The deal sickens me beyond belief, but I've come to realize that it's a must...... It's disgusting and this was completely avoidable, but everything is freezing up and the alternative is only worse in my opinion. I've stocked up on extra food and various needs as I'm so paranoid about the state of our country.......Lets hope this plan helps avoid a depression or worse....
I walked down my street around noon, the lines at the gasoline station were about 1/3 of a mile long. Maybe I'll check again after dinner, see if it's improved... There have been reports tricking in on GasBuddy.com - Find Low Gas Prices in the USA and Canada of more stations getting gas. But then, we also have articles like this showing up:
It looks to me like the bailout plan is still too much in favor of Wall Street over Main Street, ignores major issues, and is unlikely to work well enough and quickly enough to avert a severe recession. Here are my suggestions:
Yes, the toxic MBSs and CDOs need to be taken off the banks' books. The government will have to overpay relative to any notion of market or true value, in order to avoid decapitalizing the banks. The difference between what is paid and the best possible determination of value should be compensated with a grant of preferred stock to the bailout agency.
CDSs have become a speculation vehicle. It is difficult to see how these unregulated contracts are anything other than illegal gambling, when held, on the buy side, by a party other than that which holds the security being "insured". Such speculators are probably trying to exaggerate market forces in such a way as to increase the likelyhood of defaults which would trigger their CDS payoff. This is like buying insurance on your neighbor's house, and then setting fire to it. These people should be prosecuted, and their trades neutralized.
Foreclosures should be suspended until the following is done: Cap mortgage interest at 7%, retroactive one year. Interest accrual is suspended from the time of enactment of the legislation until the servicer sends the homeowner a recalculation letter. All penalties and fees should be subtracted. The homeowner has 30 days from receipt of the recalculation letter to make their first payment, otherwise the foreclosure process resumes. This will reduce foreclosures and lessen downward pressure on home prices, and do so more quickly than an HOMC-type refinance program would.
The bailout is greed running around under the cloak of pragmatism. The winners of the game are so desperate to keep their winnings that they are willing to cheat and steal from the losers. We can only hope that the losers will organize enough outrage to severely punish the cheaters.
dr strangemoney writes:
The bailout is greed running around under the cloak of pragmatism. The winners of the game are so desperate to keep their winnings that they are willing to cheat and steal from the losers. We can only hope that the losers will organize enough outrage to severely punish the cheaters.
dr strangemoney.
~
All TOO True ... Even if Congress gets something reasonable they will come back to the table through their lobbyists and pol minions to cheat the public ...
House Speaker Nancy Pelosi, D-Calif., said negotiations were going "OK," and that speed was necessary. "I just want to do this in as timely fashion as possible, so the markets get an early, clear, certain message," she said.
I foresee a long long time before banks pay dividends on their crappy legacy common stock.
There will be a lot of losses to suck up and pass on to the taxpayers until they have stabilized. Then they will experience severe pushback on their insane idea of raising fees yet higher.
Without housing in bubble land, we would have had a recession, now we have used up that boom, what's next?
If the rumor is a governmental spending plan that could keep stocks from falling,
and the news is the approval of a bank shareholder and debt investor bailout
where taxpayers borrow $700 billion from their children
to fund shareholder dividends and bond interest payments
which may have little actual immediate impact other than a few hundred Dow points
do credit markets unfreeze on the news?
Probably not
Does bailing out those who caused this mess make real estate prices bottom?
Probably not
Do lending standards loosen?
Probably not
And then after Tuesday, September auto sales, earnings warnings and forecasts,
and non-farm payrolls on Friday
In 1929, the market crashed on October 29
In 1987, the market crashed on October 19
Unlike the platitudes of the pundits and politicians
how many October 2008 corporate earnings releases
could report falling sales and rising borrowing costs
and predict a not so good looking holiday season?
When does Joe Six Packs confidence fall off a cliff?
How many people have told you they have already gotten out?
If you had $100,000 to invest, what would you buy today?
Ok fine we stabilize the current loans but houses keep falling. We don't go back to 20% appreciation annually. Because I assume we aren't going to lending at 9X income again. Without NINJA,interest only,or neg amortization loans we aren't going anywhere fast. I also assume we will require going back to at least a 10% down payment how quaint.
This also doesn't fire up the housing ATM again so where do we get our 30 year loans for our BMWs and Caddies. Sorry does not compute we are just moving money from one pocket to the other and saying we have twice as much money.
This is a complete waste of time while Rome burns.
Anybody here that can help me see something I am missing??
Paulson wanted 'no review' because he intends to purchase securities that are practically worthless. He will try to get by with some secretive review by Fed Chairman. His actions won't bear further scrutiny. He needs to buy CDO's without Collateral or Cash Flow!
If you had $100,000 to invest, what would you buy today ?
For me just CD's under 100K . But I am considering buying a small rural land to go hide off the grid , gold and silver, and the other survivalist trappings .
I'm starting to think that no matter what happens in this bailout plan, it isn't going to work for more than a month or two at best, when the next crisis will hit.
On the one hand, $700 Billion probably won't be enough to settle things down, because bank losses will keep pouring in for the next several years.
And on the other hand, how can we possibly borrow $700 Billion when we are already running a budget deficit of $500 billion per year? Who is going to buy this debt, when it's obvious that the dollar will keep losing value?
"I'm starting to think that no matter what happens in this bailout plan, it isn't going to work for more than a month or two at best, when the next crisis will hit."
Slightly OT. Debate observations from the blog Talking Points Memo:
"As a psychotherapist and someone who treats people with anger management problems, we typically try to educate people that anger is often an emotion that masks other emotions. I think it's significant that McCain didn't make much, if any, eye contact because it suggests one of two things to me; he doesn't want to make eye contact because he is prone to losing control of his emotions if he deals directly with the other person, or, his anger masks fear and the eye contact may increase or substantiate the fear.
I noticed him doing the same thing in the Republican primary debates. The perception observers are likely to have is that he is unwilling to acknowledge the opponent's legitimacy and/or is contemptuous of the opponent."
"I think people really are missing the point about McCain's failure to look at Obama. McCain was afraid of Obama. It was really clear--look at how much McCain blinked in the first half hour. I study monkey behavior--low ranking monkeys don't look at high ranking monkeys. In a physical, instinctive sense, Obama owned McCain tonight and I think the instant polling reflects that."
McCain should have stayed in DC to make his imprint on the bailout(Snark...)
If I'm king of the world, I take all the CDOs from every FDIC insured bank. The banks receive CDO specific warrant/IOUs that they can eventually sell/trade in a market that I setup.
With all the CDOs in one place I (being King of the world) audit them, assign a value and report back to the banks and the rest of the world what these Level 3 assets are worth. At that point we can pursue some of the salvage schemes using cramdowns, auctions, insurance, etc on the pool.
Most importantly, I need a catchy name to market my plan.
What shall I call it
The SUCK
The Socialized Unwind of the Collateralized Kleptocracy
The SUMP
The Socialized Unwinding of Mortgage-related Portfolios
perhaps someone can extend this into the SUCKER. I have football to watch.
FWIW, i will ~start~ to get interested when we get in the S&P 800 neighborhood. even then, i will never go more than half in, and will be selling covered calls.
my guess is fall 2010.
methinks we are range bound, at best, until the end of time, and even that will be bubble driven, as opposed to "real".
it seems that most people are more worried about missing " buying the bottom" than they are of losing their investment dollars.
we have 4 business news stations and an explosion of financial blogs, in the last year we had major publishing giants unveil 4 major "business magazines".
i think the pendulum is still firmly in the "greed" half of its arc than the "fear" half.
Im quite sure that Hanky was behind telling the UK to merge B&B with Northern Rock, and he will be sure to tell Belgium that they will be eating Fortis. Welcome to super socialism!
Could someone try to help me theorize why the House Republicans are so immune to pressure from the big money guys in Washington? I'm a Democrat, so I'm loathe to believe that they are more principled, but, I guess, that's one theory.
I'm fearful but ok with the bailout plan not happening, because I see it as a chance for greater societal change. Don't they see what I'm seeing? That their precious capitalism will be doomed in its current form if the bailout doesn't happen (at least that's what their leaders are telling them). That people will be CLAMORING for more government intervention. That the Republican party will split.
I know what they are saying - that they want next to no government. But what do they see as coming after a financial meltdown?
if most economists agree that recessions can be cathartic and necessary for clearing out excesses, why not depressions? where do you draw the line? is -0.5% GDP part of economic cycles, but -2.5% a situation with 'unimaginable consequences'?
Why am I not seeing any discussion on how this entire idea of "insurance" is hair brained. Insurance will amount to more of a bailout than the bailout, because banks can insure their worst *rap and make a ton when the stuff goes belly up. With insurance, the taxpayer gets no equity and the bank is free to steal as much as they want from the taxpayer's pocket.
If the goal is to stabilize housing prices, why not buy vacant houses and bulldoze them? Assuming a median price of $200K, $700K can buy 3 million houses and leave some change to buy put gas in the bulldozers. You'd create quite a few deconstruction jobs for the next couple of years and virtually eliminate the unsold inventory.
I agree 100% that - on the merits - the swedish model is the best. It was based, in fact, on what FDR did 1933.
But here's the catch...FDR is not the President now. Obama is not the President now.
The reality is that GWB is the President now.
Let's ignore the real political situation in Congress and pretend Congress could propose and pass a Swedish model plan. How well does GWB do putting into practice? Do you think he can carry the nation's confidence through a closing of the banks to have them cleaned? I don't think so.
Remember, too, that when FDR did this in 1933 FDR was the one who developed the plan, proposed it, sold it to the country, executed it, and kept people's confidence through the procedure.
Such things always have to start with the President and then be exxecuted by the President (via the parts of the Executive Branch, of course).
Our reality is we are stuck with GWB until January 2009. That limits the real options.
Citoyenne Sue (Capital S) writes:
Could someone try to help me theorize why the House Republicans are so immune to pressure from the big money guys in Washington?
~
because they are clueless anal retentive ideologues still stuck in the 18th century.
So, let's say it passes on Monday. On Tuesday, Hank goes into action. And it is a shirtstorm out there, with all sorts of crazy incomprehensible transactions being made. How will we be told what they are? Is the info going to be posted somewhere? And then, when we see it, whatever the overprices marks are, what is next? Banks with marks under will have to write up, and be better capitalized. What happens to those marked over? All go bye bye? How in hell are they going to get the price right without going way over the top, and costing us a fortune?
And furthermore...if you really overprice, the $700 bil could be a trifling. Right? And if you dont, you see a ton of other bank failures. Or do you pretend they arent there? This is ludicrous.
Hank would spend the bank on Tuesday to get it off the books of the banks. That's why I don't think it's going to pass by then. I'm hoping the other politicians are too sharp to let that one slip by. Also, note that Frank and others are talking about an agreement in principle Sunday and papering it up for a vote Wednesday.
The leading House Repubs are prime recipients of Wall St support . . . or at least they have been up until now.
What's changed is that their political fortunes have turned to dust, and this was clear a few months back. Now they have nothing to lose and they are trying desparately and pyhrrically to save their own butts.
Take a look at the front page of todays NY Times. Two articles are next to each other on the top left of page 1. Story 1 is about the laissez faire rhetoric of the Repub study group in the House. Story 2, right next to it, is about SEC chair Cox (former Repub Rep and laissez faire advocate) declaring that a "volunttary" regulatory program failed miserably and is now replaced with compulsory regulation.
the laissez fair repubs are breathing their last gasp as a bloc (individually many will continue, collectively they are wiped out).
Geoff: I think little if any money will actually be spent for quite some time. The thinking is that the presence of the program will calm the markets and get banks lending again. Stranger things have happened. Then a new Admin can try something better.
bearly writes:
We need a bank holiday - a 2nd inning stretch, like other 3rd world countries have, until this inning of the hapless destructive bailout game ends.
~
Justme writes:
The market's not allowed to crash anymore. Circuit breakers, my boy, circuit breakers. After a measly 5% loss they shut the whole thing down.
@Mozo Maz
I am in Atlanta, not sure if you live here too. Happy Chicken (Sonny Perdue) our governor, thinks all is well with the gas sitro. He is leaving for Europe so he can attract new businesses to the state, meanwhile we have no gas for people to get to the jobs that they have. BWHAAHAAAHAA!
I fgure I spent at least $200 less than I would have at retailers & restaurants this week because I don't want to use up the gas I have to have to go to work or sit in line for an hour and a half waiting for more. If we conservatively say that most people spent $100 less becasue of the gas shortage, and multiply that times the 5 million people who live here, that is a huge hit on the local economy in a recession. And today they said it may now bee a month before we have normal gas supplies.
[Banks with marks under will have to write up, and be better capitalized. What happens to those marked over? ]
Absolutely. A total charade. We need a bank holiday and a forced kimono opening exercise so the bailout doesn't waste any $ on banks that will fail anyhow. Total joke!
Ricky - I dont see how that could work. You cant get confidence to put a mark on the values. Until stuff trades, we seize up further.
What do you all think of that? Do people think that just the existence that Hank will act soon will be enough for someone to risk wondering what the mark is going to be, and effectively (possibly) moving their situation from bad to worse?
only to a modest extent can the Dems name the players. They can name the oversight committee, but they can't appoint someone to the Exec Branch.
Formally speaking, it would violate separation of powers.
Informally, there could be a backroom deal for Paulson to step down and be replaced by, oh, I don't know, Paul Volcker. I'd love that. best thing that could happen short of impeachment. But lets be realistic. ain't going to happen. Bush is still President. No way the Dems get to make that call. If they could do that, then they would have impeached Bush already, but they didn't because they don't have the clout.
bearly writes:
[Banks with marks under will have to write up, and be better capitalized. What happens to those marked over? ]
Absolutely. A total charade. We need a bank holiday and a forced kimono opening exercise so the bailout doesn't waste any $ on banks that will fail anyhow. Total joke!
~~~~~
Since what is going on in Capitol Hill is no important to the future of the nation, why can't these meetings with the four congressional leaders be televised live?
And how about the meeting the other day in the White House with McCain and Obama in attendance. Wouldn't it have been nice to televise that live too?
That way we could all know what the fuck is really going on.
It is hard for us, without being flippant, to even see a scenario within any kind of realm of reason that would see us losing one dollar in any of those transactions.
Joseph J. Cassano, a former A.I.G. executive, August 2007
Geoff: Do you think they can price these things in a day? They're complicated instruments. It will takes teams of green eyeshade types weeks to figure out what is in each one. I don't expect cash to cahnge hands until well after the election if at all.
"Although it was not widely known, Goldman, a Wall Street stalwart that had seemed immune to its rivals woes, was A.I.G.s largest trading partner, according to six people close to the insurer who requested anonymity because of confidentiality agreements. A collapse of the insurer threatened to leave a hole of as much as $20 billion in Goldmans side, several of these people said."
$500 billion up front? This smells more and more like a Nigerian Letter. I say since we want to get out of this mess with more of what got us into this mess that we use the same terms. 0% down and 3% cash back to the taxpayers at close of escrow. The 3% is a paint and carpet allowance. Medium grade carpet costs $4/sq yd so 1670 sq miles (25x Washington D.C.). Let's see Congress get out from under that.
So when this thing passes before markets open in Asia, where does the money actually come from to GIVE to these companies?
Do we have a line of credit with China? Does a clerk at the Treasury make a call to a foreign borrowing partner and ask for the money? Do they make us re-sign any loan docs? Or are we "good for it" (or is it a 'no-doc' loan?
Once the country approves it, does this clerk just click 'refresh' and on the computer screen the U.S. checkbook has $700,000,000,000 in it?
Ricky - a lot of books have already been looked at by a lot of people. They already know that they have no idea of what a price should be because you CANNOT know. It all depends on what you assume. Lots of people assuming different things about housing (I used to be one of the people in a RE investment firm that gave estimates that were routinely ignored for more happy assessments) and depending upon what you assume, you'll have a mark on your books that might have nothing to do with reality. I know these types of people...they are almost ALL going to be too optimistic about values.
Dr. Jim Sadler writes:
Since what is going on in Capitol Hill is no important to the future of the nation, why can't these meetings with the four congressional leaders be televised live?
~
I am very disappointed that y'all couldn't behave during the debate thread. CR has been working very hard lately to provide up to the minute topics for discussion. He lets us get away with a lot of comments that would be deleted from other blogs. It's sad to me that the one time he asked us to to something for him-- keep the postings serious and OT--it wasn't done. .
Geoff/bearly: Have you ever done business with the government? It can take them 6 months to buy a pencil. Plus there are warrants to negotiate contracts to draft. And no team is currently in place to do any of that on Treasury's side.
I would much prefer a plan worked through FDIC. . . but I don't the Bush Admn allowing it, and they would fight Congress's efforts to rearrange the responsibilities within the Exec branch (separation of powers).
An Obama Admn, on the other hand, might propose to do exactly that (I am guessing on a hunch, not on anything Obama has said because he can't say such things now).
Meanwhile, things need to be kept on life support from today until january.
The BIG problem here is that Hank is a salesman from Goldman and Ben is an academic from Princeton, neither of them have any real 'market' experience. They are men of bluster and threory, respectively.
Thus the 3 pager. Which was basically just a big "I have no fucking clue what to do" statement to Congress. Well, into that vacuum stepped the current Congress and here we are- our collective asses blowing in the wind.
Paulson will try to jam $500B into the MBS/ABCP/CDO market and the market will eat that amount in heartbeat without even pausing to belch. Paulson wanted a HUGE amount to shock and awe the market upon his buying, or threat to buy this crap. Like any trader long and wrong who thinks he can push the price up by buying big lots haphazardly, he will learn quickly that no one, not even the US Treasury, is bigger than the market.
He should go talk to Gordon Brown ask him how Britain's defence of the pound against the euro ban worked back in the '90s. True idiots.
Unfortunately trying to keep up with a debate is something I don't think blogs are good at no matter who is running them ... the dialog moves too fast.
It's not CRs fault and we all owe a big thank you to CR for trying ...
"Anybody here that can help me see something I am missing??"
No, you're unfortunately clear-headed on this, from everything I understand.
So, $500 bill up front? That's giving away the store. In the end, I suspect, the oversight and controls and installments added to this plan will be little more than window-dressing to provide cover for the politicians.
I guess I'd better write my congressmen again and tell them i don't buy it. My local rep, a "liberal democrat," has always supported a complete revocation of the inheritence tax and is a wealthy man himself. That's the kind of Dem that's pushing for this -- probably the only kind of Dem we do have in Congress.
Well, let's remember that on Thursday morning there was a deal that would have given only $250B up front, and Paulson was on his knees begging Pelosi to give him that. . . but NOOOOOOOOO, Johnny Mac couldn't have that. The tax payers needed to be protected.
So now the repub President and Repubs in Congress have, for the moment, apparently pushed the up front figure to $500B.
Good thing those House Repubs are working for the people and fighting against Wall St. Yuppp. Yessireee.
realistically, the financial sector gets ponies.... market rallies... PPT helicopters are fully loaded & gassed up... the map is there, you only have to read it.
Given the corruption of the Department of "Justice", why does anyone think ACORN is guilty of anything except working for poor people, a criminal offense only in this administration.
Screaming has been heard outside the room by reporters. Room contains 9 Dems and 2 Republicans. All Blackberry's have been confiscated so there is no contact with th outside world.
Screaming? Sweet. Capitol Hill is long overdue for a duel.
Meanwhile, things need to be kept on life support from today until january.
joe shmoe
~
Whatever... my take is that Bush will take whatever he can get right now ... bank holiday with FDIC audits is the only way to go, otherwise the public takes it in the shorts.
You watch, it will all be a charade. Treasury will put in a bid, allowing the bank to mark the price higher on their books. Then they will spend months negotiating warrants, contracts, exec pay, etc. All the bank cares about is that they can mark the price higher and avoid raising capital.
Why don't they at least insist that the whole thing expires before January 20, 2009? That way the new president and Congress would have to explicitly re-authorize the entire thing.
Believe me, we are going to have a dramatically different Congress and White House when this is over. Fuck Paulson, treasonous asshole!
central_scrutinizer writes:
Why don't they at least insist that the whole thing expires before January 20, 2009? That way the new president and Congress would have to explicitly re-authorize the entire thing.
~
NO ! with a deadline they would spend it all overnight !
Ricky Ricardo wrote--If the goal is to stabilize housing prices, why not buy vacant houses and bulldoze them? Assuming a median price of $200K, $700K can buy 3 million houses and leave some change to buy put gas in the bulldozers. You'd create quite a few deconstruction jobs for the next couple of years and virtually eliminate the unsold inventory.--
Except there needs to be something alternative to bulldozing,
this makes the most sense since all these derivatives are leveraged against these bad sub-prime loans then the Gov't buys these houses, takes them of the market thus reducing supply. The defaults are taken off the market and thus the leveraged derivatives against these regain value and become marketable again.
If housing is the source of the problem then this is where the medicine needs to be applied, not to the leverage against the source.
Could someone try to help me theorize why the House Republicans are so immune to pressure from the big money guys in Washington?
You are making the huge assumption that these wingnuts are bucking Wall Street. In the end all the House Repubs are doing is helping to make sure almost every cent of the 700 tril gets into Wall Street's pockets. Oh, the big boys on Wall Street know that J6P will be cutting them a real fat check. The game they are now having the House Repubs play is to make sure that none of the Wall Street Food Stamps gets diverted to so-called "needy causes" such as Acorn. They know the Dems are pure whores who will give it up to big Wall Steet daddies any time, any place. But even a skanky whore needs to have some sort of lame ass excuse to give to their partisans in order to keep alive the fiction of a two party state.
Joe Schmoe at 5:41 - thank you for your response: "The leading House Repubs are prime recipients of Wall St support . . . or at least they have been up until now.
What's changed is that their political fortunes have turned to dust, and this was clear a few months back. Now they have nothing to lose and they are trying desparately and pyhrrically to save their own butts."
So what you are saying is that, as Democratic fortunes have improved, Wall Street has cynically turned off the spigot for these guys, and, for revenge, they are trying to screw Wall Street and at the same time become super-small government types to appeal to the last of their base?
Let's face it. The whole financial system in the U.S., and maybe most of the world, is going to collapse soon.
If somebody wrote a fictional story about how the U.S. financial system would collapse, this is pretty much how the story would go. Throw in those $90 Trillion in derivatives held by JPM-Chase, and you have a great story.
We're all fucked. We'll have martial law just in time for Christmas.
NO ! with a deadline they would spend it all overnight !
This can be prevented by only authorizing, say, $250 billion prior to the deadline.
That way, the new Congress/Prez has a chance to review the program and decide whether or not it is working.
Not one dollar more until Bush and Paulson are gone.
Keep in mind that after this bailout either does or does not pass, Congress is gone for the year. No lame duck session is likely, because they've passed a CR for the entire govt funding for 2009:
Descendants of the Pilgrim Fathers are gathering in Plymouth. One told this reporter, Im leaving on a jet plane.
News just in: operator of the 747 the descendants were hoping to use, Mayflower Airlines, has just gone belly-up.
Kevin de Bruxelles, I thought I was cynical and realistic, but I can see that there are higher levels of disillusionment and comprehension yet to reach! You may well be right - but doesn't your theory give an awful lot of credit to the money guys for having a master plan way out ahead of events?
more the other way around. some of these repubs are toying with separation from Wall St (Wall St backs all players when it can), but most of them are not fighting against Wall St at all, as Kevin of Bruxelles explains.
What's going on among most of them (not all) is desparate demogoguery.
Ron Paul is an ideologue, internally consistent.
Compare to McCain: all the sudden pro regulation, fire Cox, economy is strong, economy is weak, for "The Bailout," against "the Bailout."
Their fortunes turned to dust and they are swinging wildly.
wall St may now cut off support for some repubs who really go to the mat on this. Others will get rewarded for proposing a capital gains tax holiday, and/or for increasing the amount given to Paulso
I'm really saddened to see this place devolving into partisan bickering. Can't you see there is no real difference between the two sides?
Paulson/Dodd/Schumer/Frank/Gregg all serve the same masters. It's like different flavors of the same confinement loaf.
I voted for Bush twice; I'll concede he is a total disaster and should be impeached. I will never vote straight party line again. Can't some of you take off the partisan glasses and see the truth?
The Dems have their parasite constituencies to think of.
I wanna see a demographic breakdown of the foreclosed homes. The BBC and some local newspapers have profiled the problem in certain cities but nationwide we haven't seen it. Why is that?
While no one has been immune it takes a certain type of person to imagine they can buy a $500,000 house on a $50,000 income and they vote Democratic.
If you had $100,000 to invest, what would you buy today?
pay off all debt, stock up on canned goods, gasoline in 5 gallon cans in the barn, and a generator big enough to run the well pump. Already have sufficient wood to keep the house warm...
I like the insurance: sell trash to Gov't, buy new trash, insure new trash, collect insurance, buy new trash, buy insurance, sell to gov't, collect insurance ... round and round we go.
We will love the circus music playing continuously on CNBC,
unit 472...please spare us. A lot of people made bad housing purchase decisions. Some are in democratic leaning neighborhoods, some are in Republican areas. Probably the foreclosures to come (the option ARMS) will be more heavily Republican leaning, just as the Subprimes were probably democratic leaning.
No, the neo cons are sacks of shit also.
They both are owned by the crooks on Wall Street.
But Obama is worse, he is a radical black activist that sold out both his people and the rest of America twice.
Once to the bankers, and once to a radical black minority.
A vote for Obama is the equivalent of an Israeli voting for a Palestinian organizer.
wall St may now cut off support for some repubs who really go to the mat on this.
Well, if that's the case, then that means they still have money, and that contradicts the whole "the world is gonna end if we don't rape the taxpayers
in both holes" motif.
The crooks need to work on their story, if this is the case.
unit472 writes:
"While no one has been immune it takes a certain type of person to imagine they can buy a $500,000 house on a $50,000 income and they vote Democratic."
Totally wrong most of these foreclosures are exurban and the exurbs are overwhelming Republican.
We're all fucked. We'll have martial law just in time for Christmas.
What? And interrupt the holiday shopping season?
Maybe we'll see some sort of bizarro martial law. Rather than curfews keeping people at home, the military will drag maxxed-out consumers from their homes and force them to the malls to shop at gunpoint.
Wall St is an abstraction. Most of it is going to go belly up, but GS and Warren Buffett and a few other will still have bankroll. same thing happened in the depression.
I'm really saddened to see this place devolving into partisan bickering. Can't you see there is no real difference between the two sides?
Sure we see it. It is frustration to have to choose between the Palin's and the Obama's of this world. Neither one is qualified to run a small local organization on merit absent affirmative action.
but doesn't your theory give an awful lot of credit to the money guys for having a master plan way out ahead of events?
Not at all. Wall Street knew they had a pretty good deal on Thursday. But they had a few days to spare so they decided to use their House Repubs to push for an even better deal on Sunday. It's not like the Dems are going to walk away or anything. All this charade is doing is giving the Dems political cover to crawl back towards somehting closer to Paulson's original diktat.
We are all going to pay a price for the first 6 years of gwb's reign: tax cuts during wartime, cronies all thru the govmt w/orders to defang sensible regulations,no REAL oversight during their majority years, AGs around the country fired for no reason. And we wonder why all the bad actors are getting off scott free so far? Watch out who he pardons...I'm sure it will be another doozy...probably the only thing he is really working on now.
Yes defaults occur in all ethno/income groups but they occur in disproportionate amounts. Anyone can lose their job or get sick but it takes a certain type to go to Quikloan
to finance their house.
I do delinquent accounts for a utility. I see it everyday and the neighborhood doesn't matter. As Barney Frank himself admitted on Bloomberg TV, and I quote, 'We have to admit some groups were not ready, financially or culturally, for homeownership". I kid you not!
Now, if the Chairman of the House Finance Committee can make such an assertion I think it only fair to ask, "what supporting evidence does he have that he has seen that is not being released to the American people?"
We are being driven into paupery as a result of mortgage loan defaults. We have a right to know who it is who has been defaulting.
I am curious what would happen if no deal is reached. In fact, I bet that no deal will be reached this weekend. By Monday or Tuesday, maybe...
But even so, if no deal is reached, EVER, and the banks that own all the toxic waste go belly up, then do we not have all these brand new bank holding companies to lend to businesses to finance their operations? They deal dirrectly with the Fed, and the Fed will lend to them in order to lend to legitimate businesses. Would life not go on as usual (eventually), minus all the parasites that are now asking for our blood and for our children's blood?
If no bailout is passed, then it seems that the overlevereged are going to suffer the most, but we are a compassionate nation and will provide for them what they need to live.
There is nothing to fear. Bailout or no bailout, life will go on, and the sun will still rise on Monday morning and every morning thereafter.
When barney frank was talking about some groups not being ready, I think he was referring to the folks discussed in this Bill Maher skit, stupid people who can't keep accoutn books or know when they're buying worthless toxic stuff:
Yes, a lot of bad loans were made to people MOVING IN to Republican districts. But who were they? Were they Ozzie and Harriet? or were they people of a different sort. Maybe, maybe not. Let's take a look at the data. I'm willing to accept what it shows. Are you folks?
The debate drinking games were harsh... perhaps i should've tried watching the debate instead of the fark.com threads while playing... My liver will never forgive me.
For what it's worth, my small town bank was able and willing to give me a reportably large amount of cash without hassle on Friday morning. I suspect it helped that i was talking up an excuse for needing that much cash as i was in line, and that they know me personally as someone who wouldn't take "you can't have your money" reasonably or quietly.
It is really unfortunate that we have a government that is so susceptible to this form of stampede. Vote not going the way you paid for? Lock them behind closed doors and let the big money guys pound on them until they give in - that's what best for America, right?
No, it is not. There is no need for haste at this point, other than to the degree that neglect by Henry Paulson caused it. Now his world is getting fried and since it is the only world he knows, he screams and yells that the world is doomed. Bush, of course, has had the run put on him by everybody around him who has an agenda at one time or another, so he is willing to trot once again and and say what he's told to say. He'll start a war or approve torture or allow domestic spying or steal money from Main Street - it is all the same to him.
The 'plan' is being crafted by people with very little knowledge of the causes of the situation (such as Paulson, as evidenced by his public statements over the last 2 years) and politicians with agendas for pork or with idealogical axes to grind. Economists? No. Experts on housing? No. On Mortgages? No.
In spite of every word that Paulson, Bernanke or Bush has said, this is Wall Street versus Main Street. It is simply a battle about who has to eat the garbage. Are banks still making political donations? Yes. Are they still paying dividends? Yes. Bonus money and stock options? Yes. Will they continue to do so if a giveaway is passed?
Yes.
ot political, but from a game theory stanpoint these Dems are idiots, any of you guys chess buffs- go see the Caro Kann defense, I can't believe these dunces are our "leaders".
they had/have teh perfect opening to sink their opponent Bush/McCain/NeoCons all in one fell swoop and instead are being hustled all the way to the guillotine.
all they have to do is bring the desperate Houser Republicans in close, get Paulson to agree with "caps on execuutive pay and equity" and then balk, halt all talks on the premise that the "people" didnt like the administrations "plan". CYA in Jan.
Just like that, they cripple the administration/mccain/ and they give thier candidate the backing of the "people".
unit472 - again, what is your point? It's a bipartisan thing. My guess is the total $ amount in default is likely to tilt toward Republican borrowers.
But so what? A lot of people played a part in this mess. I didnt. Im a renter. I could have bought a home, and I can still buy one, but I wouldnt then, and I wont now.
It's absurd how out of touch with reality the bubble pricing was getting and this was years ago. Anyone who knows what fundamental valuation is in real estate is, and isn't knowingly part of perpetuating the system as it was, could have told you this was coming. But many people had a vested interest in NOT seeing it coming. Some were lenders. Some were borrowers. Some were appraisers. Some worked on Wall Street, some in insurance. There is more than enough blame to go around.
I think we are past the point of pointing fingers. We could point about anywhere and hit a target. But we should at least not pass some ridiculous bill that is going to give a huge benefit to the people who made the most money gaming the system.
That said, no matter how we try to fix this, we will invariably bail out some of those at fault. There is no getting around it.
If no bailout is passed, then it seems that the overlevereged are going to suffer the most, but we are a compassionate nation and will provide for them what they need to live.
Really now, don't think there's enough to go around.
Seen enough compassion in Iraq and New Orleans already.
IMO we are witnessing a special moment in U.S. politics:
The splitting in two of the Republican party.
The Populist Republicans, led by the House Republicans, splits from the Pigmen Republicans and becomes America's new 3rd party.
Defeat this pig and let the fur fly. Let's have it out right here and now, no matter who goes down.
Unfortunately, I can't get the data. I can give you the data for my small part of the world but you won't like it.
Instead, I will give the data the San
Jose Mercury News compile for its small part of it. 2/3's, that 66.7% of foreclosures in that city were to homes 'owned' by Latinos. Not my data,
theirs. Got a problem with it?
Want to look at what the BBC determined for Cleveland. Didn't think so. Would interfere with your 'reality'.
Again, unit472..you are looking at predominantly subprime, which is the foreclosure problem that is passing away...the next foreclosure problem is the jumbos, and those are going to be the inverse of what you are looking at.
Sen. Robert Bennett (R-Utah), a key member of the Senate Banking Committee, warned Saturday that another major U.S. bank was "teetering" on the edge of failure and would go under if the bailout deal doesn't come through soon.
Bennett would not name the bank, perhaps learning the lesson from a situation last month when Sen. Charles Schumer (D-N.Y.), warned that California-based IndyMac could not cover its deposits, and there was a run on that bank by customers.
Bennett was essentially trying to warn the congressional holdouts on the bailout legislation that the situation was so dire that more U.S. banks would fail as soon as Monday or Tuesday, and he seemed to have knowledge, as a member of the Banking Committee, of another major financial institution in trouble.
"What will they say come Monday if another major bank fails I will not use the name," Bennett said. "There's another major bank teetering on the edge."
Gregg: Confident of weekend deal
Sen. Judd Gregg (R-N.H.) is not one for theatrics.
But after promising that Congress was "moving toward an agreement," Gregg laid out a bleak picture if nothing gets done on the $700 billion bailout.
"On Monday or Tuesday, Main Street America will be under dire stress," Gregg said.
He went on to discuss the possibility that student loans would be on hold, companies across America would have trouble making payroll, and people's ability to go the ATM would be in danger because of runs on banks.
How's that for a bleak Saturday afternoon outlook in the Senate?
With that dire warning, Gregg said he believed House Republicans _ the main holdouts on the bailout _ are getting on board now that their ideas are being considered.
"I can say with confidence that we've moved this thing down the road toward an agreement," Gregg said. "We're going to accommodate the reasonable concerns of House Republicans."
But when Gregg was asked whether the key House GOP principle _ government backed mortgage insurance _ would actually work to help with the economic crisis, Gregg declined to endorse the idea.
"I'm not going to comment on that," Gregg said. "I"m not an insurance expert."
If (when) a bailout bill does pass, what must happen to invoke Supreme Court scrutiny immediately? Surely much of any bailout deal would be ruled unconstitutional.
Who has to file the lawsuit, and where? Seems to me any taxpayer would have standing in this matter.
The Justices have lifetime appointments, which is handy in situations such as this.
Geoff, you're GUESS? Is that what you want to base things on? A goddamn guess!
I'm telling you that the data is out there because it is always available when there is a political need for it.
Say Acorn wants to accuse Wells Fargo of discriminatory lending. Wells has to respond and, with a push of a button on their computers, up comes the numbers. Races sex, age, income,
loan approvals, loans denied. Its all there. I just want to have a look see at the default data. Got a problem with that?
Are WE REALLY IN THAT BAD OF A SITUATION? SERIOUSLY?
"On Monday or Tuesday, Main Street America will be under dire stress," Gregg said.
He went on to discuss the possibility that student loans would be on hold, companies across America would have trouble making payroll, and people's ability to go the ATM would be in danger because of runs on banks."
This is insane, making drama out of a bailout for crooks! This is like waiting all week to find out how much money the government will give to Enron, so that Skilling can start another SPE!
the house next door was bought in Jan 2007 via mortgage fraud. Option ARM, inflated purchase price to take kickback from seller, new owner was running the same scheme on several properties, immediately rented to a group of party boys, got foreclosed 1 year later.
funny thing is that the fraudster owner started changing during the foreclosure process. he started speaking spanish - never did before. then he started getting tan, really tan, then brown, then full out black. Had a sex change operation, too.
i hear the people he got his fraudulent loan from at GMAC also turned latino, black, and female, and had lots of babies.
I know most people reading CR were too smart to hold GM stock, but do you know anyone who has held the stock. Are they speaking spanish now, turning brown or black, etc
Come on, fess up. We know this is just a minority problem.
Anonymous writes:
This is insane, making drama out of a bailout for crooks! This is like waiting all week to find out how much money the government will give to Enron, so that Skilling can start another SPE!
LOL. This sounds right. And with that I shall shut down and fire up the BBQ. This IS insane.
mmckinl, The San Jose Mercury News said that the city of San Jose is only 1/3 Latino. I think they know their demographics better than you but I'm not picking on Latino's. So again why am I being badgered with assertions when all I want is the FACTS.
uh, the Repubs did end slavery, and they also advocated for workers rights, expanding the role of govt, etc, but that was the 1850s-1870s. Something changed between then and now.
Could someone try to help me theorize why the House Republicans are so immune to pressure from the big money guys in Washington?
There are essentially no more Repubs left in the House from the northeast/nyc/dc corridor, so most of the remaining Repubs aren't getting big money from wall street (although they are funded bigtime by the ultra-conservative Business Roundtable types. They are also totally powerless in the House and will have less power in January.
They have little to lose except their base voters who hate anything east coast, and many of them are in districts that are safely very conservative.
And, they are true ideologues, many elected with the Gingrich clan in the 1994/96 elections. They are not compromisers - which some may view as good, but is death to getting laws passed.
I hope the house GOP guys refuse to go along, because then the Dems can say 'we tried to support Paulson', and wait until late Jan. 09 to do something that might work (Buffet-style preferred investments/recap, RTC-III, Swedish-style restart, etc.).
In Jan.09 the Dems won't have to worry about a Bush veto, and the Senate is going to be more Dem. than today (maybe even more than 60 votes Dem.).
Dems should just appropriate some more money for FDIC to do its thing as a temporary measure, and then come back and rape/pillage wall street in Jan.
If toxic mortgages are the problem, making them liquid again seems as if it would go a long way towards easing the crisis.
There's a LOT of shit here that just doesn't make sense. We're being held hostage over something and both parties and the executive are scrambling to cover their asses.
I seriously fear for the future of my country right now.
A Self-Fulfilling Prophecy: Congressman John Shadegg on the Paulson bailout:
David Freddeso: Is a bailout necessary to save the economy at this point from complete collapse from a major failure of multiple institutions at the same time?
Shadegg: I think thats the most difficult question that could be posed under these circumstances, and its the question that I have struggled all week to find the answer to. I have talked to a lot of smart people who know Wall Street, know banking, know the economy quite well, and you hear different opinions. Some will tell you that it is absolutely essential. Quite frankly, Im skeptical about that.
But I think that in some ways the question doesnt matter any more. Because Secretary Paulson chose to raise the matter in the way he did that is, to go public in a very high-profile way, not just with his concern, but with a kind of Chicken-Little, the-sky-is-falling kind of demand it became a self-fulfilling prophecy.
That is to say, once the secretary of the Treasury announces to the world that there is a pending financial collapse, perhaps as great as the Great Depression, and Congress must act he has sent a signal that essentially tells world markets that Congress must act. I will tell you that has been one of the most frustrating things about this since the very beginning...
I cant tell you how many members of Congress were stunned at that news, and were stunned that none of their local bankers were calling them. And then they called their local bankers, as I called my local bankers, and my local bankers said, I think things are just fine. I talked to one banker who said, Gosh, weve got money, and were liquid, and were making a profit. And were in the market selling loans, and weve got competitors trying to sell loans against us.
So, at that point, theres a disconnect. Secretary Paulson is claiming that this is a catastrophe of generational proportions that could go worldwide. And none of what we were hearing back home matches that. And Im not speaking just for myself, but also for many of my colleagues who were making similar calls. They werent being called by their bankers, or by any of the businesses back home saying, I cant borrow any money.... If, in fact, Paulson had struck a chord with the American banking community, wouldnt you think that after he announced on Friday that there was a crisis of liquidity that threatens the entire nations financial solvency and Americans jobs from coast to coast, that my community bankers in Arizona wouldnt have been picking up the phone by Monday morning, if not over the weekend, to say that I share the Secretarys concerns?
Dick Morris had predicted that McCain would come out against the Paulson bailout last night at the debate and endorse the principles of the House Republican plan, which Morris had deemed a "brilliant move." Looks like McCain isn't quite a "brilliant" as Morris thought.
Taxpayers per se absolutely do not have standing purely by reason of their being taxpayers.
Unclear why you believe any of it is unconstitutional.
Before anyone does anything dumb, I work on WS and the bailout is rape and garbage but I'm also a law professor and law is law like it or not.
Be sure you understand that Congress absolutely can pass legislation that removes the jurisdiction of federal courts to review it.
But Congress cannot pass legislation that removes the jurisdiction of the Supreme Court to determine the constitutionality of such legislation.
So a "no review" clause is not unconstitutional either, and its been done before.
If you want to research this instead of bloviate, look up "Political Question Doctrine" and "Marbury v Madison" and Articles I and III and go from there.
Here's the key paragraphs from the French article on Fortis with my translation (trying to convey the nuance rather than word for word):
La porte-parole a estimé qu'il était « un peu trop tôt » pour évoquer des scénarios, mais « je pense qu'on pourra encore communiquer ce week-end », a-t-elle ajouté.
The spokesperson [for the Belgian banking regulatory agency CBFA] judged that it was "a little too early" to describe any course of action but he added that "I think there will be more to say this weekend."
Selon le journal belge De Tijd, des responsables des grandes banques belges, du CBFA et de la banque nationale des Pays-Bas vont essayer de trouver ce week-end une solution pour Fortis, en pleine tourmente sur fond de rumeurs, démenties par sa direction, sur des problèmes de solvabilité.
According to the Belgian newspaper De Tijd, officials of the major Belgian banks, the CBFA, and the Dutch central bank will try to find a solution this weekend for Fortis, severely afflicted by rumors - denied by its management - about solvency problems.
joe: I am aware of the end of slavery. Modern Republicans claiming that "their" party "ended" slavery is about as honest as Democrats claiming their party wrote the Declaration of Independence. You could make a case for it being technically true, but it's a silly assertion. It's also one that Sean Hannity makes often.
Lincoln was a Republican. But Republicans did not "end" slavery.
Dodds proposed statute and in some respects, it is far worse than has been reported. Senator Dodd has placed a loophole in the bill that is explicitly designed to siphon off tens or hundreds of billions of dollars to the Housing Trust Fund and the Capital Magnet Fund even if there are no net profits in the $700 billion venture.
Here is the provision that has already been widely noted:
d) TRANSFER OF A PERCENTAGE OF PROFITS.-
(1) DEPOSITS.-Not less than 20 percent of any profit realized on the sale of each troubled asset purchased under this Act shall be deposited as provided in paragraph (2).
(2) USE OF DEPOSITS.-Of the amount referred to in paragraph (1)-
(A) 65 percent shall be deposited into the Housing Trust Fund established under section 1338 of the Federal Housing Enterprises Regulatory Reform Act of 1992 (12 U.S.C. 4568); and
(B) 35 percent shall be deposited into the Capital Magnet Fund established under section 1339 of that Act (12 U.S.C. 4569).
(3) REMAINDER DEPOSITED IN THE TREASURY.-All amounts remaining after payments under paragraph (1) shall be paid into the General Fund of the Treasury for reduction of the public debt.
The biggest problem here is that the 20% is not taken from net profits, but rather from any profit in the sale of each and every individual troubled asset.
For example, assume that the new Agency buys three troubled assets for $1 million each. One is sold for $2 million, while the other two are sold for $300,000. Thus, $3 million in investments are sold for $2.6 million, representing a $400,000 loss.
But Senator Dodds bill does not provide for losses to offset gains: Not less than 20 percent of any profit realized on the sale of each troubled asset must be given to the two housing funds, so $200,000 of the $1 million profit on the one asset that made a profit must be siphoned off to the housing funds, despite the $400,000 net loss on the three deals taken together.
As an analogy, imagine a regular trader of stocks who takes lots of hedged positions and had net losses of 25% this year, but couldnt offset his gains with his losses, instead having to pay 15% income taxes only on his gains.
How much might be siphoned off under the Dodd bill? It all depends on how long the new credit Agency is in force, how often it turns over its portfolio, and how variable its returns are.
Or this brace of biogrpahies of House repub revolters from the NY TImes: - NY Times
Wall St is a street in lower Manhattan, that is true. But the Wall St we discuss here is an abstratction covering an array of financial firms that are multinational, and some are even based in the South and the West.
We have to face reality. We got into this situation by not facing it.
If AIG went bankrupt because it was writing life insurance policies to cigarette smoking alcoholics at the same premium level as they issued policies to observant Mormons we could put our finger on AIG's problem.
In order to come to grips with the mortgage default problem we have to be able to analyse who it is who is defaulting. It may lie outside income levels. It is in my business.
Dems should just appropriate some more money for FDIC to do its thing as a temporary measure, and then come back and rape/pillage wall street in Jan.
JimPortlandOR
~
yep
Spread 1 trillon around at the same terms Warren Buffet got from GS to save the banks.
Hire 200 of the best traders and hedge fund managers, divide the second trillon evenly among them, give them 5% of profits, forget about any regulations and set them free.
Five years later pay off the bonds and send the profits to all the taxpayers. My plan will make House Repubs happy (free market, no regulation)Dems happy (govt. checks to everyone) Paulson happy (his buddies get 5% and jobs) and Bush gets out of town before the place burns down.
"Dodds proposed statute and in some respects, it is far worse than has been reported. Senator Dodd has placed a loophole in the bill that is explicitly designed to siphon off tens or hundreds of billions of dollars to the Housing Trust Fund and the Capital Magnet Fund even if there are no net profits in the $700 billion venture."
"Mozo Maz writes:
I walked down my street around noon, the lines at the gasoline station were about 1/3 of a mile long. Maybe I'll check again after dinner, see if it's improved..."
Of all the claims that couldbe made that any political party ever deserved credit for doing anything, the Repubs ending slavery is about the strongest claim that can be made.
It wasn't just Lincoln. the repub party was formed in 1854 principally over the issue of slavery. The South seceded in 1861 precisely because Lincoln the repub had been elected. Democrats in the North were split on the Civil War and it was Dems who started the NYC Draft Riot which lynched blacks up and down Manhattan.
Sure, it is a bit reductionist to say the repubs ended slavery. But in the context of claiming that any party ever did anything, it is the strongest case and holds a hell of a lot of truth.
I'm telling you what one of the directors of the Swedish nationalization said recently in an interview. They started from the FDR model of closing banks, examining them, reopening them. They went beyond FDR, but they started from his model.
Sorry i don't have the link handy. I think I posted it a day or two back. The interview was on NPR.
You didnt ask anything. You write tendentiously, as you well know. It's a word. Look it up.
"GOT TO BE UNCONSTITUTIONAL" ???
You say that without a reason why, its bloviation.
There's not a lot of people in Congress with serious economics and financial knowledge. Or on their staffs.
There's a lot of them with serious legal knowledge.
Legislation pig headed stupid, regardless of politics, but constitutional insofar as we can judge from what proposals are coming out.
FYI, occasionally legislation is deliberately sabotaged by insertion of language known to be court-bait, as its the only way both sides can back down with political cover.
THINK THIS ONE THROUGH: Is it constitutional for an executive agency (SEC) to delegate its power to a private body (NYSE); that's what they did in telling NYSE to determine additions to list of non-shorting stocks. Is that an unconstitutional delegation? Or, is the power to do so inherent in its power to regulate the NYSE?
Did you know the "North" passed the 13th and 14th amendments to the US constitution only by not allowing the states 'that had never left the Union'
to vote on them.
We are about to witness a similiar exercise in the abrogation of the Constitution this weekend.
don't you think most of the 100 pages of the bill are the details of oversight and legal liability that Paulson evaded so neatly in his 3 page proposal by saying oh so simply that he would be above the law?
decrees from dictators can be very brief, like give me $700B and I can do whatever I want.
living under the rule of law takes statutes with precise definitions.
Imagine that, a Wall Street law professor that assumes instead of actually reading. How did we get in this mess again?
The reason I even posted it is because I''m grasping at straws to think of anything that can derail whatever monstrosity passes. Please forgive me for not being as 'educated' as you.
Suppose Paulson's request to abrogate contracts were worth something? Could he do any good with it? What about the credit default swaps? Some think they are looking at a gain; others are staring into the abyss. What about insurance not valid for third parties? What about no "taking" if the gain/loss is a paper loss?
uh, yeah, some things changed between 1876 and 1968.
just because the party name is the same mean squat, but the repubs in the 1850s and 1860s ended slavery.
likewise, the Dems say they are the party of Jefferson and Andrew Jackson, slave owners and racists. they'd be thrilled, just thrilled, to see their party electing a black man President . . . so when Obama wins will you say the Dems did not elect the first black president?
joe: I think I was not as clear as I should have been. That group of men (Republicans 1800s) at that time DID have MUCH to do with the end of slavery.
My point only is that is has virtually no relationship to today. The current parties (both), what they stand for, and who they represent, have no relationship with the parties of the past.
Modern Republicans use it as a badge of honor they do not deserve.
Modern Dems do the same thing with the working man. People called Democrats did some good in the past, but today's Dems are nothing like the old days. Yet they still wear it on their sleeve as if it is relevant.
Money Quote (although I'm not sure than this proves these were FDR's policies(:
While working at the Ministry of Finance on the initial problems in the banking sector we started to study historical and international records of financial crises. Irving Fisher's well-known paper in Econometrica, "The Debt-Deflation Theory of Great Depressions," from 1933 provided inspiration. We also came across a new volume, The Risk of Economic Crisis, edited by Martin Feldstein and containing interesting contributions by, among others, Benjamin Friedman, Paul Krugman, Lawrence Summers and our chairman today, E. Gerald Corrigan.
My copy of The Risk of Economic Crisis, arrived yesterday from Amazon UK.
(ii) neither one of us got ad hominem and stayed ad rem
(iii) "bloviation" is not a personal insult its a debating/argument characterization which may be deliberately overkill and unfair but is not punch-you-out personal
The Justices have lifetime appointments, which is handy in situations such as this.
Yup, until we see a story like this (fictitious, names changed to protect the innocent.)
AP - June 3rd, 2009
Supreme Court Justice Ralph Rut-roh was tragically killed in an automobile accident, late last night. He was driving home from his office in the Capital, when he apparently swerved to avoid a squirrel and plunged into the Potomac.
Police retrieved the vehicle, which by an amazing coincidence had no brakes and bullet holes in the side.
Justice Rut-roh was involved in deliberations on the constitutionality of the 2008 Paulson act, which has come to the docket after a Federal Appeals Court upheld it.
I'm in favor of counting how many angels can dance on the head of a pin.
For all the good it will do it will, nonetheless, occupy our intellectuals with something to discuss because that is what matters to them.
Never ever get to the bottom of the problem because they will then not be able to dazzle their interlocutors. Ignore the gun on the floor, the bank did not commit suicide by loaning money to deadbeats,it merely needs a 'liquidity injection' or someone with a 'bigger balance sheet' to take on its soured loans.
No, we must never look at just whom it was loaning money to and come to a different conclusion. Wouldn't be 'right'. Let's do WAMU again.
at the end of the day every few years someone doesnt like a spending bill and brings a private action...last time it was civil rights groups arguing that it was unconstitutional to allow segregating universities to be nonprofit
always lose.
im not saying this is the way it should be, only that this is the way it is.
you want to stop this bill (i do), call your rep.
unfortunately mines clueless dem and my senators are chuck and hillary so, you know...
THEY DO LISTEN, and when you meet (most) of them in person theyre not morons, theyre trying to do their jobs
what you have here is...
well you have the last 3 hours of the TITANIC
you have people in an end of the world once in a lifetime scenario
sometimes they rise to the occasion
sometimes they sink to debasement
you can never tell how someone will react in a major crisis
but life is not made up of major crises, and when you're inside one its hard to remember that
the end of the world happens only once. this probably isnt it.
Congress says no to Mortgage cramming. Says the Republican caucus refuses to consider it. Why?
This is the most unacceptable item in the bill, even more then bailing out the pigmen
The pigmen fuck everyone to some degree. If the 20% or so of irresponsible people get a cram down it is grossly unfair to responsible people. People compete with each other, giving the worst hundreds of thousands in debt relief burdens the responsible.
The inevitable response will be the formerly responsible will default even if there is no need, as having your neighbor given a huge windfall rewarding his irresponsibility is totally unacceptable.
Further the benefit would largely go to minorities and benefits specific states more then others. It basically would be a rehash of the HUD and FHA policies that created the monster to begin with.
At the risk of repeating myself, little of the money will be spent in the next few months. Government contracting rules, the need to negotiate warrants and the lack of an existing Treasury infrastructure will make this baby slow as hell to get off the ground. If they buy much of anything before 01/20/09 I will be very surprised. Then a new Admin may scrap or modify the whole thing.
This is just political theater. People are way to upset over this.
unit472- "Ignore the gun on the floor, the bank did not commit suicide by loaning money to deadbeats,it merely needs a 'liquidity injection' or someone with a 'bigger balance sheet' to take on its soured loans."
I respectfully submit to you that 100% of the shitpile in which the people of the United States are now standing was engineered by a group of highly-paid, Ivy League-educated whores, 99%+ of whom were probably caucasian.
unit472, I wouldn't be surprised to find that race or ethnic origin (those are the factors you're hinting at, I take it) are correlated with bad loans, even after factoring out the impact of other correlated factors that are commonly used, like income and credit rating. But I think it's narrow-minded to believe that the bulk of the bad debt problem we have now was due primarily to this factor. Where I've lived, vast numbers of middle-class white people were drinking the Koolaid, and that's where the bulk of the financial problem will come from.
The crisis is fatal to Wall Street, but Main Street is more resilient. The economy will suck, but its implosion is nowhere imminent.
The fight to have the whole $700B and not installments is the clue. This is a war chest for a real war. And not to save Goldman. Goldman will be saved by $200 oil. And this war chest is to mitigate related fallout.
Expect friendly gestures from people who call us Satan
ive never been represented by the likes of those. only decent people i occasionally agreed with.
i have a home in an upper middle class area represented by jerry nadler, congressman for life.
even he...see him all the time on the street...shops in little stores, etc, wears inexpensive clothing...
they are NOT all crooks and liars, and i suspect that (rangel excepted) the reps are more honest than the senators, and it was designed that way 200 yrs ago
most of them could make far more in private life
my point was its unfair to judge someones life by how they behave in a crisis
AND IM LIKE YOU i wrote my congressman and told him that i would max out contributions to whoever is his opponent and do anything else to fire him if he votes for this
being a realist doesnt mean i cant know rape theft and garbage when i see it
"unit472, I wouldn't be surprised to find that race or ethnic origin (those are the factors you're hinting at, I take it) are correlated with bad loans, even after factoring out the impact of other correlated factors that are commonly used, like income and credit rating."
If someone is going to start playing the race and ethnicity cards, then they should damned well be prepared to show that the proportion of foreclosures attributable to a given ethnic group is significantly HIGHER than that group's incidenc in the total population where the foreclosurs took place.
For 2+ years I was allowed in the closed-door meetings that Congressmen have with their staff. The day-to-day stratigizing - the 'sausage' that no onw wants to see made.
Please, PLEASE tell me you are in Joseph Crowley's district in NY (7th). I only wish this because in his Capital Hill office's kitchenette, his staff tapes up the "funny" correspondence they receive from their constituents - ridiculing them. You know, the ones handwritten, with misspellings and poor grammar.
Imagine the problems facing a poorly educated person that might lead them to pen a letter to their Congressman in long-hand requesting assistance.
I witnessed that wall on at least a dozen times (their server was in the kitchenette). Each time was a fresh batch.
I respectfully submit to you that 100% of the shitpile in which the people of the United States are now standing was engineered by a group of highly-paid, Ivy League-educated whores, 99%+ of whom were probably caucasian.
Sure, and it probably can be refined further.
The point is that they engineered the bait.
We all are the fish.
What they are proposing is that all fish go down because some groups of fish disproportiantely took the bait.
Even if you disregard this they are proposing that all fish go down because some took the bait.
I say let the pigmen make ceviche out of the ones that took the bait, and the ones that get food poisoning because they ate too much bad fish should rightfully die.
The fish that did not take the bait and the pig men that did not eat the bad fish live to stay in the game.
I hesitate even to dignify racist tripe with a response, but what matters is not how many foreclosures but how many $. Yes, where I live (mid-size city in the NE) almost all the foreclosures are in the inner city. But these are houses that sell for $50 or $60K. Ten of those don't equal one over-priced McMansion in Modesto.
friardaddy writes:
"So when this thing passes before markets open in Asia, where does the money actually come from to GIVE to these companies? Do we have a line of credit with China? Does a clerk at the Treasury make a call to a foreign borrowing partner and ask for the money? Do they make us re-sign any loan docs?"
Excellent point. In my opinion this was not discussed by our political leaders. The assumption is that the US Treasury has infinite access to funds. I am also disappointed that there is no repayment plan, except to hope that we can eventually make a profit on this $700 billion adventure.
Will the Government of China cough up hundreds of billions for this? They are giving hints that they might not, but our politicians aren't listening.
(I know it's supposed to be Capitol, btw. Spent the last 6 hours in a pool hall getting swashed in memory of Paul Newman. I'm just trying to type on the keyboard in the middle of the three I'm seeing right now, spelling be damned.)
invisible hand-They won't spend more than a small fraction of the money. The entire charade is just to put an above-market bid down so the holders of the paper can carry the assets on their book at that value and avoid having to recapitalize.
first!!
almost first
Keep the pressure on, contact your representatives to kill this monstrosity.
Reps by zip ...
C-SPAN | Capitol Hill, The White House and National Politics
SSDD
Is it true that the banks are still paying dividends? I don't really feel like giving them money if they're still paying out dividends.
Over the top Max Keiser predicts no election because of the financial crisis on Iranian TV.
YouTube - Afshin Rattansi : Laundering $700 Bn
A Better Bailout by Stiglitz
Henry Paulson's Shell Game
He''s being kind, I say bank holiday and throw the weak banks under the bus ...
The deal sickens me beyond belief, but I've come to realize that it's a must...... It's disgusting and this was completely avoidable, but everything is freezing up and the alternative is only worse in my opinion. I've stocked up on extra food and various needs as I'm so paranoid about the state of our country.......Lets hope this plan helps avoid a depression or worse....
mmckinl writes:
A Better Bailout by Stiglitz
x Issue of The Nation stiglitz
He''s being kind, I say bank holiday and throw the weak banks under the bus ...
Stiglitz beats Krugman hands down.
Comrade Sick & Tired of the Gr
this deal is not a must. the Scandinavian Plan proposed by Stiglitz is much better ...
Henry Paulson's Shell Game
Lets hope this plan helps avoid a depression or worse....
It will surely delay one.
Avoiding ..well you know what they say about death and taxes.
The revolution will not be televised.
Announcements will appear on your ATM receipt.
Thank you for your support, it has been a pleasure serving you.
Signed, with love,
Capitalism
I walked down my street around noon, the lines at the gasoline station were about 1/3 of a mile long. Maybe I'll check again after dinner, see if it's improved... There have been reports tricking in on GasBuddy.com - Find Low Gas Prices in the USA and Canada of more stations getting gas. But then, we also have articles like this showing up:
Fortune Article: Gas Shortages to Continue
My letter to congress...
It looks to me like the bailout plan is still too much in favor of Wall Street over Main Street, ignores major issues, and is unlikely to work well enough and quickly enough to avert a severe recession. Here are my suggestions:
This is a fair way to help fund the bailout and discourage speculation.
Thank you for your time and consideration.
Stiglitz beats Krugman hands down.
Anonymous
for archaic economists both are great ...
they both postulate with unlimited resources, an impossibility ...
The bailout is greed running around under the cloak of pragmatism. The winners of the game are so desperate to keep their winnings that they are willing to cheat and steal from the losers. We can only hope that the losers will organize enough outrage to severely punish the cheaters.
Also the insurance idea might be included as optional, although I think everyone realizes no one will be interested. - CR
GOP needs cover too.
mmckinl writes:
Stiglitz beats Krugman hands down.
Anonymous
for archaic economists both are great ...
they both postulate with unlimited resources, an impossibility .
One of them actually ran an organization of some scale.
dr strangemoney writes:
The bailout is greed running around under the cloak of pragmatism. The winners of the game are so desperate to keep their winnings that they are willing to cheat and steal from the losers. We can only hope that the losers will organize enough outrage to severely punish the cheaters.
dr strangemoney.
~
All TOO True ... Even if Congress gets something reasonable they will come back to the table through their lobbyists and pol minions to cheat the public ...
This must be getting serious. Fox has just reported that the Blackberries of everyone at the meeting have been confiscated. Roby
Another British mortgage bank bites the dust.
BBC - Peston's Picks
Robyn writes:
This must be getting serious. Fox has just reported that the Blackberries of everyone at the meeting have been confiscated.
~
The banksters were probably listening in ...
So does the market trade up on the bailout come Monday morning or does it trade down.
respond with and UP or DOWN vote, curious what the smarties at CR think?
UP, and that will be the highest the market reaches until 2011.
poseidon writes:
So does the market trade up on the bailout come Monday morning or does it trade down.
Which market?
S&P. Enjoy the bounce tomorrow. Then sell into it.
Interesting to read about the natural history of the gall wasp. Extend mentally.
Corey- the US stock market: S&P 500 index or Dow.
Shiller - What a suckup ...
Another minion giving us the Bums rush ...
That Max Keiser looks like a degenerate ripoff of Peter Schiff. What a creep.
I sent 10 faxes this AM . I wonder if anyone is in their offices to count see them .
respond with and UP or DOWN vote, curious what the smarties at CR think?
The smarties as all smarties do will melt in your mouth and not in your hands.
B&B being nationalized by the UK. What, they are going to get into the bed and breakfast industry too? Now we're really in trouble.
any word on the impact CR? (of above) Free bottle of wine with your stay? And a CDS of your choice?
Market will go up until the public realizes what it is ( how long )?
Shiller just can't say ... regulation ...
what a totally owned putz ...
House Speaker Nancy Pelosi, D-Calif., said negotiations were going "OK," and that speed was necessary. "I just want to do this in as timely fashion as possible, so the markets get an early, clear, certain message," she said.
WHORE, bailout the markets, focus on The Markets!
I foresee a long long time before banks pay dividends on their crappy legacy common stock.
There will be a lot of losses to suck up and pass on to the taxpayers until they have stabilized. Then they will experience severe pushback on their insane idea of raising fees yet higher.
Without housing in bubble land, we would have had a recession, now we have used up that boom, what's next?
Someday this war's gonna end...
Buy the rumor, sell the news
If the rumor is a governmental spending plan that could keep stocks from falling,
and the news is the approval of a bank shareholder and debt investor bailout
where taxpayers borrow $700 billion from their children
to fund shareholder dividends and bond interest payments
which may have little actual immediate impact other than a few hundred Dow points
do credit markets unfreeze on the news?
Probably not
Does bailing out those who caused this mess make real estate prices bottom?
Probably not
Do lending standards loosen?
Probably not
And then after Tuesday, September auto sales, earnings warnings and forecasts,
and non-farm payrolls on Friday
In 1929, the market crashed on October 29
In 1987, the market crashed on October 19
Unlike the platitudes of the pundits and politicians
how many October 2008 corporate earnings releases
could report falling sales and rising borrowing costs
and predict a not so good looking holiday season?
When does Joe Six Packs confidence fall off a cliff?
How many people have told you they have already gotten out?
If you had $100,000 to invest, what would you buy today?
short answer hurl : mattress. Preferably at the UK B&B.
WHORE, bailout the markets, focus on The Markets!
Anonymous
~
Expecting more ?
both parties leadership is owned lock , stock and barrel by the banksters ...
poseidon writes:
Corey- the US stock market: S&P 500 index or Dow.
US stocks - up.
Dollar - down.
Disclosures: I have a horrible investing track record. Also: I am hoping for a bounce so I can dump my FNM shares.
If you had $100,000 to invest, what would you buy today?
Ponies, definitely ponies.
I'd invest it in farming. The commodities boom is not over.
Ok fine we stabilize the current loans but houses keep falling. We don't go back to 20% appreciation annually. Because I assume we aren't going to lending at 9X income again. Without NINJA,interest only,or neg amortization loans we aren't going anywhere fast. I also assume we will require going back to at least a 10% down payment how quaint.
This also doesn't fire up the housing ATM again so where do we get our 30 year loans for our BMWs and Caddies. Sorry does not compute we are just moving money from one pocket to the other and saying we have twice as much money.
This is a complete waste of time while Rome burns.
Anybody here that can help me see something I am missing??
Congresscritter Spence just acknowledged on TV that perhaps 20% of profits (if any) could go to "ACORN"
"ACORN" is in various courts indicted with voter fraud.
Only in America.
Citizen AllenM writes:
Without housing in bubble land, we would have had a recession, now we have used up that boom, what's next?
~
GDII ... there's no bubbles left to blow and our debt leaves us on the edge of insolvency...
"ACORN" is in various courts indicted with voter fraud.
Does it come with squirrels? I want squirrels too.
It sounds like it's getting worse - now we're going to drop $500B at once?
I just faxed in my cable bill, telephone bill, and trash bill to my "representatives."
The icing on the cake is when they announce Greenspan will be coming out of retirement to manage the clean-up.
Paulson wanted 'no review' because he intends to purchase securities that are practically worthless. He will try to get by with some secretive review by Fed Chairman. His actions won't bear further scrutiny. He needs to buy CDO's without Collateral or Cash Flow!
In 1929, the market crashed on October 29
In 1987, the market crashed on October 19
The market's not allowed to crash anymore. Circuit breakers, my boy, circuit breakers. After a measly 5% loss they shut the whole thing down.
If you had $100,000 to invest, what would you buy today ?
For me just CD's under 100K . But I am considering buying a small rural land to go hide off the grid , gold and silver, and the other survivalist trappings .
I'm starting to think that no matter what happens in this bailout plan, it isn't going to work for more than a month or two at best, when the next crisis will hit.
On the one hand, $700 Billion probably won't be enough to settle things down, because bank losses will keep pouring in for the next several years.
And on the other hand, how can we possibly borrow $700 Billion when we are already running a budget deficit of $500 billion per year? Who is going to buy this debt, when it's obvious that the dollar will keep losing value?
If you had $100,000 to invest, what would you buy today ?
wait , things are just getting interesting ... and interesting doesn't necessarily mean good.
Do I understand CR's post correctly to interpret "insurance" as the proposal for government-sponsored insurance for mortgage backed securities?
If so, why are the banksters uninterested in this option?
"I'm starting to think that no matter what happens in this bailout plan, it isn't going to work for more than a month or two at best, when the next crisis will hit."
It only needs to work til election.
Slightly OT. Debate observations from the blog Talking Points Memo:
"As a psychotherapist and someone who treats people with anger management problems, we typically try to educate people that anger is often an emotion that masks other emotions. I think it's significant that McCain didn't make much, if any, eye contact because it suggests one of two things to me; he doesn't want to make eye contact because he is prone to losing control of his emotions if he deals directly with the other person, or, his anger masks fear and the eye contact may increase or substantiate the fear.
I noticed him doing the same thing in the Republican primary debates. The perception observers are likely to have is that he is unwilling to acknowledge the opponent's legitimacy and/or is contemptuous of the opponent."
"I think people really are missing the point about McCain's failure to look at Obama. McCain was afraid of Obama. It was really clear--look at how much McCain blinked in the first half hour. I study monkey behavior--low ranking monkeys don't look at high ranking monkeys. In a physical, instinctive sense, Obama owned McCain tonight and I think the instant polling reflects that."
McCain should have stayed in DC to make his imprint on the bailout(Snark...)
If I'm king of the world, I take all the CDOs from every FDIC insured bank. The banks receive CDO specific warrant/IOUs that they can eventually sell/trade in a market that I setup.
With all the CDOs in one place I (being King of the world) audit them, assign a value and report back to the banks and the rest of the world what these Level 3 assets are worth. At that point we can pursue some of the salvage schemes using cramdowns, auctions, insurance, etc on the pool.
Most importantly, I need a catchy name to market my plan.
What shall I call it
The SUCK
The Socialized Unwind of the Collateralized Kleptocracy
The SUMP
The Socialized Unwinding of Mortgage-related Portfolios
perhaps someone can extend this into the SUCKER. I have football to watch.
Martiki - what makes you think it will even work at all, let alone to the election?
Atascadero State Hospital for
~quiet, you'll spook the proletariat into stampede.
sincerely,
Banksters Clearing House LLC
It only needs to work til election.
You smart one. And also till paulson leaves.
It looks like Fortis is on deck for Monday. Funny how the Europeans were just saying it's an Anglo-American crisis.
Since they're big, I'd imagine a bailout is in the cards. If the EU let's them go that's going to have knock-on effects here for sure...
poseidon-
up, but not much, its already priced in.
FWIW, i will ~start~ to get interested when we get in the S&P 800 neighborhood. even then, i will never go more than half in, and will be selling covered calls.
my guess is fall 2010.
methinks we are range bound, at best, until the end of time, and even that will be bubble driven, as opposed to "real".
it seems that most people are more worried about missing " buying the bottom" than they are of losing their investment dollars.
we have 4 business news stations and an explosion of financial blogs, in the last year we had major publishing giants unveil 4 major "business magazines".
i think the pendulum is still firmly in the "greed" half of its arc than the "fear" half.
BooYa!! lol
I believe most of our agriculture water comes from the Sierra snowpack. The food comes from up North.
Southern Cal needs to buy its water to survive, but we're not huge on the ag down here.
Besides, desalinization solves it all. We just haven't been willing to build a plant yet.
Im quite sure that Hanky was behind telling the UK to merge B&B with Northern Rock, and he will be sure to tell Belgium that they will be eating Fortis. Welcome to super socialism!
Could someone try to help me theorize why the House Republicans are so immune to pressure from the big money guys in Washington? I'm a Democrat, so I'm loathe to believe that they are more principled, but, I guess, that's one theory.
I'm fearful but ok with the bailout plan not happening, because I see it as a chance for greater societal change. Don't they see what I'm seeing? That their precious capitalism will be doomed in its current form if the bailout doesn't happen (at least that's what their leaders are telling them). That people will be CLAMORING for more government intervention. That the Republican party will split.
I know what they are saying - that they want next to no government. But what do they see as coming after a financial meltdown?
if most economists agree that recessions can be cathartic and necessary for clearing out excesses, why not depressions? where do you draw the line? is -0.5% GDP part of economic cycles, but -2.5% a situation with 'unimaginable consequences'?
not trying to be a smart ass, but just curious.
for the record, i'm anti-bailout
Geoff
I don't think it will work but those who are pushing it hope it will if only til the election.
Why am I not seeing any discussion on how this entire idea of "insurance" is hair brained. Insurance will amount to more of a bailout than the bailout, because banks can insure their worst *rap and make a ton when the stuff goes belly up. With insurance, the taxpayer gets no equity and the bank is free to steal as much as they want from the taxpayer's pocket.
If the goal is to stabilize housing prices, why not buy vacant houses and bulldoze them? Assuming a median price of $200K, $700K can buy 3 million houses and leave some change to buy put gas in the bulldozers. You'd create quite a few deconstruction jobs for the next couple of years and virtually eliminate the unsold inventory.
I wouldnt buy insurance for the car I just wrecked, if someone's giving me a new one.
Hmmm. If the price is right, maybe I'll buy it for the new one!
mmckinl
I agree 100% that - on the merits - the swedish model is the best. It was based, in fact, on what FDR did 1933.
But here's the catch...FDR is not the President now. Obama is not the President now.
The reality is that GWB is the President now.
Let's ignore the real political situation in Congress and pretend Congress could propose and pass a Swedish model plan. How well does GWB do putting into practice? Do you think he can carry the nation's confidence through a closing of the banks to have them cleaned? I don't think so.
Remember, too, that when FDR did this in 1933 FDR was the one who developed the plan, proposed it, sold it to the country, executed it, and kept people's confidence through the procedure.
Such things always have to start with the President and then be exxecuted by the President (via the parts of the Executive Branch, of course).
Our reality is we are stuck with GWB until January 2009. That limits the real options.
isn't it worth $700 billion of other peoples money to buy a few months of economic stability until you retire?
if you were the president?
does he just not want the fireworks to happen on his watch, and he sacrifices all for the present
to be charged to the future
isn't it interesting that the bill is going to go to those who can't vote yet?
Maybe the treasury should just pay less instead of asking for more.
Citoyenne Sue (Capital S) writes:
Could someone try to help me theorize why the House Republicans are so immune to pressure from the big money guys in Washington?
~
because they are clueless anal retentive ideologues still stuck in the 18th century.
Ron Paul on Cavuto:
YouTube -
YOU CANNOT PLACE VALUE INTO ASSETS THAT ARE WORTHLESS!
Insurance for already defaulted mortgages is ridiculous, like buying fire insurance AFTER your house burns down.
So, let's say it passes on Monday. On Tuesday, Hank goes into action. And it is a shirtstorm out there, with all sorts of crazy incomprehensible transactions being made. How will we be told what they are? Is the info going to be posted somewhere? And then, when we see it, whatever the overprices marks are, what is next? Banks with marks under will have to write up, and be better capitalized. What happens to those marked over? All go bye bye? How in hell are they going to get the price right without going way over the top, and costing us a fortune?
I share first with 77 gracious comrades! Thank you comrades.
And furthermore...if you really overprice, the $700 bil could be a trifling. Right? And if you dont, you see a ton of other bank failures. Or do you pretend they arent there? This is ludicrous.
joe shmoe
simple
the democrats could name the people involved in the implementation of the Scandinavian Plan...
We need a bank holiday - a 2nd inning stretch, like other 3rd world countries have, until this inning of the hapless destructive bailout game ends.
Indeed,
Hank would spend the bank on Tuesday to get it off the books of the banks. That's why I don't think it's going to pass by then. I'm hoping the other politicians are too sharp to let that one slip by. Also, note that Frank and others are talking about an agreement in principle Sunday and papering it up for a vote Wednesday.
Just have to wait and see.
Citoyenne Sue
The leading House Repubs are prime recipients of Wall St support . . . or at least they have been up until now.
What's changed is that their political fortunes have turned to dust, and this was clear a few months back. Now they have nothing to lose and they are trying desparately and pyhrrically to save their own butts.
Take a look at the front page of todays NY Times. Two articles are next to each other on the top left of page 1. Story 1 is about the laissez faire rhetoric of the Repub study group in the House. Story 2, right next to it, is about SEC chair Cox (former Repub Rep and laissez faire advocate) declaring that a "volunttary" regulatory program failed miserably and is now replaced with compulsory regulation.
the laissez fair repubs are breathing their last gasp as a bloc (individually many will continue, collectively they are wiped out).
"because they are clueless anal retentive ideologues still stuck in the 18th century.
mmckinl"
LOL
Geoff: I think little if any money will actually be spent for quite some time. The thinking is that the presence of the program will calm the markets and get banks lending again. Stranger things have happened. Then a new Admin can try something better.
bearly writes:
We need a bank holiday - a 2nd inning stretch, like other 3rd world countries have, until this inning of the hapless destructive bailout game ends.
~
yep ...
Per Bob Brinker - Treasury will invest directly into the troubled banks....(ie Warrants)
Justme writes:
The market's not allowed to crash anymore. Circuit breakers, my boy, circuit breakers. After a measly 5% loss they shut the whole thing down.
First circuit breaker kicks in @ 10%
@Mozo Maz
I am in Atlanta, not sure if you live here too. Happy Chicken (Sonny Perdue) our governor, thinks all is well with the gas sitro. He is leaving for Europe so he can attract new businesses to the state, meanwhile we have no gas for people to get to the jobs that they have. BWHAAHAAAHAA!
I fgure I spent at least $200 less than I would have at retailers & restaurants this week because I don't want to use up the gas I have to have to go to work or sit in line for an hour and a half waiting for more. If we conservatively say that most people spent $100 less becasue of the gas shortage, and multiply that times the 5 million people who live here, that is a huge hit on the local economy in a recession. And today they said it may now bee a month before we have normal gas supplies.
geoff-
your thesis is EXACTLY what a research paper from MER, released friday, contains.
small regionals to get crushed.
said research also points out that small/mid size regionals are priced currently @ about 2.5 times TBV.
in the 90's, under similar circumstances, they were priced at .9 times TBV.
[Banks with marks under will have to write up, and be better capitalized. What happens to those marked over? ]
Absolutely. A total charade. We need a bank holiday and a forced kimono opening exercise so the bailout doesn't waste any $ on banks that will fail anyhow. Total joke!
"The thinking is that the presence of the program will calm the markets and get banks lending again."
Just like the bazooka in the pocket.
Ricky - I dont see how that could work. You cant get confidence to put a mark on the values. Until stuff trades, we seize up further.
What do you all think of that? Do people think that just the existence that Hank will act soon will be enough for someone to risk wondering what the mark is going to be, and effectively (possibly) moving their situation from bad to worse?
mmckinl
only to a modest extent can the Dems name the players. They can name the oversight committee, but they can't appoint someone to the Exec Branch.
Formally speaking, it would violate separation of powers.
Informally, there could be a backroom deal for Paulson to step down and be replaced by, oh, I don't know, Paul Volcker. I'd love that. best thing that could happen short of impeachment. But lets be realistic. ain't going to happen. Bush is still President. No way the Dems get to make that call. If they could do that, then they would have impeached Bush already, but they didn't because they don't have the clout.
GM has a story @ the NY times....where is Tanta??
bearly writes:
[Banks with marks under will have to write up, and be better capitalized. What happens to those marked over? ]
Absolutely. A total charade. We need a bank holiday and a forced kimono opening exercise so the bailout doesn't waste any $ on banks that will fail anyhow. Total joke!
~~~~~
1000% yep ...
Since what is going on in Capitol Hill is no important to the future of the nation, why can't these meetings with the four congressional leaders be televised live?
And how about the meeting the other day in the White House with McCain and Obama in attendance. Wouldn't it have been nice to televise that live too?
That way we could all know what the fuck is really going on.
It is hard for us, without being flippant, to even see a scenario within any kind of realm of reason that would see us losing one dollar in any of those transactions.
Joseph J. Cassano, a former A.I.G. executive, August 2007
Geoff: Do you think they can price these things in a day? They're complicated instruments. It will takes teams of green eyeshade types weeks to figure out what is in each one. I don't expect cash to cahnge hands until well after the election if at all.
That way we could all know what the fuck is really going on.
Dr. Jim Sadler
Just imagine a room full of strippers and lots of scotch.
"I think little if any money will actually be spent for quite some time"
Nonsense. Lenders will flock to the trough. It's free money and they will grab it until every nickel is gone.
Dark & Stormy Night- I live in Altanta . I am glad not to be spending that money either .
"Although it was not widely known, Goldman, a Wall Street stalwart that had seemed immune to its rivals woes, was A.I.G.s largest trading partner, according to six people close to the insurer who requested anonymity because of confidentiality agreements. A collapse of the insurer threatened to leave a hole of as much as $20 billion in Goldmans side, several of these people said."
THIS IS WHY AIG WAS SAVED! To save GS!
joe shmoe
from my understanding the FDIC would handle the audits and liquidations ... give THEM the money to liquidate and re-capitalize ...
Stock and bond holders be damned ...
$500 billion up front? This smells more and more like a Nigerian Letter. I say since we want to get out of this mess with more of what got us into this mess that we use the same terms. 0% down and 3% cash back to the taxpayers at close of escrow. The 3% is a paint and carpet allowance. Medium grade carpet costs $4/sq yd so 1670 sq miles (25x Washington D.C.). Let's see Congress get out from under that.
Then we start making payments, not up front.
So when this thing passes before markets open in Asia, where does the money actually come from to GIVE to these companies?
Do we have a line of credit with China? Does a clerk at the Treasury make a call to a foreign borrowing partner and ask for the money? Do they make us re-sign any loan docs? Or are we "good for it" (or is it a 'no-doc' loan?
Once the country approves it, does this clerk just click 'refresh' and on the computer screen the U.S. checkbook has $700,000,000,000 in it?
THIS IS WHY AIG WAS SAVED! To save GS!
crispy&cole
Crispy, One word: Satanson.
Elvis writes:
That way we could all know what the fuck is really going on.
Dr. Jim Sadler
Just imagine a room full of strippers and lots of scotch.
Scotch and strippers riding ponies too?
Ricky - a lot of books have already been looked at by a lot of people. They already know that they have no idea of what a price should be because you CANNOT know. It all depends on what you assume. Lots of people assuming different things about housing (I used to be one of the people in a RE investment firm that gave estimates that were routinely ignored for more happy assessments) and depending upon what you assume, you'll have a mark on your books that might have nothing to do with reality. I know these types of people...they are almost ALL going to be too optimistic about values.
Dr. Jim Sadler writes:
Since what is going on in Capitol Hill is no important to the future of the nation, why can't these meetings with the four congressional leaders be televised live?
~
A totally irresponsible and dangerous comment.
sincerely,
Banksters Clearing House LLC
.
PS - I bet we burn through this money fast. Just like someone winning the lottery. The winners spend faster than they realize.
I am very disappointed that y'all couldn't behave during the debate thread. CR has been working very hard lately to provide up to the minute topics for discussion. He lets us get away with a lot of comments that would be deleted from other blogs. It's sad to me that the one time he asked us to to something for him-- keep the postings serious and OT--it wasn't done.
.
Where is the referendum ?
"Once the country approves it"
THIS IS WHY AIG WAS SAVED! To save GS!
crispy&cole
~
Nonsense, AIG was too big too fail.
sincerely,
Banksters Clearing House LLC
.
In Soviet America, the ponies ARE the citizens.
http://americansfortruth.com/uploads/2007/10/folsom-street-fair-2007-086.jpg
Geoff/bearly: Have you ever done business with the government? It can take them 6 months to buy a pencil. Plus there are warrants to negotiate contracts to draft. And no team is currently in place to do any of that on Treasury's side.
mmckinl
I would much prefer a plan worked through FDIC. . . but I don't the Bush Admn allowing it, and they would fight Congress's efforts to rearrange the responsibilities within the Exec branch (separation of powers).
An Obama Admn, on the other hand, might propose to do exactly that (I am guessing on a hunch, not on anything Obama has said because he can't say such things now).
Meanwhile, things need to be kept on life support from today until january.
It's sad to me that the one time he asked us to to something for him-- keep the postings serious and OT--it wasn't done.
.
Dark & Stormy Night
I'm sure if I had been commenting, it would have been OT and civil. Sorry that I had plans already.
The BIG problem here is that Hank is a salesman from Goldman and Ben is an academic from Princeton, neither of them have any real 'market' experience. They are men of bluster and threory, respectively.
Thus the 3 pager. Which was basically just a big "I have no fucking clue what to do" statement to Congress. Well, into that vacuum stepped the current Congress and here we are- our collective asses blowing in the wind.
Paulson will try to jam $500B into the MBS/ABCP/CDO market and the market will eat that amount in heartbeat without even pausing to belch. Paulson wanted a HUGE amount to shock and awe the market upon his buying, or threat to buy this crap. Like any trader long and wrong who thinks he can push the price up by buying big lots haphazardly, he will learn quickly that no one, not even the US Treasury, is bigger than the market.
He should go talk to Gordon Brown ask him how Britain's defence of the pound against the euro ban worked back in the '90s. True idiots.
I meant wouldn't have been OT..
Brad Setser says Fannie and Freddie failed when the foreign central banks stopped buying their bonds. And the Fed?
http://www.campkc.com/images/pages/PonyPlay_3.jpg
A crawford resident tries out his new pony, a 33 year-old teacher from Dubuque, Iowa.
Sorry, here's the link:
Setser
Dark & Stormy Night
CR has been doing a great job ...
Unfortunately trying to keep up with a debate is something I don't think blogs are good at no matter who is running them ... the dialog moves too fast.
It's not CRs fault and we all owe a big thank you to CR for trying ...
CSC - maybe it's time to put down the bong.
"Anybody here that can help me see something I am missing??"
No, you're unfortunately clear-headed on this, from everything I understand.
So, $500 bill up front? That's giving away the store. In the end, I suspect, the oversight and controls and installments added to this plan will be little more than window-dressing to provide cover for the politicians.
I guess I'd better write my congressmen again and tell them i don't buy it. My local rep, a "liberal democrat," has always supported a complete revocation of the inheritence tax and is a wealthy man himself. That's the kind of Dem that's pushing for this -- probably the only kind of Dem we do have in Congress.
But he wants to save the whales! Damn, he's good.
Rob Dawg and Comrades
don't like $500B up front?
Well, let's remember that on Thursday morning there was a deal that would have given only $250B up front, and Paulson was on his knees begging Pelosi to give him that. . . but NOOOOOOOOO, Johnny Mac couldn't have that. The tax payers needed to be protected.
So now the repub President and Repubs in Congress have, for the moment, apparently pushed the up front figure to $500B.
Good thing those House Repubs are working for the people and fighting against Wall St. Yuppp. Yessireee.
Bailout talks falling apart:
rut roh
realistically, the financial sector gets ponies.... market rallies... PPT helicopters are fully loaded & gassed up... the map is there, you only have to read it.
Given the corruption of the Department of "Justice", why does anyone think ACORN is guilty of anything except working for poor people, a criminal offense only in this administration.
Screaming has been heard outside the room by reporters. Room contains 9 Dems and 2 Republicans. All Blackberry's have been confiscated so there is no contact with th outside world.
Screaming? Sweet. Capitol Hill is long overdue for a duel.
hurl writes: If you had $100,000 to invest, what would you buy today?
Anonymous writes: Ponies, definitely ponies.
Go short ponies... there won't be a lot of demand, as I suspect no-one will be getting theirs any time soon.
Meanwhile, things need to be kept on life support from today until january.
joe shmoe
~
Whatever... my take is that Bush will take whatever he can get right now ... bank holiday with FDIC audits is the only way to go, otherwise the public takes it in the shorts.
Yep we know how well GWB brand shock and awe works ( how many thousands of dead civilians ?)
Paulson wanted a HUGE amount to shock and awe the market upon his buying, or threat to buy this crap."
You watch, it will all be a charade. Treasury will put in a bid, allowing the bank to mark the price higher on their books. Then they will spend months negotiating warrants, contracts, exec pay, etc. All the bank cares about is that they can mark the price higher and avoid raising capital.
Why don't they at least insist that the whole thing expires before January 20, 2009? That way the new president and Congress would have to explicitly re-authorize the entire thing.
Believe me, we are going to have a dramatically different Congress and White House when this is over. Fuck Paulson, treasonous asshole!
central_scrutinizer writes:
Why don't they at least insist that the whole thing expires before January 20, 2009? That way the new president and Congress would have to explicitly re-authorize the entire thing.
~
NO ! with a deadline they would spend it all overnight !
Paulson wanted $700B with no strings and no review.
Bipartisanship got it down to $250B up front with oversight, equity, etc.
Johnny Mac and screaming laissez faire repubs broke that deal, and now it seems to be up to $500B up front.
So let's all holler at our Reps and Senators, scream no bail out! And then it can go back to Paulson's original plan of $700B with no strings.
or we could leave the dream world behind and deal with the political and economic facts.
(sorry for being so sarcastic. I apologize for bruised feelings but felt this needed to be said)
Ricky Ricardo wrote--If the goal is to stabilize housing prices, why not buy vacant houses and bulldoze them? Assuming a median price of $200K, $700K can buy 3 million houses and leave some change to buy put gas in the bulldozers. You'd create quite a few deconstruction jobs for the next couple of years and virtually eliminate the unsold inventory.--
Except there needs to be something alternative to bulldozing,
this makes the most sense since all these derivatives are leveraged against these bad sub-prime loans then the Gov't buys these houses, takes them of the market thus reducing supply. The defaults are taken off the market and thus the leveraged derivatives against these regain value and become marketable again.
If housing is the source of the problem then this is where the medicine needs to be applied, not to the leverage against the source.
Could someone try to help me theorize why the House Republicans are so immune to pressure from the big money guys in Washington?
You are making the huge assumption that these wingnuts are bucking Wall Street. In the end all the House Repubs are doing is helping to make sure almost every cent of the 700 tril gets into Wall Street's pockets. Oh, the big boys on Wall Street know that J6P will be cutting them a real fat check. The game they are now having the House Repubs play is to make sure that none of the Wall Street Food Stamps gets diverted to so-called "needy causes" such as Acorn. They know the Dems are pure whores who will give it up to big Wall Steet daddies any time, any place. But even a skanky whore needs to have some sort of lame ass excuse to give to their partisans in order to keep alive the fiction of a two party state.
Joe Schmoe at 5:41 - thank you for your response: "The leading House Repubs are prime recipients of Wall St support . . . or at least they have been up until now.
What's changed is that their political fortunes have turned to dust, and this was clear a few months back. Now they have nothing to lose and they are trying desparately and pyhrrically to save their own butts."
So what you are saying is that, as Democratic fortunes have improved, Wall Street has cynically turned off the spigot for these guys, and, for revenge, they are trying to screw Wall Street and at the same time become super-small government types to appeal to the last of their base?
Let's face it. The whole financial system in the U.S., and maybe most of the world, is going to collapse soon.
If somebody wrote a fictional story about how the U.S. financial system would collapse, this is pretty much how the story would go. Throw in those $90 Trillion in derivatives held by JPM-Chase, and you have a great story.
We're all fucked. We'll have martial law just in time for Christmas.
Have a nice weekend, anyway.
Acorn?
Are they like inner city "community organizers"?
Obama is a bigger Acorn, if they are going to run the government then might as well implode it right here and now.
Financial scorched earth.
The Dems are in the drivers seat right now ...
The public really hates this thing and the Dems could just say we tried but the Repugs wouldn't give any tax payer guarantees ...
game -set- match
bring on the bank holiday yeeeeeeeehaaaaaaaa!
NO ! with a deadline they would spend it all overnight !
This can be prevented by only authorizing, say, $250 billion prior to the deadline.
That way, the new Congress/Prez has a chance to review the program and decide whether or not it is working.
Not one dollar more until Bush and Paulson are gone.
Keep in mind that after this bailout either does or does not pass, Congress is gone for the year. No lame duck session is likely, because they've passed a CR for the entire govt funding for 2009:
CR passed
So after this week, Paulson and Bush are running the show unchecked.
Makes you feel real safe now, doesn't it?
Descendants of the Pilgrim Fathers are gathering in Plymouth. One told this reporter, Im leaving on a jet plane.
News just in: operator of the 747 the descendants were hoping to use, Mayflower Airlines, has just gone belly-up.
Vlad writes:
Acorn?
Are they like inner city "community organizers"?
~
Yep, the Republicans are so responsible ... ROTFLOL
so is anyone else enjoying the specter of america (the freest and bestest country in the universe) brought to its knees?
Kevin de Bruxelles, I thought I was cynical and realistic, but I can see that there are higher levels of disillusionment and comprehension yet to reach! You may well be right - but doesn't your theory give an awful lot of credit to the money guys for having a master plan way out ahead of events?
with a deadline they would spend it all overnight
Surely you jest. $500B is going to be spent before the election, at least.
Cit Sue
not exactly.
more the other way around. some of these repubs are toying with separation from Wall St (Wall St backs all players when it can), but most of them are not fighting against Wall St at all, as Kevin of Bruxelles explains.
What's going on among most of them (not all) is desparate demogoguery.
Ron Paul is an ideologue, internally consistent.
Compare to McCain: all the sudden pro regulation, fire Cox, economy is strong, economy is weak, for "The Bailout," against "the Bailout."
Their fortunes turned to dust and they are swinging wildly.
wall St may now cut off support for some repubs who really go to the mat on this. Others will get rewarded for proposing a capital gains tax holiday, and/or for increasing the amount given to Paulso
I'm really saddened to see this place devolving into partisan bickering. Can't you see there is no real difference between the two sides?
Paulson/Dodd/Schumer/Frank/Gregg all serve the same masters. It's like different flavors of the same confinement loaf.
I voted for Bush twice; I'll concede he is a total disaster and should be impeached. I will never vote straight party line again. Can't some of you take off the partisan glasses and see the truth?
If you are in the mood to nailbite,
Roll Call
and
Politics, Political News - POLITICO.com
seem to be leading news sites on up to minute info
this is latest from politico:
The bailout: Will the center hold?
The Dems have their parasite constituencies to think of.
I wanna see a demographic breakdown of the foreclosed homes. The BBC and some local newspapers have profiled the problem in certain cities but nationwide we haven't seen it. Why is that?
While no one has been immune it takes a certain type of person to imagine they can buy a $500,000 house on a $50,000 income and they vote Democratic.
Time to drink heavily. It's Don Julio time.
If you had $100,000 to invest, what would you buy today?
pay off all debt, stock up on canned goods, gasoline in 5 gallon cans in the barn, and a generator big enough to run the well pump. Already have sufficient wood to keep the house warm...
I like the insurance: sell trash to Gov't, buy new trash, insure new trash, collect insurance, buy new trash, buy insurance, sell to gov't, collect insurance ... round and round we go.
We will love the circus music playing continuously on CNBC,
unit 472...please spare us. A lot of people made bad housing purchase decisions. Some are in democratic leaning neighborhoods, some are in Republican areas. Probably the foreclosures to come (the option ARMS) will be more heavily Republican leaning, just as the Subprimes were probably democratic leaning.
So I'll ask you - WTF is your point?
Some Chinese bigwig called American lending practices 'ridiculous'. We won't be lecturing the world again anytime soon, unless Obama is elected.
Fortunately, we are too broke to entertain his plans.
joe shmoe
no deal , meltdown , Bush has to declare a bank holiday or the Republican Party is history ...
mmckinl
No, the neo cons are sacks of shit also.
They both are owned by the crooks on Wall Street.
But Obama is worse, he is a radical black activist that sold out both his people and the rest of America twice.
Once to the bankers, and once to a radical black minority.
A vote for Obama is the equivalent of an Israeli voting for a Palestinian organizer.
Here's to you fast eddie :
The Hustler video clip (Minnesota Fats & Fast Eddie meet)
R.I.P.
While no one has been immune it takes a certain type of person to imagine they can buy a $500,000 house on a $50,000 income and they vote Democratic.
Funny...In my area, we have a bunch of people making $85-$100k who think they belong in a "million dollar house." They tend to vote Republican.
Maybe it's not the party. Maybe it's the people.
Just a thought...
wall St may now cut off support for some repubs who really go to the mat on this.
Well, if that's the case, then that means they still have money, and that contradicts the whole "the world is gonna end if we don't rape the taxpayers
in both holes" motif.
The crooks need to work on their story, if this is the case.
Is it possible than the insurance option would be viable if say, a FI had a choice to :
A: Sell the trash outright and give up a stake in ownership to the Govt
or B: pay a premium for insurance and keep full ownership.
just brain droppings from a financial dunce.
unit472 writes:
The Dems have their parasite constituencies to think of.
~
LOL ... I didn't see the banksters arguing when their bonuses were rolling in for parasitic loans that shoud have never been made.
I agree with Geoff. americans of all parties too often believe in getting something for nothing.
ARM loans that are too good to be true.
Tax cuts and massive deficits while 2 wars go on? Something for nothing?
Let's get better schools by cutting funding?
Americans love that shit, or at least they have for 30 years.
Nothing pays for itself. Nothing is free. You get what you pay for and you get who vote for. Now we all have to pay and it is going to hurt.
unit472 writes:
"While no one has been immune it takes a certain type of person to imagine they can buy a $500,000 house on a $50,000 income and they vote Democratic."
Totally wrong most of these foreclosures are exurban and the exurbs are overwhelming Republican.
Swervin' writes:
We're all fucked. We'll have martial law just in time for Christmas.
What? And interrupt the holiday shopping season?
Maybe we'll see some sort of bizarro martial law. Rather than curfews keeping people at home, the military will drag maxxed-out consumers from their homes and force them to the malls to shop at gunpoint.
Vlad
just who are you voting for ?
Nader or Barr ?
but doesn't your theory give an awful lot of credit to the money guys for having a master plan way out ahead of events?
OT - this will break CR's heart, but Tanta will be happy. Ding dong, the DPA's are really dead:
<a href="http://www.thomas.gov/cgi-bin/bdquery/D?d110:1:./temp/~bdnqao:@@@X|/bss/d110query.html|>HR6694
It never made it out of committee.
Fuck you Toll!!
joe schmoe:
it could be argued that our entire economy is founded on getting something for nothing (or at least very little)
there is always a sucker at the bottom of the pile getting taken advantage of
Maybe it's not the party. Maybe it's the people.
Actually its "americans". You owe an apology to people everywhere.
Central Scrut
Yes, my shorthand was sloppy.
Wall St is an abstraction. Most of it is going to go belly up, but GS and Warren Buffett and a few other will still have bankroll. same thing happened in the depression.
I'm really saddened to see this place devolving into partisan bickering. Can't you see there is no real difference between the two sides?
Sure we see it. It is frustration to have to choose between the Palin's and the Obama's of this world. Neither one is qualified to run a small local organization on merit absent affirmative action.
but doesn't your theory give an awful lot of credit to the money guys for having a master plan way out ahead of events?
Not at all. Wall Street knew they had a pretty good deal on Thursday. But they had a few days to spare so they decided to use their House Repubs to push for an even better deal on Sunday. It's not like the Dems are going to walk away or anything. All this charade is doing is giving the Dems political cover to crawl back towards somehting closer to Paulson's original diktat.
We are all going to pay a price for the first 6 years of gwb's reign: tax cuts during wartime, cronies all thru the govmt w/orders to defang sensible regulations,no REAL oversight during their majority years, AGs around the country fired for no reason. And we wonder why all the bad actors are getting off scott free so far? Watch out who he pardons...I'm sure it will be another doozy...probably the only thing he is really working on now.
Corey writes:
What? And interrupt the holiday shopping season?
~
Xmas is in receivership ... Satander, Citi and JP Morgan are bidding ...
Lemme see the data is my point, Geoff.
Yes defaults occur in all ethno/income groups but they occur in disproportionate amounts. Anyone can lose their job or get sick but it takes a certain type to go to Quikloan
to finance their house.
I do delinquent accounts for a utility. I see it everyday and the neighborhood doesn't matter. As Barney Frank himself admitted on Bloomberg TV, and I quote, 'We have to admit some groups were not ready, financially or culturally, for homeownership". I kid you not!
Now, if the Chairman of the House Finance Committee can make such an assertion I think it only fair to ask, "what supporting evidence does he have that he has seen that is not being released to the American people?"
We are being driven into paupery as a result of mortgage loan defaults. We have a right to know who it is who has been defaulting.
Squeezing one off writes:
Time to drink heavily.
Some of you really are late to the party. Most of us long-time lurkers have been drunk for months in anticipation!
I am curious what would happen if no deal is reached. In fact, I bet that no deal will be reached this weekend. By Monday or Tuesday, maybe...
But even so, if no deal is reached, EVER, and the banks that own all the toxic waste go belly up, then do we not have all these brand new bank holding companies to lend to businesses to finance their operations? They deal dirrectly with the Fed, and the Fed will lend to them in order to lend to legitimate businesses. Would life not go on as usual (eventually), minus all the parasites that are now asking for our blood and for our children's blood?
If no bailout is passed, then it seems that the overlevereged are going to suffer the most, but we are a compassionate nation and will provide for them what they need to live.
There is nothing to fear. Bailout or no bailout, life will go on, and the sun will still rise on Monday morning and every morning thereafter.
Dodd and Frank are bad news. They will screw it up every time. I wonder why they get away with it.
unit472
the question is :
Where were the adults ?
Answer:
they were all at the beck and call of Wall Street and did their bidding ...
If you aren't qualified for a loan then who gave you that loan ?
When barney frank was talking about some groups not being ready, I think he was referring to the folks discussed in this Bill Maher skit, stupid people who can't keep accoutn books or know when they're buying worthless toxic stuff:
YouTube -
squeezed writes:
Actually its "americans". You owe an apology to people everywhere.
Are you saying the housing bubble was contained to America? Nah...the greed and blindness touched everyone who qualified. Spaniards, Brits, et al...
Americans were just the first rotten apples in the barrel.
on Bill Maher
the relevant part is about 2 minutes in.
Heard on a radio station that loud angry voices were heard emating from the discussion chamber.
We went to lunch, and then went to see an excellent community production of Jekyle & Hyde, and then to the auto parts store.
Our efforts to keep the economy limping along. It's nice to have money when nobody else does.
The community theater lady said that the number of subscribers was way down. And there were empty seats.
Too bad. . . .
So you're saying the B&B takeover by the UK really WAS a bed and breakfast? OK, yeh, then probably doesnt warrant comment.
I see we have a lot of conventional thinkers.
Yes, a lot of bad loans were made to people MOVING IN to Republican districts. But who were they? Were they Ozzie and Harriet? or were they people of a different sort. Maybe, maybe not. Let's take a look at the data. I'm willing to accept what it shows. Are you folks?
Everyone might want a refresher in market cirucit breakers under rule 80B just in case this all blows.
NYSE, New York Stock Exchange > About Us > News & Events > Media Resources > Media Resources
Any update on Fortis.
Let's take a look at the data. I'm willing to accept what it shows. Are you folks?
unit472
~
go get the data ... we'll wait for you here ... run along now ...
The debate drinking games were harsh... perhaps i should've tried watching the debate instead of the fark.com threads while playing... My liver will never forgive me.
For what it's worth, my small town bank was able and willing to give me a reportably large amount of cash without hassle on Friday morning. I suspect it helped that i was talking up an excuse for needing that much cash as i was in line, and that they know me personally as someone who wouldn't take "you can't have your money" reasonably or quietly.
Don't worry it's contained to the planet earth..thank god for NASA cutbacks
The suggestion that one party participated in this fiasco while the other mostly did not is just retarded.
People don't make home buying decisions based on their political party. Did I really have to state this?
I think the brunettes were the culprits. Probably enabled by country music fans, Pepsi drinkers, and a bunch of formerly breast-fed individuals.
Those damned Pepsi drinkers.
Joe and Kevin, thank you for your comments. You've given me some perspectives I hadn't considered before.
Pepsi does rot the brain. It's a gateway drug.
It is really unfortunate that we have a government that is so susceptible to this form of stampede. Vote not going the way you paid for? Lock them behind closed doors and let the big money guys pound on them until they give in - that's what best for America, right?
No, it is not. There is no need for haste at this point, other than to the degree that neglect by Henry Paulson caused it. Now his world is getting fried and since it is the only world he knows, he screams and yells that the world is doomed. Bush, of course, has had the run put on him by everybody around him who has an agenda at one time or another, so he is willing to trot once again and and say what he's told to say. He'll start a war or approve torture or allow domestic spying or steal money from Main Street - it is all the same to him.
The 'plan' is being crafted by people with very little knowledge of the causes of the situation (such as Paulson, as evidenced by his public statements over the last 2 years) and politicians with agendas for pork or with idealogical axes to grind. Economists? No. Experts on housing? No. On Mortgages? No.
In spite of every word that Paulson, Bernanke or Bush has said, this is Wall Street versus Main Street. It is simply a battle about who has to eat the garbage. Are banks still making political donations? Yes. Are they still paying dividends? Yes. Bonus money and stock options? Yes. Will they continue to do so if a giveaway is passed?
Yes.
And I know for a fact that a large percentage f new homebuyers in America were obese.
So the fattyfolks are the ones to blame.
ot political, but from a game theory stanpoint these Dems are idiots, any of you guys chess buffs- go see the Caro Kann defense, I can't believe these dunces are our "leaders".
they had/have teh perfect opening to sink their opponent Bush/McCain/NeoCons all in one fell swoop and instead are being hustled all the way to the guillotine.
all they have to do is bring the desperate Houser Republicans in close, get Paulson to agree with "caps on execuutive pay and equity" and then balk, halt all talks on the premise that the "people" didnt like the administrations "plan". CYA in Jan.
Just like that, they cripple the administration/mccain/ and they give thier candidate the backing of the "people".
These guys are truly stupid.
unit472 - again, what is your point? It's a bipartisan thing. My guess is the total $ amount in default is likely to tilt toward Republican borrowers.
But so what? A lot of people played a part in this mess. I didnt. Im a renter. I could have bought a home, and I can still buy one, but I wouldnt then, and I wont now.
It's absurd how out of touch with reality the bubble pricing was getting and this was years ago. Anyone who knows what fundamental valuation is in real estate is, and isn't knowingly part of perpetuating the system as it was, could have told you this was coming. But many people had a vested interest in NOT seeing it coming. Some were lenders. Some were borrowers. Some were appraisers. Some worked on Wall Street, some in insurance. There is more than enough blame to go around.
I think we are past the point of pointing fingers. We could point about anywhere and hit a target. But we should at least not pass some ridiculous bill that is going to give a huge benefit to the people who made the most money gaming the system.
That said, no matter how we try to fix this, we will invariably bail out some of those at fault. There is no getting around it.
If no bailout is passed, then it seems that the overlevereged are going to suffer the most, but we are a compassionate nation and will provide for them what they need to live.
Really now, don't think there's enough to go around.
Seen enough compassion in Iraq and New Orleans already.
Steelhead,
"I study monkey behavior"...my idea of a dream job.
Seriously, I envy you.
All that yelling from the room ?
football game ... Congress are all spread betters.
and do they have us spread ...
I will write Ron Paul in.
IMO we are witnessing a special moment in U.S. politics:
The splitting in two of the Republican party.
The Populist Republicans, led by the House Republicans, splits from the Pigmen Republicans and becomes America's new 3rd party.
Defeat this pig and let the fur fly. Let's have it out right here and now, no matter who goes down.
Then we can rise like the Phoenix.
Well said Wally, Marty Moose for Treasury Secretary
Any update on Fortis.
Fortis has at best two weeks to live. And I will be there Monday morning pulling my children's college funds out.
Fortis : les autorités cherchent des solutions - lesoir.be
In French, but emergency meetings going on this weekend between Dutch and Belgian Government officials
Unfortunately, I can't get the data. I can give you the data for my small part of the world but you won't like it.
Instead, I will give the data the San
Jose Mercury News compile for its small part of it. 2/3's, that 66.7% of foreclosures in that city were to homes 'owned' by Latinos. Not my data,
theirs. Got a problem with it?
Want to look at what the BBC determined for Cleveland. Didn't think so. Would interfere with your 'reality'.
Then we can rise like the Phoenix.
Vlad
~
I've seen Phoenix Arizona ... pretty bad down there..
Again, unit472..you are looking at predominantly subprime, which is the foreclosure problem that is passing away...the next foreclosure problem is the jumbos, and those are going to be the inverse of what you are looking at.
I just realized something. Almost all of the Congressmen supporting the bailout are caucasian.
The caucasians did this!
Gasoline Shelf Life
Gasoline Shelf Life
unit472
San Jose is 66% Latino so 66% of the foreclosures matches the Latino population ...
And most of the CEOs were white men. This is colonialism all over again!
The pressure on the House Republicans continues:
Sen. Robert Bennett (R-Utah), a key member of the Senate Banking Committee, warned Saturday that another major U.S. bank was "teetering" on the edge of failure and would go under if the bailout deal doesn't come through soon.
Bennett would not name the bank, perhaps learning the lesson from a situation last month when Sen. Charles Schumer (D-N.Y.), warned that California-based IndyMac could not cover its deposits, and there was a run on that bank by customers.
Bennett was essentially trying to warn the congressional holdouts on the bailout legislation that the situation was so dire that more U.S. banks would fail as soon as Monday or Tuesday, and he seemed to have knowledge, as a member of the Banking Committee, of another major financial institution in trouble.
"What will they say come Monday if another major bank fails I will not use the name," Bennett said. "There's another major bank teetering on the edge."
Gregg: Confident of weekend deal
Sen. Judd Gregg (R-N.H.) is not one for theatrics.
But after promising that Congress was "moving toward an agreement," Gregg laid out a bleak picture if nothing gets done on the $700 billion bailout.
"On Monday or Tuesday, Main Street America will be under dire stress," Gregg said.
He went on to discuss the possibility that student loans would be on hold, companies across America would have trouble making payroll, and people's ability to go the ATM would be in danger because of runs on banks.
How's that for a bleak Saturday afternoon outlook in the Senate?
With that dire warning, Gregg said he believed House Republicans _ the main holdouts on the bailout _ are getting on board now that their ideas are being considered.
"I can say with confidence that we've moved this thing down the road toward an agreement," Gregg said. "We're going to accommodate the reasonable concerns of House Republicans."
But when Gregg was asked whether the key House GOP principle _ government backed mortgage insurance _ would actually work to help with the economic crisis, Gregg declined to endorse the idea.
"I'm not going to comment on that," Gregg said. "I"m not an insurance expert."
New question:
If (when) a bailout bill does pass, what must happen to invoke Supreme Court scrutiny immediately? Surely much of any bailout deal would be ruled unconstitutional.
Who has to file the lawsuit, and where? Seems to me any taxpayer would have standing in this matter.
The Justices have lifetime appointments, which is handy in situations such as this.
And most of the CEOs were white men. This is colonialism all over again!
Currently Smoking Cannabis
~
When did colonialism end ? recently ?
mmckinl: Don't be silly, dude. The Republicans ended colonialism just after they defeated slavery.
Geoff, you're GUESS? Is that what you want to base things on? A goddamn guess!
I'm telling you that the data is out there because it is always available when there is a political need for it.
Say Acorn wants to accuse Wells Fargo of discriminatory lending. Wells has to respond and, with a push of a button on their computers, up comes the numbers. Races sex, age, income,
loan approvals, loans denied. Its all there. I just want to have a look see at the default data. Got a problem with that?
Are WE REALLY IN THAT BAD OF A SITUATION? SERIOUSLY?
"On Monday or Tuesday, Main Street America will be under dire stress," Gregg said.
He went on to discuss the possibility that student loans would be on hold, companies across America would have trouble making payroll, and people's ability to go the ATM would be in danger because of runs on banks."
IF SO, I DON'T THINK $700B IS GOING TO BE ENOUGH.
This is insane, making drama out of a bailout for crooks! This is like waiting all week to find out how much money the government will give to Enron, so that Skilling can start another SPE!
I live next to Beverly Hills.
the house next door was bought in Jan 2007 via mortgage fraud. Option ARM, inflated purchase price to take kickback from seller, new owner was running the same scheme on several properties, immediately rented to a group of party boys, got foreclosed 1 year later.
funny thing is that the fraudster owner started changing during the foreclosure process. he started speaking spanish - never did before. then he started getting tan, really tan, then brown, then full out black. Had a sex change operation, too.
i hear the people he got his fraudulent loan from at GMAC also turned latino, black, and female, and had lots of babies.
I know most people reading CR were too smart to hold GM stock, but do you know anyone who has held the stock. Are they speaking spanish now, turning brown or black, etc
Come on, fess up. We know this is just a minority problem.
No apologies for sarcasm on this one.
CalculatedRisk,
If I've missed, please let me know:
Ted
Anonymous writes:
This is insane, making drama out of a bailout for crooks! This is like waiting all week to find out how much money the government will give to Enron, so that Skilling can start another SPE!
LOL. This sounds right. And with that I shall shut down and fire up the BBQ. This IS insane.
mmckinl, The San Jose Mercury News said that the city of San Jose is only 1/3 Latino. I think they know their demographics better than you but I'm not picking on Latino's. So again why am I being badgered with assertions when all I want is the FACTS.
unit472- "2/3's, that 66.7% of foreclosures in that city were to homes 'owned' by Latinos. Not my data, theirs. Got a problem with it?"
What are you trying to say, that two-thirds of all "mortgage deadbeats" in California are Latinos?
I'll go you one better: 100% of the "mortgage deadbeats" in California weren't connected to reality when they bought.
In the big scheme of things, I'd hell of a lot rather be Latino and connected to reality, than a Caucasian in outer space.
So, again, what the hell is your point here?
The optimistic outcome is that Fortis plays WaMu and one of the five banks below may gets the role of JP Morgan Chase:
BNP Paribas (France)
ING (The Netherlands)
Santander (Spain)
Deutsche Bank (Germany)
HSBC (Britian)
weed tokers . . .
uh, the Repubs did end slavery, and they also advocated for workers rights, expanding the role of govt, etc, but that was the 1850s-1870s. Something changed between then and now.
YouTube - The Dark Bailout
Could someone try to help me theorize why the House Republicans are so immune to pressure from the big money guys in Washington?
There are essentially no more Repubs left in the House from the northeast/nyc/dc corridor, so most of the remaining Repubs aren't getting big money from wall street (although they are funded bigtime by the ultra-conservative Business Roundtable types. They are also totally powerless in the House and will have less power in January.
They have little to lose except their base voters who hate anything east coast, and many of them are in districts that are safely very conservative.
And, they are true ideologues, many elected with the Gingrich clan in the 1994/96 elections. They are not compromisers - which some may view as good, but is death to getting laws passed.
I hope the house GOP guys refuse to go along, because then the Dems can say 'we tried to support Paulson', and wait until late Jan. 09 to do something that might work (Buffet-style preferred investments/recap, RTC-III, Swedish-style restart, etc.).
In Jan.09 the Dems won't have to worry about a Bush veto, and the Senate is going to be more Dem. than today (maybe even more than 60 votes Dem.).
Dems should just appropriate some more money for FDIC to do its thing as a temporary measure, and then come back and rape/pillage wall street in Jan.
Congress says no to Mortgage cramming. Says the Republican caucus refuses to consider it. Why?
The article requested is no longer available.
If toxic mortgages are the problem, making them liquid again seems as if it would go a long way towards easing the crisis.
There's a LOT of shit here that just doesn't make sense. We're being held hostage over something and both parties and the executive are scrambling to cover their asses.
I seriously fear for the future of my country right now.
A Self-Fulfilling Prophecy: Congressman John Shadegg on the Paulson bailout:
David Freddeso: Is a bailout necessary to save the economy at this point from complete collapse from a major failure of multiple institutions at the same time?
Shadegg: I think thats the most difficult question that could be posed under these circumstances, and its the question that I have struggled all week to find the answer to. I have talked to a lot of smart people who know Wall Street, know banking, know the economy quite well, and you hear different opinions. Some will tell you that it is absolutely essential. Quite frankly, Im skeptical about that.
But I think that in some ways the question doesnt matter any more. Because Secretary Paulson chose to raise the matter in the way he did that is, to go public in a very high-profile way, not just with his concern, but with a kind of Chicken-Little, the-sky-is-falling kind of demand it became a self-fulfilling prophecy.
That is to say, once the secretary of the Treasury announces to the world that there is a pending financial collapse, perhaps as great as the Great Depression, and Congress must act he has sent a signal that essentially tells world markets that Congress must act. I will tell you that has been one of the most frustrating things about this since the very beginning...
I cant tell you how many members of Congress were stunned at that news, and were stunned that none of their local bankers were calling them. And then they called their local bankers, as I called my local bankers, and my local bankers said, I think things are just fine. I talked to one banker who said, Gosh, weve got money, and were liquid, and were making a profit. And were in the market selling loans, and weve got competitors trying to sell loans against us.
So, at that point, theres a disconnect. Secretary Paulson is claiming that this is a catastrophe of generational proportions that could go worldwide. And none of what we were hearing back home matches that. And Im not speaking just for myself, but also for many of my colleagues who were making similar calls. They werent being called by their bankers, or by any of the businesses back home saying, I cant borrow any money.... If, in fact, Paulson had struck a chord with the American banking community, wouldnt you think that after he announced on Friday that there was a crisis of liquidity that threatens the entire nations financial solvency and Americans jobs from coast to coast, that my community bankers in Arizona wouldnt have been picking up the phone by Monday morning, if not over the weekend, to say that I share the Secretarys concerns?
Dick Morris had predicted that McCain would come out against the Paulson bailout last night at the debate and endorse the principles of the House Republican plan, which Morris had deemed a "brilliant move." Looks like McCain isn't quite a "brilliant" as Morris thought.
The bottom line is it's too close to elections for any deal to be done. Too many Americans are against this bail-out and congress knows it.
Every congressman who votes for this bail-out will have their name posted on the internet and they will be voted out of office. Period.
We the majority who are against this bail-out will not allow America to dig a deeper debt hole. It has to stop now.
If the banks want to stay in business they have to start charging higher interest rates. That is how they make money!
Low interest rates are over and artificially keeping them low will cause a credit freeze like what is happening.
Let the markets take care of themself!
Taxpayers per se absolutely do not have standing purely by reason of their being taxpayers.
Unclear why you believe any of it is unconstitutional.
Before anyone does anything dumb, I work on WS and the bailout is rape and garbage but I'm also a law professor and law is law like it or not.
Be sure you understand that Congress absolutely can pass legislation that removes the jurisdiction of federal courts to review it.
But Congress cannot pass legislation that removes the jurisdiction of the Supreme Court to determine the constitutionality of such legislation.
So a "no review" clause is not unconstitutional either, and its been done before.
If you want to research this instead of bloviate, look up "Political Question Doctrine" and "Marbury v Madison" and Articles I and III and go from there.
Here's the key paragraphs from the French article on Fortis with my translation (trying to convey the nuance rather than word for word):
La porte-parole a estimé qu'il était « un peu trop tôt » pour évoquer des scénarios, mais « je pense qu'on pourra encore communiquer ce week-end », a-t-elle ajouté.
The spokesperson [for the Belgian banking regulatory agency CBFA] judged that it was "a little too early" to describe any course of action but he added that "I think there will be more to say this weekend."
Selon le journal belge De Tijd, des responsables des grandes banques belges, du CBFA et de la banque nationale des Pays-Bas vont essayer de trouver ce week-end une solution pour Fortis, en pleine tourmente sur fond de rumeurs, démenties par sa direction, sur des problèmes de solvabilité.
According to the Belgian newspaper De Tijd, officials of the major Belgian banks, the CBFA, and the Dutch central bank will try to find a solution this weekend for Fortis, severely afflicted by rumors - denied by its management - about solvency problems.
joe: I am aware of the end of slavery. Modern Republicans claiming that "their" party "ended" slavery is about as honest as Democrats claiming their party wrote the Declaration of Independence. You could make a case for it being technically true, but it's a silly assertion. It's also one that Sean Hannity makes often.
Lincoln was a Republican. But Republicans did not "end" slavery.
Remember the most irrational will win in a game of chicken.
Reuters has the article in english...
What Dodd tried to do:
Dodds proposed statute and in some respects, it is far worse than has been reported. Senator Dodd has placed a loophole in the bill that is explicitly designed to siphon off tens or hundreds of billions of dollars to the Housing Trust Fund and the Capital Magnet Fund even if there are no net profits in the $700 billion venture.
Here is the provision that has already been widely noted:
d) TRANSFER OF A PERCENTAGE OF PROFITS.-
(1) DEPOSITS.-Not less than 20 percent of any profit realized on the sale of each troubled asset purchased under this Act shall be deposited as provided in paragraph (2).
(2) USE OF DEPOSITS.-Of the amount referred to in paragraph (1)-
(A) 65 percent shall be deposited into the Housing Trust Fund established under section 1338 of the Federal Housing Enterprises Regulatory Reform Act of 1992 (12 U.S.C. 4568); and
(B) 35 percent shall be deposited into the Capital Magnet Fund established under section 1339 of that Act (12 U.S.C. 4569).
(3) REMAINDER DEPOSITED IN THE TREASURY.-All amounts remaining after payments under paragraph (1) shall be paid into the General Fund of the Treasury for reduction of the public debt.
The biggest problem here is that the 20% is not taken from net profits, but rather from any profit in the sale of each and every individual troubled asset.
For example, assume that the new Agency buys three troubled assets for $1 million each. One is sold for $2 million, while the other two are sold for $300,000. Thus, $3 million in investments are sold for $2.6 million, representing a $400,000 loss.
But Senator Dodds bill does not provide for losses to offset gains: Not less than 20 percent of any profit realized on the sale of each troubled asset must be given to the two housing funds, so $200,000 of the $1 million profit on the one asset that made a profit must be siphoned off to the housing funds, despite the $400,000 net loss on the three deals taken together.
As an analogy, imagine a regular trader of stocks who takes lots of hedged positions and had net losses of 25% this year, but couldnt offset his gains with his losses, instead having to pay 15% income taxes only on his gains.
How much might be siphoned off under the Dodd bill? It all depends on how long the new credit Agency is in force, how often it turns over its portfolio, and how variable its returns are.
Insane partisanship wasn't born until long after.
Jim Portland Or
Your'e kidding, right
Phil gramm of Texas, lobbyist for UBS?
Or this brace of biogrpahies of House repub revolters from the NY TImes:
- NY Times
Wall St is a street in lower Manhattan, that is true. But the Wall St we discuss here is an abstratction covering an array of financial firms that are multinational, and some are even based in the South and the West.
Things changed about 50 years ago
We have to face reality. We got into this situation by not facing it.
If AIG went bankrupt because it was writing life insurance policies to cigarette smoking alcoholics at the same premium level as they issued policies to observant Mormons we could put our finger on AIG's problem.
In order to come to grips with the mortgage default problem we have to be able to analyse who it is who is defaulting. It may lie outside income levels. It is in my business.
Dems should just appropriate some more money for FDIC to do its thing as a temporary measure, and then come back and rape/pillage wall street in Jan.
JimPortlandOR
~
yep
I think it's time for a real third party, from a nostalgic point of view, bring back the Bull Moose Party.
The problem here is that we are not thinking big.
Lets issue 2 trillon of US bonds @ 5% tax free.
Spread 1 trillon around at the same terms Warren Buffet got from GS to save the banks.
Hire 200 of the best traders and hedge fund managers, divide the second trillon evenly among them, give them 5% of profits, forget about any regulations and set them free.
Five years later pay off the bonds and send the profits to all the taxpayers. My plan will make House Repubs happy (free market, no regulation)Dems happy (govt. checks to everyone) Paulson happy (his buddies get 5% and jobs) and Bush gets out of town before the place burns down.
"If you want to research this instead of bloviate, ..."
fred | 09.27.08 - 6:50 pm | # "
fred- that's why I asked the question. Bloviate? Pot, meet kettle...
The arrogance of your post is why people dislike lawyers and WS types. You proudly proclaim to be. Good luck with all that.
That's what I was affraid of-
"Dodds proposed statute and in some respects, it is far worse than has been reported. Senator Dodd has placed a loophole in the bill that is explicitly designed to siphon off tens or hundreds of billions of dollars to the Housing Trust Fund and the Capital Magnet Fund even if there are no net profits in the $700 billion venture."
the swedish model is the best. It was based, in fact, on what FDR did 1933.
Shmoe, what are you talking about? What do you think FDR did?
Not really. It's a dry heat. LOL.
...'proudly proclaim to be both'...
I love how Paulson's original bill, (3 pages), is now over 100 pages and counting.
Lke that around my part of metro ATL (Roswell)
"Mozo Maz writes:
I walked down my street around noon, the lines at the gasoline station were about 1/3 of a mile long. Maybe I'll check again after dinner, see if it's improved..."
Weed toker
Of all the claims that couldbe made that any political party ever deserved credit for doing anything, the Repubs ending slavery is about the strongest claim that can be made.
It wasn't just Lincoln. the repub party was formed in 1854 principally over the issue of slavery. The South seceded in 1861 precisely because Lincoln the repub had been elected. Democrats in the North were split on the Civil War and it was Dems who started the NYC Draft Riot which lynched blacks up and down Manhattan.
Sure, it is a bit reductionist to say the repubs ended slavery. But in the context of claiming that any party ever did anything, it is the strongest case and holds a hell of a lot of truth.
sue writes:
I think it's time for a real third party
Sue-
Be very careful what you wish for. The Nazi Party is a true 3rd party. So are the Communists.
Squeezing one off writes:
I love how Paulson's original bill, (3 pages), is now over 100 pages and counting.
~
the banksters and you were the only ones who loved it ...
.
Cliffo
I'm telling you what one of the directors of the Swedish nationalization said recently in an interview. They started from the FDR model of closing banks, examining them, reopening them. They went beyond FDR, but they started from his model.
Sorry i don't have the link handy. I think I posted it a day or two back. The interview was on NPR.
I truly hope this piece of shit bill/propsal doesn't get to a vote.
This is the Bush administration's legacy- $700B gift for Wall St. fraudsters.
Signed sealed and delivered unto the people by who?? Democrats.
Unfuckingbelievable
You didnt ask anything. You write tendentiously, as you well know. It's a word. Look it up.
"GOT TO BE UNCONSTITUTIONAL" ???
You say that without a reason why, its bloviation.
There's not a lot of people in Congress with serious economics and financial knowledge. Or on their staffs.
There's a lot of them with serious legal knowledge.
Legislation pig headed stupid, regardless of politics, but constitutional insofar as we can judge from what proposals are coming out.
FYI, occasionally legislation is deliberately sabotaged by insertion of language known to be court-bait, as its the only way both sides can back down with political cover.
THINK THIS ONE THROUGH: Is it constitutional for an executive agency (SEC) to delegate its power to a private body (NYSE); that's what they did in telling NYSE to determine additions to list of non-shorting stocks. Is that an unconstitutional delegation? Or, is the power to do so inherent in its power to regulate the NYSE?
POINT IS things are NOT obvious.
joe shmoe
The Republicans lost all credit to ending slavery when they endorsed the "Southern Strategy". period
central_scrutinizer -
i couldnt agree more; what we have here is an illusion of choice.
i watched the debate last night, and wanted to cry.
Did you know the "North" passed the 13th and 14th amendments to the US constitution only by not allowing the states 'that had never left the Union'
to vote on them.
We are about to witness a similiar exercise in the abrogation of the Constitution this weekend.
All, I started a thread on B&B and Fortis.
Sounds grim for Fortis.
Best to all.
don't you think most of the 100 pages of the bill are the details of oversight and legal liability that Paulson evaded so neatly in his 3 page proposal by saying oh so simply that he would be above the law?
decrees from dictators can be very brief, like give me $700B and I can do whatever I want.
living under the rule of law takes statutes with precise definitions.
You want 3 pages or you want oversight?
Fred-
The first two words of my post: "New question:"
Imagine that, a Wall Street law professor that assumes instead of actually reading. How did we get in this mess again?
The reason I even posted it is because I''m grasping at straws to think of anything that can derail whatever monstrosity passes. Please forgive me for not being as 'educated' as you.
So as I understand it now the bill will pass with something for all factions totalling $1.7 trillion and nothing for us except a greater depression!
can I haz trikkle down?
Suppose Paulson's request to abrogate contracts were worth something? Could he do any good with it? What about the credit default swaps? Some think they are looking at a gain; others are staring into the abyss. What about insurance not valid for third parties? What about no "taking" if the gain/loss is a paper loss?
Thanks, fred. Your points about constitutionality and the uneven expertise of congresscritters is well taken.
mmcknly
uh, yeah, some things changed between 1876 and 1968.
just because the party name is the same mean squat, but the repubs in the 1850s and 1860s ended slavery.
likewise, the Dems say they are the party of Jefferson and Andrew Jackson, slave owners and racists. they'd be thrilled, just thrilled, to see their party electing a black man President . . . so when Obama wins will you say the Dems did not elect the first black president?
joe: I think I was not as clear as I should have been. That group of men (Republicans 1800s) at that time DID have MUCH to do with the end of slavery.
My point only is that is has virtually no relationship to today. The current parties (both), what they stand for, and who they represent, have no relationship with the parties of the past.
Modern Republicans use it as a badge of honor they do not deserve.
Modern Dems do the same thing with the working man. People called Democrats did some good in the past, but today's Dems are nothing like the old days. Yet they still wear it on their sleeve as if it is relevant.
The Swedish Esperience
Sveriges Riksbank/Riksbanken - The Swedish Experience
Money Quote (although I'm not sure than this proves these were FDR's policies(:
While working at the Ministry of Finance on the initial problems in the banking sector we started to study historical and international records of financial crises. Irving Fisher's well-known paper in Econometrica, "The Debt-Deflation Theory of Great Depressions," from 1933 provided inspiration. We also came across a new volume, The Risk of Economic Crisis, edited by Martin Feldstein and containing interesting contributions by, among others, Benjamin Friedman, Paul Krugman, Lawrence Summers and our chairman today, E. Gerald Corrigan.
My copy of The Risk of Economic Crisis, arrived yesterday from Amazon UK.
IF you want to agree
(i) tone is hard to tell in ims and postings
(ii) neither one of us got ad hominem and stayed ad rem
(iii) "bloviation" is not a personal insult its a debating/argument characterization which may be deliberately overkill and unfair but is not punch-you-out personal
then of course we can agree to be cordial.
can I haz trikkle down?
Down the back of your thighs.
Ted writes:
CalculatedRisk,
If I've missed, please let me know:
I know, I know: we'll hire some of the firees from Lehman Bros. to do it, on 7 figure consulting contracts.
The Justices have lifetime appointments, which is handy in situations such as this.
Yup, until we see a story like this (fictitious, names changed to protect the innocent.)
AP - June 3rd, 2009
Supreme Court Justice Ralph Rut-roh was tragically killed in an automobile accident, late last night. He was driving home from his office in the Capital, when he apparently swerved to avoid a squirrel and plunged into the Potomac.
Police retrieved the vehicle, which by an amazing coincidence had no brakes and bullet holes in the side.
Justice Rut-roh was involved in deliberations on the constitutionality of the 2008 Paulson act, which has come to the docket after a Federal Appeals Court upheld it.
I'm in favor of counting how many angels can dance on the head of a pin.
For all the good it will do it will, nonetheless, occupy our intellectuals with something to discuss because that is what matters to them.
Never ever get to the bottom of the problem because they will then not be able to dazzle their interlocutors. Ignore the gun on the floor, the bank did not commit suicide by loaning money to deadbeats,it merely needs a 'liquidity injection' or someone with a 'bigger balance sheet' to take on its soured loans.
No, we must never look at just whom it was loaning money to and come to a different conclusion. Wouldn't be 'right'. Let's do WAMU again.
at the end of the day every few years someone doesnt like a spending bill and brings a private action...last time it was civil rights groups arguing that it was unconstitutional to allow segregating universities to be nonprofit
always lose.
im not saying this is the way it should be, only that this is the way it is.
you want to stop this bill (i do), call your rep.
unfortunately mines clueless dem and my senators are chuck and hillary so, you know...
THEY DO LISTEN, and when you meet (most) of them in person theyre not morons, theyre trying to do their jobs
what you have here is...
well you have the last 3 hours of the TITANIC
you have people in an end of the world once in a lifetime scenario
sometimes they rise to the occasion
sometimes they sink to debasement
you can never tell how someone will react in a major crisis
but life is not made up of major crises, and when you're inside one its hard to remember that
the end of the world happens only once. this probably isnt it.
life goes on.
Congress says no to Mortgage cramming. Says the Republican caucus refuses to consider it. Why?
This is the most unacceptable item in the bill, even more then bailing out the pigmen
The pigmen fuck everyone to some degree. If the 20% or so of irresponsible people get a cram down it is grossly unfair to responsible people. People compete with each other, giving the worst hundreds of thousands in debt relief burdens the responsible.
The inevitable response will be the formerly responsible will default even if there is no need, as having your neighbor given a huge windfall rewarding his irresponsibility is totally unacceptable.
Further the benefit would largely go to minorities and benefits specific states more then others. It basically would be a rehash of the HUD and FHA policies that created the monster to begin with.
At the risk of repeating myself, little of the money will be spent in the next few months. Government contracting rules, the need to negotiate warrants and the lack of an existing Treasury infrastructure will make this baby slow as hell to get off the ground. If they buy much of anything before 01/20/09 I will be very surprised. Then a new Admin may scrap or modify the whole thing.
This is just political theater. People are way to upset over this.
Fred-
I'm well aware of the power of calls, letters and faxes to Representatives. I worked in Congress and intimately know how things work in reality.
Hence, my hail mary S.C. wishful thinking. Congress is beholden to the 1%.
unit472- "Ignore the gun on the floor, the bank did not commit suicide by loaning money to deadbeats,it merely needs a 'liquidity injection' or someone with a 'bigger balance sheet' to take on its soured loans."
I respectfully submit to you that 100% of the shitpile in which the people of the United States are now standing was engineered by a group of highly-paid, Ivy League-educated whores, 99%+ of whom were probably caucasian.
"THEY DO LISTEN, and when you meet (most) of them in person theyre not morons, theyre trying to do their jobs"
Absolutely correct. Their 'job' is getting re-elected, PERIOD. Campaigns ain't cheap.
unit472, I wouldn't be surprised to find that race or ethnic origin (those are the factors you're hinting at, I take it) are correlated with bad loans, even after factoring out the impact of other correlated factors that are commonly used, like income and credit rating. But I think it's narrow-minded to believe that the bulk of the bad debt problem we have now was due primarily to this factor. Where I've lived, vast numbers of middle-class white people were drinking the Koolaid, and that's where the bulk of the financial problem will come from.
Brian: Linky?
Which Brian, and linky for what?
Time to call the bluff.
The crisis is fatal to Wall Street, but Main Street is more resilient. The economy will suck, but its implosion is nowhere imminent.
The fight to have the whole $700B and not installments is the clue. This is a war chest for a real war. And not to save Goldman. Goldman will be saved by $200 oil. And this war chest is to mitigate related fallout.
Expect friendly gestures from people who call us Satan
"Bennett was essentially trying to warn..."
Of course he was. He wasn't trying to threaten, cajole, browbeat, pressure, scare or stampede. Nope, none of those things.
ive never been represented by the likes of those. only decent people i occasionally agreed with.
i have a home in an upper middle class area represented by jerry nadler, congressman for life.
even he...see him all the time on the street...shops in little stores, etc, wears inexpensive clothing...
they are NOT all crooks and liars, and i suspect that (rangel excepted) the reps are more honest than the senators, and it was designed that way 200 yrs ago
most of them could make far more in private life
my point was its unfair to judge someones life by how they behave in a crisis
AND IM LIKE YOU i wrote my congressman and told him that i would max out contributions to whoever is his opponent and do anything else to fire him if he votes for this
being a realist doesnt mean i cant know rape theft and garbage when i see it
"unit472, I wouldn't be surprised to find that race or ethnic origin (those are the factors you're hinting at, I take it) are correlated with bad loans, even after factoring out the impact of other correlated factors that are commonly used, like income and credit rating."
If someone is going to start playing the race and ethnicity cards, then they should damned well be prepared to show that the proportion of foreclosures attributable to a given ethnic group is significantly HIGHER than that group's incidenc in the total population where the foreclosurs took place.
If I'm wrong I will be relieved to admit as much. Now, can I please see the data or is that forbidden?
Fred-
For 2+ years I was allowed in the closed-door meetings that Congressmen have with their staff. The day-to-day stratigizing - the 'sausage' that no onw wants to see made.
Please, PLEASE tell me you are in Joseph Crowley's district in NY (7th). I only wish this because in his Capital Hill office's kitchenette, his staff tapes up the "funny" correspondence they receive from their constituents - ridiculing them. You know, the ones handwritten, with misspellings and poor grammar.
Imagine the problems facing a poorly educated person that might lead them to pen a letter to their Congressman in long-hand requesting assistance.
I witnessed that wall on at least a dozen times (their server was in the kitchenette). Each time was a fresh batch.
I respectfully submit to you that 100% of the shitpile in which the people of the United States are now standing was engineered by a group of highly-paid, Ivy League-educated whores, 99%+ of whom were probably caucasian.
Sure, and it probably can be refined further.
The point is that they engineered the bait.
We all are the fish.
What they are proposing is that all fish go down because some groups of fish disproportiantely took the bait.
Even if you disregard this they are proposing that all fish go down because some took the bait.
I say let the pigmen make ceviche out of the ones that took the bait, and the ones that get food poisoning because they ate too much bad fish should rightfully die.
The fish that did not take the bait and the pig men that did not eat the bad fish live to stay in the game.
...wishing I had a proof-reader on MY staff... please don't tape my posts on the wall of your kitchenette fred!
I hesitate even to dignify racist tripe with a response, but what matters is not how many foreclosures but how many $. Yes, where I live (mid-size city in the NE) almost all the foreclosures are in the inner city. But these are houses that sell for $50 or $60K. Ten of those don't equal one over-priced McMansion in Modesto.
friardaddy writes:
"So when this thing passes before markets open in Asia, where does the money actually come from to GIVE to these companies? Do we have a line of credit with China? Does a clerk at the Treasury make a call to a foreign borrowing partner and ask for the money? Do they make us re-sign any loan docs?"
Excellent point. In my opinion this was not discussed by our political leaders. The assumption is that the US Treasury has infinite access to funds. I am also disappointed that there is no repayment plan, except to hope that we can eventually make a profit on this $700 billion adventure.
Will the Government of China cough up hundreds of billions for this? They are giving hints that they might not, but our politicians aren't listening.
At least I spelled Capital Hill correctly, hehe.
(I know it's supposed to be Capitol, btw. Spent the last 6 hours in a pool hall getting swashed in memory of Paul Newman. I'm just trying to type on the keyboard in the middle of the three I'm seeing right now, spelling be damned.)
invisible hand-They won't spend more than a small fraction of the money. The entire charade is just to put an above-market bid down so the holders of the paper can carry the assets on their book at that value and avoid having to recapitalize.