they were both guilty of getting us to this point, and there is plenty of finger pointing that could happen. What amazes me is that the Democrats have done a poor job in this crisis, they jumped onto the unpopular Bush bandwagon in panic, and the Repubs might actually score points with the populus.
The longer this drags on though, it makes both look bad so a deal will now be quickly reached before people actually start peeling back the onion and discovering the rot inside. We aren’t even asking the questions yet in the media about how and why this welfare for wall street might work… this administration has always been good at creating false choices.
1. You’re with us or you are with the terrorists.
2. Invade Iraq now or be hit with WMDs.
3. Support the war or you’re helping the insurgents.
4. Bailout WallStreet now or you want imminent financial doom for Main Street.
We are never allowed a 3rd or more option, nor even time to debate as there is always impending doom. This is going to cost us more than Iraq, and yet the House Repubs are the only ones even considering other options?
Perhaps Paulson and Bernanke were miffed that Congress felt the American public was against handing over $1 trillion to the ones that started the mess in the first place, not mention consolidating even more power under the “regulatory” branches of government that did NOTHING over the last 10 years to curtain this problem.
Anyhow, what better way to shift public / congressional sentiment than to seize the largest thrift in the nation. Suddenly Paulson and Bernanke have everyone’s attention.
This seems amazingly coincidental to me. And yes I know … don’t give me any cr@p about the recent rating agency downgrades, I worked in the CDO biz, I know how entirely worthless S&P and Moody’s have become.
Well there you go. Investors only bought all that cr@p paper because Moody’s et al gave it a good rating!
Yep, I personally witnessed a business deal where a guy flew out to California to discuss dealings with the mother company and was told everything was OK. They waited (and confirmed) that he was on a plane flying back when they had the locks changed on his offices along with all internet access to the offices shut down.
A poster at the oildrum.com noted the following:
Any economic system that is based on interest-based debt is destined to fall. In a pure interest-based debt system the capital never decreases; it always increases regardless of increase or decrease in economy. This results in concentration of wealth in a few hands and illiquidity of money. That is what caused Great Depression.
Rosevelt, Keynes etc delayed the fall of interest-based economic system after the Great Depression by these four methods:
1) Paper currency without gold backing which allowed govts to print money which eats people’s savings.
2) A growing economy especially during and after wwii, the growth in economy ofcourse cannot happen without an increase in net energy consumption by economy.
3) A larger role of govt in economy through higher taxes and more govt expenditures especially in defense, research, space programs etc.
4) The bankruptcy law that allow borrower to default on his liabilites hence saving himself from pressures of lenders and after reaching point zero may start again.
Due to decline in net energy consumption since 2005 the 2nd method is no longer working. The net energy consumption of society is decreasing because while amount of fossil fuel used in economy is at plateau the energy cost of extraction of the fossil fuels is increasing. The growth that was providing the interests on debts is no longer available.
The 3rd method of larger role of govt can also no longer be effectively implemented because the govt of usa itself is technically bankrupt. Remember the technical definition of bankruptcy is when you are unable to provide for your liabilities without taking further debts.
The 4th method is implemented and is the result of banks becoming bankrupt. This reduces the amount of capital in economy. Many new business can’t be started because the capital from banks is no longer available.
This leaves the america to the 1st method.
Notes on a Scare Card:
2008 was the 1st year Baby Boomers could receive social security moolah, and you just know they’ve been circling the drain of debt in doing so.
It takes the public quite a long time to figure out things, and when their $1484.63 per month stipend represents a couple shopping carts full of food, they’ll better understand the economic Trojan Horse that hyper-inflation is…
RE: they’ll better understand the economic Trojan Horse that hyper-inflation is…
You can bet a FHA/HUD run reverse mortgage program for “seniors” will be the next scam to keep the debt ball in the air.
Somebody posted there cannot be hyperinflation without wage inflation. I’m not seeing any sign of wage inflation.
Don’t need wage inflation to get there from here. It’s route cause is always the same, sweeping debt under the carpet.
Those Germans after WWI that used wheel barrows full of money to by a loaf of bread had to get a wheel barrow money somehow.
It was either from savings, a loan from a bank, pay from a job.
Now you can just type a 7 with 11 Zeroes and presto! Instant Digital Money. No need for a printing press or wheelbarrows.
What is not insured by the FDIC?
The FDIC does not insure the money individuals invest in stocks, bonds, municipal bonds, or other securities; mutual funds, (including money market mutual funds, and mutual funds that invest in stocks, bonds and other securities)….
http://www.fdic.gov/deposit/deposits/deposit/faqs/index.html
On Friday (a full week after this crisis was “announced” by the administration) I finally heard a coherent description of the problem and its impact on main street on All Things Considered, broadcast by NPR. Companies use the money markets to raise short-term funds. But, at the close of the segment, the announcer says that since the money market isn’t working, companies are using other methods to raise money such as drawing on existing lines of credit. It seems that people are adjusting to these credit shocks. My, what a surprise (yes, I am being sarcastic).
I also notice that the world did not fall apart last week even though there was no bailout.
BTW, Tim, thanks for your explanations yesterday.
So lets stop or scale down the bailout. Let China try to trash the dollar, we’ll see if anyone else buys their stuff and we’ll compete with them by using our technology. Their strength is their cheap labor.
Let collateral money flows strengthen and banks consolidate. Abolish the Fed and phase out fractional reserve banking, let interest rates reflect risk, and let our savings be the source of lending again. It will hurt, but it is what we need.
Amen, brothah! Sheesh, I agree wholeheartedly.
Yep, you nailed it!
If you are interested to find out real cause of the current financial fallout here is the interesting material for you, fellow HBB site readers, to be familiar:
http://www.pbs.org/wgbh/pages/frontline/shows/wallstreet/weill/demise.html
It starts with Glass-Steagall Act and goes through the stages of how further the greed of our financial “wizards” eliminated that important cornerstone-safeguard, to bring us in today’s United States Bankruptcy…
Septembrist or Septembris?
Septem-bris.
Oops.
think nothing of it.
Ouch.
http://consumerist.com/5054482/man-sues-doctors-for-amputating-penis
followed by Oktimberrr?
My My Morning sob story from CL….
I’ll bet it was an illegal construction project with an unlicensed “contractor” and nothing written down….
HELP! I need a construction guy…… (Bay Shore)
Reply to: windchimes2@optonline.net [?]
Date: 2008-09-27, 9:58AM EDT
Construction was started on my basement to turn it into an apartment. The guy took off, left unfinished AND took my money. It should cost approx. $8,000 to finish. Here’s the deal: If you finish the basement without money upfront, it can be repaid after completion in monthly installments. My sob story is that this guy wiped me out. Single mom, kids, house the whole thing. It really sucks. I don’t want to have to sell my house. The apartment was my savior. I am willing to talk other terms with someone who has the capabilities to do this thing. Here’s hoping this works…..
* Location: Bay Shore
* Compensation: Full payment in installments after completion
RE: My sob story is that this guy wiped me out.
Anybody who let’s a contractor get ahead in the disbursement game is really asking to get completely screwed.
Here’s an amateur landlord who’s toasted before she’s even started.
Man, I really gotta start a housing consultant/counselor biz.
People just haven’t got a clue about how not to get fooked by the legions of scammers out there.
You nailed it.
My wife during the great Battle Of Philippines Remodeling paid a friend of her step-mother’s brother in advance for tile work. Oops.
She ended up paying his temp workers herself to finish after re-buying the last half of the (undelivered) materials for them to use.
“other terms”?
“other terms”?
LOL! Maybe she’s hot?
$8k hot? Not unless Elliot Spitzer has entered the construction biz…
Scam
mortgage world- deregulated my asz
bob komikazi
as capitalism fails ?”
WTF
fre/fnm and the hole mess is a new. new deal gone bad
Could somebody translate this into “normal” English?
I feel drunk and it’s barely 9am on a Saturday morning.
i’ll give it a whirl:
translation:
A Zero pilot aims his craft @ FDR’s New Deal, and crashes squarely into FanFred & Sum’s junkyard of debt?
I took it to mean, “The quick brown fox jumped over the lazy dog.”
Or,
“The quick brown fox jumped over the lazy asz dog.”
I took it to mean, “had to much too drink or took to deep of a breath from the bong”
I like it that translation.:-)
(Zero airplane piloted by Joe6P)
The greatest American casualty of the recent episode of financial history will likely be a move towards Adam Smith’s ideal of capitalism subject to a rule of law (which we have unfortunately not actually enjoyed). We are likely to come out with a lending system under the thumb of a legal thicket of coercive legislation, to be overseen by a top down command-and-control regulatory czar (Comrade Bernanke?), rather than a level playing field governed by rules that allow lending markets to function properly and locally(as opposed to, say, enabling households earning $20,000 a year to purchase $700,000 houses).
There is no time for such philosophical musings at the moment — $700,000 bn in emergency funding needs to be summarily appropriated this weekend or else.
towardsaway from Adam Smith’s ideal of capitalism(must not post when children are present)
sounds like harry wants it more than hank
CONgressmen must be in a panic since Hank took away their campaign contribution cookie jar (Fan&Fred).
There is no panic if everyone’s contribution cookie jar is equally depleted. An all-round reduction of the “advertising budget” is actually a healthy thing.
But, (gasp), an incumbent might lose!
As long as the lobotomized herd creatures known as the American electorate continue to lurch into the voting booth and vote for business as usual, i.e. the same Republicrat flim-flam men, few if any incumbents are in any real danger of losing their positions, perks, and privileges.
Maybe it time for real public financing of campaigns.
Presidential get $1 per voter….110 milion voted in 2004 so $110 million each party…NO solicited donations
3rd 4th parties 50 cents or $50 million or so….and ALL must participate in the presidential debates. (Libertarian, independent
Senators representatives maybe 50 cents each voter….
3rd 4th parties 25 cents…
So actively voting is a must, to get more money.
But still allow a Perot Bloomberg Buffett Gates to spend their own money to run.
And all tv networks must allow some FREE time to candidates…even if its just an hour split anyway they want….120 30 second commercials or a 1 hour long interview its their time,
During 2007, Lehman ($720,000), AIG ($680,000), and BS ($900,000) dumped a few bucks on useless politicians, too, and that cash will also be missed.
http://www.opensecrets.org/lobby/indusclient.php?lname=F07&year=2007
“The paper contains other useful warnings that appear to be getting little heed. For instance:”
‘All too often, central banks privilege stability over cost in the heat of the containment phase: if so, they may too liberally extend loans to an illiquid bank which is almost certain to prove insolvent anyway. Also, closure of a nonviable bank is often delayed for too long, even when there are clear signs of insolvency (Lindgren, 2003). Since bank closures face many obstacles, there is a tendency to rely instead on blanket government guarantees which, if the government’s fiscal and political position makes them credible, can work albeit at the cost of placing the burden on the budget, typically squeezing future provision of needed public services.’
And this:
‘Special bank restructuring agencies are often set up to restructure distressed banks (in 48 percent of crises) and asset management companies (AMC) have been set up in 60 percent of crises to manage distressed assets. Asset management companies tend to be centralized rather than decentralized. Examining the cases where AMCs were used, we find that the use of AMCs is positively correlated with peak non-performing loans and fiscal costs, with correlation coefficients of about 15 percent in both cases. These correlations may suggest some degree of ineffectiveness in AMC’s, at least in those episodes where asset management companies were established. In line with these simple correlations we find Klingebiel (2000) who studies 7 crises where asset management companies were used and concludes that they were largely ineffective.’
“So much for the idea that taxpayers might show a profit.”
Yves Smith
http://www.imf.org/external/pubs/ft/wp/2008/wp08224.pdf
Systemic Banking Crises: A New
Database
Luc Laeven and Fabian Valencia
Caution 80 pg pdf.
Who do you think is sitting on the cash pile funded by the Fed’s below-market-interest loan program, waiting for the fire sale to begin?
No pile of cash was left unmolested.
Mine has grown, as has my pile of real money.
Absolutely, PB.
Wouldn’t be surprising at all to see Pauson and his friends “helping” our country by buying up all these assets at “market” price (currently described by Bernanke as “fire sale” prices).
Don’t forget, they are going to have “experts” manage the entire bailout program. No doubt, they will be the same “experts” who profitted during the credit expansion — and who fought regulation at every turn.
(I have guests and am lazy.)
Is it common in economics to bother to write papers about results that show correlation coefficients of 0.15? Or is that the point, that AMC’s are about as good as throwing the money straight up and seeing where it falls?
Non-profits, all dependant on government grant, hand-outs are now the largest employment sector in Mazzland.
Just more evidence of the illusionary US economy in this country which now produces nothing other than an entitlement sense of dependancy and de-facto reliance on big government.
http://www.boston.com/news/local/articles/2008/09/27/nonprofits_warn_governor_on_cuts
From the article:
“Community healthcare centers, housing organizations, and fund-raising groups are waging a preemptive fight against program cuts, warning the governor that slashing funding would destabilize the state’s leading employer - nonprofits.
The Massachusetts Nonprofit Network made the plea in a letter to Governor Deval Patrick this week, anticipating that their state funds are about to dry up amid state budget cuts.
Nonprofit hospitals, museums, healthcare centers, and human service agencies provide more than 13 percent of the jobs in the state - more than manufacturing or the financial services sector, the letter notes.
“To fix our state’s economic problems by cutting its major source of jobs is not wise,” said the letter from the network’s board, which includes representatives from the Massachusetts As sociation of Community Development Corporations, Families First Parenting Programs, and the Environmental League of Massachusetts.
“You cannot dismiss the impact of nonprofit services on the overall economy,” Bill Walczak, president of the nonprofit network and founder of Codman Square Health Center in Dorchester, said in an interview.
“It’s not just the services that would be going. It’s lots and lots of jobs - and jobs in very important areas that need to be stable, especially due to the foreclosure crisis, which often hits the exact same communities.”
*****
This is ridiculous, the perspective of non-profits:
“Yeah, we’re being preemptive, and not just because we do any good!
You shouldn’t be cutting us because of the jobs we supply, even though we don’t generate a dime of tax revenue and we line the pockets of many of our management…
And besides, our workers were dumb enough to obtain bad mortgages, too.”
“Community healthcare centers, housing organizations, and fund-raising groups are waging a preemptive fight against program cuts, warning the governor that slashing funding would destabilize the state’s leading employer - nonprofits.”
Bunch of leeches existing on the gov’t dole doing unproductive work. Better the gov’t set up infrastructure re-build programs , work projects, and allow unlimted domestic energy production out here in CA. That will create good paying jobs in refineries, energy plants, and other energy fields. Also green technologies
such as solar plants, water desalination, anything to do with creating sustainable energy and infrastructures dealing with energy and renewable resources.
Because it appears you don’t understand what I’m saying, I’ll repeat it again:
“This is ridiculous, the perspective of non-profits:
‘Yeah, we’re being preemptive, and not just because we do any good!
You shouldn’t be cutting us because of the jobs we supply, even though we don’t generate a dime of tax revenue and we line the pockets of many of our management…
And besides, our workers were dumb enough to obtain bad mortgages, too.’”
If the non-profs are the largest employer in the state then laying off workers will directly impact the economy…. in a country (hint: THIS country) where our economy is ~74% consumer driven.
This is the engine behind the current national problem. It was only a matter of time before rising vector of costs intersected the downward vector of real wages.
Companies (maybe not you or yours) have been systematically cutting or freezing wages, benefits and pensions for the majority of their employees.
A ~74% consumer driven economy can end up only one way if the consumers can’t, well, consume, now can it?
wow, I thought DC had a lock on that sht
non profits my azs
Mass is a peoples republic, so it makes sense
A conundrum: Nobody wants to loan money at today’s low rates, which do not have much of an inflation premium built in, but if interest rates are allowed to adjust upwards to market clearing levels, then asset owners face a negative wealth effect the likes of which have not been seen since the tech stock crash.
Be sure to click on the linked graphic “What does $700 bn look like.” While viewing, ‘bear’ in mind McCain’s worries about $3 million spent on grizzly bear endangerment status at last night’s debate.
Planet Money
The Week America’s Economy Almost Died
by Adam Davidson and Alex Blumberg
Treasury Secretary Henry Paulson takes a call as he walks to his office from the White House. Getty Images
How Big Is $700 Billion?
Watch: How Big Is $700 Billion?
Photo Gallery: Wall Street Bailout
Photos: Wall Street Bailout Debated
All Things Considered,
September 26, 2008
The potential for disaster was horrifying. For people on Wall Street and in the inner circles of government, last Wednesday and Thursday will long be remembered as the time when the American economy survived a brush with death.
The nation’s entire financial system slid toward a terrifying abyss, they say — a landscape where no one would lend and no one could borrow, where no one could buy anything and no one could get paid. As Congress and the Bush administration continue debating a proposed $700 billion bailout of Wall Street, those with intimate knowledge of the crisis say that whatever solution emerges must avert future brushes with very real disaster.
The nightmare scenario rattled Mark Peterson, far from the halls of finance, in Memphis, Tenn. “For those of you who’ve experienced an earthquake, some say it’s a soul-wrenching experience, and it’s massively moving everything,” Peterson says. “And that’s last week. There was a monster unleashed. The commercial paper market, which is the most liquid market, probably in the world, basically froze up.”
Well, what the hell on earth did all these brilliant jackasses think would happen when their man Greenspan kept rates so damn low for so long! Mainly thanks to his overreaction to 9/11 and ego we’re in the jam we are seeing.
What a bunch of bullsh**! Apparently, it’s all peaches and cream until it isn’t.
So many “amateurs” saw this coming for so long, it’s just incredible that anyone in any position of responsibility could just exempt themselves from rational thinking, for so damn long, on these issues.
Sheesh, this makes me mad.
You sound enraged.
The Federal Reserve and the Treasury Department and Congress were well aware of all these problems and other potential problems over a year ago. There are many recent papers from internationally recognized economists pointing these problems. Most of these papers require data from the Federal Reserve and other government agencies. The Federal Reserve has never ignored these reports in the past, why would they ignore them now?
To give you an idea of how seriously, the government regards outside reports, read the BLS recently written paper to refute Mr. John Williams ShadowStat inflation reports. (BTW, I agree with the BLS figures for the most part with regards to inflation.)
Mr. Bernanke may not understand the derivatives market, but he has hundreds of people that do understand derivatives and hundreds of people that read papers from outside economists.
hoz,
Hmmm, “… over a year ago” doesn’t cut it.
These problems were YEARS in the making.
You knew it. I knew it. Many, many others knew it.
Of those in Congress, at the Fed, Treasury or anywhere else that could have done something about it - where were they?
Is this the best they could come up with? Wait until September 2008, when the world’s financial markets turn to sludge - to do something?
The leadership’s behavior (all stripes, in all parties, in many nations, too) is appalling.
APPALLING.
It lacks moral fiber, at the very least, to have waited until now.
The “leaders” I most respect now are people like Thornberg, Roubini, Shiller, Krugman, Rodgers and the like. I can’t stand Krugman’s politics, but he at least wrote a column a couple years ago saying “it’s gonna be bad.”
They’ve all been basically shouting (in their own way) from the rooftops for several years now.
That shows how terribly bad the “leaders” have been…
Where was the leadership? Where were they?
Hiding in a hole and hoping it would go away?
They acted like a bunch of teenagers.
It’s gotten so bad, I have to say this - that I often cannot agree with Bernie Sanders, nor some of Ron Paul’s extreme positions, most of the time - but at least the pair would make an interesting pair of candidates for veep and president.
Can you believe that? I know - it’s ridiculous!
And by “rational”, I mean thinking for themselves and seeing a dark future if action is delayed.
And that’s all they did…
*****
“So many “amateurs” saw this coming for so long, it’s just incredible that anyone in any position of responsibility could just exempt themselves from rational thinking, for so damn long, on these issues.”
In 1994 from the Fed Notes of the March meeting, the question was asked by one of the voting Fed Governors (Boston’s Fed) “Won’t these policies result in asset bubbles? ”
The last non political Fed was in 1969 and he caved. Since then every Fed has known what was wrong, but it has always been the easy way out.
Of course the Fed knew in 1997 they were creating an asset bubble in housing - it was discussed, they knew in 1994 that they were creating asset bubbles.
Just because they plead “we didn’t see this coming” does not mean they tell the truth. The first rule of the fed is never tell the truth.
+1
which is what I understand the appropriate interwebs response should be.
Hoz, my tinfoil hat is busted. They created the bubbles to watch them burst? The bailout was the plan all along?
‘Just because they plead “we didn’t see this coming” does not mean they tell the truth. The first rule of the fed is never tell the truth.’
Must-pretend-asset-bubble-collapses-are-acts-of-God…
“Hoz, my tinfoil hat is busted. They created the bubbles to watch them burst? The bailout was the plan all along?”
———————————————————————
My guess is some people were making alot of money and convinced the FED to let the free market work, at least until they fleeced as many sheep as possible
” They created the bubbles to watch them burst? The bailout was the plan all along?”
why not? if opportunities are to be found in crisis, why not engineer crises?
you don’t need a tin hat. people are plotting and conspiring all the time (this sometimes referred to as “strategizing” or “planning” or even “advertising”
)sometimes successfully, and many times not.
I’ve mentioned it before, but you can watch the BBC documentary Century of the Self on google video and find out just how easily manipulated we are. Fascinating, amazing documentary which everyone should see.
Tell ya what, Ella…
I’ll Google “Century of the Self” if you Google “Hanlon’s Razor”.
(grats to sm_landlord)
“Never attribute to malice that which can be adequately explained by stupidity.”
mm-hmm. It’s not either-or in my opinion.
Get back to me on “Torches of Freedom”…
also…in case you are imagining I lurk about in a trenchcoat and tinfoil cloche, let me tell you that I grew up in the house of a journalist, and the main thing I learned is: the world is full of people doing very strange things.
Let me add this link from the fantastic this american life:
http://www.thislife.org/Radio_Episode.aspx?episode=168
Episode Description:
“Yes, airline prices are always the same no matter which airline you call; in Presidential elections you always feel like you’re choosing between the lesser of two evils; and it doesn’t really make your hair any cleaner if do the “repeat” part of the instructions “shampoo, rinse, repeat.” There are all sorts of situations in which we suspect the fix is in, but we almost never find out for certain. On today’s show, for once, we find out. The whole program is devoted to one story, in which we go inside the back rooms of one multinational corporation and hear the intricate workings — recorded on tape — of how they put the fix in.
We hear from Kurt Eichenwald, whose book The Informant is about the price fixing conspiracy at the food company ADM, Archer Daniels Midland, and the executive who cooperated with the FBI in recording over 250 hours of secret video and audio tapes, probably the most remarkable videotapes ever made of an American company in the middle of a criminal act.”
I am in the same camp with you jack….
I think sf jack hit the main point right on the head: “So many “amateurs” saw this coming for so long, it’s just incredible that anyone in any position of responsibility could just exempt themselves from rational thinking, for so damn long, on these issues.”
I mean, cripes, I remember walking through my neighborhood with my girlfriend back in 2003 (we’re married now). I had moved to DC/NoVA in 2002, bought a house, and when I was house hunting, the rapid increase in prices made me nervous. And as we’re walking around the block after dinner, we took a look at the asking price of a house that was for sale. I was stunned at how quickly prices had increased from 2002 to 2003. I remember saying to her 5 years ago “This is going to end badly”.
If so many amateur sleuths could have seen this happening so far advanced, just WTF were the ‘experts’ doing? Talk about shear negligence and ineptitude.
No Frackin chance are we avoiding financial death.
http://www.moneyandmarkets.com/files/documents/Final-Bailout-White-Paper.pdf
Warning PDF!
The reason I don’t believe the bailout will work:
Liquidity has a way of rapidly disappearing into financiers’ pockets (or perhaps under their matrices) when interest rates are suppressed to below market-clearing levels.
But someone is going to make a killing once interest rates revert the way they did in the 1980-1982 period.
I agree something needs to be done, but the money should be used to create NEW infrastructure and allow the old evil empires to go away. Throwing ANY amount of money at some banking institution without routing the management layer is doomed to fail imo.
Totally agree with both points:
1. Interest rates must be allowed to rise
2. We will need to do something, but it should be shoring up the FDIC, SIPC, PBGC and assiting insurance companies and municipalities with low/no-interest loans. Additionally, we need work programs, because debt deflation (which MUST happen) is terribly destructive and people will need jobs. Our infrastructure has been sorely neglected because of the misallocation of resources which resulted from Greenspan’s obsession with expanding credit (and not much else).
The funny part is that the NAR/REIC still thinks that all this fuss is for their sake!
The comments coming from Gaylord/Yun this week show that they’re beginning to realize that they might not be “the” priority anymore.
once interest rates revert the way they did in the 1980-1982 period ??
Yep…
Well, it will then be very obvious which clients to work for, as a buyer’s agent at least.
:>)
The never-ending problem is money. Each person must answer the questions of what is money, and how is it created? When each person has answered those questions accurately, then every action taken by each individual comes into focus. Without answering those questions, the problem will never be solved.
After those questions, then one can turn to answering other questions. Do we have a constitution? Does it specify who can create money? Do we abide by the rule of law? What is the rule of law, and what is the supreme law of the land? Does Congress have constitutional authority to create money, or only the power to borrow and tax? Is the Fed part of the government? If it is, how did they get the power to create money to buy its own debt?
I think Hank needs to sit down with Henry Miller …
“To walk in money through the night crowd, protected by money, lulled by money, dulled by money, the crowd itself a money, the breath money, no least single object anywhere that is not money. Money, money everywhere and still not enough! And then no money, or a little money, or less money, or more money but money always money. and if you have money, or you don’t have money, it is the money that counts, and money makes money, but what makes money make money?”
What is money?
a. medium of exchange b. store of value c. unit of measure.
We also need to confront the fact that interest-based debt economies are immoral and dishonest and are an affront to god (however you wish to define that term) and fellow man and woman.
Has anyone mentioned yet how much of the $700 bn pie will be allocated towards funding Congressional campaigns? I guess when that much money is thrown around, the slice that gets diverted to Campaign finance will be so small percentage-wise that it is not even worth worrying about it.
When Paulson was asked during the hearings about banning lobbying by entities who benefit from the bailout, he said they would not and could not restrict lobbying (paraphrasing here).
If this were really such a “crisis” wouldn’t it be easier to limit executive compensation, prosecute and seize the assets of those responsible (long list), ban lobbying by any beneficiaries of the taxpayers’ largesse, etc.?
Why are these issues so “untouchable” when they are demanding taxpayer money???
MSM is finally reporting on the public’s opposition to the No Banker Left Behind Act of 2008.
KCBS news radio (Alt-A Bay Area) this morning just talked about Tausher’s, Speier’s, Lundgren’s and Bono’s offices (all US House Reps) being inundated with calls and e-mails.
Tausher’s received more than 1,000, with overwhelming opposition.
Lundgren’s tally was “running 697 against; 2 for the bailout.”
Others have seen similar figures.
So, what do HBBers think after watching the Obama/McCain debate last night?
Speaking for me, I had to be sat on, (twice actually because the first time I kicked and wiggled free), in order to be prevented from leaping into my car and driving wildly up and down Steamboat Island road beeping my horn and shouting ‘Obama! ObamaaaaaAAAAAAA!’ Like that.
I was quite enthusiastic, is what I’m saying.
I thought they were both squirmy economic dogs, and skirted the hard questions about the soft underbelly with much aplomb.
I couldn’t really warm up to either of them, McCain always quoting something and Obama quickly on the defensive to rectify what had already been said.
McCain went to his “being there” set speech, topped off with a cherry on the top @ the end, one war’s prisoner demanding that our country be held prisoner to war, indefinitely.
I thought McCain was very robotic…Kind of weird really…Almost like he was on a sedative or something…No eye contact in 90 minutes…What kind of debate strategy is that ??
Olygal, I was sooo nervous, Obama had been so cautious the previous days, but when I saw him hit his stride I went “that’s my guy”. I thought McCashforTrash was pummelled in the first 30 minutes or so. He then scored a few mean points every time he said “Mr. Obama does not understand this”, or “Senator Obama naively thinks that….”. I’m sure McCain’s fans remained in his camp, I’m not sure he charmed the independents. I was not satisfied with Obama’s pitch on the economy, but I understand both he and McCain have to be as non-committal as possible. They both know exactly the kind of hot potato they are going to have to handle in just a couple of months time. So much could happen from now to then, that, much as I wanted both of them to spit fire against the bailout, I have to understand that they can’t, even if they wanted to. All I can say is if McCain wanted to get ahead, he should have scored more points yesterday. Obama came across as exceedingly articulate, prudent, not impulsive, thoughtful, studious. Those are the qualities I’m looking for in a president and commander in chief.
If Johnny Carson was doing his great Carnack role in which he would give the answer first and then psychicly think of the question, it would have gone like this.
Carnack with the envelope to his forhead. Answer:
“Both Senators McCain and Obama in a photo finish dead heat.”
Opens the envelope and reads:
“In the televised debate, which presidential candidate was completely full of $hit?”
Watch, the Supreme Court will decide this one again in a photo finish. If the standoff is in a state with a Democratic governor, like Ohio, they will contradict their 2000 decision.
i learned that obama has a braclet too.
that’s about it though.
McCain not only doesn’t know how many houses he owns, but he managed to grouse early in the debate over the “waste” of spending $3 million on the Endangered Species Act while managing to avoid much discussion of the failure to broker an agreement on the $700 bn bailout. Do you think he has an inkling about how much bigger $700 bn is than $3 million?
That one caught me off-guard as well.
$3 million…seriously???
Of course I was going to vote for McCain anyway so my bias is clear. I thought in foreign policy McCain looked like the Jedi master and Obama looked like the eager student. McCain needs to clearly delineate the stark difference in spending and tax policy that separates the men. It drives me crazy that the media and McCain let Obama get by with that stupid 95% of the people will get a tax cut. Almost 40% don’t even pay taxes! Then of course Obama says again “we have help people stay in their homes” AAAAAAAHHHYY!
Caught 30mins of it in Jackson, WY at a restaurant. A beautiful bartender distracted me with her low cut blouse. I’m with you in spirit!!! Obama! Obama!
on a side note: never seen so many fore sale signs in Alta and Jackson. It is like the entire town is up for sale.
Cinch
Jackson Hole ??
yes
Jackson Hole is just a geographic area north of jackson near the airport.
interesting….Maybe time to go take a peek..
Sorry Olympiagal, but I wasn’t enthusiastic. I was bored stiff. I’ve heard it all before, again and again, in every presidential election since I was a teenager. Nothing Obama said was new or original (much less futuristic). Nothing McCain said was new or original (much less futuristic). Both pretended to have infinite knowledge, which got tiresome, and fudged when they didn’t have a clue (”I agree with John McCain, etc.”) as to what the other was talking about.
McCain should have a boombox playing “Stars and Stripes Forever” every time he frogmarches on stage, with VFW members in wheelchairs rolling behind him.
Obama should have FBs waving their forclosure notices in the background, stretching out their hands for government grants.
And could two people boast more about themselves without exploding from all the hot air?
I’m glad you got excited, and I hope it works out well for you. To me, it’s like a football match between teams that mean nothing to me at all. I’m still waiting for a candidate that will tell humans to stop reproducing for about forty years. I’m not advocating abortion, euthanasia, infanticide, mass suicide, plagues, wars, or anything that hurts anybody. Just a natural reduction in our numbers by not incessantly duplicating ourselves every fifteen minutes, give or take a tick. That would pretty much solve ALL the world’s problems.
Tic, not tick. Sorry.
I’m doing my part (by not reproducing).
But that’s partially because I hate kids. And also because I don’t deem my genes good enough for reproduction.. One of the scariest trends (IMHO) is the idea that those with the worst genetic makeups happen to also be the ones with the most offspring; it’s a form of genetic regression, we will become stupider through time if it continues on this pace. The most intelligent have the fewest children. That’s not a good thing.
The wrong ones are reproducing (in general). The productive ones are not reproducing but scrambling hard to build wealth.
This is also happening in South Korea and Japan - the birth rate is going down remarkably by the most educated and most productive members of society. Women are delaying childbirth, which is their choice.
The worry is that the GDP in those nations will go down as there will be a large pool of people retired, no longer creating wealth.
A young Darwinist - Libertarian friend of mine recommends that I should watch Idiocracy. He told me what the movie is about. I did not get the movie yet but I think this is what is happening now all over the world, not 500 years in the future.
Got gold?
Don’t watch it late at night. A scary movie.
Once of the best parts of the flick:
President Camacho addresses the House of Representin:
http://www.youtube.com/watch?v=cxJnf5tkfoo&feature=related
http://www.youtube.com/watch?v=C1sE1E3z7jU
The intro to IDIOCRACY is hilarious - the successful, high-IQ, non-reproducing couple in contrast to the frenetic overbreeding of the imbecilic Clevon and his spawn.
When I saw it, it reminded me who is heeding the adage “be fruitful and multiply”.
Why hasn’t the Rapture happened already? I wish they were already gone.
Your hatred of kids, self-proclaimed genetic retardedness, and the machinations in DC reminds me of a Pushkin verse that goes something like this…
Amongst the crafty and small minded
The children spoilt, the mad, the rogues
both dull and ludicrous, the blinded
critics and their capricious vogues.
Amongst devout coquettes
appalling lickspittles who adore their crawling
and modish scenes of daily life
where civil treachery is rife.
Urbane betrayals and the chilling
verdicts of vanity the bleak
men’s thoughts, their plots, the words the speak
all of an emptiness so killing.
that’s the morass I beg you note
in which dear friends we’re all afloat.
Did any of these schmucks mention energy? How about rebuilding our national railroad network? That is the one thing that would do more to ease our national suffering than anything else, but neither of these bozos probably mentioned it because their heads are firmly implanted in their buttocks.
I give an edge to Obama as I think he looked every bit the president that I hope he becomes.
I thought he looked like the Grim Reaper, which might not be an accident.
Perhaps. With some Baby Huey thrown in.
What a thought!
The differences between the two are underwhelming.
John Jackson v. Jack Johnson
Kind of like Ben Jones v. Jen Bones
luv
In times like these, go with The Name You Know.
I was very interested in hearing what the two candidates had to say. After listening to them for 15 minutes bickering uselessly, calling each other liars, denying their actions, pumping up their accomplishments made me shake my head and I thought I can get more useful information from this blog which I had not read in a couple of days.
I was more intrigued by the body-language. I think, by showing passive-agression, contempt and impatience McCain has effectively lost the election.
I’ll agree that neither of them had anything particularly new to say, nor did either of them deliver anything that zoomed out of the ballpark.
But, I just can’t get McCain’s non-eye-contact out of my head, and I’m sure a lot of other people noted it too.
Basically, we’re all stupid monkeys. Stupid monkeys that take in more information non-verbally than we either realize or like to admit. McCain looked like a loser last night, and Obama a winner.
Simple as that.
“Basically, we’re all stupid monkeys. Stupid monkeys that take in more information non-verbally than we either realize”
I totally agree about the body language. However, I don’t think it’s stupid to take in information non-verbally. Non-verbal cues feed intuition, which can be more powerful than reason sometimes.
Well some other people also felt different. Sorry about the non-link.
ttp://www.democracycorps.com/focus/2008/09/first-presidential-debate-obama-makes-important-personal-and-national-security-gains/
McBama won the debate. But that was puny compared to the larger debate that the Demo’s claim will be settled Sunday or Monday.
This even larger debate is more interesting: The responsible savers versus the parasites in the Demopublican Party making us responsible for their own mismanagement.
Peter Schiff saw this monetary crisis coming years ago, as did Ron Paul.
Lehrer tried to get them to mix it up, but they weren’t able to pull it off, although Obama did try to confront McCain a couple times without much success. They both went with their strengths; McCain with the repeated surge references and Obama with his “do you want four more years of the same” spiel.
For a first debate it was uneventful, but neither committed political suicide, which is a success for both. Obama needs to be more forceful or he ends up like Adlai Stevenson; brilliant, but fails to connect to the masses. Obama wilted against McCain’s earmark slam, when if fact Palin has asked for more earmarks per capita than any other elected official (Palin’s earmark requests as Governor average $330 per Alaskan each year. Obama’s average $18 per Illinois resident each year - mediamatters.org/items/200809120009). McCain needs to be less warlike or he ends up with a Goldwater nuke ad.
“McCain needs to be less warlike or he ends up with a Goldwater nuke ad.”
I was thinking the same thing. Recklessness will scare people.
Obama: professorial and condescending.
McCain: unoriginal and deceptive.
Lehrer: pompous and whiny.
One of my buddies nailed it in his description as he watched it in closed caption mode at the back end of a bar. He said that if you judged from facial expressions, Obama won. If your natural inclination is to go with the underdog, it was McCain.
I found it to be rather boring.
I thought they were both terrific.
Well, let me tell you why!
I saw it in Japan with subtitles in japanese, and the voice overs were in japanese, so I couldn’t hear a word they said!
But that non eye contact was seriously apparent from McBush.
I think anyone paying a reasonable amount of attention already knows the candidates’ positions, so it matters more how the candidates leave people feeling about them.
Turn down the sound and watch the debate for 5 minutes. Body language is a very important measure of judgement that we all use unconsciously. Obama wins it.
Did anyone notice the end of the debate where the candidates greet their wives? One pair embraces warmly, one pair stays far apart with a little pat on the back. I don’t need to tell you which was which, right?
McCain’s brand is: experienced, Warshington, Vietnam, war, maverick, old, hero, impulsive, funny. Since Palin he has added reckless and dishonest to his brand (in terms of how he is referred to in the media). Obama’s brand is: young, change, calm, inexperienced, affable, elite/middle-class (depending). Which brand sells happiness better? That will be the winner.
Pat Buchanen made an excellent point that how people “feel” about the debates isn’t clear for a couple of days. Maybe blogs speed up the process, though.
Obama is affable?! You are kidding, right?
I’ve never seen a politician test the air with as high a sniff as Obama. He continually holds his chin up high so as to look down upon his disciples. He comes across as a condescending elitist born and bred in NYC, DC or California. That’s the last thing we need - a pompous ass.
And no, I don’t like McCain either. My vote will be a write-in.
You must be a short man to notice this!
Sometimes we put our own shortcomings into our observations.
McCain can’t gushingly hug his wife: He has physical injuries from his POW days that don’t let him raise his arms. I thought everybody knew that by now, especially after the bombed Obama commercial saying he couldn’t use a computer. That’s why he can’t use it.
Obama’s occasional idiot grins didn’t inspire confidence in me, but, then, I have even nicer teeth, and I would blow up the world in three seconds if that damn red phone woke me up.
“McCain can’t gushingly hug his wife:”
Please don’t mischaracterize my comment. Michelle walked up to Barack and they leaned in very close to one another, looked in eachother’s eyes and smiled. You can do that with a war injury.
Cindy and John didn’t look at eachother directly, and she stood far away from him, side by side, and reached a long ways to quickly pat his back.
I’m not saying it means anything about their ability to govern, I just thought it was interesting that it was an on camera part of the debate, and wonder about how small things like that unconsciously influence people’s reaction to candidates.
“Obama is affable?! You are kidding, right?”
Nope, McCain was more aggressive, Obama was more conciliatory. Obama looked at McCain directly, and referred to him by first name. McCain was bristling and threw more punches. That’s the “story” about the debate you’ll read in any recap. Partisans will view that story how they like (McCain was tough/McCain was mean).
I didn’t see that Obama was anything special. I’ve heard how great a speaker he’s supposed to be. I heard the phrase from a coworker “McCaine’s just trying to avoid his cancer treatment” regarding McSame avoiding the debates, and I agreed. I expected quite a rout and instead it was boring. Nothing special on either side. About the only thing that may have made an impression on me was that I think McSame has more foreign relations experience.
Meh. They made my headache hurt 10 times worse than it did before the start. My wife fell asleep. I think you saw what you wanted to see, but maybe I did too.
Once again, we have the evil of two lessors.
Dems are grabbing defeat from the jaws of victory supporting the Paulson plan. The people, particularly in the South and West, God’s country, toss up States, the margins, are wholeheartedly against the Paulson plan, regardless of details. The Dems are creating major opportunities for the Pubs, Independents, and third party candidates to run against them and the plan, regardless of the plan’s origin.
My only thought was for a guy who thought Iraq and deregulating Wall Street were good ideas. He really shouldn’t keep saying that Obama doesn’t understand things.
touche
[I had] to be prevented from leaping into my car and driving wildly up and down Steamboat Island road beeping my horn and shouting ‘Obama!
Please be joking. I could barely watch these two dwarfs and their sorry performances without retching. They are the embodiment of Tweedle Dee and Tweedle Dum. Seriously, is this the best that a nation of 300 million people can come up with? While I’d say that Obama came off better in the “debate,” the absence of REAL voices for change, like Ron Paul, meant that we were treated to the usual slogan-spouting and moronic cheap shots, pandering to the denizens of IDIOCRACY, without any interjection of actual sanity and reason.
Interesting question:
The Sandlers personally owned over 14 Million WaMu shares after the merger…(And the foundation another 17 million) what happened to them? Did they sell any of them??
—————————————————————————-
The Sandler Family Supporting Foundation was created by Herbert and Marion Sandler.
In 2006, the Sandlers gave 17,422,751 shares of Golden West Financial stock worth $1.3 billion to the foundation.[1] This was the second largest American charitable contribution of 2006.[2]
As the US moves away from free markets, former third world countries are opening up the gates.
China is now allowing ’short selling’, having determined that it is in the markets best interest. China is also going to allow buying on margin.
Funny, I have more rights as a shareholder of a Shanghai listed stock than I do as a (potential) shareholder of a US listed stock.
I don’t care either way if they pass the bank recapitalization bill. But Congress has/had the opportunity to enact shareholder protections in the bill and they passed.
As Mr. Brad DeLong writes: “Time Not for a Bailout, But for Nationalization……Paulson had his shot. It’s time for the Democrats to pass a nationalization in the taxpayers’ interest bill and dare Bush to veto it. If he does, then announce that the congress will pass it again the day after the election. And if he vetoes it again, announce that congress will pass it yet again on January 21, 2009.”
Is there anyone in the Democratic party smart enough or has the balls/ovaries to do this?
They are too shortsighted. Now, they have to run defending the Paulson plan. Instead of capitalizing on a 9/11 type economic event.
I wonder if the Heritage Foundation will become honest for once and rank the United States properly on this list:
http://www.heritage.org/research/features/index/countries.cfm
1. Hong Kong
2. Singapore
3. Ireland
4. Australia
5. United States
6. New Zealand
7. Canada
8. Chile
9. Switzerland
10. United Kingdom
11. Denmark
12. Estonia
13. Netherlands
14. Iceland
15. Luxembourg
16. Finland
17. Japan
18. Mauritius
19. Bahrain
20. Belgium
Of course, this is a list of economic freedom, not civil liberties (Singapore is low on civil liberties).
I think Ireland and Australia are probably ranked properly. I still think United States should be ranked around 9. I still suspect J6P’s tax burden is higher than many European countries’.
Note Estonia is ranked 12 in economic freedom. It has a flat income tax and much lower than the income tax America’s J6P pays!
One could hope that Aladinsane is parking his bullion in Ireland, Australia, or Hong Kong!
If by J6P you might mean the nearly 40 million tax filers who have zero or a negative tax liablity… well, then, you’d be wrong.
I concur with Professor DeLong. The Republicans sat on the toilet long enough without producing any sh*t, and now they are trying to pass the mother of all t*rds. Let the election decide who gets to plot the way out of this mess, and spare us from your “bailout now or we are all doomed” stories.
While this video may be more appropriate for a financial blog, I thought it was entertaining, especially if you listen to the talking heads. Santelli, on the floor of the nyse (I think), rips into the bailout puppets on CNBC. The guys who know the score - the bailout isn’t a cure all - are being drowned out by the fear crowd.
http://cosmos.bcst.yahoo.com/up/player/popup/?rn=289004&cl=9914467&src=finance&ch=4043681
“Not enough details … snake oil salesmen on every side… the history of the government making money for us is not a good one…”
Hummmmmm…
Santelli is my hero. I wonder is he reads or contributes to this blog.
In for a penny, in for a pound.
They might as well do as you suggest before the banks rip the taxpayers off for another trillion dollars. It could back-fire if less than 50% of Americans are parasites. GOP pulls a victory out of the fire. All parties are treading carefully now as any move could spell doom.
HUD grants to ease impact of foreclosures
Click-2-Listen
By CARA FITZPATRICK
Palm Beach Post Staff Writer
Friday, September 26, 2008
Palm Beach County, the city of Port St. Lucie and the city of West Palm Beach will receive millions in federal money to deal with the effects of home foreclosures, the U.S. Department of Housing and Urban Development announced Friday.
The county will get about $27.7 million; Port St. Lucie, $13.5 million; and West Palm Beach, about $4.3 million.
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The grants are part of a nearly $4 billion nationwide program approved by Congress to alleviate the effects of foreclosures and declining property values. Florida’s cities and counties received about $541 million.
Port St. Lucie, which has been among the nation’s fastest growing cities, has one of the highest foreclosure rates in the state. St. Lucie County courts processed more than 5,400 mortgage foreclosure filings as of last month; in all of 2006, the county had about 1,329 such filings.
Port St. Lucie’s foreclosure rate was in the top five for Florida cities and counties offered the HUD money.
City and county officials can use the money to buy and redevelop foreclosed homes, which might otherwise fall into disrepair and abandonment. Homes would be purchased at a discount.
If they want to prop up house prices, shouldn’t they simple bulldoze these homes, encourage the community to plant gardens or do micro-farming on them?
I agree, and I’ve said this several times here before.
The abandoned properties need to be BULLDOZED, not given away to whatever groups will yield the most votes for a given political party.
Materials worth keeping should be sold as scrap to the highest bidders.
Naturally, this won’t happen. Homes all around the country will be given to the destitute, government employees, illegals, etc., to benefit the “greater good.”
HUD money that is what we need. Add that to CRA. Just keep the printing presses rolling,
Has the Fed fallen into the liquidity trap it built?
Waste deep in big muddy…
What is money? I know the answer to that. It is a song by Pink Floyd.Do I win a prize?
It is a beautiful day here in Houston but 2 weeks after Ike, I still do not have power. I have to do all my internet browsing with my phone. It is so uncivilized ! oh the hummanity….
2 weeks and still no power? If only you had solar panels you would be the envy of all!
If only your solar panels are protected from flying projectiles.
Cinch
For $1000 - What is the root of all evil today?
Debt?
Fear.
Ditto; Fear
Sloth
organized religion.
Winner.
So which one do you worship? Obama or McCain?
Corporate Capitalism. Marx warned that corporate capitalism is what ultimately destroys entreprenuerial spirit.
Groucho Marx also said you could get stucco on Florida.
EZ-Credit! Love of debt!
And the bubbling up of the “entitlement class” from the non-working poor to the middle class, who feel entitled to a huge house, two brand new trucks in the 3-car garage, and perfect children. And the right not to pay taxes either, with all their deductions for kids, mortgage interest, etc.
Unregulated Dishonesty
Religious fear of debt?
AP Newswire (see below)
The shaming of individualism.
I heard it was witches.
Serious answer: size.
We are disconnected (geographically) from the effects of our actions so we don’t have to accept responsibility. This is true for choice of investments, pollution etc. and the “everybody else is doing it” line of weaselly reasoning that is popular in corporate and governmental agencies.
What is money? Eric Idle can tell us about it.
http://www.youtube.com/watch?v=JFKz-OsUUoY
Grab that Cash with both hands and Make A Stash…
Paul Newman just passed away…
I think i’ll watch The Sting tonight, one of my favorite movies of his.
r.i.p.
Very sad. One of my favorite actors. He was a class act who often used his influence for humanitarian purposes. With all this $700 bl bailout talk, it might be a nice evening to watch The Hustler.
My favorites of his were The Verdict, Absence of Malice, The Sting and Cat on a Hot Tin Roof.
Indeed, one of the good guys for sure.
‘Butch Cassidy and the Sundance Kid’ is my fave.
I can’t understand why he only got one oscar…I think he is the best actor of all time…
I felt he should have gotten a Best Actor oscar for his role in “The Verdict”
I still tear up at the end of that one.
No, not cool hand Luke. “Just shaking the bush boss, just shaking the bush.”
(remember when he tied a string around the bush as he was peeing in the bushes and then ran away…again?)
Truly a great man sans big Hollywood ego. Not too many like him nor will there ever be.
Good point…Not just a great actor a geat person also…
The US Government vrs the People of the United States of America…”what we have here is (A) FAILURE TO COMMUNICATE”
Take it easy up there Cool Hand Luke
Yes, brilliantly delivered line.
“what we’ve got here is failure ta communcake”
http://www.youtube.com/watch?v=1fuDDqU6n4o
He was smiling… That’s right. You know, that, that Luke smile of his. He had it on his face right to the very end. Hell, if they didn’t know it ‘fore, they could tell right then that they weren’t a-gonna beat him. That old Luke smile. Oh, Luke. He was some boy. Cool Hand Luke. Hell, he’s a natural-born world-shaker.
RIP
Stand by for Black Monday:
Meltdown as Bush battles to pass mutiny-hit £400bn bail-out
By David Gardner
Last updated at 12:20 PM on 27th September 2008
U.S. president George W. Bush continues his fight this weekend to reach an agreement over his proposed £400bn bail-out plan to rescue Wall Street.
As the debate raged on, politicians said they’re making progress and hope to reach an agreement this weekend to protect bankers from the bad loans that threaten to derail the economy and send it into a deep and long depression.
http://www.dailymail.co.uk/news/worldnews/article-1060850/Stand-Black-Monday-Meltdown-Bush-battles-pass-mutiny-hit-400bn-bail-out.html
I don’t think so. W assured us the bailout bill will pass.
Peter Shiff and another guy really getting after it right now on CNN…
For those interested in buying a new pickup truck, I went to a dealer’s lot this week and saw 2008 Ford F-150s with $5-$7K off sticker price, meaning you can get a brand new, plastic sheet on the seats work vehicle for as low as $12,000. A decent V8 4×4 can be had for just about/under $20K.
Remarkably, these prices are lower than similar used vehicles that are 1-4 years old, listed on Craigslist.
Similar deals can be had, through December IMO, for Chevy and Dodge pickups as well. Both Ford and Dodge have redesigned 2009s on the lot and the 2008s tend to get a stink to them when you have the latest and greatest ready to be sold to the few remaining buyers.
We also know a family that just bought a new Suburban for about $28K, or $15K off sticker. And the dealer told them he didn’t want their used Suburban, that it was only worth $3K.
Also, if you want the best deal, now is the time to tell them you are a cash buyer. In the past, this would get you treated like a bubble blogger circa 2005, because credit is where the profit is at — but with fewer people getting approved for auto loans, cash is suddenly a language everyone is happy to hear once more.
Alternative $700 bn Bailout Proposal:
1) Disallow any Congressional campaign contributions to be funded from the bailout spoils (including a law against backdoor lobbying efforts to accomplish the same).
2) Tie strings to the money so that it does not wind up in the hands of greedy bankers and hedge fund managers.
Other than those two details, I see nothing wrong with the $700 bn bailout proposal.
Other than those two details, I see nothing wrong with the $700 bn bailout proposal.
Anyone who actually believes in free markets, is against welfare, and minimal government should see EVERYTHING wrong with this bailout.
Does anyone else think it is about time for the Fed to start including asset prices in their monetary policy models?
Delong seems to have sung out his mea maxima culpa loud enough on his blog.
Are you suggesting he doesn’t get the connection between asset prices and liquidity traps, or that he chooses to stick fingers in his ears and shout “Naa-na-naa-nee-naa-na,” or did I miss your point?
Please elaborate.
OK, y’all, I’m off to the Bay Area.
I’ll see you when I get back in two weeks. Don’t cause too much carnage in the markets.
Have fun! Eat lots. Try not to startle the hippies with your BWA HA HAs.
I thought that was the whole purpose of the trip.
Hippies like a good belly laugh. Even maniacal ones.
Not as much as the Yippies
Here’s the problem with the candidates. On a practical, pragmatic level:
If we accept that we need to infuse some cash into our credit system to avoid a catastrophe (which I don’t accept…not because there won’t be a catastrophe, but I think it won’t help and will just extend the duration of the pain)
THEN
It’s more efficient to do it by bailing out banks than to give handouts to deadbeat homedebtors (as Obama proposes.)
In fact giving handouts to deadbeat homedebtors creates even worse Moral Hazard problems. Homeowners who aren’t behind on their mortgages will feel screwed. And house prices will remain artificially inflated.
This is one election where I really am having a tough time deciding. It would have been an easier decision of McCain didn’t nominate a wack-job as his VP.
When homedebtors who are behind on their mortgages get help, and those who are current on their mortgages don’t, what is the current homedebtor incented to do? Stop paying, of course.
I don’t see how a direct homedebtor bailout can be effected that does not have this problem, except perhaps by setting a cut-off date: those in default before the current date are included in the bailout, and those who default after the current date are not.
Doesn’t sound like it would be a very politicially palatable option, though.
“It’s more efficient to do it by bailing out banks than to give handouts to deadbeat homedebtors (as Obama proposes.)”
Since no one thinks it is necessary to vet McCain anymore, I wonder what he REALLY thinks, given that his top aide Rick Davis was a lobbyist for Fannie and Freddie? Imagine…15K/mo to a lobbyist who didn’t do any lobbying! Where can I get a job like that? I don’t think any single person in the Obama campaign has benefitted quite as much from the supposed “no-strings” largesse of these two bastions of socialism.
But they are Republicans, therefore we musn’t talk about such things in public.
Anyway, giving handouts to banks doesn’t make the toxic loans any more viable. Making homedebtors able to pay their bills (by creating domestic jobs and raising wages) is the best chance out of this mess. Of course, neither of those things is a priority of the Republican party.
Making homedebtors able to pay their bills (by creating domestic jobs and raising wages) is the best chance out of this mess. Of course, neither of those things is a priority of the Republican party.
No it’s not! I’m a Liberal and I think all that will do is prolong the pain by propping up house prices for a few more months, and keep honest folks who don’t want to overextend themselves from buying homes.
No bailouts for banks OR home debtors. Sadly, Obama’s strategy is to handout money to his core constituency. They’d rather have handouts than affordable housing.
All true.
ALSO true is what you’ve conveniently ignored (or are possibly unaware of, though that’s unlikely) - the second largest contributor to Obama’s campaign has been… drum roll, please….Freddie Mac/Fannie Mae.
That, and Tony Rezco, and a bag of chips.
How’s that sit with ya?!
Okay - somebody make me laugh cause I’m totally depressed (and remembering why I don’t pay attention to mainstream media).
Been watching the progress through the AP wire on Yahoo!
I hate how they write it as though this flippin bill is just a “given” even though a) it appears 80% of America dislikes or just plain hates the idea (including me), b) it’s not even out of committee yet and the Dems aren’t willing to force it, c)some of the major players aren’t even in the talks, and d)not knowing of those up for re-election are actually willing to incur the wrath of voters a mere 6 weeks to election, despite their current smile and nod “we’ll go along with it” status.
And who set up this random deadline anyway? Why can’t anyone coherently express, other than in terms of Armageddon, what exactly happens on Monday if, heaven forbid, we leave the markets to themselves? And is it just me, or does it appear everyone in Congress is very happy to have this stuck in committee?
I guess I shouldn’t stress - it’s all funny money injected into another funny money system. It just rubs the wrong way to live in the Bush/Media dictatorship through methods I associate with George Lucas movies (”These aren’t the droids you’re looking for…move along”) within what should be a democracy.
Thanks for the vent. So really - I could use a laugh. Does any know any good knock knock jokes? Dirty limericks? Reader’s Digest snippets? Funny stories?
A long time ago, a visitor from out of town came to a tour in Manhattan. At the end of the tour they took him to the financial district. When they arrived to Battery Park the guide showed him some nice yachts anchoring there, and said, “Here are the yachts of our bankers and stockbrokers.” “And where are the yachts of the investors?” asked the naive visitor.
I went to buy a toaster, and it came with a bank.
What is the difference between a credit default swap and a beanie baby?
You can still sell a beanie baby.
Exit stage right……
This isn’t a funny story exactly, but I think of it whenever I feel overwhelmed by wolrd events.
I dont’ have a link for this, it’s just something that one of my friends told me when they were pursuing a degree in history. As the year 1,000 approached priests in England began predicting an Armageddon. People began to see unfolding events (like scary Viking raids) as proof of this coming Armageddon. So, one the eve of the New Year, people took off their clothes and lay on their rooves, ready to be taken by God.
Guess what happened?
Of course, nothing happened and everyone put on their clothes and went back to work.
Hmmm, in case my little story about the naked peasants didn’t cheer you up…try this:
http://www.memebon.jp/
LOL! Thanks guys - I can always count on this board to make me smile.
Q: What’s the difference between a Lehman trader and a pigeon?
A: The pigeon can still make a deposit on a Ferrari.
There once was a shrub on a ranch
Who couldn’t find is @ss from a tranche
This suckers going down
All you peons should drown
Let him die under his own debt avalanche
Good one, Greg!
I can’t do it myself - but FailBlog always cracks me up.
http://failblog.org
The ‘Dairy Queen Fail’, about halfway down the page, had me laughing so hard this morning that the husband had to get out of the bath to see if I was OK.
Corporations (at least those still standing) should be protected by the bailout, and homeowners are proposed to be protected, which covers approximately 100 pct of firms and 70 pct of households in the U.S. Who exactly is supposed to pay for it, then? Renters???
WSJ OPINION
SEPTEMBER 27, 2008
The Bailout Must Protect Homeowners
By DAVID PATERSON
New York is both the epicenter and chief victim of the current financial cataclysm. That is why I strongly support immediate federal action to stabilize the financial markets, but also insist on simple yet critical changes that will not hinder instant action.
Today, the U.S. financial markets are under serious systemic threat. Centuries-old banks have been destroyed in days. The scale of the bailout dwarfs any other bailout ever attempted. Even today, we do not know how far the wreckage truly extends.
…
We must recreate confidence in our credit markets and protect as many homeowners as is reasonably possible. The cost will be high. But our choices are few and time is short. This plan must change quickly and pass rapidly, so that we all can get back to business.
Mr. Paterson is the governor of New York.
Is this a fair indication of how a McCain presidency would pan out?
WSJ
SEPTEMBER 27, 2008
An Inside View of a Stormy White House Summit
McCain’s Return to Washington and Meetings With Fellow Republicans
Culminated in U.S. Leaders Yelling in Roosevelt Room
By JOHN D. MCKINNON, LAURA MECKLER and CHRISTOPHER COOPER
The real question is, would it be better than petulance?
New York Times
Conservatives Viewed Bailout Plan as Last Straw
By CARL HULSE
Published: September 26, 2008
WASHINGTON — The seeds of the House Republican revolt over the financial industry bailout were sown in an e-mail message circulated Monday night as internal animosity built quickly over the Bush administration’s request for $700 billion to prevent an economic collapse.
In a message to members of the conservative Republican Study Committee, leaders of the bloc of more than 100 lawmakers solicited ideas, calling for a “free-market alternative to the Treasury Department’s proposal so that, regardless of how individual R.S.C. members vote on final passage, House conservatives have something to be for.”
As the week progressed, it became abundantly clear that one thing conservative Republicans were most certainly not for was the Treasury plan, prompting them to begin searching for an alternative to avoid the perception of strictly being naysayers.
A political meltdown followed the financial one
By CHARLES BABINGTON and JULIE HIRSCHFELD DAVIS – 20 hours ago
WASHINGTON (AP) — A political meltdown followed quickly after the financial meltdown.
Facing the possible collapse of major Wall Street institutions, President Bush had proposed an extraordinary package, to be fueled by $700 billion in taxpayers’ money. It seemed to have the support — in body language if not words — of heavy hitters in both parties.
Rarely, it seemed, had Washington responded so quickly with something so large, to a problem so dire. And it was, like the credit bubble itself, an illusion.
The package fell apart in a multitude of ways — the phone calls from angry constituents, the feeling by House Republicans that they were being snubbed, the sudden and unwelcome injection of the presidential campaign. Talks were revived Friday and a Democratic negotiator, Rep. Barney Frank, dared to predict an agreement “that people can understand” by the end of the weekend.
“Talks were revived Friday and a Democratic negotiator, Rep. Barney Frank, dared to predict an agreement “that people can understand” by the end of the weekend.”
“No deal!!!”? People would understand that.
“This sucker could go down,” G.W.Bush, 2008
“We will not tire, we will not falter, and we will not fail.” G.W. Bush, 2001
I think he’s getting more eloquent
They will do their “something” in time. Just like in college, finishing up the term paper at the last minute. Always better than sitting around for years fixing things as they come up.
Financial Times of London
Tempers fray in fight for future of capitalism
By Alan Beattie and James Politi
Published: September 26 2008 21:09 | Last updated: September 26 2008 21:09
Wall Street is in turmoil and there is anger right across America that hundreds of billions of dollars could be shovelled towards the rich New Yorkers that have brought the financial system to the brink of implosion.
But the fight over the future of finance capitalism has been confined over the past two days to a handful of rooms in Washington DC. Thursday saw frenzied, bad-tempered negotiations at the White House between an administration almost visibly haemorrhaging power and a Congress determined not to be dragged down with it.
One senior Democratic congressional aide described the meeting as “just awful” and spoke of it “paralysing” the talks. Dana Perino, the White House spokeswoman, euphemistically spoke of a “full-throated debate” and made the meeting sound like an anger management therapy session: “Everyone was able to lay it all out on the table, vent their frustrations if they had them,” she said.
“Wall Street is in turmoil and there is anger right across America that hundreds of billions of dollars could be shovelled towards the rich New Yorkers that have brought the financial system to the brink of implosion.”
They were just the middle men between those who HELOCed, ran up credit cards, and borrowed and speculated, and the suckers who saved and invested. Hopefully they won’t have any more money shoveled to them.
Yep. The original “Paulson Plan” can be defined as “shoveling more money to the rich middle men who conned the spenders *and* the savers. ”
It’s pretty much why many Americans are willing to risk Depression II (at least I know I am) to make sure they collapse under their own weight. For the record, I think we’re headed there anyway, bailout or no, so I don’t see what exactly is to be gained by throwing a resource that’s equal to 1 year’s worth of Federal budget at them.
That’s how I feel as well.
Been expecting a severe recession/depression for years…seeing the end of Wall Street would make it more acceptable. I’ll be damned if Wall Street makes money off the depression (and they will certainly try). These parasites are far worse than any “welfare queens” in the ghetto.
“I have something un-American to confess: I rent an apartment, despite having enough money to buy a house. I plan to keep renting for as long as I can. I’m not just holding out for better prices. Renting will make me richer.”
http://realestate.yahoo.com/promo/renting-makes-more-financial-sense-than-homeownership.html;_ylc=X3oDMTFta3Jqcjk3BF9TAzI3MTYxNDkEX3MDOTc2MjA0NjUEc2VjA2ZwLXRvZGF5BHNsawNyZW50aW5nLWJldHRlcg–
What is the deal with the House Republicans’ plan to offer FDIC-like insurance for mortgages that are already doomed, it sounds WORSE than a bailout that at least (if approved in fixed dollar increments) has a fixed dollar limit?
I like the insurance idea better because it trades a known huge dollar amount for at least the possibility of less and doesn’t involve the government owning garbage assets.
The system will suck up any money we throw at them like sponge and it will probably be wasted. If the bailout goes through without the money being a royal pain to get at, they will want more in very short order. (It’s never enough for an addict..) In that sense there is no fixed dollar limit to the bailout idea.
Insurance, on the other hand, will require those who benefit to pay in. It will also create a great deal of defacto regulation, just as the FDIC system does for banks.
Why the insurance idea isn’t “good enough”, I can only attribute to Wall Street’s greed and Bush’s complete inability to compromise after he’s drawn his line in the sand. He only seems to know how to steamroller a legislative body, he doesn’t know how to work with it. The House Republicans were the first ones he should have worked with before announcing any plan. Personally, I think the house Rep. came up with a much better and far more politically palatable solution than the Bush Administration.
If I were them, I’d be working up a “bailout” solution that made any direct help involve CEO assets being seized, large equity stakes, with direct congressional approval required for direct help over a certain amount, etc, etc. The insurance “option” would require regulations but CEOs could keep their bonuses and companies intact.
In other words, make using a direct government assistance so unpalatable that the only real option is insurance. Then everybody wins and saves face, and the markets go up on Monday until they go way back down.
I like the insurance idea better because it trades a known huge dollar amount for at least the possibility of less and doesn’t involve the government owning garbage assets.
—
I’d rather the government own them than to have the banks accept the insurance payout, then “buy back the salvage” too from their friends in congress.
database error.
heh - thats an understatement.
Did you notice the article on Yahoo about how you can get rich renting rather than buying? I didnt think I’d ever see one of those.
Or, how about, “How to Treat a ‘Money Disorder’
HAHA - row yer boat, gently, through the dream.
When contracts mean nothing, and breaking the law becomes a virtue and not a vice, what remains left of our civilization?
Love & the little people under the heel?
Far out — a pizza-fueled panic party! It looks like W’s, HP’s and BB’s scare tactics have been very effective in motivating Congress into action.
After the vote on the bailout, I am hoping somebody puts together a tally of which Congressmen supported it, in order to enable voters to punish them on November 4. Please post a link to such a site here, in case one emerges. (If you know a link to Congressional votes, that would serve just as well…)
Bailout push is fueled by market fears, pizza
Sat Sep 27, 2008 6:03pm EDT
By Kevin Drawbaugh
WASHINGTON (Reuters) - Angry messages from voters back home and empty pizza boxes were piling up at the U.S. Capitol on Saturday as lawmakers and staff labored around the clock on a plan to bail out Wall Street.
With one eye on the November 4 elections and another on volatile stock market indices, negotiators were trying to reach agreement on a bill aimed at shoring up the shaky financial system. Some legislators echoed the Bush administration’s pleas for urgent action. Others were still skeptical.
Some congressional staffers have been sleeping at the office and living on pizza, Thai food and sandwiches. True to Washington form, though, most are still in business attire, with only a few marking the weekend by dressing down to jeans.
“We’re all a little punchy,” said one aide, expressing the kind of fatigue that worries outsiders watching the process unfold.
The U.S. Treasury wants to spend up to $700 billion to buy broken mortgage-backed bonds from banks and dump them into a vast government portfolio, betting that the move will help thaw out frozen capital markets.
The plan — being promoted by Treasury Secretary Henry Paulson and Federal Reserve Chairman Ben Bernanke — has met fierce resistance from some quarters in Congress. Embattled lawmakers from the Senate and the House of Representatives were trying to hammer out a list of features acceptable to all.
After the vote on the bailout, I am hoping somebody puts together a tally of which Congressmen supported it … Please post a link to such a site here, in case one emerges.
All votes are recorded at the Senate and House sites, and roll calls are searchable.
I’ll post the links when they are available.
I’m not automatically against gifting money to Wall street. I just want the resolution to their foolishness that costs me the least money. I don’t really see how anyone can argue that the top 20% of earners paying 70% or so of federal income taxes (and presumably also have the largest stakes in the “stock market”) won’t be paying either way. Of course, that assumes we plan to pay it off before we die. I’ll say no more lest I engender a generational confrontation.
One thing that strikes me from those tax numbers is that the housing bubble had to have been a huge transfer of wealth from the rich to the middle class. (OK, more a transfer of debt.) Too bad the middies squandered most of it back to the corporations. But the corporations are holding the bag for once. (At least until Sunday night.) No wonder there is a crisis air.
Another one bites the dust in old blighty, 50billion (100US) of mortgages to be nationalised on socialism sunday.
Treasury
to nationalise Bradford and Bingley”
When all the returns are in I expect Britain to be the poster child
of the great unwinding.
Financial Times
End of laisser faire?
Published: September 26 2008 09:36 | Last updated: September 26 2008 22:17
England, commented John Stuart Mill, the father of British liberalism, “is the ballast of Europe, France is its sail.” If that were true today, then Europe would be headed towards the end of laisser faire capitalism. Take Nicolas Sarkozy, the latest leader to toll the bell on principles that have delivered, over the past 30 years, unparalleled global prosperity – and now a tremendous bust. “The all-powerful market which is always right is finished,” Mr Sarkozy said. Even Hank Paulson has said “raw capitalism is a dead end”.
Before everyone dons Mao suits, let it be noted that it is not clear how raw this all-powerful capitalism really was. The market was fuelled by the central bank-filled punchbowl of cheap credit and underwritten by the existence of the Greenspan “put”. This promise of rate cuts in an emergency has now crystallised into a systemic bailout. The Paulson plan is not “trickle-down communism”, as some critics on the right suggest. No country has ever managed a serious banking crisis without government intervention. Even with a few nationalisations and creeping government by fiat, property rights remain largely secure.
Shelby deserves a Medal of Freedom Award!
Dissenters hold up US bail-out
By Daniel Dombey, Krishna Guha, James Politi in,Washington and Andrew Jack and Michael Mackenzie in New,York
Published: September 26 2008 03:00 | Last updated: September 26 2008 03:00
An unprecedented White House emergency meeting ended last night without full agreement on the Bush administration’s financial rescue package after another day of intense stress on the money markets.
A hard core of Republicans on Capitol Hill maintained their resistance to a deal, even as John McCain and Barack Obama, the leading candidates in November’s presidential elections, met President George W. Bush and Congressional leaders to hammer out a compromise.
…
Earlier in the day, Chris Dodd, the Democratic chairman of the Senate banking committee, said the two parties’ Congressional leadership had reached “fundamental agreement” on the principles for a deal.
“I now expect we will, indeed, have a plan that can pass the House, pass the Senate, be signed by the president, and bring a sense of certainty to this crisis that is still roiling in the market,” added Bob Bennett, Republican Senator from Utah.
However, emerging from the meeting at the White House, Mr Dodd accused Mr McCain and Republicans in the House of Representatives of complicating the negotiations with last-minute demands. “We haven’t gotten agreement,” said Senator Richard Shelby, the senior Republican member of the Senate Banking Committee.
“There’s still a lot of different opinions. Mine is it’s flawed from the beginning.”
It sounds as though only a small minority of principled Republicans are standing tall and calling BS on the pretend financial emergency.
SPECIAL REPORT AMERICA’S MONEY CRISIS
Rescue talks on OT
$700B financial bailout negotiations go deep into the night. Lawmakers race toward Sunday deadline.
By CNNMoney.com staff
Last Updated: September 27, 2008: 10:31 PM ET
NEW YORK (CNNMoney.com) — Negotiators from Capitol Hill and the Bush administration are expected to work late into the night Saturday to try and reach a deal on the White House’s proposed $700 billion bailout of the financial system.
Their goal: to craft and announce final legislation by Sunday evening - in time for the start of financial markets around the world.
“I’ve been here 22 years, and I’ve never seen anything quite like this,” said Sen. Kent Conrad, D-N.D.
Conrad said that negotiators had talked by phone with Warren Buffett to ask the famous investor for help in gauging market reaction.
The next steps in the high-stakes talks over the rescue were not clear, but lawmakers said they were confident they could reach consensus soon.
“The night doesn’t end for a long time,” Senate Majority Leader Harry Reid, D-Nev., told reporters.
Earlier in the day, Reid, speaking on the Senate floor, said a number of issues remain to be resolved. “The goal is to try to come up with a final agreement by tomorrow.”
House Speaker Nancy Pelosi, D-Calif., also said earlier that negotiations were going “OK,” and that speed was necessary. “I just want to do this in as timely fashion as possible, so the markets get an early, clear, certain message,” she said.
Pushing the talks forward was a decision by key lawmakers to get together and meet starting on Saturday afternoon.
“When we get in that room as principals, we will stay there until we reach an agreement,” said Sen. Judd Gregg, R-N.H. “Or if we can’t reach an agreement, we’ll stay until we’ve done something” to address the issue “in a comprehensive and effective way, hopefully.”
Senate Minority Leader Mitch McConnell, R-Ky., said that the “goal” was to have a vote on Monday.
A group of House Republicans, who earlier resisted efforts to quickly pass a bailout package, on Saturday afternoon said they were about to rejoin the talks but would not be held to any “artificial timelines.”
We should all send faxes and call these Republicans’ offices, thanking them for standing up for taxpayers.
“When we get in that room as principals, we will stay there until we reach an agreement,” said Sen. Judd Gregg, R-N.H. “Or if we can’t reach an agreement, we’ll stay until we’ve done something” to address the issue “in a comprehensive and effective way, hopefully.”
—-
Well, that is their motto: Something, done on time.
Credit crunch banker leaps to his death in front of express train
The City was in shock last night after the apparent suicide of a millionaire financier haunted by the pressures of dealing with the credit crunch.
Kirk Stephenson, who was married with an eight-year-old son, died in the path of a 100mph express train at Taplow railway station, Berkshire.
Mr Stephenson is believed to have taken his own life after succumbing to mounting personal pressures as the world’s financial markets went into meltdown.
http://www.dailymail.co.uk/news/article-1063356/Credit-crunch-banker-leaps-death-express-train.html
Wall Street’s cargo cultists are fervently praying for a $700 bn helicopter drop of cashola…
marketwatch . com
September 27, 2008 11:30 P.M.ET
BULLETIN
Stocks await rescue accord
U.S. stocks are headed toward an uncertain Monday, with investors waiting for a weekend resolution to the rescue plan for Wall Street even as WaMu failure fuels worries of more collapses to come.
News Alert . The Politicians ar announcing they stuck a deal - to be announced tomorrow . It doesn’t look good because the wrong people are smiling . The Politicians that created this mess are acting like they should be applauded for there hard work . How to make the unsaleable saleable
is the name of the game . I predict already that its not good for the
taxpayers ,capitalism or the future of America . My fellow Americans ,I wish you good luck .
Woopie, they’ve come up with a plan to save us all!