Just asking...is anyone else getting tired of this phony "Wall St. vs. Main St." meme yet? Not to rip of Jas or anything, but is that the only way "born and bred dopes" can understand this issue?
Maybe it's just because it's been worked to death by the cheerleaders over at CNBC, I don't know.
Another day of fruitless speculation. So what do we know? Paulson wants a lot of money. Some in Congress think it will save the economy. But we have no numbers other than the amount asked for. Too much? Too little? If it saves the banks now, what about next year.
If you think on it, the only thing we know, is only number we know: $700 billion.
If there ever is a time a politician should do the right thing regardless of the political cost, this is it.
The thing is, once voters are convinced that this bill is necessary, it would be too late -- the panic would be too wide spread to be stopped.
marie | 09.30.08 - 3:19 am | #
The American economy is not wall street. It'll survive even if the DOW halves. What wont survive are the parasites in investment banks etc who have been creaming it in for the last decade without giving anything back. There's a world of pain coming now, no matter what happens. Save the money for people who deserve it - not the parasites.
Nude writes:
How, exactly, is the Senate going to vote on an appropriations bill tha failed in the house? Consitutional violation, isn't it?
Nude | 09.30.08 - 3:24 am | #
Didn't you see, the Dow dropped 777 points? Constitutional trading curbs
I'm a bit surprised that Karl Denninger (at Market-Ticker) believes Paulson/Bernanke are crying wolf.
I don't think they are. While the bail-out bill is so wrong-headed that it's an embarrassment to even have to oppose it, it's hard to imagine any possible ending to what is happening other than a financial apocalypse.
Think of it this way perhaps....after the Depression, the seed was planted for the rise of the strongest nation on earth. It was a cleansing. It was similar to throwing up after you drank to much. Wall Street was drunk.
The U.S., because of free enterprise, grew to superpower status.
Banking and capitalism is like a balloon. Blow it up more and more and very once once in a while it pops.
You cannot win every time. Take your losses in stride.
Main Street is fine. Normal Americans will be fine. Have a Coke and a smile while you watch the evil parasites melt before your eyes! The only thing we have to fear is fear itself!
Sept. 30 (Bloomberg) -- European stock-index futures sank, extending the worst global sell-off in 21 years, after the House of Representatives rejected a $700 billion rescue plan for financial companies.
I'd have to say re the excerpt above that juxtaposition is not causation, but few have ever listened to that argument. Try as I may.
As to how can the Senate do this? Any number of ways, all of which involve logic. Debate logic and other things like a referral. Sort of like when you're selling something and a client refers you. Or, they can just gin up something, pass it and send it for the action of the people's house. The process will require a more lengthy process of conference etc.
As to what they were voting on today, I could be wrong, but they were voting on an amendment that would have eliminated the need for a conference committee.
unirealist writes:
I'm a bit surprised that Karl Denninger (at Market-Ticker) believes Paulson/Bernanke are crying wolf.
I don't think they are. While the bail-out bill is so wrong-headed that it's an embarrassment to even have to oppose it, it's hard to imagine any possible ending to what is happening other than a financial apocalypse.
unirealist | 09.30.08 - 3:31 am | #
I don't really care. These are the same people who told you at the top "this is contained" and are now after dozens of firms went under and the market has dropped 20% that we are fucked. Reminds me of a sell-side analyst. Either they are incompetent or corrupt.
What is going to happen will happen. In times of crisis, "cash is king". There is not reason to throw so much money at something we are unsure of because uncredible people say its going to happen.
The problem is people are terrible investors and are going to hold the bag again by listening to someone telling them to buy high and sell low.
The American economy is not wall street. It'll survive even if the DOW halves.
I don't think so. The US economy has changed a great deal for the worse over the past few decades. It is no longer an engine of production. It is an engine of consumption.
Once we abandoned the cornerstone of our currency (gold/silver) our culture no longer knew how to value anything. Our ancestors would puke if they saw what the US has become.
The American economy is not wall street. It'll survive even if the DOW halves.
It used to be not wall street. Offshoring everything except the "service sector" has taken care of that. HELOCs have kept the consumption house of cards 2gether since 2001 and now that well is pulling up mud.
unirealist writes:
The American economy is not wall street. It'll survive even if the DOW halves.
I don't think so. The US economy has changed a great deal for the worse over the past few decades. It is no longer an engine of production. It is an engine of consumption.
You may be overlooking what the economy is not. It is not static. From need will come the adaptation and adjustment. We will need to learn to speak in different terms, perhaps drifting away from the unsustainable concept of growth.
Since pensions are most often 401k, most Americans are going to realize that they do partially live on Wall St. The group that gets 401k statements on nov 1 will definitely vote in this election,
Since pensions are most often 401k, most Americans are going to realize that they do partially live on Wall St. The group that gets 401k statements on nov 1 will definitely vote in this election,
PIMCO and gross i believe hold many of those funds.
And what is all this talk of "Main Street"? Main Street was sold to China long ago. I demand that all future references to "Main Street" be replaced with "Wal-Mart Parking Lot". Ironically, most "Main Street"'s only still exist because the excess of the credit bubble has allowed them to be reborn as centers of sophistication and artisanal production. When everybody is an artist, who is growing the food? Oh, yeah, that's right. Megacorporations and their illegal slave labor.
No one has yet stated how, exactly, this 700 billion dollars is to help fix the economy. No one has even said that 700 billion dollars will be enough.
Right now we do not know if 700 billion is enough or even how this big sum of money can be used to save the economy. We do know that printing up this cash will seriously affect our deficit, the dollar index, treasury yields, and oil prices.
We are being sold fear and the price tag is 700 billion dollars.
Mr. Holiday explained it earlier, but your comment sparked my memory. Here is how the Senate gets to vote on it...
Mr. Holiday writes:
Anyway, if you're scratching your head about how the bailout legislation, which was conceived over the weekend, ends up numbered H.R. 3997 when they're already well into the 7000s with House bills already (they're numbered in order of their introduction), the answer is that they're going back to a trick we've seen them use before -- taking an old bill that has passed one House but not both, and hollowing it out and replacing that text with the new stuff.
So H.R. 3997, an old tax bill that passed the House, bounced back and forth a few times after being amended, but was never passed in the same form by both houses, which means it's still available as a legislative vehicle. That means that technically, what's under consideration in the House today is an amendment to the Senate amendment to the House amendment to the Senate amendment to H.R. 3997.
Seriously.
Why? Because pretending that the bailout package is just a new amendment (in the nature of a substitute) for what now stands as the old body of H.R. 3997 means they can get expedited consideration on the House floor, plus be protected from a Republican motion to recommit [send back to committee, essentially killing the bill].
In addition to doing this to speed the bill through with fewer chances to kill it, I think they're also doing this to obfuscate their votes. It's a lot easier to look up online who voted for "HR 3997" than it is to look up "who voted for an amendment to the senate amendment to the house amendment to the senate amendment to HR 3997."
Every Congressman already has a vote on the record for the original version of HR 3997, which was originally "The Defenders of Freedom Tax Relief Act of 2007." It's purpose was "to provide tax relief and protections for military personnel." Of course now it's being amended to be something completely different and will have a completely separate vote for the amendment. This will make it much more difficult for the average citizen to sort through all of this and determine whether their congressman voted for the bill last year as originally intended to provide tax relief to members of the military, or voted this year to pass the bailout.
Mr. Holiday | 09.29.08 - 3:22 pm |
So that's how they got around the issue, they are just revoting on an old bill with a new amendment that gutted the original bill. Reduce, Reuse, Recycle, Revote!
There is not reason to throw so much money at something we are unsure of because uncredible people say its going to happen.
--zero beta
Don't misunderstand. I agree with you entirely. But Denninger has been way out in front of the problem for a long, long time. He knows the staggering dimensions of what's out there in the shadows.
Yet his latest post suggests that Paulson and Bernanke misled everyone on how acute the problem was.
They didn't. They just want to save the wrong people, in a way that screws the rest of us even worse.
The American economy is not wall street. It'll survive even if the DOW halves.
I don't think so. The US economy has changed a great deal for the worse over the past few decades. It is no longer an engine of production. It is an engine of consumption.
Once we abandoned the cornerstone of our currency (gold/silver) our culture no longer knew how to value anything. Our ancestors would puke if they saw what the US has become.
unirealist | 09.30.08 - 3:39 am | #
I wont argue that there aren't extremely painful changes coming for the USA but I would argue that propping up the markets with what amounts to fake money is not going to help anyone except the financial parasites currently living off the system. America is no longer a super power - you blew it. There's nothing you can do to change that now, and it's going to hurt, but that's not an excuse for bailing out the top of the country with money from everyone else. Let the correction happen and try and lessen the pain for the people who are hurting the most. Don't try to hang on to the illusion of wealth and power that has been built up over the last few decades and is now slipping away. You have another decade of being at the top of the planet monetarily and economically before your power is completely frittered away. Use that time wisely and the USA will be OK. Use it to desperately prop up empire and the system and there will be nothing but a shell left when the conversion from super power to equal partner with the world is complete
Use it to desperately prop up empire and the system and there will be nothing but a shell left when the conversion from super power to equal partner with the world is complete
Where the hell is the world's gratitude? Where is the goodwill from decades of foreign aid and charity and world policing? If this bailout is so important to the world, then let the world bail out Wall Street.
There are worse things than being poor and broke. I started this life poor and broke. I don't mind ending it poor and broke if I'm allowed to keep some dignity and self respect. I just am tired of feeling like everybody's bitch.
If Wall Streeters had any dignity or self respect they wouldn't be asking for this money and they wouldn't accept it. They'd take their lumps like men. This could be a character building experience for so many people, if only Congress would treat them like mature adults.
Sorry Ben, you left us a republic, and we couldn't keep it. We traded liberty for security and now we have little of both.
From need will come the adaptation and adjustment. We will need to learn to speak in different terms, perhaps drifting away from the unsustainable concept of growth.
--CVV
That won't be as gentle a ride as you imply. Otherwise, yeah...
Unfortunately, it turned out that Bailout Corp employed everybody. When the stealing from taxpayers was not approved, Bailout Corp had enormous layoffs.
I wont argue that there aren't extremely painful changes coming for the USA but I would argue that propping up the markets with what amounts to fake money is not going to help anyone except the financial parasites currently living off the system. America is no longer a super power - you blew it. There's nothing you can do to change that now, and it's going to hurt, but that's not an excuse for bailing out the top of the country with money from everyone else. Let the correction happen and try and lessen the pain for the people who are hurting the most. Don't try to hang on to the illusion of wealth and power that has been built up over the last few decades and is now slipping away. You have another decade of being at the top of the planet monetarily and economically before your power is completely frittered away. Use that time wisely and the USA will be OK. Use it to desperately prop up empire and the system and there will be nothing but a shell left when the conversion from super power to equal partner with the world is complete
MrPeregrination | 09.30.08 - 3:55 am |
We have vast national resources, virtually unfettered freedom of movement, and we are remarkably stubborn in our resilience. Any real crisis will only serve to shake the rust off our resolve and get us back into production, even if it's only for domestic use. Don't count out the U.S.A. just yet.
dr strangemoney writes:
perhaps drifting away from the unsustainable concept of growth.
Yeah! War!
War is a racket, and when we decentralize and get closer to local everything the need for war will simply fade away. And comments like yours will increasingly be seen as thoughtless and silly.
that is the problem with testing the market response to something: the market knows what the men in white coats are doing, so its response is never valid.
penniless kidbuck writes:
Where the hell is the world's gratitude? Where is the goodwill from decades of foreign aid and charity and world policing? If this bailout is so important to the world, then let the world bail out Wall Street.
Let me take the role of The World.
Gratitude? You take our labor and pay us with ever worthless declining value paper? Foreign aid? Did you really think there was no quid pro quo? World policing? Looks like Rodney King to me.
You should 'bail out' of the world instead, but do kindly pay your bills first.
How's that? Was i good? Does it accurately portray the perception of the US worldwide?
And comments like yours will increasingly be seen as thoughtless and silly.
How dare you accuse my snark as thoughtless and silly. If you need it explained, war is the unsustainable concept of destruction. The opposite of the unsustainable concept of growth. Damn, this place is going yahoo in a hurry.
This is the original Paulson plan. The Dem's additions were watered down to 'make sure it will work' and gain 'wide market participation' that the equity swaps are going to be very generous to the banks. Again, to encourage wide participation.
Even Krugman was against the original Paulson plan. This is basically the same plan.
Certainly not. Anyone who thinks so is delusional.
One of major consequences the recession we are in and heading is the lack of $$$ for basic infrastructure maintenance and improvements. Deferred maintenance. Deferred replacement. Deferred repair.
At the same time we are looking at massive slowdowns in private commercial and res. building activities, etc. etc.
Only 118 people online. And some of them probably just fell asleep in front of the screen.
Anyways, I fear this is not over. It is going to be a battle to the death, either for "We The People," or for The Powers That Be.
Tuesday is a new day, and these cornered animals are NOT going to give up. Not when they're so close to looting what's left of our country.
Unfortunately, we CANNOT LET UP. This thing can't pass, and they're not going to anything less than what they want, to get through. I assure you of that. They'll allow meaningless and toothless stuff in, and say it's progress, when it's still a GARBAGE DEAL.
These criminals are used to going to the mat. They have not even brought out their best stuff yet. I fear tactics pursuing capitulation are on tap for us in the coming days. It may test our very souls, and the more we try and maintain control, the more they'll try and take us down.
Our only hope is the American people see through their SHAM. And not only don't give in, but throw their attacks where it's deserved. At those who got us into this mess, and those that are trying to perpetuate it for their own motives, and not those of the citizens of this fragile Democracy.
unirealist writes:
There is not reason to throw so much money at something we are unsure of because uncredible people say its going to happen.
--zero beta
Don't misunderstand. I agree with you entirely. But Denninger has been way out in front of the problem for a long, long time. He knows the staggering dimensions of what's out there in the shadows.
Yet his latest post suggests that Paulson and Bernanke misled everyone on how acute the problem was.
They didn't. They just want to save the wrong people, in a way that screws the rest of us even worse.
Yeah while I say that tongue-in-cheek, its no secret that there is a bit of an agency problem on Wall Street.
Financial intervention should not be taken care of pre-emptively - regardless of how fair a bailout proposal is. It is a bad tactic if losses are smaller than expected the money will never be returned. If losses are greater than expected we wasted the money and should have waited.
It's like paying a huge premium to buy a long-dated put option on a broad index fund tied to the economy, when you are only worried about hedging your exposure to a one of the holdings. One holding is "the destruction of paper assets" the other is "second order effects". I'd rather just buy a put on second order effects as I see them go and not pay such a rediculous premium
the citizens of this fragile Democracy.
Comrade Scared Shitless
this is a republic and not a democracy
See, we've devolved our approach to a simplistic sort of blather--war v peace, with me v against me, ad nauseum
We have forgotten how to have a conversation. This medium is a thin soup of intercourse. And most people have a fragile intellect due to not having learned to be critical thinkers. Stop yammering on and think your way through this situation.
I'm probably the only asshat in all of Belgium who opened an account at Dexia yesterday! Well I have already closed it and we are talking to Deutsche Bank tomorrow. But with my luck they collapse today as well...
From need will come the adaptation and adjustment. We will need to learn to speak in different terms, perhaps drifting away from the unsustainable concept of growth.
Comrade Volker the Viking
We'll also need to learn to speak in different languages. So we can talk better with our new masters and owners.
We have vast national resources, virtually unfettered freedom of movement, and we are remarkably stubborn in our resilience. Any real crisis will only serve to shake the rust off our resolve and get us back into production, even if it's only for domestic use. Don't count out the U.S.A. just yet.
Nude | 09.30.08 - 4:02 am | #
I'm certainly not counting the US out. You will always be a large economy and will continue to have a lot of clout but the days of the USA "going it alone" and dictating to the rest of the planet are over. George Bush has utterly destroyed your reputation as a country to look up to and voting him in twice ensured that your reputation can not be repaired. He also helped destroy your economy but that's been happening for some time now and can't be blamed on one person. The loss of reputation though is where a lot of these economic problems are now coming from. The USA has been faking it for years but everyone was happy to ignore that because it was expected you'd stop faking and pull out all the stops lke the USA always does. Unfortunately you elected an idiot twice instead.
Zero Beta writes:
Anyone catch how bailout after being uttered ad nauseum became "rescue bill".
Last week Mark Haynes on CNBC said that exact thing would happen, when he was blasting out loud, not to believe it, that it's just a BAILOUT
its like calling a war a "slaughter" eventually all wars become "slaughters" and when mass slaughter starts to occur its no'rmal. Unless one dare say "genocide
Right now we do not know if 700 billion is enough or even how this big sum of money can be used to save the economy. We do know that printing up this cash will seriously affect our deficit, the dollar index, treasury yields, and oil prices.
We are being sold fear and the price tag is 700 billion dollars.
I will not buy into any of this.
ks
If you think $700B is going to be enough, I've got a bridge to sell you.
Yeah, just like their first request for Iraq war money was the last.
Multiply the $7B by 4 or 5, and you've got a better approximation of the eventual cost.
Good job Anonymous. Why'd we bother with 2 world wars? We should have let the Germans and the Japs keep you. I'm sure they'd have been more agreeable masters.
Sorry Ben, we were warned against foreign entanglements.
We'll also need to learn to speak in different languages. So we can talk better with our new masters and owners.
Comrade Scared Shitless
You would perhaps be one who will return to your cave and shudder at the shadows on the wall. We will, as someone thoughtful said above, have the next decade to drift along. And we have abundant natural resiuyrces. And we have a resilient population, those of us who have not succumbed to the terror of ourselves.
The world is devolving into one language. That language is the language of peace. It requires tolerance, forbearance and forgiveness. Sort of lather rinse repeat cycle of human kindness.
When we 'get' this, we will all be able to relax a bit.
Unless one of those fucking slope headed morons slip out of their cave in the middle of the night and come to my house and fuck my daughter and steal my gold and then by god I'll have to blow his face off.
George Bush has utterly destroyed your reputation as a country to look up to and voting him in twice ensured that your reputation can not be repaired.
Mr. P, he wasn't voted in either time. In 2000 he was selected by the SCOTUS, with Sandra Day O'Conner casting the deciding vote, much to her eternal shame. In 2008 he was selected by Diebold machines.
unirealist writes:
George Bush has utterly destroyed your reputation as a country to look up to and voting him in twice ensured that your reputation can not be repaired.
Mr. P, he wasn't voted in either time. In 2000 he was selected by the SCOTUS, with Sandra Day O'Conner casting the deciding vote, much to her eternal shame. In 2008 he was selected by Diebold machines.
Seriously, we never elected GWB.
You think Exactly like me. Thumbs Up to your comment.
Good job Anonymous. Why'd we bother with 2 world wars? We should have let the Germans and the Japs keep you.
I'm sure they'd have been more agreeable masters.
Alas what if I AM German or Jap.
And if i were some poor third world country, your last sentence just shows that the US are my masters now instead of the German or Japs.
And the 'liberation' of Iraq would have been done even if they had no oil. And the madman who was in power never bought any US weapons to use against Iran in a previous time.
looks likely (based on the action of the last hour or so) that about half of this drop will be erased upon the open here.
Anyone having the courage (or big brass balls) to buy into that steamroller of a last hour yesterday will be rewarded....now getting access to a platform to sell it into is going to be pretty interesting to watch too.
That's just not true. Every major newspaper in the country studied the Florida vote for years afterwards. No one could find anything but a clear Bush win.
Even Dan Rather prematurely calling the election for Gore couldn't change it.
I'm sorry, but the opposition put up such sorry losers against W.
Futures are up big at this hour. Asia was down but not as much as the US. Europe appears to be doing OK. The FTSE is actually up. I'm certainly not seeing the markets panicking today from this. Is this really just because they are going to try to vote this thing in the Senate on Wednesday?
Pass the HP plan, a mod, or not, what should be noted will be the absence of political motivation to get behind alternatives.
Nationalization a la Sweden, or now an idea from John Hussman, none of it seems to have any traction in legislative committee.
I'm sure CR junkies have a better take on their inaction. Or maybe I've not followed the issue closely enough. But my take is that these guys are scared stiff, and worthless.
"The only way that buying the questionable assets will increase capital on the liability side of the balance sheet is if the Treasury overpays for them.
A better approach would be for the government to provide capital directly, in the form of a super-bond, in an amount no greater than the debt to bondholders. The super-bond would be subordinate to customer liabilities, so it could be counted as capital for the purpose of capital requirements, and would be seen by customers as a legitimate cushion of protection. However, in the event of bankruptcy, it would have a senior claim in front of both stockholders and even senior bondholders. Do that, and you've actually got a mechanism to protect the financial system while at the same time protecting customers and taxpayers. Ideally, the super-bond accrues a relatively high rate of interest so that financials have an incentive to shift to private financing as soon as possible, but you would also defer the interest until the bank meets a minimal level of profitability to make sure that the financing doesn't strain the institution's liquidity."
Financial intervention should not be taken care of pre-emptively
That's a fresh look at this. Is it always true?
I think so. It allows you to, when the smoke clears, sort out the winners and losers and assess the situation. then decide where to allocate capital that you could better model some sort of return on.
you're overpaying for uncertainty in a period of high volatility - some of which won't seem as bad when it happens.
The Hang Seng and Strait Times actually closed up. Intervention or bargain hunting? The global panic case is going to get a bit of cold water thrown on it this morning if the US futures hold up.
I have to admit these numbers are already increasing my more than healthy cynicism regarding the "immediate need" for the bailout for the reasons stated.
The American economy is not wall street. It'll survive even if the DOW halves. What wont survive are the parasites in investment banks etc who have been creaming it in for the last decade without giving anything back. There's a world of pain coming now, no matter what happens. Save the money for people who deserve it - not the parasites.
Mr. Peregrination
Well, actually, you've got it backwards my friend. If the Dow halves, investment bankers will survie and the American economy won't!! Wake the fu-- up!!
You guys are great, so normally don't need ot say anything. However why is nobody is complaining about the Citi/Wachovia deal ..did I miss it somthing ... FDIC/US Treasury give out a 270BB guarantee ..no oversight .. no transparency .. no at market pricing ? Isn't this the Paulson plan inacted ?
SS writes:
The Hang Seng and Strait Times actually closed up. Intervention or bargain hunting? The global panic case is going to get a bit of cold water thrown on it this morning if the US futures hold up.
I have to admit these numbers are already increasing my more than healthy cynicism regarding the "immediate need" for the bailout for the reasons stated.
I read it as they think that a bailout is unavoidable and the traders position themselves for the upswing.
Well, actually, you've got it backwards my friend. If the Dow halves, investment bankers will survie and the American economy won't!! Wake the fu-- up!!
newyorkdo
Are you in any way involved with the financial or real estate industries?
I read it as they think that a bailout is unavoidable and the traders position themselves for the upswing.
Traders may be shooting themselves in the foot then. If the politicians don't see a real crisis right before the election their natural tendency will be to punt an issue until after the election. This whole thing has been sold on the "immediate danger" argument. If that doesn't appear to be the case...
Of course, my track record is mixed on these things overall -- I thought the bill would pass for sure -- so I'm just putting it out there.
Overnight markets are thinly traded and easily manipulated. Just set the computer for executing orders right before or right after NY or London open, pull the trigger on some front running trades and voila.
Tomorrow? Who knows. I ain't in this market. But if I had to guess, I'd guess that the close on the Dow at under 10,500, coupled with a riptide action on the S&P Monday, means we're at one of the vaunted and much anticipated inflection points.
Financial intervention should not be taken care of pre-emptively
Not true in practise, otherwise there would not be any central banks of any kind.
Who said Central Banks should act preemptively?
While its true that many do, all that does is basically make your Central Bank one big trader or money manager.
Tools like a discount window are great because they are not preemptive moves rather reactive and more a part of design than anything.
I have to agreed they should not.
Having said that, CBs will always try to 'salvage' a situation and will act.
You describe a benign CB, but in reality CBs are like sharks(not the whale shark though), it would be good if they really only ate overgrown vegetation but alas that is not in their nature.
If the politicians don't see a real crisis right before the election their natural tendency will be to punt an issue until after the election.
Alas if only the current crop of politicians see it this way, both presidential candidates are for it vehemently judging by the rhetoric that is spewed forth.
I always thought the plan will pass although it did not this time.
I am still sticking to my original view that they will pass a plan eventually.
Attention board: The hedge fund Paulson & Co. made 3.7 billion dollars last year betting against this market. All of you here hoping that "wall street" will get it just desserts don't understand how the financial world and economy works. You can destroy 1.1 trillion dollars of net economic worth, but that doesn't mean you're going to destroy the trader/players. if they're short, they win and you lose!! Kapisch???
You can destroy 1.1 trillion dollars of net economic worth, but that doesn't mean you're going to destroy the trader/players. if they're short, they win and you lose!! Kapisch???
But what he says does make a little sense.
The people who main st. wants to punish are already out of the US in their safe havens.
At least that's my take. But again what do i know.
Attention board: The hedge fund Paulson & Co. made 3.7 billion dollars last year betting against this market. All of you here hoping that "wall street" will get it just desserts don't understand how the financial world and economy works. You can destroy 1.1 trillion dollars of net economic worth, but that doesn't mean you're going to destroy the trader/players. if they're short, they win and you lose!! Kapisch???
newyorkdog
Sounds like someone was on the wrong end of an alligator spread, whatever that is.
Any other country in our situation would long ago have been Argentina.
The fact that we still have a currency and economy to discuss is precisely because the rest of the world has had an interest in not seeing the dollar go to zero, which they've expressed by continuing to buy dollar-denominated Treasuries despite all that's wrong.
That's why i find it perplexing as to why anyone would suggest that China or any other nation which holds trillions in US securities will suddenly dump them to 'hurt' the US.
In reality they would be destroying their avenues of growth and it would benefit Neither party if they were to disrupt this balance as it is now.
Having said that of course, the current system is teetering on the brink, it would be interesting to see how this would be resolved.
The HP plan is ill-begotten and they can tinker all they want, it's still of, by and for the financial elite.
And all it's doing is shoveling around the toxic crap, requiring the taxpayer over-pay to pretty up their balance sheets, w/o addressing the real solvency issue.
If they were concerned about forming national policy to address that, congress would start from a clean sheet of paper.
Example: Walter Bagehot would relieve the banksters of their capital jones but make them pay. All the while protecting the provider:
"We'll see if the academic community which has been so vociferous in its criticisms can also make constructive proposals (It doesn't have to have all the details in place, just remember 3 goals that can be reduced to soundbites for public consumption: save the financial system, punish Wall St., and cost less than $700 bil)."
Not only does the dollars reserve currency get us a lot of "respect" and support, having the dominate military in the world gets us additional "respect".
Right, if we were any other country we would be a basket case (Argentina). Our trade deficit alone would have sunk the US currency.
So we are living on borrowed time and money. And we are deleveraging. So no matter what there are major changes coming, my only hope is that the changes can be managed to control the coming pain.
"We will need to learn to speak in different terms, perhaps drifting away from the unsustainable concept of growth."
Counting consumption as a measure of production has no place in the new order. The "consumer-driven economy" notion will be studied, in dissertations on abnormal psychology.
Dangerous. If the Senate changes or alters the bill in any way, it will violate Constitutional rules on spending bills having to originate in the House.
I'm not sure adding a constitutional crisis to a financial one is a bright move.
They could pass the bill unaltered, but that would be essentially giving the House the finger.
A better approach would be to negotiate changes with the House and Paulson, and pass the revised bill in the House first.
Also I would caution you, CR, that this has been some of the worst political reporting I've ever seen in the mainstream press. Last Friday Fox news and some other media outlets were breaking rumors and untruths, such as "Deal expected by midnight Friday." If you blindly post this crap, you are going to undermine the credibility of your own site. Go for quality over quantity.
This crisis has been a new low for media accuracy and journalistic standards.
There are a couple of media sources I still trust - TheHill.com has been very solid and the Washington Post tends to get the story right over breaking it first.
I would not characterize Bloomberg as reliable anymore.
Shaun writes: ... why is nobody is complaining about the Citi/Wachovia deal ..did I miss it somthing ... FDIC/US Treasury give out a 270BB guarantee ..no oversight .. no transparency .. no at market pricing?
Quit dwelling on the negative. Sheila has made it clear that there will be no more bank failures. From here on out, there will only be bank purchases. If you are going to keep insisting that the details of where the purchasing banks get their money are important, you will never be a happy team player.
Hmmm, the sun rose, the trains ran, newspapers got printed, the cafe took my pound coin for a croissant, the markets are kinda flat-tish. Is this Armageddon? Did the sucker go down yet? I was expecting worse I have to admit. So a few bankers lose their fortunes. I suspect the rest of us will carry on.
When I warned of an ugly bearish flag forming on the futures 6 hours ago - I didn't really believe that it would keep forming into a full-fledged bear flag (futures now up 3%). This is terrible for the market! It's another A-B=C-D down move inside in already ongoing A-B=C-D move. This projects, conservatively, to the low 1000s on the S&P (prev. target was 1075). And it's another opportunity for people to short the market.
Wall St. acted like a spoiled brat who didn't get its new toy yesterday.
It threw a temper tantrum on the floor of the New York Stock Exchange.
Now, as it lays spent on the floor, looking over the wreckage, the spoiled
brat sees that his outburst convinced no one. That he must clean up his room and sheepishly be satisfied with the toys he already had.
Here's a page with a <a href="http://chart-patterns.netfirms.com/bearflag.htm>explanation and example of a bearish flag (chart).
Now compare that with the <a href="http://quotes.ino.com/chart/?s=CME_ES.Z08.E&t=f>E-mini S&P futures.
A bearish flag is basically a downmove in price (nearly vertical) that terminates with a diagonal line about 30-45 degree angle forming off it. Then you can project price target from the peak of the "flag" (diagonal) by adding the length of the "poll" (vertical price decline). So even if I conservatively use the poll length of 110 S&P point, and the flag stops at 1150 - thats a projection of 1040 S&P. But if I use the 1260 for the poll it projects to 1000 SPX.
Hope that makes your day
I have to get ready for work now.
The vote in the House yesterday was essentially a vote of "no confidence" in Henry Paulson.
And it was deserved, as the oversight board was toothless; a charade masquerading as a bad joke. Even proposing to put yourself above the law (section 8 non-judicial review clause) should be immediate grounds for dismissal.
The only way anything useful is going to pass is if Congress steps up and takes ownership, and puts Paulson in his place, which is serving the people.
If he cannot accept that we live in a constitutional republic, he should resign immediately, and let the legislative process work as the founders designed it.
We're talking about the United States of America. The greatest asset of the USA is its human capital.
So what if the current corporations and banks of Wall Street fall ? Are we saying thats the end of America as we know it ? Corporations and bankers come and go, the bad and greedy deserve an early demise, they brought it on themselves. They have earned it. Do not deny them their just and well deserved rewards.
Why keep the terminally ill on tax payer funded life support ? They are nothing more than a parasitic infestation on American tax payers.
New and better corporations and banks will replace them. America is NOT bankrupt of intelligence and capability.
Currently, from opensecrets.org, a non-partison watchdog
"On average, House members who voted for the Emergency Economic Stabilization Act have received 51 percent more money from the finance sector since 1989 than those who opposed it."
However why is nobody is complaining about the Citi/Wachovia deal ..did I miss it somthing ... FDIC/US Treasury give out a 270BB guarantee ..no oversight .. no transparency .. no at market pricing ? Isn't this the Paulson plan inacted ?
FDIC was already on the hook for every penny of the 270 BB they "guaranteed". No loss there. If the losses eventually exceed the 42 billion limit they'll still end up paying 42 billion less than if they hadn't made the deal. An excellent move on their part.
Japan and Germany make cars. Saudi Arabia pumps oil. China supplies the world with socks and toys and flat-screen TVs. What does the United States produce? Lots of stuff, but in recent years this country's No. 1 export--by far--has been debt.
Won't somebody kindly tell me,
What's the gubmint tryin' to do?
Hankie's much to tricky
For a chump like me to use
You take that sub-committee seriously, boy
You could get a seizure from the evenin' news
Millions 'n millions of dollars...
Much as he might need...
He could open up a chain of motels, people
On the highway, yes indeed!
Quadrafonic desperation!
Just might be some confinement loaf all up under your bed
If you just might pinch a little loaf in your slumber
The fbi gonna get your number
The fbi
Gonna get your number
The fbi
Gonna get your number
Except many WB bondholders get to skate away under the Citi umbrella, so FDIC over guarantees by approx 200BB..ish [don't know how much of WB's liabilities remain with brokerage which Citi didn't buy].
Let the financial system collapse. If the issue is credit to main st. then the US has in place a multiple location banking system currently in place--its called the US Post Offices. They handle money. They are located in every community in US. They can with staffing increase perform banking services in an emergency. Great start-up. Will show the private banks that there is an alternative to bankrupt banks. The US should loan the 700 Bil directly through the post offices and small local/community banks.
Congress.org - Get informed, get involved --- call / write / everyone (national down to local ) in these next few the highest stakes are on the line in the high stakes game of chicken.
It is really important we tell our friends and family not just to support the no-bailout effort, but to not to be fearful. The market might go down more -- and people might be scared enough to think whatever rope Paulson throws is good enough - let them know it's the hanging rope and why.
Some questions for your Congress members:
Ask them what kind of lending we think these banks will do when they get this infusion (to creditworthy borrowers? lending that will ensure their continued financial health?? where's that guarantee?) i.e. - what are they going to do with our money? They and the media have utterly failed to make this clear.
As them why this bailout will be any better for the taxpayer than a Reconstruction Finance Corp or RTC-type solution. Again, failure of clarity (and questioning on the press's part)
Ask them why, if this is such a desperate time, Paulson used the moment for a traitorous power grab ---and why we're still letting him grab power under the "revised" bill.
Ask them why Paulson's hurry-up used car salesman tactics are necessary. They waited this long to address the problem -- what is our "imminent" threat to our economy here and what analysis/evidence do they have to back up such a claim of imminent threat?
Ask them if they are serious about ceo pay, where is the strong clawback provisions?
And if we must remove this garbage, ask them why we can't get the same shrewd deal as buffett if we are going to be in the bailout biz.
I suspect you won't have to worry about Deutsche Bank; from what I am hearing in So Cal, they are the only bank getting their act together and aggressively selling off swiftly declining REO assets. If I were in Europe, I'd certainly be considering them.
Can somebody explain why Paulson hasn't offered to resign? He could make a dignified speech that "personalities should not be the issue in this time of crisis" blah, blah, blah. There must be some quasi-respectable figurehead who could be persuaded to try to make this look like the right thing to do.
"One of major consequences the recession we are in and heading is the lack of $$$ for basic infrastructure maintenance and improvements. Deferred maintenance. Deferred replacement. Deferred repair....Put the two together? I don't know"
Either do I, but humor me with this scenario:
We have an epidemic of huge interstate bridges expending intercoastal waterways/railroads or other interstates suddenly collapsing and killing soccor mom's and their cute little boys and girls.(It just happened in MN.)
Around here we have many such high rise bridges over waterways.
Aside from the bloody triage scenes and the calls for name calling that will be flowing on you-tube, the reality is that there will be no road/bridge. How that will effect commerce will not be pretty.
Now reminde me again why we continue to pay state and fed taxes and elect these worthless- suit&tie- six- figure income morons time and time again...?
Oh, btw-Kramer says it's the PERFECT time to buy! Don't delay.
See, it's not the end of the world. This was a replay of the Iraq War scam except this time people called it out. With the equity market stabalizing, I hope the congress sees this bill was not necessary.
See, it's not the end of the world. This was a replay of the Iraq War scam except this time people called it out. With the equity market stabalizing, I hope the congress sees this bill was not necessary.
It's not the equity markets that they are taking the cues from.
Sounds like Hank is getting a bit worn down - From Bloomberg:
The past 10 days of talks between the White House and Capitol Hill are testing the limits of Paulson's endurance to work weekends and nights, which staffers have characterized as relentless. The marathon may be starting to take its toll.
During a negotiating session that extended into the evening on Sept. 28 at the Capitol, Paulson at one point leaned back in his chair and closed his eyes, sparking worries that he might need a doctor. According to a person familiar with the deliberations, it wasn't a health crisis, just fatigue.
Look...it's time to root out the greed again. It's been 80 years since the last time it happened. Wall Street needs to pay for the 20, 30, 40x leveraged-bet that they made on risky mortgage assets, which used to be limited to 12.8x. The bail out is for investment banks only. Paulson is the former CEO of an investment bank. He will save his own first. It's time to erase Goldman Sachs. Yes, the investment banks manage a lot of pensions, but pensions are risk-takers just like anyone else in the stock market. Anyone who's in the stock market for anything is taking a risk of losing everything. Even money market accounts aren't immune to risk. Sell now and buy back in when the investment banks have fallen. Oh, and instead of 700 billion for investment banks, perhaps the government should spread around 10-20% debt forgiveness on all mortgages.
The interbank lending markets have gone ballistic overnight. Fed funds is trading at 30% in Europe, one week funding is 9%, one month 8%. If this kind of severe distress continues much longer, October will make September look tame on the collapsing financial institutions front.
The interbank lending markets have gone ballistic overnight. Fed funds is trading at 30% in Europe, one week funding is 9%, one month 8%. If this kind of severe distress continues much longer, October will make September look tame on the collapsing financial institutions front.
I heard as much, there will be true carnage if nothing is done. But what will they do and will it be enough, we shall see.
Anon, please provide evidence/analysis of alleged "true carnage"
It has not happened yet and i can't recall ever markets not lending at all. So i guess we'll see it when we see it.
Much depends if this bill is passed or not, either way we will know soon enough.
The ISEF Index of financial shares surged as much as 25 percent, and was up 14 percent at 10:15 a.m. in Dublin, as Anglo Irish Bank jumped as much as 49 percent. Ireland's government said today it will guarantee all deposits, covered bonds, senior debt and dated subordinated debt of four publicly traded banks and two building societies.
The government was guaranteeing liabilities of about 400 billion euros ($575 billion), Finance Minister Brian Lenihan said today at a news conference in Dublin. The Irish economy is worth about 190 billion euros
Ah, so the vote didn't go the way they want, so we just basically suspect those annoying rules of democracy and pass it anyway. If the Senate doesn't pass this, will it just magically become law anyway thanks to a few words spoken by The Decider with King Henry Paulson's hand up the puppet's rear?
What a joke, but it is good to know how the system works...
As Ron Paul says, they have the same people that created the problem trying to solve it...The Fed and Paulson...and they are trying to solve a debt bubble by creating more debt.
Chuck- We can only hope that the illegals will return home. God knows that they have foreclosed on 10s of thousands of homes in California that were sold to them on stated income and no social security numbers. Just look at the worst states for foreclosures...California, Texas, Florida, Arizona, Nevada...all of which harbor millions of illegals. I love how the liberals blame the Republicans for this mess...but the Republican in power have been as fiscally liberal as any Democrat has ever been. He signed everything they wanted...social programs, entitlements. He pushed for "fair housing" to eliminate down payments for homes. Of course people bought homes that they couldn't afford, because IT WAS ALLOWED. The Democrats and Republicans are both to blame...Republicans more so for abandoning their conservative roots and letting the libs loot the country.
The Democrats and Republicans are both to blame...Republicans more so for abandoning their conservative roots and letting the libs loot the country.
Let this bear mute witness to how effectively the banksters have convinced the American people to attack one-another by inciting racism and false division. If you think like this, you are a sucker.
They trying to push the idea that the American people don't understand the consequences.
What about the over 100 economists that signed a letter and sent it to Bush explain why they are against this bill,including a few Nobel Prize winners?
That seems to have been buried.
.but the Republican in power have been as fiscally liberal as any Democrat has ever been.
DK | 09.30.08 - 8:11 am | #
I don't really think you can argue that George Bush is liberal (fiscally or otherwise) - I personally wouldn't try and argue he is conservative either. He's simply a crook who found himself in a position of unfettered power. He did what comes naturally to thieves,thugs and crooks. He lied, cheated, stole and abused the system in every way he was allowed (and both parties allowed him). The man should never have been given power over his pets let alone the population of the most powerful (soon to be less so) nation in the world. You can argue whether he was voted in or not (I have my own opinion - you will surely have yours) but the fact will always remain that he was allowed to act like a thuggish dictator by virtually every member of your political system, liberal or conservative.
The evidence is in the money markets i guess, the effect will not be immediate of course but will take time to reach most of the public.
Anonymous | 09.30.08 - 8:07 am
And how would rushing through with this 'plan' solve the money market situation (with anything more than a frayed, fleeting bandaid?). And what impact will the public suffer?
Just listening to Roubini on Bloomberg suggesting we guarantee deposits over 100 thou while we decide what banks will survive (and make those, and only those, the banks we recapitalize). Now that sounds more like a plan...
Things have to be done, but it is critical we do the right things. Falling into the Bush admin. lame duck trap is not one of them. This bill was not wise, and was not written to benefit taxpayers on "main street", and it will not solve the problems that need solving.
And if not passing it will harm main street, as the politicos and pundits suddenly are blabbering - then cough up the evidence to show that is the case or STFU with the hysterical babble.
I just hit my representative with I'm going to volunteer and donate to your opponent letter. It probably won't make a difference but its out there now.
personally I think capitalism should be given a chance to come up with a solution to the credit market cash crunch that is supposedly going to destroy main street.
Banks may not trust each other (and whose fault is that?) but they are still giving out housing loans, and business loans, you just have to have your ducks in a row.. go into your local branch, are the loan officers sitting there with nothing to do? no, will be happy to talk to you if you can really show that you're going to pay your loan back.
They trying to push the idea that the American people don't understand the consequences.
What about the over 100 economists that signed a letter and sent it to Bush explain why they are against this bill,including a few Nobel Prize winners?
Obviously, Hank is smarter than those Nobel Prize types in their ivory towers. ::eyeroll::
He will announce the Internet will be shut down and fax transmissions are cancelled through 10/31. All phone calls will be monitored between congressional phone lines and the schmucks mucking up this "Most Excellent" bill
How, exactly, is the Senate going to vote on an appropriations bill tha failed in the house? Consitutional violation, isn't it?
The Senate uses the term "appropriations" to mean "general" spending bills; here, they are proceeding on the basis that this is an "emergency" bill that just happens to involve spending. While it's six in one hand and half a dozen in the other, there is nothing unconstitutional about this.
DK - Of course people bought homes that they couldn't afford, because IT WAS ALLOWED.
Wow, my BS meter broke on that one.
Realtors and Brokers have always sold the most they could at the highest price they could to maximize their own profit. Basic good old greed.
But Underwriters and Appraisers used to counter them. And Regulators and Auditors used to provide oversight. But in this Bush Home Ownership period, the Underwriters and the Appraisers were purposefully diminished. Oversight was scuttled. And the crap mortgages were passed like hot potatoes to the far flung investors who too greedy to question why they were able to make so much profit so easily.
This is what the NeoCon view of business is all about. Debt doesn't matter anymore. Bullshit!
Jos Lombard wrote, Think of it this way perhaps....after the Depression, the seed was planted for the rise of the strongest nation on earth. It was a cleansing. It was similar to throwing up after you drank to much. Wall Street was drunk.
Uh, I think a lot of it has to do with WWII, which destroyed a lot of other countries.
DK writes: We can only hope that the illegals will return home. God knows that they have foreclosed on 10s of thousands of homes in California that were sold to them on stated income and no social security numbers. Just look at the worst states for foreclosures...California, Texas, Florida, Arizona, Nevada...all of which harbor millions of illegals.
DK: A fine mixture of racism and ignorance. It would be nice if you had any evidence supporting your contention. A handful of sales (even a thousand, hypothetical sales) to undocumented aliens does not result in a financial crisis of this magnitude. Your sort of commentary only undermines anything of value you might have to add to this thread.
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It doesn't appear that the media has reported the fact that Ben's helicopter dumped $630 biliion into the financial system yesterday. This is shock dotrine and fear mongering at its best. The sky is not falling and the sun will rise again tomorrow.
Thanks Concerned Observer for saying that. I live in Florida and you would not believe the foolishness that went on here (well actually, you probably would). I live in Panama City and they built high rise condo after condo. As residents we laughed wondering who in the heck could afford million dollar condos on the prevailing wage of about 8 bucks an hour in this town. Turns out, nobody. They are now being foreclosed on and most never got above 40% occupancy. These were AMERICAN developers that borrowed hundreds of millions of dollars on these boondoggles...
$700 billion slapped together for 'political cover'?
Political suicide, maybe. I think we are going to see a lot of new faces in Congress - both houses - this winter.
I see the 'innuendo' posts appearing in threads here, now: "you'll lose your 401k if this giveaway is not passed, hint, hint."
So, if a giveaway passes, everybody's 401k is just fine, is that what you guys are saying? Please put it right out there in words.
And the lost 'stock market value' is due to this giveaway not being passed, huh? So you're saying that if this is passed, the stock market will be stable or go up, right?
Please put your direct words behind that promise, too.
All you BDS sufferers need to decide:
Is W a high functioning moron, or, is he an evil genius? Chimp or mastermind? Your posts are inconsistent. You may have noticed that this is a blog on economics and finance. Take you politics back to DU and Kos.
YES...we need an increase in FDIC insurance. With fewer banks around, you need to have a higher limit because there won't be enough banks around to spread your cash into 100K chunks!
Kidding aside, this is exactly what I feared. That there is market manipulation even in this action and the bill will eventually pass with minor, inconsequential changes.
Even if the bailout goes forward, I doubt the funds received by banks will be used for additional lending. I believe banks will shore up their balance sheets or perhaps buy other banks. The politicians are clueless to this reality.
Also, this bailout is about the FED getting the assets they have acquired in swaps off their balance sheet.
FYI - I was able to get through to the desk jockey's at both of my senators this morning. They actually had time to chat... I told them this bill was bad politics and worse policy and that they would be heroes to oppose it by any means possible. More importantly I told them there are other options, better options but we won't get them unless we kill this beast first.
I was polite, prepared to talk issues with them (not hysterical) and they each gave me about 2-3 minutes. I was astonished they gave me that much time. Asked what town in state I came from & my ZIP - they already had my phone number (caller ID).
What I find interesting this morning, is the stress in the system, the systemic collapse and increasing risk of meltdown -- BUT, this dramatic condition is being linked to politics and the MacBeth-like push for a bailout plan designed (once again) to goose the stock market and thus increase the compensation of fat cats that rely on the easy availability of a tsunami of option grants -- the very mechanism which will burden American taxpayers for decades! Contrast the fear mongering now to the weeks after 9/11 and the level of pro-patriotism where America wanted to unite against an enemy and work to make America stronger -- today, we have a common cause as Americans to unite against the corruption within the financial system - to unite against wall street and washington. The majority of people do not want to support financial terrorism which comes from within our government or to bailout corruption and accounting fraud on wall street!
This plan being pushed will help the terrorists make money at the taxpayer expense and taxpayers will never make a penny as they are placed in inflationary hell! The people that will make money will be buffett , gross and the CEOs that have melted our economy!
picturerock writes:
All you BDS sufferers need to decide:
Is W a high functioning moron, or, is he an evil genius? Chimp or mastermind? Your posts are inconsistent. You may have noticed that this is a blog on economics and finance. Take you politics back to DU and Kos.
Right on picturerock. As I wrote late in another string:
CR. Just read your thoughts about better commentary (way above). It would be much appreciated.
I was directed here by a regular. As a newbie, it is hard to sift through the pointless comments that are being made just to (to me) prove how smart they are, but end up being very mean spirited and ultimately useless and timewasting.
The insightful comments are both educational and provocative. These are the comments that cause me to continue reading.
I'm in Dubai and was talking to a banker this morning (Muslim holiday today). He and a New Zealander where talking about how disappointed they the people of the US didn't want to pay for the bailout. I turned around and asked why they wouldn't pull our their checkbooks and pay for it themselves. What...they didn't have a spare $700 billion to spend? I was stunned they were actually having this conversation. They countered and said they thought it would be bad in the long-term for the US to have all of these banks to go down.
I told them if you turn this down once and for all, Treasury will go back and do what it has done, bail banks out one at a time. Treasury won't back up foreign banks to take over the likes of a Wachovia, since they won't get the same guarentees a Citigroup would. So, we'll end up with a few (or maybe one) superbank, with unmatched economies of scale.
the precedent dates to 1982. tefra (tax bill) came from senate not house, but courts rejected challenge (all revenue bills supposed to originate in house) for lack of jurisdiction.
Huff, the reality is there will be no bailout, if the bill
bears any reemblence the Paulson plan. Its the inevitable and something the msm just can't comprehend.
i think there is a politically acceptable solution. buy the homes out of foreclosure for the principal balance of the loan. rent the homes out and sell them over the next decade.
everyone wins and loses something. wall street gets rid of the toxic loans but loses the interest income.
the owner still has a place to live but loses the downpayment if any along with any equity if any.
local governments can count on the federal government to keep paying the property taxes on time so the schools don't close up.
Many people today are probable wondering what the bail out means for main stream Americans and what is the bail out really about. For those who think the bail out is ONLY about Wall St big fish.
Let me share a little light on the subject. Let's start bu analyzing the chain of events.
Financial Services Modernization Act of 1999 The proposed Financial Services Modernization Act of 1999 would do away with restrictions on the integration of banking, insurance and stock trading imposed by the Glass-Steagall Act of 1933, one of the central pillars of Roosevelt's New Deal after the financial crisis of 1929. Under the old law, banks, brokerages and insurance companies were effectively barred from entering each others' industries, and investment banking and commercial banking were separated.
Many investment and commercial banks jump head first into the housing market lending game.
2005 JOhn Thain, Goldman Sachs CFO is appointed Chairman of the NYSE. While all the casino investment was goin on, and nobody complained. He amassed $300 million in Goldman stock. It was widely believed that Mr. Thain was also a front runner to head Citigroup. The same group that is now "saving" all the other banks. Or should I say cashing on the mistakes of other banks?One must wonder after amasing such a fortune at Goldman Sachs where these people loyalty lays.
2006 Hank Paulson, CEO of Goldman Sschs leaves the company to serve as Secretary of the treasure. After questionable investments in Patagonia, Argentina that ended up as a property of a non profit run by his son. Oh, did I forget to mention this piece of property is floating in petroleum? Opps, mis mistake.
2007, the subprime loan crisis start showing signs of the truth underlying the sourness of loans backed by air.
March we had the failure of Bear Sterns, to whom the Fed came to rescue and arranged for a purchase at 7% of their original share price.
July 2008, the Fed takes over Freddie and Fannie, the number one instruments through which the American dream of home ownership is made possible.
We had the fall of Lehman Brothers, all time number # 1 competitor of Goldman Sachs, whom the Fed of course lead by Hank Paulson allowed to fail. I wonder why....
AIG was rescued with a credit line of 85 billion dollars from the fed. Hmmm I wonder who will be chasing the interest on those loans and who will be the underwriter of all those debt instruments now that ONLY two investment banks are left.... Could it be Goldman?Hmmm nobody knows.
IN a brief explanation this is how the picture has been forming. Now Hank Paulson is asking for 700 billion dollars to "rescue" the economy.
But what do these 700 billion mean to the US government and the investment banks. Why would the government do that?
I wonder, could it be that the US had planned the financial crisis for a while in order to be able to enter the most profitable industry in earth for a cheap price? Now that the lending to 3rd world countries is drying off because they are outsmarting this game just as China did. Could it be that the US has turned to lending to big institutions and has turned their own citizes into suckers that will pay taxes, that in turn will be lent back to them in the form of Home mortgages to make a profit that they will never see?
Could it be that some investment banks not only knew about this but also facilitated this situation by coaching the government on how to do it?
I don't know, but it seems to me that these few investment banks that are left had something to do with everything and positioned themselves just like a kid under a pinata waiting for the free candy to fall in the floor. Because that is exactly what the price of these "rescued" banks were "free candy". These so called bad loans are not 100% bad, there is a lot of money to be made and not only the government has the money to purchase them, but also the power to work a deal once they have been purchased, so delinquent borrowers are able to stay in their homes and pay at least some of the debt.
Think about it, you buy the loan for 0.20 cents of the dollar, settle with the delinquent borrowers into making the loan worth 0.50 cents of the dollar and it becomes, a win situation, if you add the interest that the borrower will still pay on that loan, voilá, you have a ton of money in profits that the tax payer will never see. This would translate into the government buying a $300,000 loan at a price of $60,000 and setteling with the borrower as if the price of the "new government Aided loan" of let's say $150,000 instead of the 300,000 they previously owed. Do you think that would solve the problem of delinquent loans? I definitely think so, and the government has the power to do it. and there is still plenty of proficts to go around.
The big question is, will this be enough as a strategy to maintain the dollar as the #1 world currency? The safe heaven? What will happen to the dollar when investors realize that US brillant GDP was based on consumer spending originated by this home equiy loans backed by thin air? What will happen when foreign investors realize that the US is a non producing country whose business have been surviving for the last 1o years may be more, by short term loans from commercial paper and ulimately IPO's that transferred the cost of the business loans to institutional investors like Wachovia that purchase these securities with American's retirement money?
Will we survive as the empire we once were or will we become the cheap labor market?
"Obama can guarantee victory by getting angry at Paulson and telling him hands off the purse, bailout or no bailout. How clear can it be?"
You are right, but he won't, proving he's not the agent of change he professes to be.
Read Denninger's Market Ticker today for proof this bailout will do nothing to stop this crisis.
Anybody know where the text of the failed bill can be pulled up on the internet? I really want to dig and see if the odious provision 6 of the old bill survived in the recent bill, i.e. the provision where it said that only $700 billion AT ONE TIME could be held by the Treasury. I call this the Money Laundering Clause.
I am quite concerned as most Americans are about the Congress stating that the banking bailout bill is bad, but is the best we can do.
This is the same Congress that is responsible for the legislation and oversight of Federal mortgage lenders of which the Office of Thrift Supervision is responsible for the Chartering of Savings Banks ,for example Countrywide Bank and Wa Mu and Indy Mac.
The starting point of this crisis was the mortgage lending for the residential housing market which was being pushed by the Administration to put everyone in a home. This was the American Dream which has now been turned into the American nightmare
The Congress in its last housing bill and now in this rescue bill are protecting only the wealthy and the powerful that are well connected to the Congress.
Here is what Nouriel Roubini said in part on 9-28-08(Note that Mr. Roubini predicated this crisis in 2002.) Is Purchasing $700 billion of Toxic Assets the Best Way to Recapitalize the Financial System? No! It is Rather a Disgrace and Rip-Off Benefitting only the Shareholders and Unsecured Creditors of Banks
Thus, the Treasury plan is a disgrace: a bailout of reckless bankers, lenders and investors that provides little direct debt relief to borrowers and financially stressed households and that will come at a very high cost to the US taxpayer. And the plan does nothing to resolve the severe stress in money markets and interbank markets that are now close to a systemic meltdown. It is pathetic that Congress did not consult any of the many professional economists that have presented alternative plans that were more fair and efficient and less costly ways to resolve this crisis. This is again a case of privatizing the gains and socializing the losses; a bailout and socialism for the rich, the well-connected and Wall Street. And it is a scandal that even Congressional Democrats have fallen for this Treasury scam that does little to resolve the debt burden of millions of distressed home owners.
I am one of 4 million homeowners that are in or have completed foreclosure.
The American people have yet to realize that the mortgage borrower has no right to contest, object or to question their foreclosure within the same Federal Regulatory System that the Federally Chartered Savings Banks lends their money. There are basically no Federal Lending Regulations that pertain to the federal savings banks. These banks answer to no one and operate with absolute impunity . This federal lending system designed by the Congress that protects the wealthy and the powerful financial Institutions with no protection given to the mortgage borrower. This is called Lynch Mob lending. The bank forecloses the mortgage and hangs the borrower. The borrower has no voice.
My federally Chartered Savings Bank ,Am Trust Bank, headquartered in Cleveland Ohio in 2007 paid 14 million dollars to settle a class action suit for unethical interest miscalculations. This same bank threatened to sue me with a frivolous lawsuit for fighting my foreclosure. This bank changed my loan purpose twice in order to prevent my refinance which I qualified for under federal regulation. This bank performed a flawed property appraisal which was the catalyst for my foreclosure. The State of Ohio confirmed and cited the flawed appraisal but then made a deal with the bank which was treated like a minor infraction instead of the 9 violations of law.
The Media talks about the anger of most Americans who do not want these wealthy and powerful Banks along with WallStreet to be made whole with taxpayer money.
The Senate Majority Leader Harry Reid stated that they were trying to protect the Banks from the bad loans. Senator Reid should have stated that he wanted to protect the American public from the Bad Banks that made the loans.
Until the American public understands that these Banks like Wall Street do as they please without any fear from government or borrowers attorney that this crisis will continue to get worse without effective regulation controlling the banks aberrant behavior with their mortgage lending.
The reality is that there are 4 million foreclosed homeowners now and the Brooking Institute states that there are 2 million more projected for 2009. Tell me that there are 6 million homeowners that cannot protect themselves and are at the mercy of these ruthless greedy politically powerful Banks. By the design of this American government these victims have no voice. Even a bank robber is titled to representation with an attorney.
Based on the activities of the financial system in our country for the past 8 years with the Congress charged with the responsibility for legislation and the oversight the Congress as a governing body has committed malfeasance and misfeasance.
We need to change the type of Politician that we elect to office. We need to change the way we elect our representatives to office.
What about the friends of Congress,the well connected Bankers and the WallStreet that cheated the American public out of billions of dollars? What about the 4 million foreclosure victims who have no voice?
This Congress went over the top when they said we have to pass something. That is criminal to spend the taxpayers money on"something".
It is not the rescue bill that stinks like year old fish; the bad smell is coming from the stench that this Congress created.
6 Million foreclosure victims with no voice and this Congress does nothing. Billionaires and Millionaires complain about their cash flow and Congress cant do enough.
.
America for socialism? USA is not a democracy state anymore. The Congress is control by the Wall Street Bankers.
You can have a re-vote anytime?
THIS IS CRITICAL: Please fax AND phone your congressman. Do not bother with any members of the House except for Nancy Pelosi.
Call them with this simple message "If you vote for this bill, you will lose my vote".
Click Here For Congresional Phone And Fax Numbers
Senate Fax List
Please fax everyone on this list.
Sen. Richard Shelby (R) 202-224-3416 or 202-224-5137 (try both not sure which is correct)
Sen. Harry Reid (D) 202-224-7327
Sen. Jim DeMint (R) 202-228-5143
Sen. John Ensign (R) 202-228-2193
Sen. Jim Bunning (R) 202-228-1373
Sen. Chuck Grassley (R) 202-224-6020
Sen John McCain (R) 202-228-2862
Sen. Barack Obama 202-228-4260
Sen. John D. Rockefeller 202-224-7665
Sen. Dianne Feinstein 202-228-3954
Sen. Ron Wyden 202-228-2717
Sen. Evan Bayh 202-228-1377
Sen. Barbara Mikulski 202-224-8858
Sen. Bill Nelson 202-228-2183
Sen. John Kerry 202-224-8525
Sen. Daniel Inouye 202-224-6747
Sen. Hillary Clinton 202-228-0282
Those inclined should also fax their own senators as well.
First?
CR: thanks for all the posts! Long time day for me, so good night y'all....
Fail... mulligans??
For the candidates:
It's 3am. The red phone is ringing. Do you know where your economy is?
M
Just asking...is anyone else getting tired of this phony "Wall St. vs. Main St." meme yet? Not to rip of Jas or anything, but is that the only way "born and bred dopes" can understand this issue?
Maybe it's just because it's been worked to death by the cheerleaders over at CNBC, I don't know.
Gotta go get some shut-eye...
If there ever is a time a politician should do the right thing regardless of the political cost, this is it.
The thing is, once voters are convinced that this bill is necessary, it would be too late -- the panic would be too wide spread to be stopped.
Another day of fruitless speculation. So what do we know? Paulson wants a lot of money. Some in Congress think it will save the economy. But we have no numbers other than the amount asked for. Too much? Too little? If it saves the banks now, what about next year.
If you think on it, the only thing we know, is only number we know: $700 billion.
Those long term generational, secular cycles are a real bitch.
If there ever is a time a politician should do the right thing regardless of the political cost, this is it.
The thing is, once voters are convinced that this bill is necessary, it would be too late -- the panic would be too wide spread to be stopped.
marie | 09.30.08 - 3:19 am | #
The American economy is not wall street. It'll survive even if the DOW halves. What wont survive are the parasites in investment banks etc who have been creaming it in for the last decade without giving anything back. There's a world of pain coming now, no matter what happens. Save the money for people who deserve it - not the parasites.
Anyone catch how bailout after being uttered ad nauseum became "rescue bill".
How, exactly, is the Senate going to vote on an appropriations bill tha failed in the house? Consitutional violation, isn't it?
Will this mean they voted for it after the voted against it?
The U.S. is now borrowing $1.6 trillion per year ($700b trade deficit, $800b federal deficit) .
How does an additional $700 billion help?
Hasn't anyone been paying attention to "financial crises" starting from Dec 2006 until now? Each time the next one got bigger.
Hello?
That's a clue.
A bailout won't work.
marie writes:
If there ever is a time a politician should do the right thing regardless of the political cost, this is it.
The thing is, once voters are convinced that this bill is necessary, it would be too late -- the panic would be too wide spread to be stopped.
My answer:
YouTube -
The #1 story for the entire trading day in Europe and Asia has so far been about the bailout
These people are going mental
P.S.
Dexia follow-up, 6.4bn from France + Belgium. Problems being blamed on its bond insurer
Nude: Apparently you didn't get the Bush memo. The Constitution is just a piece of paper.
As for the re vote or whatever, will the GENIUSES be sending Dick Cheney up to the hill to lobby for it? If so it's DOA. Shot in the face.
Britain, Germany, France, Benelux (+Spain) have all had their taste of the bank crisis.
Next up is Italy
Nude writes:
How, exactly, is the Senate going to vote on an appropriations bill tha failed in the house? Consitutional violation, isn't it?
Nude | 09.30.08 - 3:24 am | #
Didn't you see, the Dow dropped 777 points? Constitutional trading curbs
I'm a bit surprised that Karl Denninger (at Market-Ticker) believes Paulson/Bernanke are crying wolf.
I don't think they are. While the bail-out bill is so wrong-headed that it's an embarrassment to even have to oppose it, it's hard to imagine any possible ending to what is happening other than a financial apocalypse.
EvilHenryPaulson writes:
Britain, Germany, France, Benelux (+Spain) have all had their taste of the bank crisis.
Next up is Italy
Not good.. sooner or later this wall street mess is going to hit main street. Argh!
Think of it this way perhaps....after the Depression, the seed was planted for the rise of the strongest nation on earth. It was a cleansing. It was similar to throwing up after you drank to much. Wall Street was drunk.
The U.S., because of free enterprise, grew to superpower status.
Banking and capitalism is like a balloon. Blow it up more and more and very once once in a while it pops.
You cannot win every time. Take your losses in stride.
Comrade Volker the Viking
If you want to email CR, click on the email link and pull the address from there and put it into your email provider. (I can't use Outlook either.)
Main Street is fine. Normal Americans will be fine. Have a Coke and a smile while you watch the evil parasites melt before your eyes! The only thing we have to fear is fear itself!
Far out. This doesn't look good -Asia is tanking hedges on redemption fever and the Euros are marking down equities. Both from bloomberg:
European Stock-Index Futures Tumble; Societe Generale May Drop - Bloomberg.com
And:
Sept. 30 (Bloomberg) -- European stock-index futures sank, extending the worst global sell-off in 21 years, after the House of Representatives rejected a $700 billion rescue plan for financial companies.
I'd have to say re the excerpt above that juxtaposition is not causation, but few have ever listened to that argument. Try as I may.
M
Nude: Please, put something on.
As to how can the Senate do this? Any number of ways, all of which involve logic. Debate logic and other things like a referral. Sort of like when you're selling something and a client refers you. Or, they can just gin up something, pass it and send it for the action of the people's house. The process will require a more lengthy process of conference etc.
As to what they were voting on today, I could be wrong, but they were voting on an amendment that would have eliminated the need for a conference committee.
It was similar to throwing up after you drank to much. Wall Street was drunk.
Dubya.. is that you? Fine mess this is no?
Screw your beliefs or those of your constituents, Congress-people. Don't you realize how much MONEY is being lost?!
Cynical Yes writes:
Main Street is fine.!
Revisit this comment six months down the road.
unirealist writes:
I'm a bit surprised that Karl Denninger (at Market-Ticker) believes Paulson/Bernanke are crying wolf.
I don't think they are. While the bail-out bill is so wrong-headed that it's an embarrassment to even have to oppose it, it's hard to imagine any possible ending to what is happening other than a financial apocalypse.
unirealist | 09.30.08 - 3:31 am | #
I don't really care. These are the same people who told you at the top "this is contained" and are now after dozens of firms went under and the market has dropped 20% that we are fucked. Reminds me of a sell-side analyst. Either they are incompetent or corrupt.
What is going to happen will happen. In times of crisis, "cash is king". There is not reason to throw so much money at something we are unsure of because uncredible people say its going to happen.
The problem is people are terrible investors and are going to hold the bag again by listening to someone telling them to buy high and sell low.
The American economy is not wall street. It'll survive even if the DOW halves.
I don't think so. The US economy has changed a great deal for the worse over the past few decades. It is no longer an engine of production. It is an engine of consumption.
Once we abandoned the cornerstone of our currency (gold/silver) our culture no longer knew how to value anything. Our ancestors would puke if they saw what the US has become.
The American economy is not wall street. It'll survive even if the DOW halves.
It used to be not wall street. Offshoring everything except the "service sector" has taken care of that. HELOCs have kept the consumption house of cards 2gether since 2001 and now that well is pulling up mud.
unirealist writes:
The American economy is not wall street. It'll survive even if the DOW halves.
I don't think so. The US economy has changed a great deal for the worse over the past few decades. It is no longer an engine of production. It is an engine of consumption.
You may be overlooking what the economy is not. It is not static. From need will come the adaptation and adjustment. We will need to learn to speak in different terms, perhaps drifting away from the unsustainable concept of growth.
Since pensions are most often 401k, most Americans are going to realize that they do partially live on Wall St. The group that gets 401k statements on nov 1 will definitely vote in this election,
I think technology more than anything will help us get through this. But our standard of living is going to be reduced significantly.
Mel writes:
Since pensions are most often 401k, most Americans are going to realize that they do partially live on Wall St. The group that gets 401k statements on nov 1 will definitely vote in this election,
PIMCO and gross i believe hold many of those funds.
Main Street is fine.!
Revisit this comment six months down the road.
And what is all this talk of "Main Street"? Main Street was sold to China long ago. I demand that all future references to "Main Street" be replaced with "Wal-Mart Parking Lot". Ironically, most "Main Street"'s only still exist because the excess of the credit bubble has allowed them to be reborn as centers of sophistication and artisanal production. When everybody is an artist, who is growing the food? Oh, yeah, that's right. Megacorporations and their illegal slave labor.
No one has yet stated how, exactly, this 700 billion dollars is to help fix the economy. No one has even said that 700 billion dollars will be enough.
Right now we do not know if 700 billion is enough or even how this big sum of money can be used to save the economy. We do know that printing up this cash will seriously affect our deficit, the dollar index, treasury yields, and oil prices.
We are being sold fear and the price tag is 700 billion dollars.
I will not buy into any of this.
Volker, I put on a sock in your honor
Mr. Holiday explained it earlier, but your comment sparked my memory. Here is how the Senate gets to vote on it...
Mr. Holiday writes:
Anyway, if you're scratching your head about how the bailout legislation, which was conceived over the weekend, ends up numbered H.R. 3997 when they're already well into the 7000s with House bills already (they're numbered in order of their introduction), the answer is that they're going back to a trick we've seen them use before -- taking an old bill that has passed one House but not both, and hollowing it out and replacing that text with the new stuff.
So H.R. 3997, an old tax bill that passed the House, bounced back and forth a few times after being amended, but was never passed in the same form by both houses, which means it's still available as a legislative vehicle. That means that technically, what's under consideration in the House today is an amendment to the Senate amendment to the House amendment to the Senate amendment to H.R. 3997.
Seriously.
Why? Because pretending that the bailout package is just a new amendment (in the nature of a substitute) for what now stands as the old body of H.R. 3997 means they can get expedited consideration on the House floor, plus be protected from a Republican motion to recommit [send back to committee, essentially killing the bill].
In addition to doing this to speed the bill through with fewer chances to kill it, I think they're also doing this to obfuscate their votes. It's a lot easier to look up online who voted for "HR 3997" than it is to look up "who voted for an amendment to the senate amendment to the house amendment to the senate amendment to HR 3997."
Every Congressman already has a vote on the record for the original version of HR 3997, which was originally "The Defenders of Freedom Tax Relief Act of 2007." It's purpose was "to provide tax relief and protections for military personnel." Of course now it's being amended to be something completely different and will have a completely separate vote for the amendment. This will make it much more difficult for the average citizen to sort through all of this and determine whether their congressman voted for the bill last year as originally intended to provide tax relief to members of the military, or voted this year to pass the bailout.
Mr. Holiday | 09.29.08 - 3:22 pm |
So that's how they got around the issue, they are just revoting on an old bill with a new amendment that gutted the original bill. Reduce, Reuse, Recycle, Revote!
We will need to learn to speak in different terms, perhaps drifting away from the unsustainable concept of growth.
Comrade Volker the Viking | 09.30.08 - 3:44 am | #
Yup.
Or redefining "growth" in a manner that is economically possible and viable.
Note that this dovetails with our simultaneous need to reconfigure our energy usage and sources to get off oil addiction and to reduce CO2 emissions.
Hey mamma, there's a whole lotta reconfigurin' goin' on ....
One wonders how that FBI probe into Freddie, Fannie, AIG and Lehman is coming along... No news is good news, obviously./
Can I haz electrolytes now?
Haz shylock holiday?
There is not reason to throw so much money at something we are unsure of because uncredible people say its going to happen.
--zero beta
Don't misunderstand. I agree with you entirely. But Denninger has been way out in front of the problem for a long, long time. He knows the staggering dimensions of what's out there in the shadows.
Yet his latest post suggests that Paulson and Bernanke misled everyone on how acute the problem was.
They didn't. They just want to save the wrong people, in a way that screws the rest of us even worse.
The American economy is not wall street. It'll survive even if the DOW halves.
I don't think so. The US economy has changed a great deal for the worse over the past few decades. It is no longer an engine of production. It is an engine of consumption.
Once we abandoned the cornerstone of our currency (gold/silver) our culture no longer knew how to value anything. Our ancestors would puke if they saw what the US has become.
unirealist | 09.30.08 - 3:39 am | #
I wont argue that there aren't extremely painful changes coming for the USA but I would argue that propping up the markets with what amounts to fake money is not going to help anyone except the financial parasites currently living off the system. America is no longer a super power - you blew it. There's nothing you can do to change that now, and it's going to hurt, but that's not an excuse for bailing out the top of the country with money from everyone else. Let the correction happen and try and lessen the pain for the people who are hurting the most. Don't try to hang on to the illusion of wealth and power that has been built up over the last few decades and is now slipping away. You have another decade of being at the top of the planet monetarily and economically before your power is completely frittered away. Use that time wisely and the USA will be OK. Use it to desperately prop up empire and the system and there will be nothing but a shell left when the conversion from super power to equal partner with the world is complete
Nude writes:
Volker, I put on a sock in your honor
I sure hope a garter is involved at one point or another. Sheesh, my wife is gonna kill me!
Yet his latest post suggests that Paulson and Bernanke misled everyone on how acute the problem was.
They didn't. They just want to save the wrong people, in a way that screws the rest of us even worse.
Or ... that Paulson wanted to commit the Congress and U.S. taxpayer to his plan so as to prevent the consideration of any other plan.
I think, for Paulson, there are two sides to the "urgency" coin.
And for us as well.
Use it to desperately prop up empire and the system and there will be nothing but a shell left when the conversion from super power to equal partner with the world is complete
But Bailout is what our economy craves!
Where the hell is the world's gratitude? Where is the goodwill from decades of foreign aid and charity and world policing? If this bailout is so important to the world, then let the world bail out Wall Street.
There are worse things than being poor and broke. I started this life poor and broke. I don't mind ending it poor and broke if I'm allowed to keep some dignity and self respect. I just am tired of feeling like everybody's bitch.
If Wall Streeters had any dignity or self respect they wouldn't be asking for this money and they wouldn't accept it. They'd take their lumps like men. This could be a character building experience for so many people, if only Congress would treat them like mature adults.
Sorry Ben, you left us a republic, and we couldn't keep it. We traded liberty for security and now we have little of both.
From need will come the adaptation and adjustment. We will need to learn to speak in different terms, perhaps drifting away from the unsustainable concept of growth.
--CVV
That won't be as gentle a ride as you imply. Otherwise, yeah...
dr strangemoney writes:
But Bailout is what our economy craves!
And bailout is shall have, the bill will pass but then it is only a delaying mechanism and the trend is unmistakable.
perhaps drifting away from the unsustainable concept of growth.
Yeah! War!
But Bailout is what our economy craves!
dr strangemoney | 09.30.08 - 3:57 am | #
Economies need electrolytes!
unirealist: I didn't say it would be easy. Why would you think I meant it so?
nude: the word perigrination comes to mind, did I see it somewhere here? I mean they are just across the hall on the other side of the same building.
Anyone: Can anyone tell us exactly what the house was voting on today?
Unfortunately, it turned out that Bailout Corp employed everybody. When the stealing from taxpayers was not approved, Bailout Corp had enormous layoffs.
European indexes off only 1%
What Armageddon?
I wont argue that there aren't extremely painful changes coming for the USA but I would argue that propping up the markets with what amounts to fake money is not going to help anyone except the financial parasites currently living off the system. America is no longer a super power - you blew it. There's nothing you can do to change that now, and it's going to hurt, but that's not an excuse for bailing out the top of the country with money from everyone else. Let the correction happen and try and lessen the pain for the people who are hurting the most. Don't try to hang on to the illusion of wealth and power that has been built up over the last few decades and is now slipping away. You have another decade of being at the top of the planet monetarily and economically before your power is completely frittered away. Use that time wisely and the USA will be OK. Use it to desperately prop up empire and the system and there will be nothing but a shell left when the conversion from super power to equal partner with the world is complete
MrPeregrination | 09.30.08 - 3:55 am |
We have vast national resources, virtually unfettered freedom of movement, and we are remarkably stubborn in our resilience. Any real crisis will only serve to shake the rust off our resolve and get us back into production, even if it's only for domestic use. Don't count out the U.S.A. just yet.
dr strangemoney writes:
perhaps drifting away from the unsustainable concept of growth.
Yeah! War!
War is a racket, and when we decentralize and get closer to local everything the need for war will simply fade away. And comments like yours will increasingly be seen as thoughtless and silly.
Liberty or slavery.
that is the problem with testing the market response to something: the market knows what the men in white coats are doing, so its response is never valid.
penniless kidbuck writes:
Where the hell is the world's gratitude? Where is the goodwill from decades of foreign aid and charity and world policing? If this bailout is so important to the world, then let the world bail out Wall Street.
Let me take the role of The World.
Gratitude? You take our labor and pay us with ever worthless declining value paper? Foreign aid? Did you really think there was no quid pro quo? World policing? Looks like Rodney King to me.
You should 'bail out' of the world instead, but do kindly pay your bills first.
How's that? Was i good? Does it accurately portray the perception of the US worldwide?
you people, I swear
Gabor writes:
European indexes off only 1%
What Armageddon?
Means that a Bill will ultimately pass or they are expecting it.
And comments like yours will increasingly be seen as thoughtless and silly.
How dare you accuse my snark as thoughtless and silly. If you need it explained, war is the unsustainable concept of destruction. The opposite of the unsustainable concept of growth. Damn, this place is going yahoo in a hurry.
oops
This is the original Paulson plan. The Dem's additions were watered down to 'make sure it will work' and gain 'wide market participation' that the equity swaps are going to be very generous to the banks. Again, to encourage wide participation.
Even Krugman was against the original Paulson plan. This is basically the same plan.
That won't be as gentle a ride as you imply.
unirealist | 09.30.08 - 3:58 am | #
Certainly not. Anyone who thinks so is delusional.
One of major consequences the recession we are in and heading is the lack of $$$ for basic infrastructure maintenance and improvements. Deferred maintenance. Deferred replacement. Deferred repair.
At the same time we are looking at massive slowdowns in private commercial and res. building activities, etc. etc.
Put the two together?
I don't know.
Only 118 people online. And some of them probably just fell asleep in front of the screen.
Anyways, I fear this is not over. It is going to be a battle to the death, either for "We The People," or for The Powers That Be.
Tuesday is a new day, and these cornered animals are NOT going to give up. Not when they're so close to looting what's left of our country.
Unfortunately, we CANNOT LET UP. This thing can't pass, and they're not going to anything less than what they want, to get through. I assure you of that. They'll allow meaningless and toothless stuff in, and say it's progress, when it's still a GARBAGE DEAL.
These criminals are used to going to the mat. They have not even brought out their best stuff yet. I fear tactics pursuing capitulation are on tap for us in the coming days. It may test our very souls, and the more we try and maintain control, the more they'll try and take us down.
Our only hope is the American people see through their SHAM. And not only don't give in, but throw their attacks where it's deserved. At those who got us into this mess, and those that are trying to perpetuate it for their own motives, and not those of the citizens of this fragile Democracy.
Comrade V, I think it was drifting away that did it.
Anyway, your view is dead-on. Like I said, however, it's going to get real ugly before we are ready to accept the kind of change you anticipate.
Didn't mean it to sound snarky.
World markets going increasingly positive... bailout is imminent.
unirealist writes:
There is not reason to throw so much money at something we are unsure of because uncredible people say its going to happen.
--zero beta
Don't misunderstand. I agree with you entirely. But Denninger has been way out in front of the problem for a long, long time. He knows the staggering dimensions of what's out there in the shadows.
Yet his latest post suggests that Paulson and Bernanke misled everyone on how acute the problem was.
They didn't. They just want to save the wrong people, in a way that screws the rest of us even worse.
Yeah while I say that tongue-in-cheek, its no secret that there is a bit of an agency problem on Wall Street.
Financial intervention should not be taken care of pre-emptively - regardless of how fair a bailout proposal is. It is a bad tactic if losses are smaller than expected the money will never be returned. If losses are greater than expected we wasted the money and should have waited.
It's like paying a huge premium to buy a long-dated put option on a broad index fund tied to the economy, when you are only worried about hedging your exposure to a one of the holdings. One holding is "the destruction of paper assets" the other is "second order effects". I'd rather just buy a put on second order effects as I see them go and not pay such a rediculous premium
the citizens of this fragile Democracy.
Comrade Scared Shitless
this is a republic and not a democracy
See, we've devolved our approach to a simplistic sort of blather--war v peace, with me v against me, ad nauseum
We have forgotten how to have a conversation. This medium is a thin soup of intercourse. And most people have a fragile intellect due to not having learned to be critical thinkers. Stop yammering on and think your way through this situation.
Zero Beta writes:
Anyone catch how bailout after being uttered ad nauseum became "rescue bill".
Last week Mark Haynes on CNBC said that exact thing would happen, when he was blasting out loud, not to believe it, that it's just a BAILOUT.
unirealist: smooch
I'm probably the only asshat in all of Belgium who opened an account at Dexia yesterday! Well I have already closed it and we are talking to Deutsche Bank tomorrow. But with my luck they collapse today as well...
From need will come the adaptation and adjustment. We will need to learn to speak in different terms, perhaps drifting away from the unsustainable concept of growth.
Comrade Volker the Viking
We'll also need to learn to speak in different languages. So we can talk better with our new masters and owners.
Perhaps some Chinese, Japanese or even Arabic.
kevin de bruxelles writes:
we are talking to Deutsche Bank tomorrow.
I have it on dubious knowledge, as i cannot prove this, that the specified bank is leveraged 50:1.
Luck be with you.
Financial intervention should not be taken care of pre-emptively
That's a fresh look at this. Is it always true?
We have vast national resources, virtually unfettered freedom of movement, and we are remarkably stubborn in our resilience. Any real crisis will only serve to shake the rust off our resolve and get us back into production, even if it's only for domestic use. Don't count out the U.S.A. just yet.
Nude | 09.30.08 - 4:02 am | #
I'm certainly not counting the US out. You will always be a large economy and will continue to have a lot of clout but the days of the USA "going it alone" and dictating to the rest of the planet are over. George Bush has utterly destroyed your reputation as a country to look up to and voting him in twice ensured that your reputation can not be repaired. He also helped destroy your economy but that's been happening for some time now and can't be blamed on one person. The loss of reputation though is where a lot of these economic problems are now coming from. The USA has been faking it for years but everyone was happy to ignore that because it was expected you'd stop faking and pull out all the stops lke the USA always does. Unfortunately you elected an idiot twice instead.
Zero Beta writes:
Anyone catch how bailout after being uttered ad nauseum became "rescue bill".
Last week Mark Haynes on CNBC said that exact thing would happen, when he was blasting out loud, not to believe it, that it's just a BAILOUT
its like calling a war a "slaughter" eventually all wars become "slaughters" and when mass slaughter starts to occur its no'rmal. Unless one dare say "genocide
Financial intervention should not be taken care of pre-emptively
Not true in practise, otherwise there would not be any central banks of any kind.
Right now we do not know if 700 billion is enough or even how this big sum of money can be used to save the economy. We do know that printing up this cash will seriously affect our deficit, the dollar index, treasury yields, and oil prices.
We are being sold fear and the price tag is 700 billion dollars.
I will not buy into any of this.
ks
If you think $700B is going to be enough, I've got a bridge to sell you.
Yeah, just like their first request for Iraq war money was the last.
Multiply the $7B by 4 or 5, and you've got a better approximation of the eventual cost.
its 1:15 in the morning and there are 101 people online...
wow!
Let me take the role of The World
Good job Anonymous. Why'd we bother with 2 world wars? We should have let the Germans and the Japs keep you. I'm sure they'd have been more agreeable masters.
Sorry Ben, we were warned against foreign entanglements.
We'll also need to learn to speak in different languages. So we can talk better with our new masters and owners.
Comrade Scared Shitless
You would perhaps be one who will return to your cave and shudder at the shadows on the wall. We will, as someone thoughtful said above, have the next decade to drift along. And we have abundant natural resiuyrces. And we have a resilient population, those of us who have not succumbed to the terror of ourselves.
The world is devolving into one language. That language is the language of peace. It requires tolerance, forbearance and forgiveness. Sort of lather rinse repeat cycle of human kindness.
When we 'get' this, we will all be able to relax a bit.
Unless one of those fucking slope headed morons slip out of their cave in the middle of the night and come to my house and fuck my daughter and steal my gold and then by god I'll have to blow his face off.
Other than that, we'll be fine.
George Bush has utterly destroyed your reputation as a country to look up to and voting him in twice ensured that your reputation can not be repaired.
Mr. P, he wasn't voted in either time. In 2000 he was selected by the SCOTUS, with Sandra Day O'Conner casting the deciding vote, much to her eternal shame. In 2008 he was selected by Diebold machines.
Seriously, we never elected GWB.
EvilHenryPaulson writes:
Britain, Germany, France, Benelux (+Spain) have all had their taste...
Did you know that Stalin actually thought Benelux was a country?
Anonymous writes:
World markets going increasingly positive... bailout is imminent.
Anonymous
yes HK went from -4% to positive in the blink of an eye.
In case anyone thinks only the Americans are nuts.
http://www.techcrunch.com/wp-content/uploads/2008/09/septembermadnessb.jpg
A little dark humor....
g'nite
.......
nades writes: its 1:15 in the morning and there are 101 people online...
I remember from my 11th grade health text that if you do it before breakfast it's a sure sign of an addiction.
Sorry Ben...
unirealist writes:
George Bush has utterly destroyed your reputation as a country to look up to and voting him in twice ensured that your reputation can not be repaired.
Mr. P, he wasn't voted in either time. In 2000 he was selected by the SCOTUS, with Sandra Day O'Conner casting the deciding vote, much to her eternal shame. In 2008 he was selected by Diebold machines.
Seriously, we never elected GWB.
You think Exactly like me. Thumbs Up to your comment.
Good job Anonymous. Why'd we bother with 2 world wars? We should have let the Germans and the Japs keep you.
I'm sure they'd have been more agreeable masters.
Alas what if I AM German or Jap.
And if i were some poor third world country, your last sentence just shows that the US are my masters now instead of the German or Japs.
And the 'liberation' of Iraq would have been done even if they had no oil. And the madman who was in power never bought any US weapons to use against Iran in a previous time.
Just saying.
looks likely (based on the action of the last hour or so) that about half of this drop will be erased upon the open here.
Anyone having the courage (or big brass balls) to buy into that steamroller of a last hour yesterday will be rewarded....now getting access to a platform to sell it into is going to be pretty interesting to watch too.
Ciao
MS
and why am I up??
Sick doggie.
Ciao
MS
Mr. P, he wasn't voted in either time.
That's just not true. Every major newspaper in the country studied the Florida vote for years afterwards. No one could find anything but a clear Bush win.
Even Dan Rather prematurely calling the election for Gore couldn't change it.
I'm sorry, but the opposition put up such sorry losers against W.
Sorry Ben...
Futures are up big at this hour. Asia was down but not as much as the US. Europe appears to be doing OK. The FTSE is actually up. I'm certainly not seeing the markets panicking today from this. Is this really just because they are going to try to vote this thing in the Senate on Wednesday?
Did someone cancel Armageddon?
Did someone cancel Armageddon?
No, it was merely postponed.
Pass the HP plan, a mod, or not, what should be noted will be the absence of political motivation to get behind alternatives.
Nationalization a la Sweden, or now an idea from John Hussman, none of it seems to have any traction in legislative committee.
I'm sure CR junkies have a better take on their inaction. Or maybe I've not followed the issue closely enough. But my take is that these guys are scared stiff, and worthless.
Hussman Funds - Weekly Market Comment - You Can't Rescue the Financial System If You Can't Read a Balance Sheet - September 29, 2008
"The only way that buying the questionable assets will increase capital on the liability side of the balance sheet is if the Treasury overpays for them.
A better approach would be for the government to provide capital directly, in the form of a super-bond, in an amount no greater than the debt to bondholders. The super-bond would be subordinate to customer liabilities, so it could be counted as capital for the purpose of capital requirements, and would be seen by customers as a legitimate cushion of protection. However, in the event of bankruptcy, it would have a senior claim in front of both stockholders and even senior bondholders. Do that, and you've actually got a mechanism to protect the financial system while at the same time protecting customers and taxpayers. Ideally, the super-bond accrues a relatively high rate of interest so that financials have an incentive to shift to private financing as soon as possible, but you would also defer the interest until the bank meets a minimal level of profitability to make sure that the financing doesn't strain the institution's liquidity."
Financial intervention should not be taken care of pre-emptively
That's a fresh look at this. Is it always true?
I think so. It allows you to, when the smoke clears, sort out the winners and losers and assess the situation. then decide where to allocate capital that you could better model some sort of return on.
you're overpaying for uncertainty in a period of high volatility - some of which won't seem as bad when it happens.
The Hang Seng and Strait Times actually closed up. Intervention or bargain hunting? The global panic case is going to get a bit of cold water thrown on it this morning if the US futures hold up.
I have to admit these numbers are already increasing my more than healthy cynicism regarding the "immediate need" for the bailout for the reasons stated.
Financial intervention should not be taken care of pre-emptively
Not true in practise, otherwise there would not be any central banks of any kind.
Who said Central Banks should act preemptively?
While its true that many do, all that does is basically make your Central Bank one big trader or money manager.
Tools like a discount window are great because they are not preemptive moves rather reactive and more a part of design than anything.
The American economy is not wall street. It'll survive even if the DOW halves. What wont survive are the parasites in investment banks etc who have been creaming it in for the last decade without giving anything back. There's a world of pain coming now, no matter what happens. Save the money for people who deserve it - not the parasites.
Mr. Peregrination
Well, actually, you've got it backwards my friend. If the Dow halves, investment bankers will survie and the American economy won't!! Wake the fu-- up!!
Long time lurker (2years)
You guys are great, so normally don't need ot say anything. However why is nobody is complaining about the Citi/Wachovia deal ..did I miss it somthing ... FDIC/US Treasury give out a 270BB guarantee ..no oversight .. no transparency .. no at market pricing ? Isn't this the Paulson plan inacted ?
SS writes:
The Hang Seng and Strait Times actually closed up. Intervention or bargain hunting? The global panic case is going to get a bit of cold water thrown on it this morning if the US futures hold up.
I have to admit these numbers are already increasing my more than healthy cynicism regarding the "immediate need" for the bailout for the reasons stated.
I read it as they think that a bailout is unavoidable and the traders position themselves for the upswing.
But of course you may be right.
Well, actually, you've got it backwards my friend. If the Dow halves, investment bankers will survie and the American economy won't!! Wake the fu-- up!!
newyorkdo
Are you in any way involved with the financial or real estate industries?
I read it as they think that a bailout is unavoidable and the traders position themselves for the upswing.
Traders may be shooting themselves in the foot then. If the politicians don't see a real crisis right before the election their natural tendency will be to punt an issue until after the election. This whole thing has been sold on the "immediate danger" argument. If that doesn't appear to be the case...
Of course, my track record is mixed on these things overall -- I thought the bill would pass for sure -- so I'm just putting it out there.
Overnight markets are thinly traded and easily manipulated. Just set the computer for executing orders right before or right after NY or London open, pull the trigger on some front running trades and voila.
Tomorrow? Who knows. I ain't in this market. But if I had to guess, I'd guess that the close on the Dow at under 10,500, coupled with a riptide action on the S&P Monday, means we're at one of the vaunted and much anticipated inflection points.
Next stop? 9,500, or so say the gray beards.
Zero Beta writes:
Financial intervention should not be taken care of pre-emptively
Not true in practise, otherwise there would not be any central banks of any kind.
Who said Central Banks should act preemptively?
While its true that many do, all that does is basically make your Central Bank one big trader or money manager.
Tools like a discount window are great because they are not preemptive moves rather reactive and more a part of design than anything.
I have to agreed they should not.
Having said that, CBs will always try to 'salvage' a situation and will act.
You describe a benign CB, but in reality CBs are like sharks(not the whale shark though), it would be good if they really only ate overgrown vegetation but alas that is not in their nature.
SS writes:
If the politicians don't see a real crisis right before the election their natural tendency will be to punt an issue until after the election.
Alas if only the current crop of politicians see it this way, both presidential candidates are for it vehemently judging by the rhetoric that is spewed forth.
I always thought the plan will pass although it did not this time.
I am still sticking to my original view that they will pass a plan eventually.
Comrade scared shitless,
only in the run-of-the-mill retail investor way.
Attention board: The hedge fund Paulson & Co. made 3.7 billion dollars last year betting against this market. All of you here hoping that "wall street" will get it just desserts don't understand how the financial world and economy works. You can destroy 1.1 trillion dollars of net economic worth, but that doesn't mean you're going to destroy the trader/players. if they're short, they win and you lose!! Kapisch???
You can destroy 1.1 trillion dollars of net economic worth, but that doesn't mean you're going to destroy the trader/players. if they're short, they win and you lose!! Kapisch???
newyorkdog | 09.30.08 - 5:02 am | #
bee in your bonnet ?
Doug Watts, thrip:
But what he says does make a little sense.
The people who main st. wants to punish are already out of the US in their safe havens.
At least that's my take. But again what do i know.
Congress in on break until thursday for the Jewish New Year according to CNBC
Attention board: The hedge fund Paulson & Co. made 3.7 billion dollars last year betting against this market. All of you here hoping that "wall street" will get it just desserts don't understand how the financial world and economy works. You can destroy 1.1 trillion dollars of net economic worth, but that doesn't mean you're going to destroy the trader/players. if they're short, they win and you lose!! Kapisch???
newyorkdog
Sounds like someone was on the wrong end of an alligator spread, whatever that is.
Someone asked why isn't the world bailing us out?
They are.
Any other country in our situation would long ago have been Argentina.
The fact that we still have a currency and economy to discuss is precisely because the rest of the world has had an interest in not seeing the dollar go to zero, which they've expressed by continuing to buy dollar-denominated Treasuries despite all that's wrong.
Andrew Foland :
Very True.
That's why i find it perplexing as to why anyone would suggest that China or any other nation which holds trillions in US securities will suddenly dump them to 'hurt' the US.
In reality they would be destroying their avenues of growth and it would benefit Neither party if they were to disrupt this balance as it is now.
Having said that of course, the current system is teetering on the brink, it would be interesting to see how this would be resolved.
The HP plan is ill-begotten and they can tinker all they want, it's still of, by and for the financial elite.
And all it's doing is shoveling around the toxic crap, requiring the taxpayer over-pay to pretty up their balance sheets, w/o addressing the real solvency issue.
If they were concerned about forming national policy to address that, congress would start from a clean sheet of paper.
Example: Walter Bagehot would relieve the banksters of their capital jones but make them pay. All the while protecting the provider:
Again,
404 Not Found
wmc080929.htm
GS pays a penalty when Warren Buffet cuts a deal. Congress can demand the same of all of them.
On the most crucial piece of business before the country, why oh why cannot congress originate legislation?
Sorry, that's John Hussman, but it reminds me of Bagehot rigor.
And if it's not enough, well via con dios, taxpayer is first in line.
via naked capitalism:
"We'll see if the academic community which has been so vociferous in its criticisms can also make constructive proposals (It doesn't have to have all the details in place, just remember 3 goals that can be reduced to soundbites for public consumption: save the financial system, punish Wall St., and cost less than $700 bil)."
An Assessment of Bailout Bill Options from a Former Congressional Staffer « naked capitalism
Not only does the dollars reserve currency get us a lot of "respect" and support, having the dominate military in the world gets us additional "respect".
Right, if we were any other country we would be a basket case (Argentina). Our trade deficit alone would have sunk the US currency.
So we are living on borrowed time and money. And we are deleveraging. So no matter what there are major changes coming, my only hope is that the changes can be managed to control the coming pain.
"We will need to learn to speak in different terms, perhaps drifting away from the unsustainable concept of growth."
Counting consumption as a measure of production has no place in the new order. The "consumer-driven economy" notion will be studied, in dissertations on abnormal psychology.
Dangerous. If the Senate changes or alters the bill in any way, it will violate Constitutional rules on spending bills having to originate in the House.
I'm not sure adding a constitutional crisis to a financial one is a bright move.
They could pass the bill unaltered, but that would be essentially giving the House the finger.
A better approach would be to negotiate changes with the House and Paulson, and pass the revised bill in the House first.
Also I would caution you, CR, that this has been some of the worst political reporting I've ever seen in the mainstream press. Last Friday Fox news and some other media outlets were breaking rumors and untruths, such as "Deal expected by midnight Friday." If you blindly post this crap, you are going to undermine the credibility of your own site. Go for quality over quantity.
This crisis has been a new low for media accuracy and journalistic standards.
There are a couple of media sources I still trust - TheHill.com has been very solid and the Washington Post tends to get the story right over breaking it first.
I would not characterize Bloomberg as reliable anymore.
Shaun writes: ... why is nobody is complaining about the Citi/Wachovia deal ..did I miss it somthing ... FDIC/US Treasury give out a 270BB guarantee ..no oversight .. no transparency .. no at market pricing?
Quit dwelling on the negative. Sheila has made it clear that there will be no more bank failures. From here on out, there will only be bank purchases. If you are going to keep insisting that the details of where the purchasing banks get their money are important, you will never be a happy team player.
Sorry Ben...
"A better approach would be to negotiate changes with the House and Paulson, and pass the revised bill in the House first."
Tell Hank to wait outside. W ain't going to veto shit. The people have spoken.
You got a bazooka? But we still have the ammo. And don't make us get out the guillotine.
W ain't going to veto shit. The people have spoken.
But...W told me he had a mandate.
Sorry Ben...
Hmmm, the sun rose, the trains ran, newspapers got printed, the cafe took my pound coin for a croissant, the markets are kinda flat-tish. Is this Armageddon? Did the sucker go down yet? I was expecting worse I have to admit. So a few bankers lose their fortunes. I suspect the rest of us will carry on.
When I warned of an ugly bearish flag forming on the futures 6 hours ago - I didn't really believe that it would keep forming into a full-fledged bear flag (futures now up 3%). This is terrible for the market! It's another A-B=C-D down move inside in already ongoing A-B=C-D move. This projects, conservatively, to the low 1000s on the S&P (prev. target was 1075). And it's another opportunity for people to short the market.
Although I am convinced TA is 100% self-fulfilling voodoo, can you explain?
Wall St. acted like a spoiled brat who didn't get its new toy yesterday.
It threw a temper tantrum on the floor of the New York Stock Exchange.
Now, as it lays spent on the floor, looking over the wreckage, the spoiled
brat sees that his outburst convinced no one. That he must clean up his room and sheepishly be satisfied with the toys he already had.
yogi,
Here's a page with a <a href="http://chart-patterns.netfirms.com/bearflag.htm>explanation and example of a bearish flag (chart).
Now compare that with the <a href="http://quotes.ino.com/chart/?s=CME_ES.Z08.E&t=f>E-mini S&P futures.
A bearish flag is basically a downmove in price (nearly vertical) that terminates with a diagonal line about 30-45 degree angle forming off it. Then you can project price target from the peak of the "flag" (diagonal) by adding the length of the "poll" (vertical price decline). So even if I conservatively use the poll length of 110 S&P point, and the flag stops at 1150 - thats a projection of 1040 S&P. But if I use the 1260 for the poll it projects to 1000 SPX.
Hope that makes your day
I have to get ready for work now.
The vote in the House yesterday was essentially a vote of "no confidence" in Henry Paulson.
And it was deserved, as the oversight board was toothless; a charade masquerading as a bad joke. Even proposing to put yourself above the law (section 8 non-judicial review clause) should be immediate grounds for dismissal.
The only way anything useful is going to pass is if Congress steps up and takes ownership, and puts Paulson in his place, which is serving the people.
If he cannot accept that we live in a constitutional republic, he should resign immediately, and let the legislative process work as the founders designed it.
We're talking about the United States of America. The greatest asset of the USA is its human capital.
So what if the current corporations and banks of Wall Street fall ? Are we saying thats the end of America as we know it ? Corporations and bankers come and go, the bad and greedy deserve an early demise, they brought it on themselves. They have earned it. Do not deny them their just and well deserved rewards.
Why keep the terminally ill on tax payer funded life support ? They are nothing more than a parasitic infestation on American tax payers.
New and better corporations and banks will replace them. America is NOT bankrupt of intelligence and capability.
{From open secrets.org}
Financial sector contributions to Congress, 1989-2008
Office\t
FirstLastPState\t
GrandTotal\t
\tHillary Clinton (D-NY) \t
$31,040,714\t
\tBarack Obama (D) \t
$27,942,613\t
\tJohn McCain (R)\t
$26,593,411\t
\tJohn Kerry (D-Mass) \t
$19,094,828\t
\tChristopher J. Dodd (D-Conn) \t
$13,204,556\t
\tCharles E. Schumer (D-NY) \t
$12,795,946
\tJoe Lieberman (I-Conn) \t
$9,972,924\t
\tArlen Specter (R-Pa) \t
$5,652,910\t
\tLamar Alexander (R-Tenn) \t
$4,678,993\t
\tKay Bailey Hutchison (R-Texas)\t
$4,669,788\t
\tMax Baucus (D-Mont) \t
$4,491,183\t
\tMitch McConnell (R-Ky) \t
$4,437,474\t
\tRichard C. Shelby (R-Ala) \t
$4,360,242\t
\tCharles B. Rangel (D-NY) \t
$4,117,402\t
\tEvan Bayh (D-Ind) \t
$3,974,396\t
\tJohn Cornyn (R-Texas) \t
$3,957,686\t
Robert Menendez (D-NJ) \t
$3,898,822\t
\tNorm Coleman (R-Minn) \t
$3,864,281\t
\tJoseph R. Biden Jr. (D-Del) \t
$3,714,310\t
\tJon L. Kyl (R-Ariz) \t
$3,700,309\t
\tSpencer Bachus (R-Ala) \t
$3,699,199\t
\tDianne Feinstein (D-Calif) \t
$3,570,557
Thanks mouse. Don't trust charts but I always enjoy your posts.
No robbing of the taxapyer or
power grabs by the executive branch .
The Big Picture
"Tell Hank to wait outside. W ain't going to veto shit. The people have spoken."
Central Scrutinizer,
I agree. And I can't understand why there isn't a groundswell for both Paulson and Bernanke to resign. They have been wrong at every turn.
Keep the faxing and calling up - they are listening but they still think they know better. The next two days are critical.
Tell Congress NO NO NO.
SR
Currently, from opensecrets.org, a non-partison watchdog
"On average, House members who voted for the Emergency Economic Stabilization Act have received 51 percent more money from the finance sector since 1989 than those who opposed it."
However why is nobody is complaining about the Citi/Wachovia deal ..did I miss it somthing ... FDIC/US Treasury give out a 270BB guarantee ..no oversight .. no transparency .. no at market pricing ? Isn't this the Paulson plan inacted ?
FDIC was already on the hook for every penny of the 270 BB they "guaranteed". No loss there. If the losses eventually exceed the 42 billion limit they'll still end up paying 42 billion less than if they hadn't made the deal. An excellent move on their part.
Hmm, think CNBC will announce Yogi's little tidbit about political donations?
No, but Bloomberg let slip the Paulson 100 mil. tax exemption yesterday.
America's No. 1 Export: Debt
America's No. 1 Export: Debt - TIME
Japan and Germany make cars. Saudi Arabia pumps oil. China supplies the world with socks and toys and flat-screen TVs. What does the United States produce? Lots of stuff, but in recent years this country's No. 1 export--by far--has been debt.
One and one makes eleven!!
Two and two makes twenty-two!!
Won't somebody kindly tell me,
What's the gubmint tryin' to do?
Hankie's much to tricky
For a chump like me to use
You take that sub-committee seriously, boy
You could get a seizure from the evenin' news
Millions 'n millions of dollars...
Much as he might need...
He could open up a chain of motels, people
On the highway, yes indeed!
Quadrafonic desperation!
Just might be some confinement loaf all up under your bed
If you just might pinch a little loaf in your slumber
The fbi gonna get your number
The fbi
Gonna get your number
The fbi
Gonna get your number
Obama can guarantee victory by getting angry at Paulson and telling him hands off the purse, bailout or no bailout. How clear can it be?
Fair Point Fair Economist
Except many WB bondholders get to skate away under the Citi umbrella, so FDIC over guarantees by approx 200BB..ish [don't know how much of WB's liabilities remain with brokerage which Citi didn't buy].
Let the financial system collapse. If the issue is credit to main st. then the US has in place a multiple location banking system currently in place--its called the US Post Offices. They handle money. They are located in every community in US. They can with staffing increase perform banking services in an emergency. Great start-up. Will show the private banks that there is an alternative to bankrupt banks. The US should loan the 700 Bil directly through the post offices and small local/community banks.
jmho
Yep -start it up again:
Congress.org - Get informed, get involved --- call / write / everyone (national down to local ) in these next few the highest stakes are on the line in the high stakes game of chicken.
It is really important we tell our friends and family not just to support the no-bailout effort, but to not to be fearful. The market might go down more -- and people might be scared enough to think whatever rope Paulson throws is good enough - let them know it's the hanging rope and why.
Some questions for your Congress members:
Ask them what kind of lending we think these banks will do when they get this infusion (to creditworthy borrowers? lending that will ensure their continued financial health?? where's that guarantee?) i.e. - what are they going to do with our money? They and the media have utterly failed to make this clear.
As them why this bailout will be any better for the taxpayer than a Reconstruction Finance Corp or RTC-type solution. Again, failure of clarity (and questioning on the press's part)
Ask them why, if this is such a desperate time, Paulson used the moment for a traitorous power grab ---and why we're still letting him grab power under the "revised" bill.
Ask them why Paulson's hurry-up used car salesman tactics are necessary. They waited this long to address the problem -- what is our "imminent" threat to our economy here and what analysis/evidence do they have to back up such a claim of imminent threat?
Ask them if they are serious about ceo pay, where is the strong clawback provisions?
And if we must remove this garbage, ask them why we can't get the same shrewd deal as buffett if we are going to be in the bailout biz.
If the crisis is so bad, why not nationalize?
to: kevin de Bruxelles:
I suspect you won't have to worry about Deutsche Bank; from what I am hearing in So Cal, they are the only bank getting their act together and aggressively selling off swiftly declining REO assets. If I were in Europe, I'd certainly be considering them.
Good Luck!
yogi writes:
Obama can guarantee victory by getting angry at Paulson and telling him hands off the purse, bailout or no bailout. How clear can it be?
Actually his base isn't all against it
Daily Kos: State of the Nation
1665 comments there too.
Can somebody explain why Paulson hasn't offered to resign? He could make a dignified speech that "personalities should not be the issue in this time of crisis" blah, blah, blah. There must be some quasi-respectable figurehead who could be persuaded to try to make this look like the right thing to do.
"One of major consequences the recession we are in and heading is the lack of $$$ for basic infrastructure maintenance and improvements. Deferred maintenance. Deferred replacement. Deferred repair....Put the two together? I don't know"
Either do I, but humor me with this scenario:
We have an epidemic of huge interstate bridges expending intercoastal waterways/railroads or other interstates suddenly collapsing and killing soccor mom's and their cute little boys and girls.(It just happened in MN.)
Around here we have many such high rise bridges over waterways.
Aside from the bloody triage scenes and the calls for name calling that will be flowing on you-tube, the reality is that there will be no road/bridge. How that will effect commerce will not be pretty.
Now reminde me again why we continue to pay state and fed taxes and elect these worthless- suit&tie- six- figure income morons time and time again...?
Oh, btw-Kramer says it's the PERFECT time to buy! Don't delay.
The base is shifting, and the undecideds still hold sway. Bipartisan resistance to bipartisan bullshit bailout.
yogi writes:
The base is shifting, and the undecideds still hold sway. Bipartisan resistance to bipartisan bullshit bailout.
I'd like to believe that, do you have any latest polls?
My working class Main Street life was crappy yesterday.
My working class Main Street life will be slightly crappier today.
A lot of very comfortable people will panic. I will enjoy the schadenfreude for a little bit but still go back to work doing my crappy job.
In 10 years Wall Street will be comfortable and bloated again, and my life will be slightly less crappy.
FIN
See, it's not the end of the world. This was a replay of the Iraq War scam except this time people called it out. With the equity market stabalizing, I hope the congress sees this bill was not necessary.
Hmmm... will McCain and Obama cast any votes in the Senate on this?
geegee writes:
See, it's not the end of the world. This was a replay of the Iraq War scam except this time people called it out. With the equity market stabalizing, I hope the congress sees this bill was not necessary.
It's not the equity markets that they are taking the cues from.
anonymous writes:
Hmmm... will McCain and Obama cast any votes in the Senate on this?
They should because they are both for it.
A lot of very comfortable people will panic.
Paulson better hope so. Because he and Buffett promised a historic meltdown, and so far things look hard but not terrible.
If the markets end up today, then NFW does congress want to pass this legislative beast.
Sounds like Hank is getting a bit worn down - From Bloomberg:
The past 10 days of talks between the White House and Capitol Hill are testing the limits of Paulson's endurance to work weekends and nights, which staffers have characterized as relentless. The marathon may be starting to take its toll.
During a negotiating session that extended into the evening on Sept. 28 at the Capitol, Paulson at one point leaned back in his chair and closed his eyes, sparking worries that he might need a doctor. According to a person familiar with the deliberations, it wasn't a health crisis, just fatigue.
Look...it's time to root out the greed again. It's been 80 years since the last time it happened. Wall Street needs to pay for the 20, 30, 40x leveraged-bet that they made on risky mortgage assets, which used to be limited to 12.8x. The bail out is for investment banks only. Paulson is the former CEO of an investment bank. He will save his own first. It's time to erase Goldman Sachs. Yes, the investment banks manage a lot of pensions, but pensions are risk-takers just like anyone else in the stock market. Anyone who's in the stock market for anything is taking a risk of losing everything. Even money market accounts aren't immune to risk. Sell now and buy back in when the investment banks have fallen. Oh, and instead of 700 billion for investment banks, perhaps the government should spread around 10-20% debt forgiveness on all mortgages.
The interbank lending markets have gone ballistic overnight. Fed funds is trading at 30% in Europe, one week funding is 9%, one month 8%. If this kind of severe distress continues much longer, October will make September look tame on the collapsing financial institutions front.
Maybe if we go into Depression Part 2 all the illegals would go home!
Turbo writes:
The interbank lending markets have gone ballistic overnight. Fed funds is trading at 30% in Europe, one week funding is 9%, one month 8%. If this kind of severe distress continues much longer, October will make September look tame on the collapsing financial institutions front.
I heard as much, there will be true carnage if nothing is done. But what will they do and will it be enough, we shall see.
Keep calling:
Congress.org - Get informed, get involved
The entire bill (as evidenced by that SIFMA conference call)reeks of effort to get the financial industry to buy in.
Think about it: If we have to court buy-in from financial sector, they are most assuredly not desperate for our help.
Wake up, take a deep breath, repeat mantra: Fools Rush In
Congress.org - Get informed, get involved
I thought I read something last night about Bush speaking this morning at 7:30. Anyone know about that or did I get it wrong?
SS writes:
I thought I read something last night about Bush speaking this morning at 7:30. Anyone know about that or did I get it wrong?
Maybe he overslept.
Anon, please provide evidence/analysis of alleged "true carnage"
I think bush will speak at 8:45
i hope CR will put up a topic for it.
Alo writes:
Anon, please provide evidence/analysis of alleged "true carnage"
It has not happened yet and i can't recall ever markets not lending at all. So i guess we'll see it when we see it.
Much depends if this bill is passed or not, either way we will know soon enough.
Suggested guidelines for commenters here - and in congress
The more hysterical the description of market damage, the more evidence must be offered to support that hysterical projection.
Jeez...
The ISEF Index of financial shares surged as much as 25 percent, and was up 14 percent at 10:15 a.m. in Dublin, as Anglo Irish Bank jumped as much as 49 percent. Ireland's government said today it will guarantee all deposits, covered bonds, senior debt and dated subordinated debt of four publicly traded banks and two building societies.
The government was guaranteeing liabilities of about 400 billion euros ($575 billion), Finance Minister Brian Lenihan said today at a news conference in Dublin. The Irish economy is worth about 190 billion euros
How are they going to pay off on that one?
Alo writes:
Suggested guidelines for commenters here - and in congress
The more hysterical the description of market damage, the more evidence must be offered to support that hysterical projection.
The evidence is in the money markets i guess, the effect will not be immediate of course but will take time to reach most of the public.
"How are they going to pay off on that one?"
50:1 Leverage, of course.
Ah, so the vote didn't go the way they want, so we just basically suspect those annoying rules of democracy and pass it anyway. If the Senate doesn't pass this, will it just magically become law anyway thanks to a few words spoken by The Decider with King Henry Paulson's hand up the puppet's rear?
What a joke, but it is good to know how the system works...
How are they going to pay off on that one?
They have central banks too and print more money it will.
Paulson need to take a hike -
As Ron Paul says, they have the same people that created the problem trying to solve it...The Fed and Paulson...and they are trying to solve a debt bubble by creating more debt.
that irish story is nuts. How many people there? they have guaranteed $143k per 4m Irish residents, or over $300k per Irish taxpayer.
unbelievable, and impossible to actually do unless you never plan to pay on all guarantees.
Chuck- We can only hope that the illegals will return home. God knows that they have foreclosed on 10s of thousands of homes in California that were sold to them on stated income and no social security numbers. Just look at the worst states for foreclosures...California, Texas, Florida, Arizona, Nevada...all of which harbor millions of illegals. I love how the liberals blame the Republicans for this mess...but the Republican in power have been as fiscally liberal as any Democrat has ever been. He signed everything they wanted...social programs, entitlements. He pushed for "fair housing" to eliminate down payments for homes. Of course people bought homes that they couldn't afford, because IT WAS ALLOWED. The Democrats and Republicans are both to blame...Republicans more so for abandoning their conservative roots and letting the libs loot the country.
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The Democrats and Republicans are both to blame...Republicans more so for abandoning their conservative roots and letting the libs loot the country.
Let this bear mute witness to how effectively the banksters have convinced the American people to attack one-another by inciting racism and false division. If you think like this, you are a sucker.
They trying to push the idea that the American people don't understand the consequences.
What about the over 100 economists that signed a letter and sent it to Bush explain why they are against this bill,including a few Nobel Prize winners?
That seems to have been buried.
.but the Republican in power have been as fiscally liberal as any Democrat has ever been.
DK | 09.30.08 - 8:11 am | #
I don't really think you can argue that George Bush is liberal (fiscally or otherwise) - I personally wouldn't try and argue he is conservative either. He's simply a crook who found himself in a position of unfettered power. He did what comes naturally to thieves,thugs and crooks. He lied, cheated, stole and abused the system in every way he was allowed (and both parties allowed him). The man should never have been given power over his pets let alone the population of the most powerful (soon to be less so) nation in the world. You can argue whether he was voted in or not (I have my own opinion - you will surely have yours) but the fact will always remain that he was allowed to act like a thuggish dictator by virtually every member of your political system, liberal or conservative.
Ed McMahon voiceover:
"MrWibble, you are CORRECT, sir."
Please note that Representative Tom Davis from Virginia voted yes. I had called his office and been told that he opposed the bill.
I guess he opposed it until he did not oppose it.
He will be hearing from me today.
The evidence is in the money markets i guess, the effect will not be immediate of course but will take time to reach most of the public.
Anonymous | 09.30.08 - 8:07 am
And how would rushing through with this 'plan' solve the money market situation (with anything more than a frayed, fleeting bandaid?). And what impact will the public suffer?
Just listening to Roubini on Bloomberg suggesting we guarantee deposits over 100 thou while we decide what banks will survive (and make those, and only those, the banks we recapitalize). Now that sounds more like a plan...
Things have to be done, but it is critical we do the right things. Falling into the Bush admin. lame duck trap is not one of them. This bill was not wise, and was not written to benefit taxpayers on "main street", and it will not solve the problems that need solving.
And if not passing it will harm main street, as the politicos and pundits suddenly are blabbering - then cough up the evidence to show that is the case or STFU with the hysterical babble.
/bile
I just hit my representative with I'm going to volunteer and donate to your opponent letter. It probably won't make a difference but its out there now.
personally I think capitalism should be given a chance to come up with a solution to the credit market cash crunch that is supposedly going to destroy main street.
Banks may not trust each other (and whose fault is that?) but they are still giving out housing loans, and business loans, you just have to have your ducks in a row.. go into your local branch, are the loan officers sitting there with nothing to do? no, will be happy to talk to you if you can really show that you're going to pay your loan back.
Sovereign Bancorp booted its CEO.
They trying to push the idea that the American people don't understand the consequences.
What about the over 100 economists that signed a letter and sent it to Bush explain why they are against this bill,including a few Nobel Prize winners?
Obviously, Hank is smarter than those Nobel Prize types in their ivory towers. ::eyeroll::
"According to a person familiar with the deliberations, it wasn't a health crisis, just fatigue.
Or a sympathy ploy?
I wouldn't put anything past our 100 million dollar civil servant.
Has Bush declared martial law yet?
where is the boy king?
everyone must be exhausted and out of quips.
Is he wishing Barney a happy Rosh Hashanah?
The market is up. So its not the end of the world?
He will announce the Internet will be shut down and fax transmissions are cancelled through 10/31. All phone calls will be monitored between congressional phone lines and the schmucks mucking up this "Most Excellent" bill
everyone has crisis fatigue?
lower new york feels like a sunday AM on jewish holidays, I doubt anything much is going to happen financially over the next two days.
If the internet shuts for an hour the panic will be... interesting.
Dum de dum.
My Google ads @ CR:
"Is your bank in trouble?
Free list of banks doomed to fail. The banks and brokers X list. Free"
followed up directly by:
"Banking jobs in Australia
Challenging jobs in top banks await you,
Apply now at.."
Challenging indeed!
How, exactly, is the Senate going to vote on an appropriations bill tha failed in the house? Consitutional violation, isn't it?
The Senate uses the term "appropriations" to mean "general" spending bills; here, they are proceeding on the basis that this is an "emergency" bill that just happens to involve spending. While it's six in one hand and half a dozen in the other, there is nothing unconstitutional about this.
Bush is going to whip up more fear -- rather than the confident resolve we desperately need -- you can be sure of it.
He will continue the extortion scheme. He will warn of future losses. But no evidence that his rush job solution is necesary or will be effective.
The only thing we have to fear is Bush himself.
According to a person familiar with the deliberations, it wasn't a health crisis, just fatigue.
Headline: "Christian scientist treasury seretary succumbing to untreated heart condition during tense negotiations --- everyone panic now"
Seems unlikely -- thus, they would report this no matter what.
Forbes says we have to do it..
Well that convinces me!LOL
This is a classic treasury raid by an outgoing leadership. Obama guard the mint.
DK - Of course people bought homes that they couldn't afford, because IT WAS ALLOWED.
Wow, my BS meter broke on that one.
Realtors and Brokers have always sold the most they could at the highest price they could to maximize their own profit. Basic good old greed.
But Underwriters and Appraisers used to counter them. And Regulators and Auditors used to provide oversight. But in this Bush Home Ownership period, the Underwriters and the Appraisers were purposefully diminished. Oversight was scuttled. And the crap mortgages were passed like hot potatoes to the far flung investors who too greedy to question why they were able to make so much profit so easily.
This is what the NeoCon view of business is all about. Debt doesn't matter anymore. Bullshit!
Jos Lombard wrote, Think of it this way perhaps....after the Depression, the seed was planted for the rise of the strongest nation on earth. It was a cleansing. It was similar to throwing up after you drank to much. Wall Street was drunk.
Uh, I think a lot of it has to do with WWII, which destroyed a lot of other countries.
DK writes: We can only hope that the illegals will return home. God knows that they have foreclosed on 10s of thousands of homes in California that were sold to them on stated income and no social security numbers. Just look at the worst states for foreclosures...California, Texas, Florida, Arizona, Nevada...all of which harbor millions of illegals.
DK: A fine mixture of racism and ignorance. It would be nice if you had any evidence supporting your contention. A handful of sales (even a thousand, hypothetical sales) to undocumented aliens does not result in a financial crisis of this magnitude. Your sort of commentary only undermines anything of value you might have to add to this thread.
Yep , a last attempt by that lame lame duck BuschCo " little dab 'ill do you"
"This is a classic treasury raid by an outgoing leadership. Obama guard the mint."
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I've never seen so many expensive cars on craigslist new york:
classifieds - craigslist
some relative bargains as well, at least with respect to new car prices for exotics.
Increase FDIC insurance??
Do you think they really want people pulling money out of the stock market now?
The Senate will not move first. It's unconstitutional.
It doesn't appear that the media has reported the fact that Ben's helicopter dumped $630 biliion into the financial system yesterday. This is shock dotrine and fear mongering at its best. The sky is not falling and the sun will rise again tomorrow.
Thanks Concerned Observer for saying that. I live in Florida and you would not believe the foolishness that went on here (well actually, you probably would). I live in Panama City and they built high rise condo after condo. As residents we laughed wondering who in the heck could afford million dollar condos on the prevailing wage of about 8 bucks an hour in this town. Turns out, nobody. They are now being foreclosed on and most never got above 40% occupancy. These were AMERICAN developers that borrowed hundreds of millions of dollars on these boondoggles...
W about to cry.
W about to cry.
yogi | 09.30.08 - 8:51 am | #
Good, he ought to. When he's done crying here he ought to cry at the Hague.
No, he'll be laughing in Paraguay.
$700 billion slapped together for 'political cover'?
Political suicide, maybe. I think we are going to see a lot of new faces in Congress - both houses - this winter.
Yep, Bush is whipping up fear - 'look what happened to your retirement accts America.' when market dropped.
Unfounded assertions about how what we buy could be worth more later.
'It'll get worse every day we wait' nonense -- as if a 700B mistake would not obliterate make it worst of all.
Congress.org - Get informed, get involved
The enemy is legislation that gets it wrong.
No, no Bush is the enemy.
Both leaders of both houses MUST be turned out.
I see the 'innuendo' posts appearing in threads here, now: "you'll lose your 401k if this giveaway is not passed, hint, hint."
So, if a giveaway passes, everybody's 401k is just fine, is that what you guys are saying? Please put it right out there in words.
And the lost 'stock market value' is due to this giveaway not being passed, huh? So you're saying that if this is passed, the stock market will be stable or go up, right?
Please put your direct words behind that promise, too.
Yogi:
Paraguay may not have an extradition treaty, but the current government is not exactly pro Bush.
I have to give Roubini due credit.
He's describing triage. Nobody else wants to hear that term, much less perform the actual function.
But I tend to think he is correct.
OMG, the world did not end. It's morning in America and we're all still here. Who could have known?
Still giving 7-5 that W will not expire on US soil.
All you BDS sufferers need to decide:
Is W a high functioning moron, or, is he an evil genius? Chimp or mastermind? Your posts are inconsistent. You may have noticed that this is a blog on economics and finance. Take you politics back to DU and Kos.
It would seem that politics has some influence on finance. This was a posting about the bailout vote.
YES...we need an increase in FDIC insurance. With fewer banks around, you need to have a higher limit because there won't be enough banks around to spread your cash into 100K chunks!
Kidding aside, this is exactly what I feared. That there is market manipulation even in this action and the bill will eventually pass with minor, inconsequential changes.
Even if the bailout goes forward, I doubt the funds received by banks will be used for additional lending. I believe banks will shore up their balance sheets or perhaps buy other banks. The politicians are clueless to this reality.
Also, this bailout is about the FED getting the assets they have acquired in swaps off their balance sheet.
picturerock - Is W a high functioning moron, or, is he an evil genius?
Bush is a high level moron taking direction from Grover Nordcrist and the Neocon think tanks.
FYI - I was able to get through to the desk jockey's at both of my senators this morning. They actually had time to chat... I told them this bill was bad politics and worse policy and that they would be heroes to oppose it by any means possible. More importantly I told them there are other options, better options but we won't get them unless we kill this beast first.
I was polite, prepared to talk issues with them (not hysterical) and they each gave me about 2-3 minutes. I was astonished they gave me that much time. Asked what town in state I came from & my ZIP - they already had my phone number (caller ID).
Go for it.
Contact forms for rep and senators are very slow this morning. It hasn't been like this before.
I hope that people aren't just yelling.
Here's an item to discuss in email or voice contact to elected official, the "Scandinavian model":
How Sweden Handled a Financial Crisis Without Burdening Taxpayers - NY Times
Paulson's approach is much more like the "Japanese model."
Is it possible under any circumstances to have a referendum on this and let people decide like in other countries?
What I find interesting this morning, is the stress in the system, the systemic collapse and increasing risk of meltdown -- BUT, this dramatic condition is being linked to politics and the MacBeth-like push for a bailout plan designed (once again) to goose the stock market and thus increase the compensation of fat cats that rely on the easy availability of a tsunami of option grants -- the very mechanism which will burden American taxpayers for decades! Contrast the fear mongering now to the weeks after 9/11 and the level of pro-patriotism where America wanted to unite against an enemy and work to make America stronger -- today, we have a common cause as Americans to unite against the corruption within the financial system - to unite against wall street and washington. The majority of people do not want to support financial terrorism which comes from within our government or to bailout corruption and accounting fraud on wall street!
This plan being pushed will help the terrorists make money at the taxpayer expense and taxpayers will never make a penny as they are placed in inflationary hell! The people that will make money will be buffett , gross and the CEOs that have melted our economy!
picturerock writes:
All you BDS sufferers need to decide:
Is W a high functioning moron, or, is he an evil genius? Chimp or mastermind? Your posts are inconsistent. You may have noticed that this is a blog on economics and finance. Take you politics back to DU and Kos.
Right on picturerock. As I wrote late in another string:
CR. Just read your thoughts about better commentary (way above). It would be much appreciated.
I was directed here by a regular. As a newbie, it is hard to sift through the pointless comments that are being made just to (to me) prove how smart they are, but end up being very mean spirited and ultimately useless and timewasting.
The insightful comments are both educational and provocative. These are the comments that cause me to continue reading.
I'm in Dubai and was talking to a banker this morning (Muslim holiday today). He and a New Zealander where talking about how disappointed they the people of the US didn't want to pay for the bailout. I turned around and asked why they wouldn't pull our their checkbooks and pay for it themselves. What...they didn't have a spare $700 billion to spend? I was stunned they were actually having this conversation. They countered and said they thought it would be bad in the long-term for the US to have all of these banks to go down.
I told them if you turn this down once and for all, Treasury will go back and do what it has done, bail banks out one at a time. Treasury won't back up foreign banks to take over the likes of a Wachovia, since they won't get the same guarentees a Citigroup would. So, we'll end up with a few (or maybe one) superbank, with unmatched economies of scale.
Oregon Rep Peter DeFazio (D) says that we can fix this without spending a trillion dollars of our kids money:
What happened? And what's next? | Marketplace From American Public Media
He's working with a former FDIC chair, which gives him some credibility.
Check it out - pass it on.
Please call or fax your Senator NOW with your inputs. Mish has a list of phone and fax numbers at his blog linked below
Mish's Global etc.
Best of luck to all.
the precedent dates to 1982. tefra (tax bill) came from senate not house, but courts rejected challenge (all revenue bills supposed to originate in house) for lack of jurisdiction.
its called the "political question doctrine"
Huff, the reality is there will be no bailout, if the bill
bears any reemblence the Paulson plan. Its the inevitable and something the msm just can't comprehend.
i think there is a politically acceptable solution. buy the homes out of foreclosure for the principal balance of the loan. rent the homes out and sell them over the next decade.
everyone wins and loses something. wall street gets rid of the toxic loans but loses the interest income.
the owner still has a place to live but loses the downpayment if any along with any equity if any.
local governments can count on the federal government to keep paying the property taxes on time so the schools don't close up.
Many people today are probable wondering what the bail out means for main stream Americans and what is the bail out really about. For those who think the bail out is ONLY about Wall St big fish.
Let me share a little light on the subject. Let's start bu analyzing the chain of events.
Financial Services Modernization Act of 1999 The proposed Financial Services Modernization Act of 1999 would do away with restrictions on the integration of banking, insurance and stock trading imposed by the Glass-Steagall Act of 1933, one of the central pillars of Roosevelt's New Deal after the financial crisis of 1929. Under the old law, banks, brokerages and insurance companies were effectively barred from entering each others' industries, and investment banking and commercial banking were separated.
Many investment and commercial banks jump head first into the housing market lending game.
2005 JOhn Thain, Goldman Sachs CFO is appointed Chairman of the NYSE. While all the casino investment was goin on, and nobody complained. He amassed $300 million in Goldman stock. It was widely believed that Mr. Thain was also a front runner to head Citigroup. The same group that is now "saving" all the other banks. Or should I say cashing on the mistakes of other banks?One must wonder after amasing such a fortune at Goldman Sachs where these people loyalty lays.
2006 Hank Paulson, CEO of Goldman Sschs leaves the company to serve as Secretary of the treasure. After questionable investments in Patagonia, Argentina that ended up as a property of a non profit run by his son. Oh, did I forget to mention this piece of property is floating in petroleum? Opps, mis mistake.
2007, the subprime loan crisis start showing signs of the truth underlying the sourness of loans backed by air.
March we had the failure of Bear Sterns, to whom the Fed came to rescue and arranged for a purchase at 7% of their original share price.
July 2008, the Fed takes over Freddie and Fannie, the number one instruments through which the American dream of home ownership is made possible.
We had the fall of Lehman Brothers, all time number # 1 competitor of Goldman Sachs, whom the Fed of course lead by Hank Paulson allowed to fail. I wonder why....
AIG was rescued with a credit line of 85 billion dollars from the fed. Hmmm I wonder who will be chasing the interest on those loans and who will be the underwriter of all those debt instruments now that ONLY two investment banks are left.... Could it be Goldman?Hmmm nobody knows.
IN a brief explanation this is how the picture has been forming. Now Hank Paulson is asking for 700 billion dollars to "rescue" the economy.
But what do these 700 billion mean to the US government and the investment banks. Why would the government do that?
I wonder, could it be that the US had planned the financial crisis for a while in order to be able to enter the most profitable industry in earth for a cheap price? Now that the lending to 3rd world countries is drying off because they are outsmarting this game just as China did. Could it be that the US has turned to lending to big institutions and has turned their own citizes into suckers that will pay taxes, that in turn will be lent back to them in the form of Home mortgages to make a profit that they will never see?
Could it be that some investment banks not only knew about this but also facilitated this situation by coaching the government on how to do it?
I don't know, but it seems to me that these few investment banks that are left had something to do with everything and positioned themselves just like a kid under a pinata waiting for the free candy to fall in the floor. Because that is exactly what the price of these "rescued" banks were "free candy". These so called bad loans are not 100% bad, there is a lot of money to be made and not only the government has the money to purchase them, but also the power to work a deal once they have been purchased, so delinquent borrowers are able to stay in their homes and pay at least some of the debt.
Think about it, you buy the loan for 0.20 cents of the dollar, settle with the delinquent borrowers into making the loan worth 0.50 cents of the dollar and it becomes, a win situation, if you add the interest that the borrower will still pay on that loan, voilá, you have a ton of money in profits that the tax payer will never see. This would translate into the government buying a $300,000 loan at a price of $60,000 and setteling with the borrower as if the price of the "new government Aided loan" of let's say $150,000 instead of the 300,000 they previously owed. Do you think that would solve the problem of delinquent loans? I definitely think so, and the government has the power to do it. and there is still plenty of proficts to go around.
The big question is, will this be enough as a strategy to maintain the dollar as the #1 world currency? The safe heaven? What will happen to the dollar when investors realize that US brillant GDP was based on consumer spending originated by this home equiy loans backed by thin air? What will happen when foreign investors realize that the US is a non producing country whose business have been surviving for the last 1o years may be more, by short term loans from commercial paper and ulimately IPO's that transferred the cost of the business loans to institutional investors like Wachovia that purchase these securities with American's retirement money?
Will we survive as the empire we once were or will we become the cheap labor market?
What do you think folks?
"Obama can guarantee victory by getting angry at Paulson and telling him hands off the purse, bailout or no bailout. How clear can it be?"
You are right, but he won't, proving he's not the agent of change he professes to be.
Read Denninger's Market Ticker today for proof this bailout will do nothing to stop this crisis.
Anybody know where the text of the failed bill can be pulled up on the internet? I really want to dig and see if the odious provision 6 of the old bill survived in the recent bill, i.e. the provision where it said that only $700 billion AT ONE TIME could be held by the Treasury. I call this the Money Laundering Clause.
"The Senate will not move first. It's unconstitutional."
There's no reason a conference committee bill can't originate in the House.
I am quite concerned as most Americans are about the Congress stating that the banking bailout bill is bad, but is the best we can do.
This is the same Congress that is responsible for the legislation and oversight of Federal mortgage lenders of which the Office of Thrift Supervision is responsible for the Chartering of Savings Banks ,for example Countrywide Bank and Wa Mu and Indy Mac.
The starting point of this crisis was the mortgage lending for the residential housing market which was being pushed by the Administration to put everyone in a home. This was the American Dream which has now been turned into the American nightmare
The Congress in its last housing bill and now in this rescue bill are protecting only the wealthy and the powerful that are well connected to the Congress.
Here is what Nouriel Roubini said in part on 9-28-08(Note that Mr. Roubini predicated this crisis in 2002.) Is Purchasing $700 billion of Toxic Assets the Best Way to Recapitalize the Financial System? No! It is Rather a Disgrace and Rip-Off Benefitting only the Shareholders and Unsecured Creditors of Banks
Thus, the Treasury plan is a disgrace: a bailout of reckless bankers, lenders and investors that provides little direct debt relief to borrowers and financially stressed households and that will come at a very high cost to the US taxpayer. And the plan does nothing to resolve the severe stress in money markets and interbank markets that are now close to a systemic meltdown. It is pathetic that Congress did not consult any of the many professional economists that have presented alternative plans that were more fair and efficient and less costly ways to resolve this crisis. This is again a case of privatizing the gains and socializing the losses; a bailout and socialism for the rich, the well-connected and Wall Street. And it is a scandal that even Congressional Democrats have fallen for this Treasury scam that does little to resolve the debt burden of millions of distressed home owners.
I am one of 4 million homeowners that are in or have completed foreclosure.
The American people have yet to realize that the mortgage borrower has no right to contest, object or to question their foreclosure within the same Federal Regulatory System that the Federally Chartered Savings Banks lends their money. There are basically no Federal Lending Regulations that pertain to the federal savings banks. These banks answer to no one and operate with absolute impunity . This federal lending system designed by the Congress that protects the wealthy and the powerful financial Institutions with no protection given to the mortgage borrower. This is called Lynch Mob lending. The bank forecloses the mortgage and hangs the borrower. The borrower has no voice.
My federally Chartered Savings Bank ,Am Trust Bank, headquartered in Cleveland Ohio in 2007 paid 14 million dollars to settle a class action suit for unethical interest miscalculations. This same bank threatened to sue me with a frivolous lawsuit for fighting my foreclosure. This bank changed my loan purpose twice in order to prevent my refinance which I qualified for under federal regulation. This bank performed a flawed property appraisal which was the catalyst for my foreclosure. The State of Ohio confirmed and cited the flawed appraisal but then made a deal with the bank which was treated like a minor infraction instead of the 9 violations of law.
The Media talks about the anger of most Americans who do not want these wealthy and powerful Banks along with WallStreet to be made whole with taxpayer money.
The Senate Majority Leader Harry Reid stated that they were trying to protect the Banks from the bad loans. Senator Reid should have stated that he wanted to protect the American public from the Bad Banks that made the loans.
Until the American public understands that these Banks like Wall Street do as they please without any fear from government or borrowers attorney that this crisis will continue to get worse without effective regulation controlling the banks aberrant behavior with their mortgage lending.
The reality is that there are 4 million foreclosed homeowners now and the Brooking Institute states that there are 2 million more projected for 2009. Tell me that there are 6 million homeowners that cannot protect themselves and are at the mercy of these ruthless greedy politically powerful Banks. By the design of this American government these victims have no voice. Even a bank robber is titled to representation with an attorney.
Based on the activities of the financial system in our country for the past 8 years with the Congress charged with the responsibility for legislation and the oversight the Congress as a governing body has committed malfeasance and misfeasance.
We need to change the type of Politician that we elect to office. We need to change the way we elect our representatives to office.
What about the friends of Congress,the well connected Bankers and the WallStreet that cheated the American public out of billions of dollars? What about the 4 million foreclosure victims who have no voice?
This Congress went over the top when they said we have to pass something. That is criminal to spend the taxpayers money on"something".
It is not the rescue bill that stinks like year old fish; the bad smell is coming from the stench that this Congress created.
6 Million foreclosure victims with no voice and this Congress does nothing. Billionaires and Millionaires complain about their cash flow and Congress cant do enough.
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Michael LittleBig
9-30-08
Bloomberg is now reporting that your House of Representatives is getting phone calls supporting the bailout:
House Members Receive Angry Calls on Vote, Aides Say (Update3) - Bloomberg.com
I am in favour of referenda, but would the People kindly refrain from changing their mind within 48 hours? It makes it a bit hard to run a country.
America for socialism? USA is not a democracy state anymore. The Congress is control by the Wall Street Bankers.
You can have a re-vote anytime?
THIS IS CRITICAL: Please fax AND phone your congressman. Do not bother with any members of the House except for Nancy Pelosi.
Call them with this simple message "If you vote for this bill, you will lose my vote".
Click Here For Congresional Phone And Fax Numbers
Senate Fax List
Please fax everyone on this list.
Sen. Richard Shelby (R) 202-224-3416 or 202-224-5137 (try both not sure which is correct)
Sen. Harry Reid (D) 202-224-7327
Sen. Jim DeMint (R) 202-228-5143
Sen. John Ensign (R) 202-228-2193
Sen. Jim Bunning (R) 202-228-1373
Sen. Chuck Grassley (R) 202-224-6020
Sen John McCain (R) 202-228-2862
Sen. Barack Obama 202-228-4260
Sen. John D. Rockefeller 202-224-7665
Sen. Dianne Feinstein 202-228-3954
Sen. Ron Wyden 202-228-2717
Sen. Evan Bayh 202-228-1377
Sen. Barbara Mikulski 202-224-8858
Sen. Bill Nelson 202-228-2183
Sen. John Kerry 202-224-8525
Sen. Daniel Inouye 202-224-6747
Sen. Hillary Clinton 202-228-0282
Those inclined should also fax their own senators as well.