It may seem like a long time ago, but it was only on Monday of last week (Sept. 15) that Lehman Brothers filed for bankruptcy; the equally big news was that the Federal Reserve declined to bail Lehman out.
Ive read several details regarding Lehmans demise and learned some interesting facts. The bankruptcy filing was pre-dawn on the 15th, according to Bloomberg. The filing document is available in PDF form on the internet: it names Lehmans largest unsecured creditors, and the dollar amounts of their claims.
Citibank, N.A., as indenture trustee is listed as Lehmans largest unsecured creditor, with a claim of Approximately $138 billion in Bond Debt.
Following Lehmans filing, J.P. Morgan transferred $138 billion in two payments to Lehman Brothers$87 billion on Sept. 15th and $51 billion on Sept. 16th. Bloomberg reported that the transfer of funds was to keep financial markets stable, and to settle Lehmans securities transactions with customers...and clearance parties, according the [court] filing.
After these transfers, also according to Bloomberg, the Federal Reserve Bank of New York made two subsequent payments to J.P. Morgan: $87 billion on Sept. 15th and $51 billion on Sept. 16th, for a total of $138 billion.
Lehmans bankruptcy court filing said that J.P. Morgans $138 billion transfer to Lehman was At the request of the Federal Reserve Bank of New York. I have not been able to find an explanationin media reports or from the Federal Reserveof why J.P. Morgan needed to be a party to the $138 billion that Lehman received, and that the Fed transferred.
Im also unable to find an announcement from the Fed that it was making the transfer.
One could infer that J.P. Morgan was used as a third party in order to avoid the perception that, despite statements regarding not bailing out Lehman, the Fed was indeed assuming $138 billion in obligations that were in default upon Lehmans bankruptcy.
Once could also infer that such an action by the Fed amounted to a $138 billion bailout of Citibank, which was the dollar value of the Lehman-issued bonds Citibank held. Citibank issued a Sept. 15 press release saying that its role in this issue is administrative in nature and does represent exposure for Citi to Lehman. The statement did not identify who or what owned the $138 billion in bonds.
I hope that more facts become available showing that the inferences are mistaken, and I invite journalists and others to bring any such relevant facts to light.
the national news networks are in the hands of spineless corporate weasels who fear and tremble at the thought of being accused of liberal bias. so everything they say comes out as bland as paste.
Shelby is right that the Paulsonian concept is flawed and that we should have a better plan, but it is clear Shelby has no alternative in mind, just an injunction to listen to hundreds of economists. That won't stand up for long in this political context.
I think that the MSM, the Fed, GS or JPM cannot do anything about this now.. this is beyond their capabilities.. they have overreached themselves in a world where the west is no longer the dominant power..
There is no quick fix and only Shelby realizes it. The recovery will come only after home prices have fallen to affordable levels and industries adjust to reality. Give him credit for showing some spine for standing against the bailout which won't do much good
The House republican plan is to suspend capital gains tax for two years?
Curious Capitalist: [The plan] of the House Republican Study Committee seems to be a joke. It calls for a two-year suspension of the capital gains tax to "encourag[e] corporations to sell unwanted assets." But the toxic mortgage securities clogging up bank balance sheets are worth less now than when they were acquired. Meaning that no capital gains tax would be owed on them anyway. If you repealed the tax, banks would have even less incentive to sell them because they wouldn't be able use the losses to offset capital gains elsewhere. Seriously, where do these people come up with this stuff?...
Shelby is right that the Paulsonian concept is flawed and that we should have a better plan, but it is clear Shelby has no alternative in mind, just an injunction to listen to hundreds of economists. That won't stand up for long in this political context.
Isn't the best bailout plan no bailout plan at all?
ShortCourage writes:
Too bad Shelby wasn't a little more detailed and eloquent about the objections of "these economists" to the plan...
ShortCourage | 09.26.08 - 1:51 am | #
He was pretty clear in a down homsey way - he doesn't want to do anything. He said the market will fix it.
What is not to understand? His constituents will get it 100%.
The economists' letter is very short and thin. If shelby had read the whole text aloud it would not have added much to his comments. The letter was minimalist to maximize the number of people who would sign. Likewise, Shelby's statment was minimalist to keep a coalition together in opposition, and also because he knows a big part of the publi is liable to be sheared away from him by left populism.
The repub alternate plan is capital gains breaks to firms taking bad paper and lowering regulations. How does that help the moosehunters of America?
If barney Frank cuts loose with a left populist Dem bailout, then the Repubs are in trouble.
You might agree with Shelby's goal of stopping the bailout, but he didn't make any argument: all he did was wave a sheaf of papers in the air to prove exert support, refused to say what it was he didn't like, and refused to propose anything else. Yuck. What a piece of work.
Bear, Lehman, Merryl all disappear, essentially failing institutions.
WaMu and Indymac, largest and 3rd-largest bank failures.
Fannie, Freddie & AIG effectivly nationalized to avoid failure.
Chinese threatening to bail out of US bonds.
Oh yeah, and don't forget oil is still over $100, MUCH higher than a year ago.
Hey, this is getting pretty serious...Think some fiscal stimulus will help? How about we use the Paulson philosophy and "hit it hard" with a $500B worth of checks in our mailboxes?
Exactly... There is no alternative bailout plan. The $300 billion plan passed by Congress to have workouts on mortgages was the best thing gov't can do. Also the gov't is still providing mortgages for qualified buyers at 6% interest.
Any consensus yet on what's the triggering event that has Paulson on his knees? As much as you'd like to believe it's just concern for GS, it's pretty clear he's scared. Hmmmm, like he got a glimpse of abyss and something was staring back.
Who said it
"When the stock market crashed, FDR got on television"
"Barak Obama ain't takin my shotguns. If he tries to fool with my beretta, he's got a problem"
I was disappointed with Shelby's objections too.* Couldn't he talk about how the crises are occuring in bank clearance and short-term commercial paper and that propping up the prices for long-term MBS won't help with either problem? I would think he knows enough for that. I'm not much for arguments by authority.
But still very happy he's helping block this abomination.
Have you considered the fact that almost every large commercial US bank (and many more in other countries) are now effectively zombies propped up and controlled by their respective central banks..
or in the cases of some.. the disease has not yet shown any symptoms..
Biden stuffs his foot in his mouth with more or less full sentences, but more often is very sharp and knowledgable.
Palin does this:
COURIC: Why isnt it better, Governor Palin, to spend $700 billion helping middle-class families who are struggling with health care, housing, gas and groceries? Allow them to spend more, and put more money into the economy, instead of helping these big financial institutions that played a role in creating this mess?
PALIN: Thats why I say I, like every American Im speaking with, we're ill about this position that we have been put in. Where it is the taxpayers looking to bail out. But ultimately, what the bailout does is help those who are concerned about the health care reform that is needed to help shore up our economy. Um, helping, oh, its got to be about job creation, too. Shoring up our economy, and putting it back on the right track. So health care reform and reducing taxes and reining in spending has got to accompany tax reductions, and tax relief for Americans, and trade we have got to see trade as opportunity, not as, uh, competitive, um, scary thing, but one in five jobs created in the trade sector today. Weve got to look at that as more opportunity. All of those things under the umbrella of job creation.
Isn't the best bailout plan no bailout plan at all?
Comrade Midwest Product | Homepage | 09.26.08 - 1:54 am | #
Right now? Absolutely - there is nothing that can stop the short term mess.
In the longer run we'll have a 'bailout' of FDIC, pension funds & such similar to RTC as they unload the bad assets from the failures.
Folks say WaMu proved the 'market worked'... wait until we see who got blew up from the bad bonds & stock collapse... more banks probably & pension funds & insurance companies.
Eventually the bad debt will 'distill' into FDIC or similar agency hands and be liquidated at taxpayer expense.
But AFTER the cascading cross defaults & counter party blow ups concentrate the bad debts... then it will make sense to facilitate the liquidation... that is exactly what RTC did.
We aren't there yet - Paulson was trying to circumvent the 'failures' & 'job loss' part - can't happen. There won't be political will to do so until we are up to our eyeballs in failures. Even Shelby will be crying for 'help' by then...
@Cinch: I've never had trouble with Firefox, either on my PC or on the Mac I use at work. Unless you're using an older version and can update, I'm afraid I'm of no use, sorry.
Shelby: deeply unimpressive.
He could have talked more about not getting bullied into signing something and less about a chain letter from some economists..
Interesting split among those assembled here on the Shelby issue. Is it safe to say that those of us who are anti-bailout are pro-Shelby because he's stonewalling, whereas those who are pro-bailout but anti-Paulson-plan are disappointed because he's preventing not only the Paulson bailout but any bailout?
Those would be clear comments from Shelby, prompting a massive bank-run the next day and the biggest route of the Repubs ever.
The constituency for laissez-faire right now is small and localized. That's why he didn't say more.
Right populism's appeal focuses on "the people" - namely these people over here like us and not those people over there not like us - not getting anything while the bailout goes to Wall St. But the Repub right populists have no interest in offering anything to "the people" except more resentment.
In the context of the secular economic decline and the Bush inspired/exeaggerated panic, that creates a climate for left populism to pick off support by promising economic relief.
You see Shelby on firm principle. i see him on thin ice.
Shelby may not be the most impressive figure intellectually or in hist oratory skills, but I give the man a ton of credit for standing up to this insanity in a way that no one else has done. I thought the US Congress had turned into a rubber stamp for Bush policies (Pelosi and Reid are a joke), but the genuine chaos that has ensued from this plan--including thousands of people actually berating their elected representatives has been quite amazing.
Who the hell knows where this will all lead to. Maybe the next President will find that they have been elected to the Presidency of a country that no longer exists, Maybe there will be a secession crisis over the cost of government intervention, and the rest of the country not wanting to be the bagholder for Wall Street's toxic waste?
Anything could happen. It's terribly frightening, but history must march forward.
No really. Is there any financial event that would quickly and obviously cause an instantaneous meltdown? One so quick that they couldn't just do a special session of congress and vote more money? We've been looking at all the things that could happen, and most of them unfold in months or weeks, not one or two days.
I am glad he's stalling the passage of a bailout. But I would have liked some ideas for alternatives, even if it was just to "do nothing, and later just liquidate the failing institutions".
You see Shelby on firm principle. i see him on thin ice.
joe shmoe | 09.26.08 - 2:13 am | #
I say he's on 'thick ice' - the kind we get in Minnesota in February - it isn't 'solid' all the way but solid enough - you can drive a full sized truck around on it MOST of the time.
But all it takes is a spring feeding into the lake to create a localized 'thin spot' or even an opening... three feet of ice most places then three inches somewhere else. And you can't tell looking at it from the top - you discover it by going through.
Shelby is probably okay taking that position whether cold political calculation or principle. The market & economic conditions are unlikely to get seriously bad that fast between now & election.
But if they do - he and a lot of other GOPers go through.
I am glad he's stalling the passage of a bailout. But I would have liked some ideas for alternatives, even if it was just to "do nothing, and later just liquidate the failing institutions".
That's what I mean. I don't like Shelby because he's a visionary or because he has good ideas, or any ideas at all for that matter. All I care about is the fact that he's thrown a wrench in the works. To me, stopping this legislation is step number one. Once that's happened, then we can worry about whether or not we need a replacement concept.
But to those who genuinely feel a need for rapid intervention in the financial sector, this has to be tremendously disappointing for exactly the reason that I am pleased.
Let's not be naive here. Shelby didn't oppose the plan strongly before McCain came to the 'rescue'. This is just McCain playing politics, trying to stall the plan so that he can claim credit for 'brokering the deal'.
Question asked several times: What is the triggering event for Paulson to come begging?
Answer: It's the capital markets who are choking any and every leveraged/financed company in America.
This was seen by 3 month Treasuries dropping below ZERO yield. That was prompted by the money market shock that was caused by Lehman.
Well since 3 month Treasuries have flatlined, it has been a 2 way trade. LIBOR has jumped.
The swap between fixed and floating interest rate have jumped.
The Fed pathetically unable to maintain an overnight rate without it swinging wildly.
The uncertainty of funding is a positive feedback loop that is only limited by complete deleveraging. The only way to stop the deleveraging loop is to drive a dump truck full of cash up to each bank in the country -- the mortgage paper is just a convenient and sympathetic dumptruck-sized vehicle.
(the Feedback loop is hoard cash-> forces sale of other assets -> need more cash at other banks because assets devalued)
Wall St has been well behaved in the sense that equity market volatility has plummeted to ridiculously low levels; everyone is afraid of starting the avalanche.
They can only hold back for so long as their outside sources of funding (interbank loans, letters of credit) have been cut and day-by-day they are all being pushed towards the cliff
I just don't understand how the hearings seemed so hostile, and Paulsen/Bernanke freakin' tanked to anyone who understood what was going on; couldn't explain the plan; had to BS and hand-wave regarding the cost; exposed that we were going to pay above market value; and here we are the day after this awful testimony... let's pass this sucker!
Next window of opportunity will be a couple weeks to a month after the inaugural address. World might look a lot different by then.
I'm not so sure about that. While members of Congress are under tremendous pressure from their constituents NOT to go forward with a bailout, they are also under tremendous pressure from the Bush administration, a large portion of the media, and wealthy donors to pass a bill now now now NOW NOW NOW!
I think there's a very good chance the legislative session will be extended.
drob writes:
Let's not be naive here. Shelby didn't oppose the plan strongly before McCain came to the 'rescue'. This is just McCain playing politics, trying to stall the plan so that he can claim credit for 'brokering the deal'.
drob | 09.26.08 - 2:27 am | #
Well's been poisoned - won't happen until end of January at the soonest.
This is the greatest political theater we are ever likely to see. What a high stakes poker game. We will muddle our way through this economic issue but in the meantime don't miss the opportunity to watch and see who goes all in-or who folds. The biggest pot you can have. The U.S. Presidency.
God, who even cares about the posturing regarding the Presidential race? There are way, way bigger issues at stake this week. That crap only matters inasmuch as it affects the likelihood of a bailout, and so far it really hasn't. Neither candidate was at the hearings, neither candidate has drafted legislation or taken a strong stance. They are there as window dressing, don't let yourselves be distracted by it.
We had a marketing twit who talked a lot like Sarah Palin. Mangling grammar trying to sound smart, saying way too much without saying anything at all, etc. We fired her ass because the job she was in required good verbal and written communication skills. Unlike, you know, vice president.
drop,
Not so. I thought I read yesterday that Shelby was dumped out of the negotiating table for being "too hostile" and replaced by the #2 Repub on his committee.
Most of Washington just wants to appear to be solving problems, even if they have no idea the root cause and the correct solution... or they do and they are all a bunch of greedy evil little pigs pretending to be solving problems.
Ministry of Truth writes:
Isn't the best bailout plan no bailout plan at all?
The banking system will have to be recapitalized: It's a fact. How it gets done is obviously the critical question. Unfortunately the Democrats, ever the suckers, went along with what they thought was a good faith negotiation to work it out, and had the Republicans torpedo it so as to be able to blame the Dems later...
The politics are irrelevant when you do not control your own finances.
The absurd debt levels (federal, state, municipal, future UNFUNDED obligations that are public and private, household debt, depreciating assets) mean there is no longer a choice with Iraq. You have to withdraw because you can't meet the payroll. You can't invest for the common good (infrastructure) in sectors where individual interests cannot replace the efficiency of the public sector. You cannot use your military to gain concessions and lucrative contracts from foreign countries
It's not worth investing in the American market until there is clarity on debt reduction. Right now it is convenient to use the dollar, nothing more
On another thread, someone questioned whether this was "an ungovernable moment". I think truly that it is. With the nation watching, our leaders appear paralyzed by their own imcompetence and partisanship to carry out the true will of the people. Where do we go from here?
You know what is total bullshit huh, do yah punk, Shelby never said what the 200 economists suggested ... he just waves around this shit and never says what he wants or what people think they want.. retarded!
Is it safe to say that those of us who are anti-bailout are pro-Shelby because he's stonewalling, whereas those who are pro-bailout but anti-Paulson-plan are disappointed because he's preventing not only the Paulson bailout but any bailout?
I am pro intelligence, and he just came over as dumb.
Dutch Auction? From Bloomberg:
Sept. 26 (Bloomberg) -- Kathy Fuld, the art-collecting wife of Lehman Brothers Holdings Inc. Chief Executive Officer Richard Fuld, is selling a $20 million set of rare Abstract Expressionist drawings at a November auction, according to two art dealers.
Richard Fuld earned $34.4 million in 2007 running the fourth-largest U.S. investment bank -- pay that lawyers said may be the target of lawsuits by creditors. He sold Lehman shares that were worth $247 million a year and a half ago for less than $500,000 last week after the stock price collapsed. Kathy Fuld, Wife of Lehman CEO, to Auction Artworks (Update1) - Bloomberg.com
A deus ex machina (lat. IPA: [ˈdeːus eks ˈmaːkʰina], literally "god from a/the machine")[1] is an improbable contrivance in a story characterized by a sudden unexpected solution to a seemingly intractable problem.[1] Neoclassical literary criticism, from Corneille and John Dennis on, took it as a given that one mark of a bad play was the sudden invocation of extraordinary circumstance. Thus, the term "deus ex machina" came to mean any inferior plot device that expeditiously solves the conflict of a narrative.
On another thread, someone questioned whether this was "an ungovernable moment". I think truly that it is. With the nation watching, our leaders appear paralyzed by their own imcompetence and partisanship to carry out the true will of the people. Where do we go from here?
In the vein of someone else in that thread, I disagree. IMO, this has been a huge victory (so far) for the public in that a bill that politicians overwhelmingly favored AND viewed as urgent was totally derailed by public opinion. When was the last time that happened?
The fact that this happened "with the nation watching" is why events have played out as they have; virtually every major media figure and every politician in a key role was ardently pro-bailout just 48 hours ago. Now their plans are in total disarray.
This is not unlike sending in a lawyer or polisci grad to deal with a nuclear power plant crisis. The fact that no one wants a meltdown has little to do with the capabilities of the people who are handling the crisis.
And the nimrods who caused the crisis are now supposed to guide them through it?
There is a third way between bailout and no bail out.
Use the same money to start several banks that are staffed by the best investment bankers (working on bonuses as they prefer) who value job security and capital access. Buy any and every actual asset and let the existing leveraged-counterpartied-derivative banking system sort itself out.
Sell the shares in 5-10 years. Asset prices are stable. Investment HQ of the world stays put. Government secures 110% of the upside (the extra 10% for having the capital when no one else did)
Or continue with the RTC, but only buy at hold-to-maturity or less prices. This will cause banks to become insolvent (use the SEC/OTS to force price discovery + disclosure among all banks).
Then step in to provide all the capital needed to remain solvent, let a few of them fail to keep them honest with fear. Any and all injected capital comes at Buffet-style deals. Call options and usurious interest rates at super-senior creditor levels.
Both ways separate the recapitulation from the RTC like deal (which was completely different to begin with because the government was already on the hook for those institutions because of the FDIC)
From Brad Setser:
In the last two weeks if I am reading the Federal Reserves balance sheet data correctly the Fed has:
Increased other loans to the financial system by around $230 billion (from $23.56b to $262.34b);
Increased its other assets by about $80b (from $98.67b to $183.89b);
Increased the securities it lends out to dealers by $60b (from $117.3b to $190.5b);
That works out to the provision of something like $370b of credit to the financial system in a two week period. And that is just what I saw on a cursory glance.
The most that the IMF ever lent out to cash strapped emerging economies in a year?
$30b, in the four quarters through September 1998 (i.e. the peak of the 97-98 crisis). Brad Setser: Follow the Money » Blog Archive » Extraordinary times
You can see the reason behind the additional outflow of funds by looking at the effective overnight Fed rate. It's been about as stable as a epipleptic at a pink floyd lazer show
The guy interviewing Shelby, did he work for Hank or what?
"Well someone told me it's a good plan, and you might be a senator but I have hair almost as good as Anderson Cooper, and you better explain yourself. Are you turning your back on the president by not doing everything he says?"
I guess the people holding big media's leash are not at all shy about telling the face talent how it's supposed to be.
I'm writing the Senator a heartfelt thank you right now.
With the nation watching, our leaders appear paralyzed by their own imcompetence and partisanship to carry out the true will of the people.
Just to clarify, what I mean is: it wasn't the goal of the Congress, even just two days ago, to carry out the true will of the people (which, at least from a majoritarian standpoint, is to NOT pass any bailout legislation). Their goal was to carry out the exact opposite of the will of the people, by handing out an unprecedented amount of money to mismanaged institutions. And now, they are being forced to govern in the way their constituents desire (for better or worse).
I questioned whether we are facing an ungovernable moment. The thought struck tonight that both sides are right and as a consequence we may very well be screwed. Assured mutual destruction.
I hate the bailout philosophically as well. I find myself feeling angry with each sound bite signaling it's moving forward. Yet the combination of news of Paulson's kneeling tonight,with word out of Asia, and the incredible FED injections this week are troublesome. We are running out of ammo keeping this "sucker" on life support.
Takes me back to an observation earlier this week--it appears the center will not hold.
If it doesn't, life as we know it, as we have been socialized, will be over. The intellectual nightmare scenario will move from the theoretical to the applied. We will truly understand living two different lives.
I get what you're saying. But I'd define governance as some kind of decisive action. Even saying 'we will do nothing and let the market work itself out' would be fine. But they're not doing that. Not even Shelby. They're scrambling. And just because the people are pissed about a $700BB bailout doesn't mean the people want inaction. They want decisive action... and we have not seen that yet from either party.
Well, Bush obviously is the worst president in a very long time.
A mostly Republican controlled congress helped him perpetuate his disastrous policies. Democrats failed because they were completely incompetent during the past 8 years.
The media failed by allowing he said/she said bullshit coverage of trivial matters instead of acting as the 4th estate and keeping Americans informed on issues that have a long term impact on all our lives.
Most of all, we failed ourselves because we followed our leaders like sheep instead of driving up to Washington D.C. and ripping the fucking lies out of their mouths with our bare hands.
1, 2 years ago the economy was great and GM looked like a bad investment
Now that everything is heading downhill, it looks like a good time to invest. They are getting their revenue more globally every year, under the current political climate they will be paid any amount to avoid firing 1 worker, the chance that GMAC's ResCap will be entirely bailed out, juicy loans and purchasing tax incentives tailored to meet their planned production, they've got good engineers and good plants (well the newer ones). Chrysler will likely be bankrupted/auctioned, Ford did sell their other divisions but the company from the CEO on down is crap
Sorry for being off-topic, I kind of just wanted a reality check if someone wanted to call me a loony.
Kathy Fuld, the art-collecting wife of Lehman Brothers Holdings Inc. Chief Executive Officer Richard Fuld, is selling a $20 million set of rare Abstract Expressionist drawings at a November auction, according to two art dealers
i guess that is the high-life version of j6p selling his wife's beanie baby collection on ebay in order to keep up the payments on the second car.
The poor fuld's. Down to their last $50m .. how on earth will they manage?
I got home from a real estate auction in Phoenix about 40 minutes ago. It's now just a few ticks short of midnight. Our group walked in with $4 million in our pocket and another $8 million in credit lines. The banks are crawling all over us to give us more. We bought 20 homes last weekend and were prepared to to buy as much as we could tonight at the prices we paid last week. We can rent them out for cash on cash returns or from 8% to 16% (no appreciation assumptions). We currently manage or own 800 single family houses in Phoenix so we aren't amateurs. Here is what happened.
We got outbid from the start. The room was full of workiing class stiffs who see a great deal and they bought like there was no tomorrow. Think they were getting bad deals? Try $50 a square foot max. Wells Fargo was there writing loans like it was 2006.
Boys, there is a disconnect here. The only problem with this country's economy is on Wall Street.
reality check: GM just exercised all of its un-utilized credit lines at banks (who must be cursing that they didn't find some way to pull them), and they are going to spend all of that money on restructuring expenses. If they don't actually start MAKING SOME MONEY they will have reached the end of their credit rope and still be 100 foot off the ground.
Try $50 a square foot max. if that was the max the working class stiffs paid, and clearly a great deal, and you guys had $4m ready to put down as deposits, how come you got outbid from the start?
Now, Gentlemen, I beg you again to consider, that none of
these Persons above-named, can ever suffer the loss of one
Farthing by all the Miseries under which the Kingdom groans at
present. For, first, until the Kingdom be intirely Ruined the
Lord Lieutenant and Lords-Justices must have their Salaries. My
Lords the Bishops, whose Lands are set a fourth part value, will
be sure of their Rents and their Fines. My Lords the Judges, and
Those of other Employments in the Courts, must likewise have
their Salaries. The Gentlemen of the Revenue will pay Themselves;
and as to the Officers of the Army, the Consequences of not
paying Them, is obvious enough; Nay, so far will those Persons I
have already mentioned to be from suffering, that, on the
contrary, their Revenues being now way lessen'd by the fall of
Money, and the prices of all Commodities considerably sunk
thereby, they must be great Gainers. Therefore, Gentlemen, I do
entreat you, that, as long as you live, you will look upon all
Persons who are for lowering the Gold, or any other Coin, as no
Friends to this poor Kingdom, but such who find their private
account in what will be most detrimental to Ireland. And, as the
Absentees are the strongest views, our greatest Enemies, first,
by consuming above one half of the Rents of this Nation Abroad.
And secondly, by turning the Weight, by their Absence, so much on
the Popish side, by weakning the Protestant Interest. Can there
be a greater folly than to pave a Bridge of Gold at your Expence,
to support them in their Luxury and Vanity abroad, while hundreds
of thousands are starving at home, for want of Employment.
I get what you're saying. But I'd define governance as some kind of decisive action.
Doing nothing IS decisive. Telling Henry Paulson, down on bended knee, "No" is what I want, and for the first time I now feel like that's what I'm going to get. I mean honestly, does anyone really believe that an idea ardently supported by both George W. Bush and Henry "housing prices are at or near a bottom in September 2007" Paulson is a good idea?
We can have a stock market decline and a number of large bank failures with a poorly thought out waste of $700 billion and serious inflation, or we can have a stock market decline and a number of large bank failures with no waste of &700 billion. I prefer the latter.
Doc Holiday writes: What Shelby has waving in his fat hands is this
I would say the deus ex machina here is the little fat man with Bell's Palsy who saved the Republic.
If dryfly says he made a canny choice, I'm inclined to believe him. I know he made the right choice.
I also agree with our favorite imitation mayfly that, after this, it isn't gonna come together. I'll say that as someone who has won and lost his share of bureaucratic tussles. There is going to be no cowing the rank and file after this. Bum rushes tend to come apart if you lose momentum.
Interviewer: "So you don't believe President Bush?"
Shelby: "Well President Bush is not an economist. He won't be the President of the United States four months from now, and Paulson won't be Secretary of the Treasury."
Shelby: "They're trying to rush this plan through, to borrow nearly a Trillion dollars."
Shelby: "We should listen to the economists."
Shelby: "The economists believe the market will correct itself."
Thank you!!! Shelby notes that he doesn't know who else is opposed to the bailout - Republican or Democrat - he's only speaking for himself. "I don't just rubber stamp anything, and I hope the House members, Republicans and Democrats, won't either."
Ironically, thanks to the Democratic insistence that Republicans provide the majority of votes for any bill, and some Republicans' unwillingless to vote for any bill, we have a chance! This is bi-partisan deadlock at its finest!
I urge more politicians to say "We're not going to be rushed into rubber stamping a plan". You know, the same way a few people resisted being rushed by the hysteria of nuclear attack by Iraq. Iraq wasn't threatening America - Bush was. And now he's at it again.
Tom Lindmark, thanks for the first hand insight. Do you think there is any longer term risk for Phoenix in terms of water and transportation costs? Or are the neighborhood layouts fine, and won't need to be bulldozed.
Anonymous, see I look at it as GM used up all of its conventional credit lines and will now upgrade to the exclusive club of primary dealer type interest rates. That $25bn loan is costed at $7.5bn, which implies a 10 year no interest loan during a time when the government can borrow at 3%. It won't be the last such deal.
Anonymous, Poor Fulds? Poor Paulson. Working more hours than ever, everyone hates him, he's got $500-600 million tied up in government mutual funds from when he cashed in his GS at $145/share and wanted to dodge the capital gains taxes. So working harder than ever, getting less love than ever, the WSJ redrew his face to be grumpy, and he's losing money by the day in the mutual fund
Tom Lindmark, I know just enough about Arizona real estate to get into real trouble but, it seems to me, housing prices in the Tucson and Phoenix areas are still too high.
$50/sq foot for what? I'm not arguing with you, but trying to understand what's up.
"They're scrambling. And just because the people are pissed about a $700BB bailout doesn't mean the people want inaction."
The more inaction I can get from my government the better. Small lean and effective would be a pleasant change from the bloated corrupt monstrosity that has grown up around us since "deficits don't matter."
Any consensus yet on what's the triggering event that has Paulson on his knees? As much as you'd like to believe it's just concern for GS, it's pretty clear he's scared. Hmmmm, like he got a glimpse of abyss and something was staring back.
sdtfs | 09.26.08 - 1:59 am | #
Doesn't a lot of commercial paper have to roll over on Tuesday? I wonder if, with A2/P2 spreads so high, a lot of companies just won't be able to roll it over, and won't be able to pay them off.
I was born and raised in a very housing-bubble-prone market. In fact its just starting to plateau in its 4th significant depreciation in 20 years.
Anyway this makes me want to ask a question. Has anyone seen reports of increased arson fraud? Arson for insurance money is normally rare, but when the bubble is big enough and pops fast enough it causes a lot of group behavior that will not be foreseen by the present models. Part of it is a way to recoup equity invested, and part of it is a bitter lashing out at the system.
The other thing we should see are people that can afford their homes walking away to save money and repurchasing because in these group-events there is no shame in foreclosing. There is also no punishment because the banks and credit card companies would be out of business if they refused to go on ability to pay in the future.
When the Dow drops 400 in the first 3 hours we'll get a plan.
What happened overnight after the public meetings? Paulsen and Bernanke explained to everyone that the US Government is about to get its credit line chopped off and interest rates raised. Hence, the Congress doesn't want that to happen either. It's like telling your teenage princess you're tearing up her credit cards... now she's going to do anything she can to spend up to the limit just because it's about to go poof.
YLSP
Impossible, if they weren't ready before going to bed there is no way bureaucrats+politicians can get organized to
1) Agree
2) Organize the vote
3) Pass the vote without delay/questioning/addendums
it is possible that they could have an announcement Friday evening, but if they took the pain of waiting that long they might as well wait another couple of days at least to get their parties in order
I get what you're saying. But I'd define governance as some kind of decisive action.
Governance is providing political goods. Physical security, maintenance of shared infrastructure, disputes adjudication. That is the root of rule, and not in a "this is what I think" way.
Beyond that it is all wu wei. Your country is paralyzed by debt and splt into countless factions. Do you wonder why? Too much decisive action.
A good ruler / leader / manager acts as little as possible. The world is as it is. With a few exceptions, the crisis is in the mind of the policymaker. You can make the world full of crises, or it can have just a few.
Your resources, however, are not in your mind. Many crises, many decisive acts, few resources for any given one. Few crises, few decisive acts, many resources for the decision you are forced to make. "Decisive action," is the root of your nation's current weakness.
You should think about this constantly until you understand it.
Those who claim Shelby is some kind of economic moron please listen to This American life radio program (thislife.org "Going Big") where Shelby takes Cox to task on the lack of regulatory action against predatory lending practices by the banks in 04 I think
It appears most of you are unaware of what the house republicans have been saying over the past week about the bailout. The base...the red staters...are vehemently opposed. What happened today was no surprise. The bailout was rejected on principle. But, alas, they are politicians so their principles don't last long. There will be a compromise plan eventually: without ACORN and without capital gains cuts.
Could be worse:
Pakistan is the world's riskiest government borrower. Credit-default swaps on the nation's $2.7 billion of dollar- denominated bonds outstanding have jumped to 1,700 basis points, according to prices from CMA Datavision. That means it costs $1.7 million annually to protect $10 million of Pakistan debt from default for five years, more than triple the cost on Lebanon's debt, according to data compiled by Bloomberg. Pakistan `Deteriorated' Since Outlook Cut to Negative, S&P Says - Bloomberg.com
1996 paper from the NY Fed on impact of sovereign credit ratings.
Note: Many of the countries then listed BBB on up are now AAA.
The USA does not have the fortitude to agree on spending cuts/tax increases necessary to pay down debt, let alone in a downturn, let alone on the doorstep of a major explosion in future-now-present obligations, let alone at a time when state/municipalities/households are all at record debt to income levels
If the process does not begin gradually before a ratings downgrade, then there is no hope of ever catching up
At the auction we attended last weekend newer construction, 4000 square foot homes went for $200,000. The homes were in desirable suburbs. Tonight, they were going for $60 to $80 a foot in the same suburbs and up to $120 a foot in Scottsdale (If you don't know Phoenix, that's a land locked top of the line location). As I said, there were a lot of people at the auction that appeared to be buying for their own use as opposed to investors.
Paulson has repeatedly insisted that "the tax payer is already ON the hook".
In what way? And why do we need to choose between the hook behind door #1 (that we haven't seen yet, and won't be shown...) for hook #2 ($700B, which is proudly displayed for our viewing pleasure)
aleister perdurabo, if you think that is something then I also saw on Bloomberg yesterday that the yield on GM's 5? year debt was 48.5%
Pakistan is partly screwed because NATO is step by step preparing to drawdown starting in 2011 and the Turkmenistan-Afghan-Pakistan-India/China pipeline never got built
The whole country is screwed up, Baluchistan (the Southwestern 1/3rd) and Waziristan (the NE 1/4) are bound to become self-governing/independent just like Bangladesh did
Frankly it that CDS would be higher than 1700bp if there was anyone willing to truly gamble
I don't know Tucson so I cannot comment specifically on the area. What I learned from bidding and buying is that the numbers you see published for median prices and the numbers you see in MLS listings in no way relate to the price you can negotiate. Only the suckers are paying list or paying any attention to what they see in the newspapers.
Paulson is right, the 3rd? largest poultry produced in the US is about to declare bankruptcy because it has failed to secure/roll-over credit
What he carefully omits is that you can provide that credit and banking if you are willing to bypass the existing mega-incumbents. You could let Bernanke lend to regional banks as if they were Primary Dealers, the only problem is that Bernanke already gave those with access his entire balance sheet and what he does have left is not enough to maintain stability in the effective overnight fed funds rate
The questions in congress should not be why $700bn, but why $700bn more
You know what sucks about the bail out? The only way to avoid paying into it is renouncing US citizenship and hopefully the capital outflow fee is not too bad. The USA is either the only one or like one of two countries in the world that you have to pay income tax to if you earn it abroad
Paulson was the leader on Wall St when all of this toxic sludge was issued.
Now he is the leader of the treasury. There is absolutely no doubt: he stole trillions from America and the world on the way up, and now he is stealing the rest on the way down.
If you explained the financial crisis to an eight year old, what is the first thing he would ask? Why is Paulson, the head of Wall Street, in charge of the treasury? Of the 6 billion people on the earth, he is the absolute worst choice.
Why is Paulson, the head of Wall Street, in charge of the treasury? Of the 6 billion people on the earth, he is the absolute worst choice.
Shawn H | 09.26.08 - 3:50 am | #
Come on, if the whole world just chips in $100 each for every man, woman and child we can put this behind us for 8-10 months
I'm sure those Haitians living off of mud pies and dirt cakes have being saving up for just this rainy day
Anyone tracking the quantities of covered bonds that have been issued since July? Doc, weren't they supposed to have stabilized us into safety? Just too few good assets upon which to write them?
Saw word today that arbitrage hedge funds were unable to operate by buying covered bonds and shorting the stock due to the ever growing short sale ban list
Also saw Citi preparing to advertise synthetic shorts in a big slap to the face of the SEC
MP,
Yes. Shoot me an email with your contact info and I will call you tomorrow. My work email is toml@metrowb.com. I would refer you to my blog and website but we had a techie go south on us and the whole thing is down. Just my luck. The whole world is imploding and I can't write about it.
Tom, I appreciate your offer and may contact you in the near future. I've got no particular interest in doing anything in Arizona in the immediate future, but have been checking into the Tucson area due to the biotech concentration there.
At the moment, it's strictly a matter of casual interest. Conjure and I like to stay current on what's happening around the country.
Having said that, the numbers you're tossing out are interesting. It suggests to me that there's a real disconnect regarding value down there. I was looking at Arizona real estate on Zillow recently, so the numbers you mentioned really startled me.
Of course by the fallout, he means those working at GS and MS and JPM.. you get the drift
Bush used the unfortunate house of cards analogy....whatever lumps we've got coming, I would bet they are unavoidable now. I don't think $700B won't blow the cards back into a housing formation. When money market funds are having runs, no one is contemplating the idea of lending zero down for $1M houses to anyone who can fog a mirror.
I don't know how fast prices ran up there, but I'd be willing to be that you're being an optimist. My impression is that even creditworthy borrowers with equity and in areas a lot better off than AZ are having their HELOCs cancelled.
Fed's H3 came out today. The banks' non-borrowed reserves went another $36 billion into the red, from a negative $122 billion to a negative $158 billion. And that's in just the last two weeks.
You know the Fed is out of funds, I don't care what it says it has left.
Oh gosh. While you're all asleep and I'm commenting here all by myself, the US Dollar has suddenly crashed. Yes, it is now worth only 0.1% of what was worth yesterday.
Yeah yeah, bad joke. But, then again, there's no one here to read it.
... someone questioned whether this was "an ungovernable moment."
This is what happens when your default position is concentration of power. What kind of a sorry man sits around and waits to be governed?
Democracy only works until the majority realizes it has the keys to the treasury. In a reversal of roles, Paulson has flung open the doors to the treasury and is calling Sooeee, Sooeee, Sooeee.
Sorry Ben, we were too stupid and cowardly to keep your republic.
Anyone else have any experience with what's going on down there?
Four properties inside the Omni Tucson National have been on (and off) the market for about a year, no sale, asking prices way above Zillow estimate. People don't seem to comprehend that house prices have tanked. Still think their house is worth what it was in 2006.
"That's why I say I, like every American I'm speaking with, we're ill about
this position that we have been put in . . . where it is the taxpayers looking
to bail out. But ultimately, what the bailout does is help those who are
concerned about the healthcare reform that is needed to help shore up our
economy. Um, helping, oh -- it's got to be all about job creation too. Shoring
up our economy, and putting it back on the right track. So healthcare reform
and reducing taxes and reining in spending has got to accompany tax reductions,
and tax relief for Americans, and trade, we've got to see trade as opportunity,
not as a competitive, um, scary thing, but 1 in 5 jobs being created in the
trade sector today. We've got to look at that as more opportunity. All of those
things under the umbrella of job creation. This bailout is a part of that."
The cake is already baked. Two year severe recession. Massive deflation of stocks and housing, good in the long-run. Greedy and stupid big banks taken to the woodshed and stable banks taking their market share. Good pain for a society that completely lost its way, with the worst leadership since the late 1800s going down in flames of disrepute.
DCBeacon
There ought to be no drastic deflation in housing costs because it is calculated through Owners Equivalent Rent. No inflation on the way up, no deflation on the way down.
There are stocks that are interesting, of fair value at present prices. However analysts/banks are holding to the charade that there will be no recession and that trailing earnings are a good estimate of forward P/E.
Things on the whole are no where near cheap. 2003 was cheap, at least for some tech and commodity companies. 2005 was funny because it was a financial shock/jitters, yet the normal economy had no reason to slow.
If you're taking GS, MS, Merrill Lynch and all of the other former-IB that were 30 or 40:1, along with all the hedge funds facing redemptions -- is there any way you can maintain current pricing given both negative outlooks for equity supply (lower growth) and equity demand (fewer/less-levered dollars chasing the same stuff) Also the capital gains tax increasing would hurt reinvestment
I was too young the first time around but I hope prices fall enough that I get the chance to wear the hat that says Dow 10,000 and drink from the coffee mug with Dow 8,000 when we come to the next leg up
Hi CR,
I think what we would al like to see is a video of Paulson down on one knee and Pelosi delivering the "I didn't know you were Catholic" quip. Does anyone have that?
The depression for debtor(USA) and recession for creditors(China, Japan, EU)... recession is going to be short, but depression will take some time - 10-15 at least... get ready, buy gold...
NEW YORK/LONDON (Reuters) - U.S. banks and money managers borrowed a record amount from the Federal Reserve in the latest week, nearly $188 billion a day on average, showing the central bank went to extremes to keep the banking system afloat amid the biggest financial crisis since the Great Depression.
How much per day was it again?
How much has been 'borrowed' already?
Isn't that 700B bailout looking a little small now?
Bush, Ben, Hank and Co. will not ride off into the sunset after this...They will be escorted out under heavily armed guards to sepreate undisclosed locations. Hopefully re-education camps....so they may get up to speed on reality. In the wake of their reign....we will be left searching for the "Ace" in the hole and indeed Kenny Rogers was right There WILL be time enough for countin' when their dealin' is done. How can tossing fat cash at the problem make it go away? Is the problem a giant 350 pound steriod eating bookie? I agree that 200 of the Nations leading economist thinkers have an edge over a handful of governmental puppets for the establishment. Kudos...Shelby
Sept. 25 (Bloomberg) -- More than 150 prominent U.S. economists, including three Nobel Prize winners, urged Congress to hold off on passing a $700 billion financial market rescue plan until it can be studied more closely.
"Hey, this is getting pretty serious...Think some fiscal stimulus will help? How about we use the Paulson philosophy and "hit it hard" with a $500B worth of checks in our mailboxes?"
sdtfs writes:
Who predicted World War III would be financial?
WWIII is financial. The Russians lost the first salvo and while we were, according to GWP, "getting drunk" on Wall Street, the Russians rebuilt their economy. They have oil and vast mineral wealth. We have Wall Street. Guess who wins?
I think there is another political edge here. The democratic congress wants to adjourn and go home to campaign. The longer they are delayed, the longer their opponents can campaign while incumbents are mired in bailout muck in Washington. Consequently Paulson and the White House may think that Congress will give in to their demands soon rather than fight on.
Chalmers Johnson stated in his book "Sorrows Of Empire" that was unlike that the U.S could be defeated military. But, their was a good chance that it could be bought down economically.
Well, the early morning round on CNBC is predictable. [disclaimer: I only watch for amusement!] After three days of pounding the tables for a bill passed without any restrictions, after "conservative Republicans" revolted, the CNBC guys are now walking back their previous statements. So far their guests have been totally in line with the Republican objectors, and the CNBC guys are barely voicing their previous full-throated support of the plan. Kernen previously "the plan needs to pass as presented." Today: "I could take either side."
All parties trying to blame Democrats. Now, I'm not sorry the plan is being blocked, but it sure looks to me that Democrats NEGOTIATED in good faith, trying to meet the requirements of the panic as presented by Paulson while building in safeguards.
Now they are blindsided by Republicans. If I were them, I would force the Republicans to come to agreement first, then come back to the table.
I'm just glad it's happening on Bush's watch, so whoever is the next president only has to deal with the the actual situation without being stigmitized as the cause.
EHB, I agree with all of your points except for housing deflation, considering these factors:
Shiller's theory of consumer psychology driving inflation and deflation of perceived value.
Comparison to rental alternatives, which in most markets still favors renting.
Add the growing incentive for mobility in a deep recession where jobs are harder to find and keep.
Lack of wage growth, the strongest argument for deflation vs. inflation that I've heard here.
Lack of credit for all but the strongest credit seekers, the second best argument I've heard here.
I'm no economist, but I have steered clear of the dot come and real estate bubbles, and am currently debt free and cash-heavy. We live well below our means and work in stable jobs. I say this less to show any superior judgment and more to be transparent about my perspective.
Hey, Joe Sixpack, we need your nice family to pony up $10,000.00 to cover our cocaine, whores, ugly mcmansions, pied a terre (whatever the fug that is?) and our 62 trillion in Credit Default Swaps. Don't even ask how us geniuses managed to create 62 TRILLION in Credit Default Swaps, just pay us or we'll shut down the economy.
Regards:
JPMorgan Has $23 Billion Secured Claim in Lehman Case (Update1)
By Jeff St.Onge
Sept. 26 (Bloomberg) -- JPMorgan Chase & Co., the biggest U.S. bank by deposits, is Lehman Brothers Holdings Inc.'s largest secured creditor, with an estimated claim of $23 billion, according to a court filing.
Lehman said it owed New York-based Fenway $3 billion, Swedbank AB $1.35 billion, and Boston-based State Street Corp. $1 billion as it filed a list of its top secured creditors yesterday with the U.S. Bankruptcy Court in Manhattan.
[...]
Creditor Amount of Claim
($million)
JP Morgan Chase 23,000
Fenway 3,000
Swedbank 1,350
State Street 1,000
Met Life 878.4
Sumitomo Mitsui Banking Corp. 870.3*
Danske Bank 800
We're proud to welcome you to one of the nation's largest banks; as of September 25, 2008, JPMorgan Chase & Co. has acquired the deposits, loans, and branches of Washington Mutual. Your deposits remain insured by the FDIC and are now also backed by the strength and security of JPMorgan Chase. Our combined company will offer superior banking convenience - over 5,400 branches and 14,000 ATMs in 23 states. Here's what this means for you:
What's different? \t
* Your deposits at WaMu are now backed by the financial strength of Chase in addition to continuing to be insured by the FDIC.
* If you bank at both WaMu and Chase, your deposits continue to be insured separately today just as they were yesterday, and generally will be for another six months. At that time, your deposits will be insured by the FDIC for up to $100,000 per depositor (with an additional $250,000 for self-directed retirement accounts), and will continue to be backed by the strength and security of JPMorgan Chase.
* Learn more about the size and strength of our company.
What stays the same? \t
Continue to bank just as you usually do:
* same account numbers,
* same Washington Mutual name on your account,
* same checks, debit cards, credit cards, deposit slips,
* same online banking website and passwords,
* same branches & ATMs,
* same familiar bankers, and
* same great service!
What will change? \tSoon
* You'll be able to use over 9,300 Chase ATMs fee-free - jointly, that's 14,000 ATMs for your banking convenience!
In the future
* You'll begin to see the Chase name on your statements, online, and on your credit cards as they reissue.
* Your branch will be re-named Chase and you'll be re-issued new debit cards with the Chase name. Until then, bank as you do today.
* As our systems merge, you'll be able to use any of the Chase branches nationwide. This won't take place this year, and we'll let you know well in advance of any changes.
We look forward to serving you, and to introducing new products, services, and convenience in the coming months.
Tell me more* about the change to JPMorgan Chase.
Visit WaMu online.
Frequently Asked Questions:
Q. What will happen to my account at WaMu? And to my branch?
A. It's business as usual. As of September 25, 2008, JPMorgan Chase has assumed the deposit and loan accounts, and all branches, of Washington Mutual. You can continue to access your accounts just the way you've accessed them in the past: use your same branch, same debit, credit and ATM cards, same checks.
Q. Is my money safe?
A. Yes; in addition to FDIC insurance, now you're assured your bank is backed by the strength and security of JPMorgan Chase. If you have money in both banks, your deposits have separate FDIC insurance for up to six months. Come see us and we can help you review your coverage.
Q. What if I have more than $100,000 at WaMu?
A. Your money is secure and now protected by the strength of Chase. Chase assumed all deposits of Washington Mutual.
Q. When can I bank at Chase branches in my area?
A. We'll be working hard to combine systems as quickly as possible so you can begin to enjoy expanded branch convenience in your area, and we expect system changes to begin late next year. We'll let you know in advance of any changes; in the meantime, simply continue to bank at WaMu branches as you do today.
When does the worldwide military drawdown start? The boyz in uniform are going to be pissed when the checks start to bounce.
There was for a time on the Web an analysis by the CIA about the potential for the USA to be brought down economically. The greedy bastards in DC and Wall Street were too stupid to connect the dots. It is to a certain extent like fishing with artificial lures. You get a hit and open the bail to let the fish run for awhile while consuming the bait ($$$$$) and then set the hook. By the time the fish realizes there is a problem, game over....
Next week will be interesting. According to Setser the Fed has burned through 370 B in the last two weeks. At that burn rate, it won't be long now.......
MISSION ACCOMPLISHED! Rock on loyal Bushies. 8 years ago the Government had a surplus, government debt was being paid off, we had $1.25 gas, peace, banks were sound, help wanted signs were everywhere. Then Bush and his rehabilited Nixon crowd blew into Washington. What happened to the press? Why don't they report this?
Anonymous writes:
... Shelby is playing politics for his buddy John McCain.
Give him credit. He has been an opponent of the Paulson Bailout Plan from the beginning
Jugurtha was an enemy of Rome who kept himself alive by bribing senators. The classical author Sallust uses the senators as an example of really bad government. I had to search back that far mentally to find a possible counterexample to the "Republicans worst ever" hypothesis.
Goddamn, these Republicans are the worst scumbags the planet has ever known.
So do you simultaenously want the bailout while also arguing that we could be spending the 700bn we don't have on frivolous gifts to the populace instead of frivolous gifts to bankers?
I'm just trying to keep the factional politics straight here because you guys that still believe the political parties seem to be getting yourselves contorted into some very interesting policy postures.
What's important about the "republicans are the worst sc..." comments are the recognition that, if you cannot solve an economic problem with $700 billion dollars then you don't really have an economic problem at all.
We have a PROBLEM...political, societal, sociological, historical. Those who comment here who get angry when the dialogue moves into these areas should get over it, and by the way stop trying to take advantage of it with your short-term investments. Tanta has said many times that this site is not intended for investors.
It is being reported that McCain asked for the meeting. Bush yielded to Pelosi and Reid. They yielded to Obama. Obama pressed Paulsen about the plan and the possible alternatives. The R's felt trapped. Obama led. McCain sat mute, meds kicking in. A big stinky smudge bomb was thrown by Boner(sp?). Everybody flounced. Mccain still pretending his bullshit 'country first, no debate' meme. Obama relaxing poolside having juleps with Haley.
There will be a debate.
There will be no bill.
We'll be fine.
Somewhere in Beijing a few withered remnants of the Great March are concerned. Too soon, they say, too soon...
Comrade Volker the Viking writes: I'm with Geo Will on McCain. He ain't fit for the job.
I agree with ya Volker. That whole "cancel the camapign! cancel the debates! I'm flying to Washington!"
Wow, way to lose it in a crisis. Conduct unbefitting a leader of the Republic. Some stuff, you gotta just keep on keeping on. Especially if it's like, a bank confidence crisis you're adding to by making a public spectacle of yourself. Or the Constitutionally mandated election of the Republic's executive.
I don't really have any strong feelings for Obama but any chance I was gonna go into the booth and decide to vote McCain just to keep the congress and executive on opposite sides of the fence evaporated right there.
I forgot one- we have a major organizational PROBLEM on our hands. Organizational effectiveness has gone down the tubes in many respects, not just within government agencies as folks like to point out, but within many of our "best" corporations.
Boring as it may sound, I think one of the primary root causes of this PROBLEM has been incompetent middle and senior management within many corporations. Again, I think most of Tanta's posts point this out really well.
With all due respect to my comrade, Comrade Volker the Viking: McCain will come out of this the hero he always imagined himself to be.
He'll have "stopped" the bailout.
Or: he'll have modified it to "protect" the taxpayers. J6P will LUUUUUUV him even more than evahhhh!
Now, only one thing can possibly be a bad outcome. If the bailout was indeed the last stopgap between us and Financial Armageddon, then McCain's gamble, well, it won't look so good. But that'll be the last of anyone's worry.
I credit Sen. Shelby with monkeywrenching this fast train to hell and perdition. I don't mind if he has no Plan B. The entire "need" for a Plan A was concocted by Paulson et al. out of thin air. The Democrats took the bait, of course, having this weird Al-Anon type of enabler relationship to the dry drunk. Shelby has helped all of us, regardless of political stripe.
"So do you simultaenously want the bailout while also arguing that we could be spending the 700bn we don't have on frivolous gifts to the populace instead of frivolous gifts to bankers? "
Are you seriously that dumb? The bankers have hijacked the economy with their short term paper buying and without it the economy stops. They have the economy as hostage, and you, yes, you, the average worker, will be affected. Don't bail it out, and teachers and city workers and many private sector workers won't get paid next week. Do you not know this?
And secondly, who wrote this bailout, the Dems? NO, it is Paulson's mess. The Dems have argued to make the White House's plan more equitable.
"it sure looks to me that Democrats NEGOTIATED in good faith"
Then why did Lindsay Graham say that "Twenty percent of the money that should go to retire debt that will be created to solve this problem winds up in a housing organization called ACORN that is an absolute ill-run enterprise, and I can't believe we would take money away from debt retirement to put it in a housing program that doesn't work.?
Money to ACORN from this debacle doesn't seem like "good faith" negotiating to me.
Did he or did the blogosphere? Are we seeing true democracy in action? Now we have to live with the results. Roller coaster or cliff? Strap yourself in.
Are you seriously that dumb? The bankers have hijacked the economy with their short term paper buying and without it the economy stops. They have the economy as hostage, and you, yes, you, the average worker, will be affected. Don't bail it out, and teachers and city workers and many private sector workers won't get paid next week. Do you not know this?
And secondly, who wrote this bailout, the Dems? NO, it is Paulson's mess. The Dems have argued to make the White House's plan more equitable.
That's it, you still don't get it? Lesson over.
Errr.. No. Explain why no one will get paid please.
And i don't see what you mean by democrats making the plan more equitable?
Uh, yeah, because they suspect they will control the government in 3 months. Wouldn't you like to see a little gov't stimulus to help ease in your transition to power if you believed it was coming? Or don't you prepare for important things in your life?
And making sure some money was spent to help the little guy would also be nice to prevent SOCIETAL COLLAPSE BROUGHT UPON US BY THE REPUBLICANS if we could ease a little of their pain while we re-structure this polluted financial system.
Yes, Republicans, you fucked up bad, and your time of power is over. And McCain and Palin are stupid as hell. What a disgrace!!
Byzantine Ruins (apt name!), thanks to your question, I've been asking myself if I'm twisting myself into a pretzel over this bailout.
Actually, I think I am advancing towards my goals, albeit by a zigzag path. I'm opposed to this bailout plan. Yet the situation is seemingly so serious that both the situation and the plan deserved serious consideration and discussion. I was pleased to see the Democrats negotiating in good faith and trying to build in safeguards. I am furious that they are being painted as Bush allies because they are even willing to negotiate.
I want the Democrats to win the election because of my serious environmental concerns. Therefore, if they need bipartisan support for this proposal in order to win the election, I hope they won't make one step without such support.
If there is some kind of serious collapse, and the Democrats do win the election, I hope it will lead to some really fundamental changes in "the system."
So, I guess, according to my thinking, things are going ok - the bailout plan collapses because of Republican opposition, and the Dems win the election with a mandate for fundamental change.
Many sharp turns there, though, with a possibility of a crash at every corner.
Shelby's list of econmic experts is probably the same list as these characters find to deny global climate change, peak oil or that drill, drill, drill will get us all the oil we will ever, ever need.
Igrew up on the lower east side of NY and we had a very concise expression for this...BULLSHIT
Boring as it may sound, I think one of the primary root causes of this PROBLEM has been incompetent middle and senior management within many corporations.
Yep. The Republic and its institutions are beset primarily by a crisis of leadership cohort recruitment and retention. Not that the talent isn't available, but the system is such that anyone who would take part in the milieu is undesirable. Typical problem during the decline phase of the dynastic cycle.
I think we really have to blame ourselves as a nation. Countries get the leadership cohorts they deserve and recruit.
Partly that runs back to the nebulous cause-and-effect tail chase of a poor educational system. The polity is too poorly educated to discern good leaders. This we might actually be getting something done with, I have a lot of hope for charter schooling.
Also, we're very close to getting into diseconomies of scale with organizational complexity. We need to learn to use simpler institutions that accomplish more by doing less. We use too many high-budget brute force approaches to problems where indirection would be better.
Finally, compared to the current technology, I think it's undeniable we are too eager to find problems with our leaders that don't relate to their leadership skills. America really needs to get over the puritanical moralist habits of being "shocked, simply shocked". People are people, they all have some bad habits and behaviors. There needs to be a lot more discernment applied as to where the difference between the public and private sphere lies. The proliferation of information and surveillance technology has created a lethal combination with America's self-righteous streak.
Igrew up on the lower east side of NY and we had a very concise expression for this...BULLSHIT
Yeah, let's spend 700 billion dollars we don't have to get a couple weeks (weeks - maybe) respite from the credit crisis. And after we spend it, we should spend the 700 billion dollars we don't have again in a grand gesture to buy everyone an electric pony and free health care.
As far as professional development goes, traditional training doesn't even work (classrooms, set curriculum) except for establishing common language and routine procedures. Execs, managers and sups "don't have time" for authentic professional development and knowledge management, which requires teams getting together regularly to:
establish trust and safety
define what they want to improve or study
assess it objectively
identify root causes
commit to short, mid and long-term remedies
implement and follow through on commitments
monitor progress, impact, and lessons learned.
This does not happen in K-12 schools or colleges, and this does not happen in all but the very best institutions.
Don't bail it out, and teachers and city workers and many private sector workers won't get paid next week. Do you not know this?
Doesn't the gvt tell you you should be prepared with food and spending money for several weeks of service disruptions? We'll have a bank holiday for a few days or a week and then we'll have a new payments system.
If there's some chaos, oh well, life is full of calamities great and small. One day even hysterical entitled you shall die of cancer and a heart attack and the big blue marble will keep on spinning and not giving a shit about you, just like always.
I no longer respond to being negotiated with along the lines of "if you don't give me x, THE WORLD WILL END". That's a false alternative. if this country can't put itself back together in short order after a payments crisis, it doesn't deserve to. End of story.
Shelby's list of econmic experts is probably the same list as these characters find to deny global climate change, peak oil or that drill, drill, drill will get us all the oil we will ever, ever need.
Economist's letter:
"We are well aware of the difficulty of the current financial situation and we agree with the need for bold action to ensure that the financial system continues to function."
These economists did not endorse no plan but seek "bold action" without proposing any alternative. What political tools.
Shelby's list of econmic experts is probably the same list as these characters find to deny global climate change, peak oil or that drill, drill, drill will get us all the oil we will ever, ever need.
Can you look that up and report back instead of making an ignorant assertion. All Shelby has said is that maybe there are alternatives to a plan by a Bush tool written on a cocktail napkin. I'm ok with that.
I don't think the Paulsen ideas were good. But Shelby is full of crap. He was asked for his ideas and he never gave any, not one.
I think there was a "plan" but when McCain "suspended" his campaign the Republicans decided to stand by their man a throw a monkey wrench into the thing. He wants the Dems to approve it and then if by chance it doesn't work guess what...It's the Dems and not us who did this to you Joe & Jane Heartland.
But it's worth dissecting the humor to see what went wrong: Concerned over maintaining the goodwill and status of their superiors, every player along the way watered down and euphemized the truth, until it was completely distorted at the end.
I don't know if there will be a giveaway or not, but I do know one thing: there will be no agreement of any kind before Sunday night.
It is now negotiation time and nobody wants to blink first because the other side will then jump back with amended terms... so you wait and wait. Sort of like a great big eBay auction. Shelby knows the power he holds.
I'm surprised Bush hasn't declared a Friday Bank Holiday to put the pressure on.
This certainly is the dead end of free market, deregulation, trickle-down republicanism. It has completely disgraced itself and can now only beg the votes of liberal dems for survival.
I think there was a "plan" but when McCain "suspended" his campaign the Republicans decided to stand by their man a throw a monkey wrench into the thing. He wants the Dems to approve it and then if by chance it doesn't work guess what...It's the Dems and not us who did this to you Joe & Jane Heartland.
I have to disagree with that assessment, reason is that Shelby was always opposed to this from the beginning, he did not vote for Chrysler and he won't for this.
GS paid 40 billion in bonus money in 2007. Less tahn one year later they are groveling for $5 billion from Buffett. Why didn't employees cough up to buy part of the company?
I was pleased to see the Democrats negotiating in good faith and trying to build in safeguards. I am furious that they are being painted as Bush allies because they are even willing to negotiate.
I am pleased to see anyone in DC sitting down and making a plan of any sort.
I think my problem with the democratic rank and file is the level of fiscal understanding that is like unto cow confronting an engine block. Our nation is in serious crisis due to massive overspending. The criticism leveled at this plan is, thus, that we should be spending this money on social services. True genius.
I would be just as happy with a quality negotiated bailout solution but I think that the scope of the flight-to-yield bubble outpaces measures yet taken to address it and I don't want to see a piecemeal approach.
It seemed like they might be approaching a good plan yesterday, but I think it would take several weeks of negotiations to get to a solid agreement and then a stronger legislature and bureaucracy than we have to pass it and implement it without fucking it up.
I want the Democrats to win the election because of my serious environmental concerns. Therefore, if they need bipartisan support for this proposal in order to win the election, I hope they won't make one step without such support.
I likewise have serious concerns about the fact that my habitat is being poisoned, although I don't have any faith in either of the parties to achieve a workable solution.
I think the current approach to green matters is generously described as "risible," "laughable," and "half-baked" and there is not even an intellectual framework established for proper debate of the issue.
If there is some kind of serious collapse, and the Democrats do win the election, I hope it will lead to some really fundamental changes in "the system."
I do too, although I have to say that I think the ideologies and factions of our era are worn out and largely inapplicable to the modern milieu. i think there will not be substantial changes to "the system" until it is re-envisioned such that, at a minimum, the faction names change to reflect new agendas.
So, I guess, according to my thinking, things are going ok - the bailout plan collapses because of Republican opposition, and the Dems win the election with a mandate for fundamental change.
What will matter is that the dynastic reform be of good quality. At this time, I see the Democratic future as a hare-bained attempt to run in rabbity circles, 'New Deal, Great Society, New Deal, Great Society'. We will get the policy equivalent of Egyptian funerary architecture while that troublesome "budget / resources" thing is left to tend to itself.
Many sharp turns there, though, with a possibility of a crash at every corner.
I would just loosen up and get ready for the impact. I suppoe there's a chance for a mid-dynastic reformer but I don't see it. IMO, Obama is much too samey-same to be a reformist.
We'd need comprehensive review of the legal code, taxation system, etc. Not gonna happen, I don't think.
"reason is that Shelby was always opposed to this from the beginning"
Not true, as early on as last Saturday, after the first meeting with Paulson/Bernanke, he was saying how he understood how important this was and how it needed to be done now. He was very interested in working towards a bipartisan argreement on the plan.
Too bad the Dems were too smart to accept that bad original Paulson plan.
Moose Killer - Orator Deluxe writes:
Kanjorski says calls to his congressional office are 50/50. 50%-No and 50% Hell No!
I've just saw the guy on C-span. Scary. He mention of an analogy of infective disease. It's not your fault but still you can die. And the normal guy in the street still think in term of us vs them. Remember Paulson said you're already on the hook.
Not true, as early on as last Saturday, after the first meeting with Paulson/Bernanke, he was saying how he understood how important this was and how it needed to be done now. He was very interested in working towards a bipartisan argreement on the plan.
Working towards a plan does not mean agreeing on the current plan.
Every politician will work towards a plan on anything, whether they are for it or not is a different matter.
Bloomberg is reporting Fed's Fisher Says Bank Rescue Plan Would Worsen Fiscal 'Chasm'
Dallas Federal Reserve Bank President Richard Fisher said the proposed $700 billion rescue of financial institutions backed by Fed Chairman Ben S. Bernanke would plunge the U.S. government deeper into a fiscal abyss.
The plan by Treasury Secretary Henry Paulson to buy troubled assets from financial institutions would put "one more straw on the back of the frightfully encumbered camel that is the federal government ledger," Fisher said today in the text of a speech in New York. "We are deeply submerged in a vast fiscal chasm."
Fisher made the comments as the central bank expands its role in the biggest government intrusion into markets since the New Deal, with Bernanke trying to persuade Congress to approve Paulson's bailout plan.
Bernanke has already cut the benchmark interest rate at the most aggressive pace in two decades, invoked emergency powers to loan to securities firms and pumped billions of dollars into banks to try to restore liquidity. Also, the central bank loaned $85 billion this month to American International Group Inc.
"The seizures and convulsions we have experienced in the debt and equity markets have been the consequences of a sustained orgy of excess and reckless behavior, not a too-tight monetary policy," Fisher said to the New York University Money Marketeers Club.
"I was, and I remain skeptical, that lowering the fed funds rate is the most effective antidote," he said. "Rates held too low, too long during the previous Fed regime were an accomplice to that reckless behavior."
Get ready for a crazy Fri
top ten...
whipsaw time
Why is a comedy show more informative than the national news networks?
fischer (dallas fed) comparing derivatives to nasty STDs.. says plan won't work.
Responding to Turbulence, remarks by Richard W. Fisher
$700B is a big number... easier to comprehend if a we change units. So think it of it as 'One Paulson'... see that doesn't sound so scary, does it?
So how about a Bernanke ouster poll? How long will it be until Bernanke either resigns or is replaced?
I say 3 days after a new president takes office.
Tremendously funny. Very sad that we elected this idiot as President.
http://messages.finance.yahoo.com/Business_&Finance/Investments/ETFs(A_to_Z)/ETFs_S/threadview?bn=45991&tid=58014&mid=58014
It may seem like a long time ago, but it was only on Monday of last week (Sept. 15) that Lehman Brothers filed for bankruptcy; the equally big news was that the Federal Reserve declined to bail Lehman out.
Ive read several details regarding Lehmans demise and learned some interesting facts. The bankruptcy filing was pre-dawn on the 15th, according to Bloomberg. The filing document is available in PDF form on the internet: it names Lehmans largest unsecured creditors, and the dollar amounts of their claims.
Citibank, N.A., as indenture trustee is listed as Lehmans largest unsecured creditor, with a claim of Approximately $138 billion in Bond Debt.
Following Lehmans filing, J.P. Morgan transferred $138 billion in two payments to Lehman Brothers$87 billion on Sept. 15th and $51 billion on Sept. 16th. Bloomberg reported that the transfer of funds was to keep financial markets stable, and to settle Lehmans securities transactions with customers...and clearance parties, according the [court] filing.
After these transfers, also according to Bloomberg, the Federal Reserve Bank of New York made two subsequent payments to J.P. Morgan: $87 billion on Sept. 15th and $51 billion on Sept. 16th, for a total of $138 billion.
Lehmans bankruptcy court filing said that J.P. Morgans $138 billion transfer to Lehman was At the request of the Federal Reserve Bank of New York. I have not been able to find an explanationin media reports or from the Federal Reserveof why J.P. Morgan needed to be a party to the $138 billion that Lehman received, and that the Fed transferred.
Im also unable to find an announcement from the Fed that it was making the transfer.
One could infer that J.P. Morgan was used as a third party in order to avoid the perception that, despite statements regarding not bailing out Lehman, the Fed was indeed assuming $138 billion in obligations that were in default upon Lehmans bankruptcy.
Once could also infer that such an action by the Fed amounted to a $138 billion bailout of Citibank, which was the dollar value of the Lehman-issued bonds Citibank held. Citibank issued a Sept. 15 press release saying that its role in this issue is administrative in nature and does represent exposure for Citi to Lehman. The statement did not identify who or what owned the $138 billion in bonds.
I hope that more facts become available showing that the inferences are mistaken, and I invite journalists and others to bring any such relevant facts to light.
Thanks, dryfly. That ought to fuel a nightmare or two.
Note to self: No more reading CR so close to bedtime.
How is DOW future look like right now?
All hail Baron Von Moneypants!
Thanks - I needed that.
the national news networks are in the hands of spineless corporate weasels who fear and tremble at the thought of being accused of liberal bias. so everything they say comes out as bland as paste.
Shelby is right that the Paulsonian concept is flawed and that we should have a better plan, but it is clear Shelby has no alternative in mind, just an injunction to listen to hundreds of economists. That won't stand up for long in this political context.
Too bad Shelby wasn't a little more detailed and eloquent about the objections of "these economists" to the plan...
Good job following the money, IrvineResident.
I think that the MSM, the Fed, GS or JPM cannot do anything about this now.. this is beyond their capabilities.. they have overreached themselves in a world where the west is no longer the dominant power..
There is no quick fix and only Shelby realizes it. The recovery will come only after home prices have fallen to affordable levels and industries adjust to reality. Give him credit for showing some spine for standing against the bailout which won't do much good
This is the logical endpoint of western hubris..
1] never extend beyond your capacities.
2] remember that the world around you changes.
The House republican plan is to suspend capital gains tax for two years?
Curious Capitalist: [The plan] of the House Republican Study Committee seems to be a joke. It calls for a two-year suspension of the capital gains tax to "encourag[e] corporations to sell unwanted assets." But the toxic mortgage securities clogging up bank balance sheets are worth less now than when they were acquired. Meaning that no capital gains tax would be owed on them anyway. If you repealed the tax, banks would have even less incentive to sell them because they wouldn't be able use the losses to offset capital gains elsewhere. Seriously, where do these people come up with this stuff?...
Shelby is right that the Paulsonian concept is flawed and that we should have a better plan, but it is clear Shelby has no alternative in mind, just an injunction to listen to hundreds of economists. That won't stand up for long in this political context.
Isn't the best bailout plan no bailout plan at all?
ShortCourage writes:
Too bad Shelby wasn't a little more detailed and eloquent about the objections of "these economists" to the plan...
ShortCourage | 09.26.08 - 1:51 am | #
He was pretty clear in a down homsey way - he doesn't want to do anything. He said the market will fix it.
What is not to understand? His constituents will get it 100%.
Isn't the best bailout plan no bailout plan at all?
- Comrade Midwest Product
BINGO!!!
Short Courage
The economists' letter is very short and thin. If shelby had read the whole text aloud it would not have added much to his comments. The letter was minimalist to maximize the number of people who would sign. Likewise, Shelby's statment was minimalist to keep a coalition together in opposition, and also because he knows a big part of the publi is liable to be sheared away from him by left populism.
The repub alternate plan is capital gains breaks to firms taking bad paper and lowering regulations. How does that help the moosehunters of America?
If barney Frank cuts loose with a left populist Dem bailout, then the Repubs are in trouble.
You might agree with Shelby's goal of stopping the bailout, but he didn't make any argument: all he did was wave a sheaf of papers in the air to prove exert support, refused to say what it was he didn't like, and refused to propose anything else. Yuck. What a piece of work.
Let's take stock of our adventure to date:
Bear, Lehman, Merryl all disappear, essentially failing institutions.
WaMu and Indymac, largest and 3rd-largest bank failures.
Fannie, Freddie & AIG effectivly nationalized to avoid failure.
Chinese threatening to bail out of US bonds.
Oh yeah, and don't forget oil is still over $100, MUCH higher than a year ago.
Hey, this is getting pretty serious...Think some fiscal stimulus will help? How about we use the Paulson philosophy and "hit it hard" with a $500B worth of checks in our mailboxes?
Anti-Bailout Protesters Outside White House
LiveLeak.com - Raw Video: Anti-Bailout Protesters Outside White House
meant to post a link to the economists' letter:
http://faculty.chicagogsb.edu/john.cochrane/research/Papers/mortgage_protest.htm
Comrade Midwest Product
Exactly... There is no alternative bailout plan. The $300 billion plan passed by Congress to have workouts on mortgages was the best thing gov't can do. Also the gov't is still providing mortgages for qualified buyers at 6% interest.
Any consensus yet on what's the triggering event that has Paulson on his knees? As much as you'd like to believe it's just concern for GS, it's pretty clear he's scared. Hmmmm, like he got a glimpse of abyss and something was staring back.
Am I the only one who has trouble watching/downloading comedy central video clips? Very frustrating!
youtube videos no problem
marketwatch videos no problem
all other internet sitse with video clips no problem
any idea?
Cinch
The Republican solution: Cut taxes for the wealthy.
How original.
Who said it
"When the stock market crashed, FDR got on television"
"Barak Obama ain't takin my shotguns. If he tries to fool with my beretta, he's got a problem"
Biden or Palin?
I was disappointed with Shelby's objections too.* Couldn't he talk about how the crises are occuring in bank clearance and short-term commercial paper and that propping up the prices for long-term MBS won't help with either problem? I would think he knows enough for that. I'm not much for arguments by authority.
Am I the only one who has trouble watching/downloading comedy central video clips? Very frustrating!
What browser are you using?
Have you considered the fact that almost every large commercial US bank (and many more in other countries) are now effectively zombies propped up and controlled by their respective central banks..
or in the cases of some.. the disease has not yet shown any symptoms..
joe shmoe, thanks for the link.
The Daily Show informs better than 90% of the 'mainstream' media.
Time for an early bedtime (10:50 Pacific) so I can watch the morning action.
Will this be the football bowl weekend of US finance?
Will Palin be doing a naked pole dance for the halftime shows?
Will Paulson reprise his kneeling to Nancy, will he be doing the sucker is going down on Bush?
Will McCain spontaneously combust?
Will Cheney share his undisclosed location with Bush when the pitchforks and torches brigade arrives at the WH?
and the big question:
Will Laura throw Bush's drunken/drugged ass out of the WH this weekend?
CNN picking up the scare tactics and using strawmen tactics. "your turning your back on the administration"
Pathetic
Smallchub
Biden stuffs his foot in his mouth with more or less full sentences, but more often is very sharp and knowledgable.
Palin does this:
COURIC: Why isnt it better, Governor Palin, to spend $700 billion helping middle-class families who are struggling with health care, housing, gas and groceries? Allow them to spend more, and put more money into the economy, instead of helping these big financial institutions that played a role in creating this mess?
PALIN: Thats why I say I, like every American Im speaking with, we're ill about this position that we have been put in. Where it is the taxpayers looking to bail out. But ultimately, what the bailout does is help those who are concerned about the health care reform that is needed to help shore up our economy. Um, helping, oh, its got to be about job creation, too. Shoring up our economy, and putting it back on the right track. So health care reform and reducing taxes and reining in spending has got to accompany tax reductions, and tax relief for Americans, and trade we have got to see trade as opportunity, not as, uh, competitive, um, scary thing, but one in five jobs created in the trade sector today. Weve got to look at that as more opportunity. All of those things under the umbrella of job creation.
sdtfs writes: Hmmmm, like he got a glimpse of abyss and something was staring back.
I'm betting they looked Chinese and Russian, and were sitting in the front row at a Treasury bond auction.
Comrade Midwest Product writes:
Am I the only one who has trouble watching/downloading comedy central video clips? Very frustrating!
What browser are you using?
Safari
but I've also tried Fire Fox
no luck
I'm using a MacBook if it means anything
This is almost like planned script.
Who wrote the play?
Isn't the best bailout plan no bailout plan at all?
Comrade Midwest Product | Homepage | 09.26.08 - 1:54 am | #
Right now? Absolutely - there is nothing that can stop the short term mess.
In the longer run we'll have a 'bailout' of FDIC, pension funds & such similar to RTC as they unload the bad assets from the failures.
Folks say WaMu proved the 'market worked'... wait until we see who got blew up from the bad bonds & stock collapse... more banks probably & pension funds & insurance companies.
Eventually the bad debt will 'distill' into FDIC or similar agency hands and be liquidated at taxpayer expense.
But AFTER the cascading cross defaults & counter party blow ups concentrate the bad debts... then it will make sense to facilitate the liquidation... that is exactly what RTC did.
We aren't there yet - Paulson was trying to circumvent the 'failures' & 'job loss' part - can't happen. There won't be political will to do so until we are up to our eyeballs in failures. Even Shelby will be crying for 'help' by then...
Watching that Couric interview, all I could think of was this:
YouTube - Miss Teen USA 2007 - South Carolina answers a question
President Bush describes the US financial system as a "house of cards."
How confidence-inspiring!
Why do I have this image of John McCain as Howard Beale. With Bill Gross as Arthur Jensen: "You have meddled in the primal forces of nature."
BTW- that's Biden for ya. What the hell is Palin scared of. A 60+ year old idiot?
All Shelby has to say is, "the banks want out of the bottom of the ponzi scheme, and they want the collective "us" to be the ponzi's..."
How hard is that to say or understand?
President Bush describes the US financial system as a "house of cards."
And apparently our deck has more than the normal allotment of jokers.
Representative Mccotter delivers a scathing indictment of the perpetrators of the economic crisis
LiveLeak.com - On the 700 B bailout: Mao and Stalin killed for the powers the executive branch is trying to extort
@Cinch: I've never had trouble with Firefox, either on my PC or on the Mac I use at work. Unless you're using an older version and can update, I'm afraid I'm of no use, sorry.
Shelby: deeply unimpressive.
He could have talked more about not getting bullied into signing something and less about a chain letter from some economists..
Am I the only one who has trouble watching/downloading comedy central video clips? Very frustrating!
youtube videos no problem
marketwatch videos no problem
all other internet sitse with video clips no problem
any idea?
Your anti-spyware blocking it?
Are your java plug-ins up to date?
I've had trouble in the past w/ comedy central if either weren't set properly.
Great interview by Shelby. Thank you sir.
John Stewart for Pres
Interesting split among those assembled here on the Shelby issue. Is it safe to say that those of us who are anti-bailout are pro-Shelby because he's stonewalling, whereas those who are pro-bailout but anti-Paulson-plan are disappointed because he's preventing not only the Paulson bailout but any bailout?
YLSP
Those would be clear comments from Shelby, prompting a massive bank-run the next day and the biggest route of the Repubs ever.
The constituency for laissez-faire right now is small and localized. That's why he didn't say more.
Right populism's appeal focuses on "the people" - namely these people over here like us and not those people over there not like us - not getting anything while the bailout goes to Wall St. But the Repub right populists have no interest in offering anything to "the people" except more resentment.
In the context of the secular economic decline and the Bush inspired/exeaggerated panic, that creates a climate for left populism to pick off support by promising economic relief.
You see Shelby on firm principle. i see him on thin ice.
Shelby may not be the most impressive figure intellectually or in hist oratory skills, but I give the man a ton of credit for standing up to this insanity in a way that no one else has done. I thought the US Congress had turned into a rubber stamp for Bush policies (Pelosi and Reid are a joke), but the genuine chaos that has ensued from this plan--including thousands of people actually berating their elected representatives has been quite amazing.
Who the hell knows where this will all lead to. Maybe the next President will find that they have been elected to the Presidency of a country that no longer exists, Maybe there will be a secession crisis over the cost of government intervention, and the rest of the country not wanting to be the bagholder for Wall Street's toxic waste?
Anything could happen. It's terribly frightening, but history must march forward.
YSLP
or i can put it in shorthand: Fred Thompson and Rudy Giuliani and Mitt Romney, dedicated to bringing Wall St down and empowering the people.
No really. Is there any financial event that would quickly and obviously cause an instantaneous meltdown? One so quick that they couldn't just do a special session of congress and vote more money? We've been looking at all the things that could happen, and most of them unfold in months or weeks, not one or two days.
SEC should look into the fear mongering comments being broadcasted from 1600 Pennsylvania Avenue in Washington, D.C.
It's like bloggers times a million.
Comrade Midwest Product,
For me, Shelby just came across as a parrot.
I am glad he's stalling the passage of a bailout. But I would have liked some ideas for alternatives, even if it was just to "do nothing, and later just liquidate the failing institutions".
sdtfs
yes, there is such a cataclysmic event: GWB going on TV again.
You see Shelby on firm principle. i see him on thin ice.
joe shmoe | 09.26.08 - 2:13 am | #
I say he's on 'thick ice' - the kind we get in Minnesota in February - it isn't 'solid' all the way but solid enough - you can drive a full sized truck around on it MOST of the time.
But all it takes is a spring feeding into the lake to create a localized 'thin spot' or even an opening... three feet of ice most places then three inches somewhere else. And you can't tell looking at it from the top - you discover it by going through.
Shelby is probably okay taking that position whether cold political calculation or principle. The market & economic conditions are unlikely to get seriously bad that fast between now & election.
But if they do - he and a lot of other GOPers go through.
I am glad he's stalling the passage of a bailout. But I would have liked some ideas for alternatives, even if it was just to "do nothing, and later just liquidate the failing institutions".
That's what I mean. I don't like Shelby because he's a visionary or because he has good ideas, or any ideas at all for that matter. All I care about is the fact that he's thrown a wrench in the works. To me, stopping this legislation is step number one. Once that's happened, then we can worry about whether or not we need a replacement concept.
But to those who genuinely feel a need for rapid intervention in the financial sector, this has to be tremendously disappointing for exactly the reason that I am pleased.
Once that's happened, then we can worry about whether or not we need a replacement concept.
Next window of opportunity will be a couple weeks to a month after the inaugural address. World might look a lot different by then.
Let's not be naive here. Shelby didn't oppose the plan strongly before McCain came to the 'rescue'. This is just McCain playing politics, trying to stall the plan so that he can claim credit for 'brokering the deal'.
Question asked several times: What is the triggering event for Paulson to come begging?
Answer: It's the capital markets who are choking any and every leveraged/financed company in America.
This was seen by 3 month Treasuries dropping below ZERO yield. That was prompted by the money market shock that was caused by Lehman.
Well since 3 month Treasuries have flatlined, it has been a 2 way trade. LIBOR has jumped.
The swap between fixed and floating interest rate have jumped.
The Fed pathetically unable to maintain an overnight rate without it swinging wildly.
The uncertainty of funding is a positive feedback loop that is only limited by complete deleveraging. The only way to stop the deleveraging loop is to drive a dump truck full of cash up to each bank in the country -- the mortgage paper is just a convenient and sympathetic dumptruck-sized vehicle.
(the Feedback loop is hoard cash-> forces sale of other assets -> need more cash at other banks because assets devalued)
Wall St has been well behaved in the sense that equity market volatility has plummeted to ridiculously low levels; everyone is afraid of starting the avalanche.
They can only hold back for so long as their outside sources of funding (interbank loans, letters of credit) have been cut and day-by-day they are all being pushed towards the cliff
I just don't understand how the hearings seemed so hostile, and Paulsen/Bernanke freakin' tanked to anyone who understood what was going on; couldn't explain the plan; had to BS and hand-wave regarding the cost; exposed that we were going to pay above market value; and here we are the day after this awful testimony... let's pass this sucker!
WTF!
Next window of opportunity will be a couple weeks to a month after the inaugural address. World might look a lot different by then.
I'm not so sure about that. While members of Congress are under tremendous pressure from their constituents NOT to go forward with a bailout, they are also under tremendous pressure from the Bush administration, a large portion of the media, and wealthy donors to pass a bill now now now NOW NOW NOW!
I think there's a very good chance the legislative session will be extended.
I say Dems go along w. the Reps' plan in exchange for an immediate vote on impeachment.
Please offer your support to the good senator via the following email address
senator@shelby.senate.gov
Also, take a look at Rep. McCotter (of Michigan) on the house floor today:
YouTube - ....
If you like what you see, fax your support to him at:
202-225-2667
You can even fax over the internet via
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It's great; and it's free!
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"I say Dems go along w. the Reps' plan in exchange for an immediate vote on impeachment."
How about in exchange for McCain's withdrawal from presidential bid?
drob writes:
Let's not be naive here. Shelby didn't oppose the plan strongly before McCain came to the 'rescue'. This is just McCain playing politics, trying to stall the plan so that he can claim credit for 'brokering the deal'.
drob | 09.26.08 - 2:27 am | #
Well's been poisoned - won't happen until end of January at the soonest.
This is the greatest political theater we are ever likely to see. What a high stakes poker game. We will muddle our way through this economic issue but in the meantime don't miss the opportunity to watch and see who goes all in-or who folds. The biggest pot you can have. The U.S. Presidency.
Tom Lindmark writes:
This is the greatest political theater we are ever likely to see.
I 100% agree.
Theatre of the Absurd
Who predicted World War III would be financial?
Shelby has no clue, but at least he is playing a part in this soap opera. He is playing at something ... hmmm?
God, who even cares about the posturing regarding the Presidential race? There are way, way bigger issues at stake this week. That crap only matters inasmuch as it affects the likelihood of a bailout, and so far it really hasn't. Neither candidate was at the hearings, neither candidate has drafted legislation or taken a strong stance. They are there as window dressing, don't let yourselves be distracted by it.
We had a marketing twit who talked a lot like Sarah Palin. Mangling grammar trying to sound smart, saying way too much without saying anything at all, etc. We fired her ass because the job she was in required good verbal and written communication skills. Unlike, you know, vice president.
-Jaso
drop,
Not so. I thought I read yesterday that Shelby was dumped out of the negotiating table for being "too hostile" and replaced by the #2 Repub on his committee.
Most of Washington just wants to appear to be solving problems, even if they have no idea the root cause and the correct solution... or they do and they are all a bunch of greedy evil little pigs pretending to be solving problems.
Ministry of Truth writes:
Isn't the best bailout plan no bailout plan at all?
The banking system will have to be recapitalized: It's a fact. How it gets done is obviously the critical question. Unfortunately the Democrats, ever the suckers, went along with what they thought was a good faith negotiation to work it out, and had the Republicans torpedo it so as to be able to blame the Dems later...
The politics are irrelevant when you do not control your own finances.
The absurd debt levels (federal, state, municipal, future UNFUNDED obligations that are public and private, household debt, depreciating assets) mean there is no longer a choice with Iraq. You have to withdraw because you can't meet the payroll. You can't invest for the common good (infrastructure) in sectors where individual interests cannot replace the efficiency of the public sector. You cannot use your military to gain concessions and lucrative contracts from foreign countries
It's not worth investing in the American market until there is clarity on debt reduction. Right now it is convenient to use the dollar, nothing more
On another thread, someone questioned whether this was "an ungovernable moment". I think truly that it is. With the nation watching, our leaders appear paralyzed by their own imcompetence and partisanship to carry out the true will of the people. Where do we go from here?
You know what is total bullshit huh, do yah punk, Shelby never said what the 200 economists suggested ... he just waves around this shit and never says what he wants or what people think they want.. retarded!
Is it safe to say that those of us who are anti-bailout are pro-Shelby because he's stonewalling, whereas those who are pro-bailout but anti-Paulson-plan are disappointed because he's preventing not only the Paulson bailout but any bailout?
I am pro intelligence, and he just came over as dumb.
This political theater is all about putting the problem off-balance-sheet for the banks, in an attempt to kick the can.
Only there ain't no can to kick no more....
Dutch Auction? From Bloomberg:
Sept. 26 (Bloomberg) -- Kathy Fuld, the art-collecting wife of Lehman Brothers Holdings Inc. Chief Executive Officer Richard Fuld, is selling a $20 million set of rare Abstract Expressionist drawings at a November auction, according to two art dealers.
Richard Fuld earned $34.4 million in 2007 running the fourth-largest U.S. investment bank -- pay that lawyers said may be the target of lawsuits by creditors. He sold Lehman shares that were worth $247 million a year and a half ago for less than $500,000 last week after the stock price collapsed.
Kathy Fuld, Wife of Lehman CEO, to Auction Artworks (Update1) - Bloomberg.com
What Shelby has waving in his fat hands is this:
Deus ex machina - Wikipedia, the free encyclopedia
A deus ex machina (lat. IPA: [ˈdeːus eks ˈmaːkʰina], literally "god from a/the machine")[1] is an improbable contrivance in a story characterized by a sudden unexpected solution to a seemingly intractable problem.[1] Neoclassical literary criticism, from Corneille and John Dennis on, took it as a given that one mark of a bad play was the sudden invocation of extraordinary circumstance. Thus, the term "deus ex machina" came to mean any inferior plot device that expeditiously solves the conflict of a narrative.
Futures say Shelby, Dodd, Paulson, McCain are scewed:
Stock Futures on Bloomberg
Isn't this just a scheme to keep the market propped up long enough for Baby Boomers to cash out their 401ks? F*** 'em, let them eat cat food.
Errr, can't you get at least 150 economists to disagree with any proposition?
On another thread, someone questioned whether this was "an ungovernable moment". I think truly that it is. With the nation watching, our leaders appear paralyzed by their own imcompetence and partisanship to carry out the true will of the people. Where do we go from here?
In the vein of someone else in that thread, I disagree. IMO, this has been a huge victory (so far) for the public in that a bill that politicians overwhelmingly favored AND viewed as urgent was totally derailed by public opinion. When was the last time that happened?
The fact that this happened "with the nation watching" is why events have played out as they have; virtually every major media figure and every politician in a key role was ardently pro-bailout just 48 hours ago. Now their plans are in total disarray.
This is not unlike sending in a lawyer or polisci grad to deal with a nuclear power plant crisis. The fact that no one wants a meltdown has little to do with the capabilities of the people who are handling the crisis.
And the nimrods who caused the crisis are now supposed to guide them through it?
Truly the blind leading the blind.
There is a third way between bailout and no bail out.
Use the same money to start several banks that are staffed by the best investment bankers (working on bonuses as they prefer) who value job security and capital access. Buy any and every actual asset and let the existing leveraged-counterpartied-derivative banking system sort itself out.
Sell the shares in 5-10 years. Asset prices are stable. Investment HQ of the world stays put. Government secures 110% of the upside (the extra 10% for having the capital when no one else did)
Or continue with the RTC, but only buy at hold-to-maturity or less prices. This will cause banks to become insolvent (use the SEC/OTS to force price discovery + disclosure among all banks).
Then step in to provide all the capital needed to remain solvent, let a few of them fail to keep them honest with fear. Any and all injected capital comes at Buffet-style deals. Call options and usurious interest rates at super-senior creditor levels.
Both ways separate the recapitulation from the RTC like deal (which was completely different to begin with because the government was already on the hook for those institutions because of the FDIC)
From Brad Setser:
In the last two weeks if I am reading the Federal Reserves balance sheet data correctly the Fed has:
Increased other loans to the financial system by around $230 billion (from $23.56b to $262.34b);
Increased its other assets by about $80b (from $98.67b to $183.89b);
Increased the securities it lends out to dealers by $60b (from $117.3b to $190.5b);
That works out to the provision of something like $370b of credit to the financial system in a two week period. And that is just what I saw on a cursory glance.
The most that the IMF ever lent out to cash strapped emerging economies in a year?
$30b, in the four quarters through September 1998 (i.e. the peak of the 97-98 crisis).
Brad Setser: Follow the Money » Blog Archive » Extraordinary times
recapitulation => recapitilization (stupid auto-spell)
You can see the reason behind the additional outflow of funds by looking at the effective overnight Fed rate. It's been about as stable as a epipleptic at a pink floyd lazer show
Didn't someone (Brad Setser or someone else) say $700B is more than the IMF has ever lent out, in total?
EvilHenryPaulson,
Those are great ideas. I'd like to shake your hand (the one without the weird pinky finger, though).
Chinese banks no longer lending money to U.S. institutions?
Ruh-Roh!
China banks told to halt lending to US banks-SCMP
| Reuters
The guy interviewing Shelby, did he work for Hank or what?
"Well someone told me it's a good plan, and you might be a senator but I have hair almost as good as Anderson Cooper, and you better explain yourself. Are you turning your back on the president by not doing everything he says?"
I guess the people holding big media's leash are not at all shy about telling the face talent how it's supposed to be.
I'm writing the Senator a heartfelt thank you right now.
With the nation watching, our leaders appear paralyzed by their own imcompetence and partisanship to carry out the true will of the people.
Just to clarify, what I mean is: it wasn't the goal of the Congress, even just two days ago, to carry out the true will of the people (which, at least from a majoritarian standpoint, is to NOT pass any bailout legislation). Their goal was to carry out the exact opposite of the will of the people, by handing out an unprecedented amount of money to mismanaged institutions. And now, they are being forced to govern in the way their constituents desire (for better or worse).
I questioned whether we are facing an ungovernable moment. The thought struck tonight that both sides are right and as a consequence we may very well be screwed. Assured mutual destruction.
I hate the bailout philosophically as well. I find myself feeling angry with each sound bite signaling it's moving forward. Yet the combination of news of Paulson's kneeling tonight,with word out of Asia, and the incredible FED injections this week are troublesome. We are running out of ammo keeping this "sucker" on life support.
Takes me back to an observation earlier this week--it appears the center will not hold.
If it doesn't, life as we know it, as we have been socialized, will be over. The intellectual nightmare scenario will move from the theoretical to the applied. We will truly understand living two different lives.
MP,
I get what you're saying. But I'd define governance as some kind of decisive action. Even saying 'we will do nothing and let the market work itself out' would be fine. But they're not doing that. Not even Shelby. They're scrambling. And just because the people are pissed about a $700BB bailout doesn't mean the people want inaction. They want decisive action... and we have not seen that yet from either party.
And so the foreign investors do not want USA anymore. Global credit crunch.
Well, Bush obviously is the worst president in a very long time.
A mostly Republican controlled congress helped him perpetuate his disastrous policies. Democrats failed because they were completely incompetent during the past 8 years.
The media failed by allowing he said/she said bullshit coverage of trivial matters instead of acting as the 4th estate and keeping Americans informed on issues that have a long term impact on all our lives.
Most of all, we failed ourselves because we followed our leaders like sheep instead of driving up to Washington D.C. and ripping the fucking lies out of their mouths with our bare hands.
You know what's funny?
1, 2 years ago the economy was great and GM looked like a bad investment
Now that everything is heading downhill, it looks like a good time to invest. They are getting their revenue more globally every year, under the current political climate they will be paid any amount to avoid firing 1 worker, the chance that GMAC's ResCap will be entirely bailed out, juicy loans and purchasing tax incentives tailored to meet their planned production, they've got good engineers and good plants (well the newer ones). Chrysler will likely be bankrupted/auctioned, Ford did sell their other divisions but the company from the CEO on down is crap
Sorry for being off-topic, I kind of just wanted a reality check if someone wanted to call me a loony.
Kathy Fuld, the art-collecting wife of Lehman Brothers Holdings Inc. Chief Executive Officer Richard Fuld, is selling a $20 million set of rare Abstract Expressionist drawings at a November auction, according to two art dealers
i guess that is the high-life version of j6p selling his wife's beanie baby collection on ebay in order to keep up the payments on the second car.
The poor fuld's. Down to their last $50m .. how on earth will they manage?
Dudes,
Chill!
I got home from a real estate auction in Phoenix about 40 minutes ago. It's now just a few ticks short of midnight. Our group walked in with $4 million in our pocket and another $8 million in credit lines. The banks are crawling all over us to give us more. We bought 20 homes last weekend and were prepared to to buy as much as we could tonight at the prices we paid last week. We can rent them out for cash on cash returns or from 8% to 16% (no appreciation assumptions). We currently manage or own 800 single family houses in Phoenix so we aren't amateurs. Here is what happened.
We got outbid from the start. The room was full of workiing class stiffs who see a great deal and they bought like there was no tomorrow. Think they were getting bad deals? Try $50 a square foot max. Wells Fargo was there writing loans like it was 2006.
Boys, there is a disconnect here. The only problem with this country's economy is on Wall Street.
reality check: GM just exercised all of its un-utilized credit lines at banks (who must be cursing that they didn't find some way to pull them), and they are going to spend all of that money on restructuring expenses. If they don't actually start MAKING SOME MONEY they will have reached the end of their credit rope and still be 100 foot off the ground.
Try $50 a square foot max. if that was the max the working class stiffs paid, and clearly a great deal, and you guys had $4m ready to put down as deposits, how come you got outbid from the start?
Now, Gentlemen, I beg you again to consider, that none of
these Persons above-named, can ever suffer the loss of one
Farthing by all the Miseries under which the Kingdom groans at
present. For, first, until the Kingdom be intirely Ruined the
Lord Lieutenant and Lords-Justices must have their Salaries. My
Lords the Bishops, whose Lands are set a fourth part value, will
be sure of their Rents and their Fines. My Lords the Judges, and
Those of other Employments in the Courts, must likewise have
their Salaries. The Gentlemen of the Revenue will pay Themselves;
and as to the Officers of the Army, the Consequences of not
paying Them, is obvious enough; Nay, so far will those Persons I
have already mentioned to be from suffering, that, on the
contrary, their Revenues being now way lessen'd by the fall of
Money, and the prices of all Commodities considerably sunk
thereby, they must be great Gainers. Therefore, Gentlemen, I do
entreat you, that, as long as you live, you will look upon all
Persons who are for lowering the Gold, or any other Coin, as no
Friends to this poor Kingdom, but such who find their private
account in what will be most detrimental to Ireland. And, as the
Absentees are the strongest views, our greatest Enemies, first,
by consuming above one half of the Rents of this Nation Abroad.
And secondly, by turning the Weight, by their Absence, so much on
the Popish side, by weakning the Protestant Interest. Can there
be a greater folly than to pave a Bridge of Gold at your Expence,
to support them in their Luxury and Vanity abroad, while hundreds
of thousands are starving at home, for want of Employment.
Lowering the Coins
by Jonathan Swift
1736
I get what you're saying. But I'd define governance as some kind of decisive action.
Doing nothing IS decisive. Telling Henry Paulson, down on bended knee, "No" is what I want, and for the first time I now feel like that's what I'm going to get. I mean honestly, does anyone really believe that an idea ardently supported by both George W. Bush and Henry "housing prices are at or near a bottom in September 2007" Paulson is a good idea?
We can have a stock market decline and a number of large bank failures with a poorly thought out waste of $700 billion and serious inflation, or we can have a stock market decline and a number of large bank failures with no waste of &700 billion. I prefer the latter.
Doc Holiday writes:
What Shelby has waving in his fat hands is this
I would say the deus ex machina here is the little fat man with Bell's Palsy who saved the Republic.
If dryfly says he made a canny choice, I'm inclined to believe him. I know he made the right choice.
I also agree with our favorite imitation mayfly that, after this, it isn't gonna come together. I'll say that as someone who has won and lost his share of bureaucratic tussles. There is going to be no cowing the rank and file after this. Bum rushes tend to come apart if you lose momentum.
This interview is so awsome:
Interviewer: "So you don't believe President Bush?"
Shelby: "Well President Bush is not an economist. He won't be the President of the United States four months from now, and Paulson won't be Secretary of the Treasury."
Shelby: "They're trying to rush this plan through, to borrow nearly a Trillion dollars."
Shelby: "We should listen to the economists."
Shelby: "The economists believe the market will correct itself."
Thank you!!! Shelby notes that he doesn't know who else is opposed to the bailout - Republican or Democrat - he's only speaking for himself. "I don't just rubber stamp anything, and I hope the House members, Republicans and Democrats, won't either."
Ironically, thanks to the Democratic insistence that Republicans provide the majority of votes for any bill, and some Republicans' unwillingless to vote for any bill, we have a chance! This is bi-partisan deadlock at its finest!
I urge more politicians to say "We're not going to be rushed into rubber stamping a plan". You know, the same way a few people resisted being rushed by the hysteria of nuclear attack by Iraq. Iraq wasn't threatening America - Bush was. And now he's at it again.
Tom Lindmark, thanks for the first hand insight. Do you think there is any longer term risk for Phoenix in terms of water and transportation costs? Or are the neighborhood layouts fine, and won't need to be bulldozed.
Anonymous, see I look at it as GM used up all of its conventional credit lines and will now upgrade to the exclusive club of primary dealer type interest rates. That $25bn loan is costed at $7.5bn, which implies a 10 year no interest loan during a time when the government can borrow at 3%. It won't be the last such deal.
Anonymous, Poor Fulds? Poor Paulson. Working more hours than ever, everyone hates him, he's got $500-600 million tied up in government mutual funds from when he cashed in his GS at $145/share and wanted to dodge the capital gains taxes. So working harder than ever, getting less love than ever, the WSJ redrew his face to be grumpy, and he's losing money by the day in the mutual fund
LA Seller- "They want decisive action... and we have not seen that yet from either party."
I agree with everything you've said.
Anonymous,
We paid $35 a foot the weekend before for similar properties. An owner-user always outbids us. Fortunately, we can find other properties at our price.
Tom Lindmark, I know just enough about Arizona real estate to get into real trouble but, it seems to me, housing prices in the Tucson and Phoenix areas are still too high.
$50/sq foot for what? I'm not arguing with you, but trying to understand what's up.
"They're scrambling. And just because the people are pissed about a $700BB bailout doesn't mean the people want inaction."
The more inaction I can get from my government the better. Small lean and effective would be a pleasant change from the bloated corrupt monstrosity that has grown up around us since "deficits don't matter."
I'm watching Shelby on MSNBC right now, maybe a rerun from a few hours ago:
"we don't know that this plan will help, it might exacerbate the problem."
Rachel Maddow asks point-blank whether the best thing now is no plan at all, he says, indirectly, yes.
MilliPaulson -- unit of money required to save a single financial institution.
(Borrowed from the "MilliHelen," the unit of beauty necessary to launch a single ship)
Any consensus yet on what's the triggering event that has Paulson on his knees? As much as you'd like to believe it's just concern for GS, it's pretty clear he's scared. Hmmmm, like he got a glimpse of abyss and something was staring back.
sdtfs | 09.26.08 - 1:59 am | #
Doesn't a lot of commercial paper have to roll over on Tuesday? I wonder if, with A2/P2 spreads so high, a lot of companies just won't be able to roll it over, and won't be able to pay them off.
(to be clear, that's not a consensus, it's a personal conjecture)
I was born and raised in a very housing-bubble-prone market. In fact its just starting to plateau in its 4th significant depreciation in 20 years.
Anyway this makes me want to ask a question. Has anyone seen reports of increased arson fraud? Arson for insurance money is normally rare, but when the bubble is big enough and pops fast enough it causes a lot of group behavior that will not be foreseen by the present models. Part of it is a way to recoup equity invested, and part of it is a bitter lashing out at the system.
The other thing we should see are people that can afford their homes walking away to save money and repurchasing because in these group-events there is no shame in foreclosing. There is also no punishment because the banks and credit card companies would be out of business if they refused to go on ability to pay in the future.
When the Dow drops 400 in the first 3 hours we'll get a plan.
What happened overnight after the public meetings? Paulsen and Bernanke explained to everyone that the US Government is about to get its credit line chopped off and interest rates raised. Hence, the Congress doesn't want that to happen either. It's like telling your teenage princess you're tearing up her credit cards... now she's going to do anything she can to spend up to the limit just because it's about to go poof.
Or maybe I don't know anything after all...
YLSP
Impossible, if they weren't ready before going to bed there is no way bureaucrats+politicians can get organized to
1) Agree
2) Organize the vote
3) Pass the vote without delay/questioning/addendums
it is possible that they could have an announcement Friday evening, but if they took the pain of waiting that long they might as well wait another couple of days at least to get their parties in order
I get what you're saying. But I'd define governance as some kind of decisive action.
Governance is providing political goods. Physical security, maintenance of shared infrastructure, disputes adjudication. That is the root of rule, and not in a "this is what I think" way.
Beyond that it is all wu wei. Your country is paralyzed by debt and splt into countless factions. Do you wonder why? Too much decisive action.
A good ruler / leader / manager acts as little as possible. The world is as it is. With a few exceptions, the crisis is in the mind of the policymaker. You can make the world full of crises, or it can have just a few.
Your resources, however, are not in your mind. Many crises, many decisive acts, few resources for any given one. Few crises, few decisive acts, many resources for the decision you are forced to make. "Decisive action," is the root of your nation's current weakness.
You should think about this constantly until you understand it.
Those who claim Shelby is some kind of economic moron please listen to This American life radio program (thislife.org "Going Big") where Shelby takes Cox to task on the lack of regulatory action against predatory lending practices by the banks in 04 I think
It appears most of you are unaware of what the house republicans have been saying over the past week about the bailout. The base...the red staters...are vehemently opposed. What happened today was no surprise. The bailout was rejected on principle. But, alas, they are politicians so their principles don't last long. There will be a compromise plan eventually: without ACORN and without capital gains cuts.
"US Government is about to get its credit line chopped off and interest rates raised"
About fucking time!
To all the self-professed Libertarians (an identification that hardly existed until the GOP embarrassed many of their devout)
Why has there been no statement from Bob Barr, King of the elephants and Libertarian presidential candidate
P.S.
Ron Paul had weak questions for someone that wasn't making a vague 2 minute statement ending with thanking Paulson/Bernanke
Palin responding to Katie Couric:
YouTube - Miss Teen USA 2007 - South Carolina answers a question
Uncle B,
WTF is this?
YouTube - Palin: No Second Guessing Israel's "Security Efforts"
Damn, tried to jump ahead only to see Mike and I think alike.
Doc, it's all part of the plan, somehow. It must be.
Could be worse:
Pakistan is the world's riskiest government borrower. Credit-default swaps on the nation's $2.7 billion of dollar- denominated bonds outstanding have jumped to 1,700 basis points, according to prices from CMA Datavision. That means it costs $1.7 million annually to protect $10 million of Pakistan debt from default for five years, more than triple the cost on Lebanon's debt, according to data compiled by Bloomberg.
Pakistan `Deteriorated' Since Outlook Cut to Negative, S&P Says - Bloomberg.com
1996 paper from the NY Fed on impact of sovereign credit ratings.
Note: Many of the countries then listed BBB on up are now AAA.
The USA does not have the fortitude to agree on spending cuts/tax increases necessary to pay down debt, let alone in a downturn, let alone on the doorstep of a major explosion in future-now-present obligations, let alone at a time when state/municipalities/households are all at record debt to income levels
If the process does not begin gradually before a ratings downgrade, then there is no hope of ever catching up
MP,
At the auction we attended last weekend newer construction, 4000 square foot homes went for $200,000. The homes were in desirable suburbs. Tonight, they were going for $60 to $80 a foot in the same suburbs and up to $120 a foot in Scottsdale (If you don't know Phoenix, that's a land locked top of the line location). As I said, there were a lot of people at the auction that appeared to be buying for their own use as opposed to investors.
Tom, again no argument from me, but how do you reconcile those numbers with the kinds of valuations you see around Tucson and Oro Valley?
Rate cut Friday?
I've got a question for the group:
Paulson has repeatedly insisted that "the tax payer is already ON the hook".
In what way? And why do we need to choose between the hook behind door #1 (that we haven't seen yet, and won't be shown...) for hook #2 ($700B, which is proudly displayed for our viewing pleasure)
KnotRP:
Paulson's thinking is that with no bailout, the taxpayer is on the hook with lost jobs, slower economy, etc., from the fall out.
aleister perdurabo, if you think that is something then I also saw on Bloomberg yesterday that the yield on GM's 5? year debt was 48.5%
Pakistan is partly screwed because NATO is step by step preparing to drawdown starting in 2011 and the Turkmenistan-Afghan-Pakistan-India/China pipeline never got built
The whole country is screwed up, Baluchistan (the Southwestern 1/3rd) and Waziristan (the NE 1/4) are bound to become self-governing/independent just like Bangladesh did
Frankly it that CDS would be higher than 1700bp if there was anyone willing to truly gamble
damondidit writes:
KnotRP:
Paulson's thinking is that with no bailout, the taxpayer is on the hook with lost jobs, slower economy, etc., from the fall out.
Of course by the fallout, he means those working at GS and MS and JPM.. you get the drift
woops, that NY Fed paper on the impact of sovereign credit ratings is
http://www.newyorkfed.org/research/epr/96v02n2/9610cant.pdf
things look a bit different here in Cambodia...
that quote from the President floored me!
here's another video mash-up of me on a rant about the Masters of the Universe!
YouTube - Revenge on the Taxpayer Killing Fields of Wall Street: AIG, Goldman Sachs, Citigroup
Baluchistan has some major league hashish though.
MP,
I don't know Tucson so I cannot comment specifically on the area. What I learned from bidding and buying is that the numbers you see published for median prices and the numbers you see in MLS listings in no way relate to the price you can negotiate. Only the suckers are paying list or paying any attention to what they see in the newspapers.
Paulson is right, the 3rd? largest poultry produced in the US is about to declare bankruptcy because it has failed to secure/roll-over credit
What he carefully omits is that you can provide that credit and banking if you are willing to bypass the existing mega-incumbents. You could let Bernanke lend to regional banks as if they were Primary Dealers, the only problem is that Bernanke already gave those with access his entire balance sheet and what he does have left is not enough to maintain stability in the effective overnight fed funds rate
The questions in congress should not be why $700bn, but why $700bn more
You know what sucks about the bail out? The only way to avoid paying into it is renouncing US citizenship and hopefully the capital outflow fee is not too bad. The USA is either the only one or like one of two countries in the world that you have to pay income tax to if you earn it abroad
WTB more competent interviewers...
"Only the suckers are paying list or paying any attention to what they see in the newspapers."
Tom, OK, you're saying that the Zillow numbers for Tucson/Oro Valley could be as bogus as the ones for Phoenix?
condao, congrats on your video's first view from me.
I don't know what it all means, or who the masters of the universe is an allusion to.
The truth is this single issue has proved more unifying than anything but pearl harbour, 9/11, and the moon landing.
Abortion? Never heard of it
Environment? Please there are more important issues
Public education? Whatever
Military? If it aint' broke, don't fix it
The cheapest way to run a campaign is to buy into the already unified group prepared to self-organize and deliver votes
Paulson was the leader on Wall St when all of this toxic sludge was issued.
Now he is the leader of the treasury. There is absolutely no doubt: he stole trillions from America and the world on the way up, and now he is stealing the rest on the way down.
If you explained the financial crisis to an eight year old, what is the first thing he would ask? Why is Paulson, the head of Wall Street, in charge of the treasury? Of the 6 billion people on the earth, he is the absolute worst choice.
Why is Paulson, the head of Wall Street, in charge of the treasury? Of the 6 billion people on the earth, he is the absolute worst choice.
Shawn H | 09.26.08 - 3:50 am | #
Come on, if the whole world just chips in $100 each for every man, woman and child we can put this behind us for 8-10 months
I'm sure those Haitians living off of mud pies and dirt cakes have being saving up for just this rainy day
Anyone tracking the quantities of covered bonds that have been issued since July? Doc, weren't they supposed to have stabilized us into safety? Just too few good assets upon which to write them?
Uncle Billy Loves Naomi Klein,
Saw word today that arbitrage hedge funds were unable to operate by buying covered bonds and shorting the stock due to the ever growing short sale ban list
Also saw Citi preparing to advertise synthetic shorts in a big slap to the face of the SEC
Cheers, Dr. Evil.
(sigh) Ok, off to bed again. Butterly dreams all.
Because Bob Barr is as phony and out of touch as all the Republicans and Democrats who still support the bailout.
MP,
Yes. Shoot me an email with your contact info and I will call you tomorrow. My work email is toml@metrowb.com. I would refer you to my blog and website but we had a techie go south on us and the whole thing is down. Just my luck. The whole world is imploding and I can't write about it.
"Once could also infer that such an action by the Fed amounted to a $138 billion bailout of Citibank"
I think that Citibank was saying that they were just the trustee for the $138B in Lehman bonds. Dunno if that means anything about anything.
Tom, I appreciate your offer and may contact you in the near future. I've got no particular interest in doing anything in Arizona in the immediate future, but have been checking into the Tucson area due to the biotech concentration there.
At the moment, it's strictly a matter of casual interest. Conjure and I like to stay current on what's happening around the country.
Having said that, the numbers you're tossing out are interesting. It suggests to me that there's a real disconnect regarding value down there. I was looking at Arizona real estate on Zillow recently, so the numbers you mentioned really startled me.
Jesus, you know, $50/sq ft has got to be less than what it costs to build the things.
I'd guess half, maybe even less.
Bush used the unfortunate house of cards analogy....whatever lumps we've got coming, I would bet they are unavoidable now. I don't think $700B won't blow the cards back into a housing formation. When money market funds are having runs, no one is contemplating the idea of lending zero down for $1M houses to anyone who can fog a mirror.
sorry - won't/will
Another thing about these numbers Tom Lindmark is talking.
A lot of people in Arizona must be hopelessly underwater by now. I would be surprised if any buyer between 2005 and 2007 can get a HELOC.
I don't know how fast prices ran up there, but I'd be willing to be that you're being an optimist. My impression is that even creditworthy borrowers with equity and in areas a lot better off than AZ are having their HELOCs cancelled.
I'm obviously too tired to discuss this intelligently but these Arizona numbers are more than startling. They're frightening.
Anyone else have any experience with what's going on down there?
How the hell can anyone sell, let alone refinance?
Has the Arizona market seized up?
I'll be in Tucson in a couple weeks. Will check around.
Night all.
Jamie Dimon sez: "Why try to sell a house in Arizona when you can just burn it down?"
Financial Arsonists ? | Angry Bear
Bedtime, Part the II'nd.
Haven't seen this posted yet:
Fed's H3 came out today. The banks' non-borrowed reserves went another $36 billion into the red, from a negative $122 billion to a negative $158 billion. And that's in just the last two weeks.
You know the Fed is out of funds, I don't care what it says it has left.
Ten-to-one BB's already monetizing debt. AKA printing money.
mp, my ex-wife sells real estate in Tucson. I'll call and ask her.
Not.
Jagshemash!
I wish you all americans much success in your plan to make benefit for
Glorious Banking System in America.
Keep money loose and sucker up!
crickets
Oh gosh. While you're all asleep and I'm commenting here all by myself, the US Dollar has suddenly crashed. Yes, it is now worth only 0.1% of what was worth yesterday.
Yeah yeah, bad joke. But, then again, there's no one here to read it.
Senator Shelby rocks the f*cking house!!!!!!! I haven't heard such honesty from a politician other than Ron Paul.
... someone questioned whether this was "an ungovernable moment."
This is what happens when your default position is concentration of power. What kind of a sorry man sits around and waits to be governed?
Democracy only works until the majority realizes it has the keys to the treasury. In a reversal of roles, Paulson has flung open the doors to the treasury and is calling Sooeee, Sooeee, Sooeee.
Sorry Ben, we were too stupid and cowardly to keep your republic.
Ten-to-one BB's already monetizing debt. AKA printing money.
Umm, isn't monetizing debt the best solution here, provided it can be done without angering China?
Unless depression is just your kind of thing.
Anyone else have any experience with what's going on down there?
Four properties inside the Omni Tucson National have been on (and off) the market for about a year, no sale, asking prices way above Zillow estimate. People don't seem to comprehend that house prices have tanked. Still think their house is worth what it was in 2006.
It's not a choice between the Paulson plan and do nothing.
It's a choice between the Paulson plan and let people keep their money and decide for themselves what to do.
Sorry Ben, we're f'ed.
Sometimes it helps our understanding to see the world through the eyes of Paulson and Ben B.
Famous New Yorker cover.
72 – The World As Seen From New York’s 9th Avenue « Strange Maps
Sorry Ben, we sucked.
Palin's response to the Bailout --
"That's why I say I, like every American I'm speaking with, we're ill about
this position that we have been put in . . . where it is the taxpayers looking
to bail out. But ultimately, what the bailout does is help those who are
concerned about the healthcare reform that is needed to help shore up our
economy. Um, helping, oh -- it's got to be all about job creation too. Shoring
up our economy, and putting it back on the right track. So healthcare reform
and reducing taxes and reining in spending has got to accompany tax reductions,
and tax relief for Americans, and trade, we've got to see trade as opportunity,
not as a competitive, um, scary thing, but 1 in 5 jobs being created in the
trade sector today. We've got to look at that as more opportunity. All of those
things under the umbrella of job creation. This bailout is a part of that."
comrad jeremy said:
The Republican solution: Cut taxes for the wealthy.
How original.
Comrade Jeremy | 09.26.08 - 1:59 am | #
--turn the page
the solution has nothing to do with taxes
the solution is plunge the country into debt and give the neocons a payday
The cake is already baked. Two year severe recession. Massive deflation of stocks and housing, good in the long-run. Greedy and stupid big banks taken to the woodshed and stable banks taking their market share. Good pain for a society that completely lost its way, with the worst leadership since the late 1800s going down in flames of disrepute.
DCBeacon
There ought to be no drastic deflation in housing costs because it is calculated through Owners Equivalent Rent. No inflation on the way up, no deflation on the way down.
There are stocks that are interesting, of fair value at present prices. However analysts/banks are holding to the charade that there will be no recession and that trailing earnings are a good estimate of forward P/E.
Things on the whole are no where near cheap. 2003 was cheap, at least for some tech and commodity companies. 2005 was funny because it was a financial shock/jitters, yet the normal economy had no reason to slow.
If you're taking GS, MS, Merrill Lynch and all of the other former-IB that were 30 or 40:1, along with all the hedge funds facing redemptions -- is there any way you can maintain current pricing given both negative outlooks for equity supply (lower growth) and equity demand (fewer/less-levered dollars chasing the same stuff) Also the capital gains tax increasing would hurt reinvestment
I was too young the first time around but I hope prices fall enough that I get the chance to wear the hat that says Dow 10,000 and drink from the coffee mug with Dow 8,000 when we come to the next leg up
Hi CR,
I think what we would al like to see is a video of Paulson down on one knee and Pelosi delivering the "I didn't know you were Catholic" quip. Does anyone have that?
(Apologies if this is already above...)
The depression for debtor(USA) and recession for creditors(China, Japan, EU)... recession is going to be short, but depression will take some time - 10-15 at least... get ready, buy gold...
Read this
Fed keeps banks afloat as money market crisis deepens
Fed keeps banks afloat as money market crisis deepens
| Reuters
NEW YORK/LONDON (Reuters) - U.S. banks and money managers borrowed a record amount from the Federal Reserve in the latest week, nearly $188 billion a day on average, showing the central bank went to extremes to keep the banking system afloat amid the biggest financial crisis since the Great Depression.
How much per day was it again?
How much has been 'borrowed' already?
Isn't that 700B bailout looking a little small now?
Older news from yesterday:-
U.S. Mint suspends Buffalo gold coins after depletion
U.S. Mint suspends Buffalo gold coins after depletion
Bush, Ben, Hank and Co. will not ride off into the sunset after this...They will be escorted out under heavily armed guards to sepreate undisclosed locations. Hopefully re-education camps....so they may get up to speed on reality. In the wake of their reign....we will be left searching for the "Ace" in the hole and indeed Kenny Rogers was right There WILL be time enough for countin' when their dealin' is done. How can tossing fat cash at the problem make it go away? Is the problem a giant 350 pound steriod eating bookie? I agree that 200 of the Nations leading economist thinkers have an edge over a handful of governmental puppets for the establishment. Kudos...Shelby
Hundreds of Economists Urge Congress Not to Rush on Rescue Plan
Hundreds of Economists Urge Congress Not to Rush on Rescue Plan - Bloomberg.com
Sept. 25 (Bloomberg) -- More than 150 prominent U.S. economists, including three Nobel Prize winners, urged Congress to hold off on passing a $700 billion financial market rescue plan until it can be studied more closely.
Sen. Shelby sure deserves phone calls letters of and thank you notes for standing up for the people .
.
Chris Whallen(sp?) from IRA just laid into Paulson and Bernanke like a firing squad on CNBC.
It was beautiful.
"Hey, this is getting pretty serious...Think some fiscal stimulus will help? How about we use the Paulson philosophy and "hit it hard" with a $500B worth of checks in our mailboxes?"
Let me do the math......
Sen. Shelby sure deserves phone calls letters of and thank you notes for standing up for the people .
.
Bill | 09.26.08 - 6:48 am
Yeah, I already sent a Thank you and keep it going email to my Republican senator.
-K
Sen Shelby is an excellent example of someone who stands up for what he believes in regardless of party affiliations and allegiances.
That takes character.
sdtfs writes:
Who predicted World War III would be financial?
WWIII is financial. The Russians lost the first salvo and while we were, according to GWP, "getting drunk" on Wall Street, the Russians rebuilt their economy. They have oil and vast mineral wealth. We have Wall Street. Guess who wins?
I think there is another political edge here. The democratic congress wants to adjourn and go home to campaign. The longer they are delayed, the longer their opponents can campaign while incumbents are mired in bailout muck in Washington. Consequently Paulson and the White House may think that Congress will give in to their demands soon rather than fight on.
Chalmers Johnson stated in his book "Sorrows Of Empire" that was unlike that the U.S could be defeated military. But, their was a good chance that it could be bought down economically.
Well, the early morning round on CNBC is predictable. [disclaimer: I only watch for amusement!] After three days of pounding the tables for a bill passed without any restrictions, after "conservative Republicans" revolted, the CNBC guys are now walking back their previous statements. So far their guests have been totally in line with the Republican objectors, and the CNBC guys are barely voicing their previous full-throated support of the plan. Kernen previously "the plan needs to pass as presented." Today: "I could take either side."
All parties trying to blame Democrats. Now, I'm not sorry the plan is being blocked, but it sure looks to me that Democrats NEGOTIATED in good faith, trying to meet the requirements of the panic as presented by Paulson while building in safeguards.
Now they are blindsided by Republicans. If I were them, I would force the Republicans to come to agreement first, then come back to the table.
I'm just glad it's happening on Bush's watch, so whoever is the next president only has to deal with the the actual situation without being stigmitized as the cause.
EHB, I agree with all of your points except for housing deflation, considering these factors:
I'm no economist, but I have steered clear of the dot come and real estate bubbles, and am currently debt free and cash-heavy. We live well below our means and work in stable jobs. I say this less to show any superior judgment and more to be transparent about my perspective.
Thanks, DCBeaco
Hey, Joe Sixpack, we need your nice family to pony up $10,000.00 to cover our cocaine, whores, ugly mcmansions, pied a terre (whatever the fug that is?) and our 62 trillion in Credit Default Swaps. Don't even ask how us geniuses managed to create 62 TRILLION in Credit Default Swaps, just pay us or we'll shut down the economy.
Regards:
McMansionDweller Cokewhore IV
Greenwich, Manhatta
TED spread is 3.11.
S&P futures down 21 handles
CNBC playing circus music.
Interesting times
JPMorgan Has $23 Billion Secured Claim in Lehman Case (Update3) - Bloomberg.com
JPMorgan Has $23 Billion Secured Claim in Lehman Case (Update1)
By Jeff St.Onge
Sept. 26 (Bloomberg) -- JPMorgan Chase & Co., the biggest U.S. bank by deposits, is Lehman Brothers Holdings Inc.'s largest secured creditor, with an estimated claim of $23 billion, according to a court filing.
Lehman said it owed New York-based Fenway $3 billion, Swedbank AB $1.35 billion, and Boston-based State Street Corp. $1 billion as it filed a list of its top secured creditors yesterday with the U.S. Bankruptcy Court in Manhattan.
[...]
Creditor Amount of Claim
($million)
JP Morgan Chase 23,000
Fenway 3,000
Swedbank 1,350
State Street 1,000
Met Life 878.4
Sumitomo Mitsui Banking Corp. 870.3*
Danske Bank 800
GOOD MORNING!!!
WaMu Customers, Welcome to JPMorgan Chase!
We're proud to welcome you to one of the nation's largest banks; as of September 25, 2008, JPMorgan Chase & Co. has acquired the deposits, loans, and branches of Washington Mutual. Your deposits remain insured by the FDIC and are now also backed by the strength and security of JPMorgan Chase. Our combined company will offer superior banking convenience - over 5,400 branches and 14,000 ATMs in 23 states. Here's what this means for you:
What's different? \t
* Your deposits at WaMu are now backed by the financial strength of Chase in addition to continuing to be insured by the FDIC.
* If you bank at both WaMu and Chase, your deposits continue to be insured separately today just as they were yesterday, and generally will be for another six months. At that time, your deposits will be insured by the FDIC for up to $100,000 per depositor (with an additional $250,000 for self-directed retirement accounts), and will continue to be backed by the strength and security of JPMorgan Chase.
* Learn more about the size and strength of our company.
What stays the same? \t
Continue to bank just as you usually do:
* same account numbers,
* same Washington Mutual name on your account,
* same checks, debit cards, credit cards, deposit slips,
* same online banking website and passwords,
* same branches & ATMs,
* same familiar bankers, and
* same great service!
What will change? \tSoon
* You'll be able to use over 9,300 Chase ATMs fee-free - jointly, that's 14,000 ATMs for your banking convenience!
In the future
* You'll begin to see the Chase name on your statements, online, and on your credit cards as they reissue.
* Your branch will be re-named Chase and you'll be re-issued new debit cards with the Chase name. Until then, bank as you do today.
* As our systems merge, you'll be able to use any of the Chase branches nationwide. This won't take place this year, and we'll let you know well in advance of any changes.
We look forward to serving you, and to introducing new products, services, and convenience in the coming months.
Tell me more* about the change to JPMorgan Chase.
Visit WaMu online.
Frequently Asked Questions:
Q. What will happen to my account at WaMu? And to my branch?
A. It's business as usual. As of September 25, 2008, JPMorgan Chase has assumed the deposit and loan accounts, and all branches, of Washington Mutual. You can continue to access your accounts just the way you've accessed them in the past: use your same branch, same debit, credit and ATM cards, same checks.
Q. Is my money safe?
A. Yes; in addition to FDIC insurance, now you're assured your bank is backed by the strength and security of JPMorgan Chase. If you have money in both banks, your deposits have separate FDIC insurance for up to six months. Come see us and we can help you review your coverage.
Q. What if I have more than $100,000 at WaMu?
A. Your money is secure and now protected by the strength of Chase. Chase assumed all deposits of Washington Mutual.
Q. When can I bank at Chase branches in my area?
A. We'll be working hard to combine systems as quickly as possible so you can begin to enjoy expanded branch convenience in your area, and we expect system changes to begin late next year. We'll let you know in advance of any changes; in the meantime, simply continue to bank at WaMu branches as you do today.
wow
"this sucker could go down."
I feel so much better knowing he's in charge.
Baron: what's next:
GOOD MORNING!
US Citizens! welcome to the Republic of China!
Dickhead Shelby is playing politics for his buddy John McCain.
Death to all scumbag Republicans and all their idiot supporters.
Seriously, Republicans are the worst scum this planet has ever seen.
When does the worldwide military drawdown start? The boyz in uniform are going to be pissed when the checks start to bounce.
There was for a time on the Web an analysis by the CIA about the potential for the USA to be brought down economically. The greedy bastards in DC and Wall Street were too stupid to connect the dots. It is to a certain extent like fishing with artificial lures. You get a hit and open the bail to let the fish run for awhile while consuming the bait ($$$$$) and then set the hook. By the time the fish realizes there is a problem, game over....
Next week will be interesting. According to Setser the Fed has burned through 370 B in the last two weeks. At that burn rate, it won't be long now.......
MISSION ACCOMPLISHED! Rock on loyal Bushies. 8 years ago the Government had a surplus, government debt was being paid off, we had $1.25 gas, peace, banks were sound, help wanted signs were everywhere. Then Bush and his rehabilited Nixon crowd blew into Washington. What happened to the press? Why don't they report this?
"Seriously, Republicans are the worst scum this planet has ever seen."
Not so fast. The Roman senators who sold out to Jugurtha in 112 BC might have been worse. Let me think about it a while.
Anonymous writes:
... Shelby is playing politics for his buddy John McCain.
Give him credit. He has been an opponent of the Paulson Bailout Plan from the beginning
"Give him credit. He has been an opponent of the Paulson Bailout Plan from the beginning"
GovTrack: Senate
Vote On Passage:
S. 900 [106th]: Gramm-Leach-Bliley Act
Senate Vote On Passage: S. 900 [106th]: Gramm-Leach-Bliley Act
Aye\tAZ\tMcCain, John [R]
Aye\tAL\tShelby, Richard [R]
That would be a yes vote for deregulation for those still behind.
That idiot congresswoman Bachmann from MN just said all would be well if they would just suspend the mark-to-market rule.
Goddamn, these Republicans are the worst scumbags the planet has ever known.
I'm with Geo Will on McCain. He ain't fit for the job.
Too much of the Red Queen in him.
(imagine arms awaving) Storm coming!! Delay the convention!! For the good of the country first!!
Stop the campaign!! Economic storm coming!! For the good of the country first!!
Meanwhile, what will be the next monkey wrench he throws into the gears?
Fucking drama queen.
Okay, okay, his actions stopped the bail out. Fine. I don't want it either. So what.
I want them to adjourn. Go home. Stay there until this erection is over.
We'll be fine. We don't need your help, thanks but no thanks as the airhead zipper said.
Plantagenet: was Jugurtha one of the lesser known leaders? They never made a movie about him, how could he be worth a mention now?
Kanjorski says calls to his congressional office are 50/50. 50%-No and 50% Hell No!
"how could he be worth a mention now?"
Jugurtha was an enemy of Rome who kept himself alive by bribing senators. The classical author Sallust uses the senators as an example of really bad government. I had to search back that far mentally to find a possible counterexample to the "Republicans worst ever" hypothesis.
Comrade Bagholders,
Hail Satan....
Bwaahahahahahah!
Nostrovia,
Keep up those contacts - call, email, fax - time to double down on "hell no" to the bailout
AND present an alternative, I like the bank holiday but I think the issue is we need to have a national conversation about this mess...
NO BAILOUT - YES TIMEOUT!
Goddamn, these Republicans are the worst scumbags the planet has ever known.
So do you simultaenously want the bailout while also arguing that we could be spending the 700bn we don't have on frivolous gifts to the populace instead of frivolous gifts to bankers?
I'm just trying to keep the factional politics straight here because you guys that still believe the political parties seem to be getting yourselves contorted into some very interesting policy postures.
What's important about the "republicans are the worst sc..." comments are the recognition that, if you cannot solve an economic problem with $700 billion dollars then you don't really have an economic problem at all.
We have a PROBLEM...political, societal, sociological, historical. Those who comment here who get angry when the dialogue moves into these areas should get over it, and by the way stop trying to take advantage of it with your short-term investments. Tanta has said many times that this site is not intended for investors.
Thanks, DCBeaco
It is being reported that McCain asked for the meeting. Bush yielded to Pelosi and Reid. They yielded to Obama. Obama pressed Paulsen about the plan and the possible alternatives. The R's felt trapped. Obama led. McCain sat mute, meds kicking in. A big stinky smudge bomb was thrown by Boner(sp?). Everybody flounced. Mccain still pretending his bullshit 'country first, no debate' meme. Obama relaxing poolside having juleps with Haley.
There will be a debate.
There will be no bill.
We'll be fine.
Somewhere in Beijing a few withered remnants of the Great March are concerned. Too soon, they say, too soon...
Comrade Volker the Viking writes:
I'm with Geo Will on McCain. He ain't fit for the job.
I agree with ya Volker. That whole "cancel the camapign! cancel the debates! I'm flying to Washington!"
Wow, way to lose it in a crisis. Conduct unbefitting a leader of the Republic. Some stuff, you gotta just keep on keeping on. Especially if it's like, a bank confidence crisis you're adding to by making a public spectacle of yourself. Or the Constitutionally mandated election of the Republic's executive.
I don't really have any strong feelings for Obama but any chance I was gonna go into the booth and decide to vote McCain just to keep the congress and executive on opposite sides of the fence evaporated right there.
I forgot one- we have a major organizational PROBLEM on our hands. Organizational effectiveness has gone down the tubes in many respects, not just within government agencies as folks like to point out, but within many of our "best" corporations.
Boring as it may sound, I think one of the primary root causes of this PROBLEM has been incompetent middle and senior management within many corporations. Again, I think most of Tanta's posts point this out really well.
With all due respect to my comrade, Comrade Volker the Viking: McCain will come out of this the hero he always imagined himself to be.
He'll have "stopped" the bailout.
Or: he'll have modified it to "protect" the taxpayers. J6P will LUUUUUUV him even more than evahhhh!
Now, only one thing can possibly be a bad outcome. If the bailout was indeed the last stopgap between us and Financial Armageddon, then McCain's gamble, well, it won't look so good. But that'll be the last of anyone's worry.
I credit Sen. Shelby with monkeywrenching this fast train to hell and perdition. I don't mind if he has no Plan B. The entire "need" for a Plan A was concocted by Paulson et al. out of thin air. The Democrats took the bait, of course, having this weird Al-Anon type of enabler relationship to the dry drunk. Shelby has helped all of us, regardless of political stripe.
Comrade Bagholders,
Bwahahahahahahahaha!
You all watching the presidential marketing stuff.
Cracks me up! There isn't a penny's difference between the two. Just a matter of which group of plutocrats gets first dibs at the trough.
Bwahahahahhaaaha!
Nostrovia,
My opinion too but is scares me to see Palin possibly being President
"Cracks me up! There isn't a penny's difference between the two. Just a matter of which group of plutocrats gets first dibs at the trough."
THANK YOU SEN SHELBY !
There isn't a penny's difference between the two.
Umm ... U.S. Supreme Court ... important if you are a woman or know one.
but let's stay focussed on one debacle at a time.
"So do you simultaenously want the bailout while also arguing that we could be spending the 700bn we don't have on frivolous gifts to the populace instead of frivolous gifts to bankers? "
Are you seriously that dumb? The bankers have hijacked the economy with their short term paper buying and without it the economy stops. They have the economy as hostage, and you, yes, you, the average worker, will be affected. Don't bail it out, and teachers and city workers and many private sector workers won't get paid next week. Do you not know this?
And secondly, who wrote this bailout, the Dems? NO, it is Paulson's mess. The Dems have argued to make the White House's plan more equitable.
That's it, you still don't get it? Lesson over.
"it sure looks to me that Democrats NEGOTIATED in good faith"
Then why did Lindsay Graham say that "Twenty percent of the money that should go to retire debt that will be created to solve this problem winds up in a housing organization called ACORN that is an absolute ill-run enterprise, and I can't believe we would take money away from debt retirement to put it in a housing program that doesn't work.?
Money to ACORN from this debacle doesn't seem like "good faith" negotiating to me.
He'll have "stopped" the bailout.
Did he or did the blogosphere? Are we seeing true democracy in action? Now we have to live with the results. Roller coaster or cliff? Strap yourself in.
Are you seriously that dumb? The bankers have hijacked the economy with their short term paper buying and without it the economy stops. They have the economy as hostage, and you, yes, you, the average worker, will be affected. Don't bail it out, and teachers and city workers and many private sector workers won't get paid next week. Do you not know this?
And secondly, who wrote this bailout, the Dems? NO, it is Paulson's mess. The Dems have argued to make the White House's plan more equitable.
That's it, you still don't get it? Lesson over.
Errr.. No. Explain why no one will get paid please.
And i don't see what you mean by democrats making the plan more equitable?
You mean like they rob me to pay me?
Your logic is as flawed as your left nut.
"The Democrats took the bait, of course"
Uh, yeah, because they suspect they will control the government in 3 months. Wouldn't you like to see a little gov't stimulus to help ease in your transition to power if you believed it was coming? Or don't you prepare for important things in your life?
And making sure some money was spent to help the little guy would also be nice to prevent SOCIETAL COLLAPSE BROUGHT UPON US BY THE REPUBLICANS if we could ease a little of their pain while we re-structure this polluted financial system.
Yes, Republicans, you fucked up bad, and your time of power is over. And McCain and Palin are stupid as hell. What a disgrace!!
Byzantine Ruins (apt name!), thanks to your question, I've been asking myself if I'm twisting myself into a pretzel over this bailout.
Actually, I think I am advancing towards my goals, albeit by a zigzag path. I'm opposed to this bailout plan. Yet the situation is seemingly so serious that both the situation and the plan deserved serious consideration and discussion. I was pleased to see the Democrats negotiating in good faith and trying to build in safeguards. I am furious that they are being painted as Bush allies because they are even willing to negotiate.
I want the Democrats to win the election because of my serious environmental concerns. Therefore, if they need bipartisan support for this proposal in order to win the election, I hope they won't make one step without such support.
If there is some kind of serious collapse, and the Democrats do win the election, I hope it will lead to some really fundamental changes in "the system."
So, I guess, according to my thinking, things are going ok - the bailout plan collapses because of Republican opposition, and the Dems win the election with a mandate for fundamental change.
Many sharp turns there, though, with a possibility of a crash at every corner.
Shelby's list of econmic experts is probably the same list as these characters find to deny global climate change, peak oil or that drill, drill, drill will get us all the oil we will ever, ever need.
Igrew up on the lower east side of NY and we had a very concise expression for this...BULLSHIT
Well put, Capital S!
Boring as it may sound, I think one of the primary root causes of this PROBLEM has been incompetent middle and senior management within many corporations.
Yep. The Republic and its institutions are beset primarily by a crisis of leadership cohort recruitment and retention. Not that the talent isn't available, but the system is such that anyone who would take part in the milieu is undesirable. Typical problem during the decline phase of the dynastic cycle.
I think we really have to blame ourselves as a nation. Countries get the leadership cohorts they deserve and recruit.
Partly that runs back to the nebulous cause-and-effect tail chase of a poor educational system. The polity is too poorly educated to discern good leaders. This we might actually be getting something done with, I have a lot of hope for charter schooling.
Also, we're very close to getting into diseconomies of scale with organizational complexity. We need to learn to use simpler institutions that accomplish more by doing less. We use too many high-budget brute force approaches to problems where indirection would be better.
Finally, compared to the current technology, I think it's undeniable we are too eager to find problems with our leaders that don't relate to their leadership skills. America really needs to get over the puritanical moralist habits of being "shocked, simply shocked". People are people, they all have some bad habits and behaviors. There needs to be a lot more discernment applied as to where the difference between the public and private sphere lies. The proliferation of information and surveillance technology has created a lethal combination with America's self-righteous streak.
It is not over yet. Time to start calling and faxing again .
Mish's Global Economic Trend Analysis: Take Back America
Sen McCain 'suspends' campaign to solve crisis?
Does 'suspends' means he's quitting?
Why would we want him there, he can't even count to 7.
Igrew up on the lower east side of NY and we had a very concise expression for this...BULLSHIT
Yeah, let's spend 700 billion dollars we don't have to get a couple weeks (weeks - maybe) respite from the credit crisis. And after we spend it, we should spend the 700 billion dollars we don't have again in a grand gesture to buy everyone an electric pony and free health care.
http://faculty.chicagogsb.edu/john.cochrane/research/Papers/mortgage_protest.htm
Spot on, BR!
As far as professional development goes, traditional training doesn't even work (classrooms, set curriculum) except for establishing common language and routine procedures. Execs, managers and sups "don't have time" for authentic professional development and knowledge management, which requires teams getting together regularly to:
This does not happen in K-12 schools or colleges, and this does not happen in all but the very best institutions.
Rick Santelli rocks.
Send out your faxes. So, far this AM my calls were met with the voice mailbox is full. Clinton, Dodd, and Frank.
I can see no reason to bail out people who made billions by playing fast and loose with the global credit system.
What is to say that they will not just be back next year for more MOOOLA.
The credit markets are not frozen. Yes, they are contracting and now you have to pay a price for your loan.
We call the bank last week and were offered a prequal on the phone at 5.5% for a 30year loan.
My credit card still works.
I am tired.
Don't bail it out, and teachers and city workers and many private sector workers won't get paid next week. Do you not know this?
Doesn't the gvt tell you you should be prepared with food and spending money for several weeks of service disruptions? We'll have a bank holiday for a few days or a week and then we'll have a new payments system.
If there's some chaos, oh well, life is full of calamities great and small. One day even hysterical entitled you shall die of cancer and a heart attack and the big blue marble will keep on spinning and not giving a shit about you, just like always.
I no longer respond to being negotiated with along the lines of "if you don't give me x, THE WORLD WILL END". That's a false alternative. if this country can't put itself back together in short order after a payments crisis, it doesn't deserve to. End of story.
Shelby's list of econmic experts is probably the same list as these characters find to deny global climate change, peak oil or that drill, drill, drill will get us all the oil we will ever, ever need.
Rick Santelli rocks.
God bless him for that rant a few minutes ago! LOL
Economist's letter:
"We are well aware of the difficulty of the current financial situation and we agree with the need for bold action to ensure that the financial system continues to function."
These economists did not endorse no plan but seek "bold action" without proposing any alternative. What political tools.
I'll say it again for those watching CNBC, Rick Santelli rocks.
Shelby's list of econmic experts is probably the same list as these characters find to deny global climate change, peak oil or that drill, drill, drill will get us all the oil we will ever, ever need.
Can you look that up and report back instead of making an ignorant assertion. All Shelby has said is that maybe there are alternatives to a plan by a Bush tool written on a cocktail napkin. I'm ok with that.
Don't bail it out, and teachers and city workers and many private sector workers won't get paid next week. Do you not know this?
Not true. Paulson never said a word about the ARS market. This is where most of the muni action is.
Byzantine Ruins....
I don't think the Paulsen ideas were good. But Shelby is full of crap. He was asked for his ideas and he never gave any, not one.
I think there was a "plan" but when McCain "suspended" his campaign the Republicans decided to stand by their man a throw a monkey wrench into the thing. He wants the Dems to approve it and then if by chance it doesn't work guess what...It's the Dems and not us who did this to you Joe & Jane Heartland.
Strangley, I'm in a shopping mode, but I can't buy yet - step up, graphic artists!
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Congress.org - Get informed, get involved -- because it worked!
Re bad management - there is of course that famous story about the Plan -
Office Folklore: The Plan
But it's worth dissecting the humor to see what went wrong: Concerned over maintaining the goodwill and status of their superiors, every player along the way watered down and euphemized the truth, until it was completely distorted at the end.
Rick Santelli is my new personal hero!
I hope he doesn't get fired.
He walked out of frame! he wouldn't roll over for liesman etc.
I don't know if there will be a giveaway or not, but I do know one thing: there will be no agreement of any kind before Sunday night.
It is now negotiation time and nobody wants to blink first because the other side will then jump back with amended terms... so you wait and wait. Sort of like a great big eBay auction. Shelby knows the power he holds.
I'm surprised Bush hasn't declared a Friday Bank Holiday to put the pressure on.
This certainly is the dead end of free market, deregulation, trickle-down republicanism. It has completely disgraced itself and can now only beg the votes of liberal dems for survival.
justin writes:
Rick Santelli is my new personal hero!
I hope he doesn't get fired.
He walked out of frame! he wouldn't roll over for liesman etc.
He's the only reason why i am remotely tuned in to CNBC, do see if you can get a video of that exchange, it would be nice to post it here.
I'm surprised Bush hasn't declared a Friday Bank Holiday to put the pressure on.
That reminds me...gotta go make another hefty withdrawl today!
BB I agree about Rick.
ew thread
SHELBY FOR PRESIDENT
grumpyoldvet writes:
I think there was a "plan" but when McCain "suspended" his campaign the Republicans decided to stand by their man a throw a monkey wrench into the thing. He wants the Dems to approve it and then if by chance it doesn't work guess what...It's the Dems and not us who did this to you Joe & Jane Heartland.
I have to disagree with that assessment, reason is that Shelby was always opposed to this from the beginning, he did not vote for Chrysler and he won't for this.
GS paid 40 billion in bonus money in 2007. Less tahn one year later they are groveling for $5 billion from Buffett. Why didn't employees cough up to buy part of the company?
Answer:______________
Now, I want the same choice with my money.
I'm surprised Bush hasn't declared a Friday Bank Holiday to put the pressure on.
For a man who barely knows how to use THE GOOGLE, what ever makes you think he know what a bank is?
adjourn
We are safe only when the legislature is adjourned.
call, fax, write, travel and drag them back
adjourn now
adjourn here, adjourn now, adjourn dammit
it doesn't matter what they do, the same outcome is approaching
adjour
Ya think Paulson was going to bail out the FED and GS. Or just GS
The ultimate proof of bad management as a root cause for our current PROBLEMS: post-invasion Iraq and Bremer replacing Garner.
Got to board a plane...interesting times!
What this country needs right now, this weekend, are joint congressional hearings, starting today with other individuals in attendance.
Such hearings should be 8 hours a day for at least a week!
The congress and senators do not really want to go back to their districts and get tarred and feathered anyway!!!
Finally, this would be free advertising that would not come out of their campaign funds.
We need to here all sides of this situation.
This is history in the making! We can not screw this up/ paper over it!!!
Exactly right, lostcontrol!
So, Cashin says the FED will not reduce the Funds rate because they to keep pressure on the Congress.
Great, they are more interested in pressuring Congress then saving the economy.
Nice. COUNTRY FIRST wrong WALL STREET FIRST
"I'm surprised Bush hasn't declared a Friday Bank Holiday to put the pressure on."
Interesting thought, a payday bank holiday. That'll teach those sheeple, eh?
I was pleased to see the Democrats negotiating in good faith and trying to build in safeguards. I am furious that they are being painted as Bush allies because they are even willing to negotiate.
I am pleased to see anyone in DC sitting down and making a plan of any sort.
I think my problem with the democratic rank and file is the level of fiscal understanding that is like unto cow confronting an engine block. Our nation is in serious crisis due to massive overspending. The criticism leveled at this plan is, thus, that we should be spending this money on social services. True genius.
I would be just as happy with a quality negotiated bailout solution but I think that the scope of the flight-to-yield bubble outpaces measures yet taken to address it and I don't want to see a piecemeal approach.
It seemed like they might be approaching a good plan yesterday, but I think it would take several weeks of negotiations to get to a solid agreement and then a stronger legislature and bureaucracy than we have to pass it and implement it without fucking it up.
I want the Democrats to win the election because of my serious environmental concerns. Therefore, if they need bipartisan support for this proposal in order to win the election, I hope they won't make one step without such support.
I likewise have serious concerns about the fact that my habitat is being poisoned, although I don't have any faith in either of the parties to achieve a workable solution.
I think the current approach to green matters is generously described as "risible," "laughable," and "half-baked" and there is not even an intellectual framework established for proper debate of the issue.
If there is some kind of serious collapse, and the Democrats do win the election, I hope it will lead to some really fundamental changes in "the system."
I do too, although I have to say that I think the ideologies and factions of our era are worn out and largely inapplicable to the modern milieu. i think there will not be substantial changes to "the system" until it is re-envisioned such that, at a minimum, the faction names change to reflect new agendas.
So, I guess, according to my thinking, things are going ok - the bailout plan collapses because of Republican opposition, and the Dems win the election with a mandate for fundamental change.
What will matter is that the dynastic reform be of good quality. At this time, I see the Democratic future as a hare-bained attempt to run in rabbity circles, 'New Deal, Great Society, New Deal, Great Society'. We will get the policy equivalent of Egyptian funerary architecture while that troublesome "budget / resources" thing is left to tend to itself.
Many sharp turns there, though, with a possibility of a crash at every corner.
I would just loosen up and get ready for the impact. I suppoe there's a chance for a mid-dynastic reformer but I don't see it. IMO, Obama is much too samey-same to be a reformist.
We'd need comprehensive review of the legal code, taxation system, etc. Not gonna happen, I don't think.
Economist from Drexel U claims that in the last 5 years wall street paid out 100Bil in bonus.
Now, mind you they never want to pay any taxes, but want us to pay.
"reason is that Shelby was always opposed to this from the beginning"
Not true, as early on as last Saturday, after the first meeting with Paulson/Bernanke, he was saying how he understood how important this was and how it needed to be done now. He was very interested in working towards a bipartisan argreement on the plan.
Too bad the Dems were too smart to accept that bad original Paulson plan.
Hmmmm, like he got a glimpse of abyss and something was staring back.
Conjure perhaps ?
Moose Killer - Orator Deluxe writes:
Kanjorski says calls to his congressional office are 50/50. 50%-No and 50% Hell No!
I've just saw the guy on C-span. Scary. He mention of an analogy of infective disease. It's not your fault but still you can die. And the normal guy in the street still think in term of us vs them. Remember Paulson said you're already on the hook.
Not true, as early on as last Saturday, after the first meeting with Paulson/Bernanke, he was saying how he understood how important this was and how it needed to be done now. He was very interested in working towards a bipartisan argreement on the plan.
Working towards a plan does not mean agreeing on the current plan.
Every politician will work towards a plan on anything, whether they are for it or not is a different matter.
He was not for it.
"GS paid 40 billion in bonus money in 2007."
I think you meant 'stolen money'. GS paid 40 billion in stolen money in 2007 to its own employees,...er...crooks, fellow gangsters.
Mish's Global Economic Trend Analysis: Fed's Fisher Says Bank Rescue Plan Would Worsen Fiscal `Chasm'
Bloomberg is reporting Fed's Fisher Says Bank Rescue Plan Would Worsen Fiscal 'Chasm'
Dallas Federal Reserve Bank President Richard Fisher said the proposed $700 billion rescue of financial institutions backed by Fed Chairman Ben S. Bernanke would plunge the U.S. government deeper into a fiscal abyss.
The plan by Treasury Secretary Henry Paulson to buy troubled assets from financial institutions would put "one more straw on the back of the frightfully encumbered camel that is the federal government ledger," Fisher said today in the text of a speech in New York. "We are deeply submerged in a vast fiscal chasm."
Fisher made the comments as the central bank expands its role in the biggest government intrusion into markets since the New Deal, with Bernanke trying to persuade Congress to approve Paulson's bailout plan.
Bernanke has already cut the benchmark interest rate at the most aggressive pace in two decades, invoked emergency powers to loan to securities firms and pumped billions of dollars into banks to try to restore liquidity. Also, the central bank loaned $85 billion this month to American International Group Inc.
"The seizures and convulsions we have experienced in the debt and equity markets have been the consequences of a sustained orgy of excess and reckless behavior, not a too-tight monetary policy," Fisher said to the New York University Money Marketeers Club.
"I was, and I remain skeptical, that lowering the fed funds rate is the most effective antidote," he said. "Rates held too low, too long during the previous Fed regime were an accomplice to that reckless behavior."
Email or fax this to Congress
Shelby needs to start talking about the economists solutions versus looking like a retard politician that has a hidden agenda!
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