Barney Frank seems to be quite talkative about serious negotiations. I am sure Paulson just loves it when Frank runs out the door to announce some other detail.
China sources are calling for a currency New World Order after this "financial tsunami". I think they are a tad premature and optimistic. The water has indeed retreated to reveal the floundering undertoads. I fear that the tsunami has not yet appeared and that people may be playing in the newly exposed sand when they clutch at these equities. I hope I'm wrong.
There's no empirical or scientific basis for making any of these decisions. It's all guesswork.
Likewise for the outcome.
It's like watching a bunch of people who've never built a skyscraper before go into a panic and try to erect one overnight because they think that's what necessary.
Maybe it is; maybe it isn't. Either way I wouldn't want to be within 10 miles of the thing because I value my life.
Read it, where does it say that when assets are sold the money has to be used to reduce the debt incurred to buy the asset? It says it has to go back to the Treasury? Am I missing something, or is that implicit in how the plan is written.
All of you who are cheering the idea of taking equity are being had. If nobody else wants to buy it, why do you?
The only fix to this situation is writing off bad debt. Period. Everything else is pissing away money this great country of ours is going to need to feed hungry people next year.
HP could hardly argue against that, could he, not after taking equity in AIG and conservatorship of F/F. That he didn't offer this at first makes one wonder at his motives. Perhaps it's a good thing he probably will not be running Treasury after January. Will he wanted back on WS?
Paulson, Bernanke, Bush must have something up their sleeve to agree so easily and quickly. They have a hidden agenda not readily apparent hidden here in this massive bailout.
China sources are calling for a currency New World Order after this "financial tsunami".
IMO China could really stage a coup and catapult themselves to the top of the financial food chain by converting to a gold-backed currency.
Yeah they'd have to suffer through deflation for a while, but they'd be the most credible destination for investment and intellectual capital in the world if they managed to pull it off.
If you truly value your children's futures...you could try harder.
If a letter is all you got. I mean, seriously.
"Well honey, I wanted to keep you from having to devote your entire life to cleaning up my checked-out bullshit...but ya know...It would have meant like...effort and stuff."
Intelligent bank investors ought to welcome dilution if it is the cost of preserving the banks. An undiluted share in an insolvent enterprise isn't worth much.
Re: snailmailing in order to be able to hold your head up a little with the kids:
Congressians' websites still warn that anthrax screening adds hella days to snailmail delivery. Fax or call, then.
I think what it comes down to is there's only two possible outcomes:
1) Debt-Deflation
2) Money printing and implicit default on the national debt
The above are side shows. The money is an illusion and the real wealth will of America will remain. The main event is that we are forfeiting our constitutional rights and future as a free country.
IMO China could really stage a coup and catapult themselves to the top of the financial food chain by converting to a gold-backed currency.
Yeah they'd have to suffer through deflation for a while, but they'd be the most credible destination for investment and intellectual capital in the world if they managed to pull it off."
well, they would first have to solve the small issue of intellectual property rights - both domestically and internationally.
OK, so great that the taxpayers get some equity, compensation is limited blah blah blah - so what!?!
If Krugman says the only way this will work is IF Paulson pays a PREMIUM for the toxic assets otherwise the banks will still be insolvent then isn't all this oversight and audit and accountability of Paulson going to ensure that the toxic assets are not bought at a premium and hence the plan WILL NOT WORK!?!?!
Seriously, aren't we, by doing this 'right' going to make sure we get it wrong and hence the whole venture should be abandoned....??
Persons who think closing down only less than 5% week over week isn't what all the intervention was about are suffering myopia. Last week was almost flat, an amazing feat in the face of fundamentals. Down only 400? Barely a bear confirmation.
As long as the broadest classes of household assets are declining - destroying purchasing power faster than credit can be thrown at them - then YES I'm in the deflation camp.
JS,
My take on today is beyond shock at the extremely light volume accompanying such wide price destruction in the equities market. If price had been rejected today, I'd say the market wants to head higher. The test will be as we come into just a few points lower on the SPX. If volume remains this light - something has changed, possibly a major reversal top side.
He's taking a page from Paulson's playbook. The inevitable bandwagon effect. Now, the "equity idea" will start to sound baked in, right?
For all their cajones, there one big job that Bush and Paulson can't do. They can't make laws. Pretty soon, they'll be on the outside of the process looking in, wondering what's going on in there.
Whatever it is, however strange it is, they'll have to agree with it in the end.
"I guess another 300+ points down day on the DOW is scaring a few people."
It should, now any company that goes to the government and wants to suck on the tit in this tightening credit environment is subject to semi-nationalization. Risk up = lower price.
A Chinese person with a bright idea is best off developing it somewhere else. (because of little existing protections) That kind of road block is a huge long term drag.
JJL writes:
Barney Frank seems to be quite talkative about serious negotiations. I am sure Paulson just loves it when Frank runs out the door to announce some other detail.
I, for one, am happy to have some semblance of openness in government decisions instead of having them treated as closed-door boardroom discussions. Treasury isn't Goldman Sachs; Congress isn't Cerberus.
zeropointzero writes:
Wow - some people are emailing their Congressmen !!! Gee - you're a regular bunch of John Adams / Nathan Hale / George Washington-style patriots.
"I regret that I had but 3 minutes to give for my country"
Ahhhh - that state of what passes for outrage and activism in our fair land these days. We're sooooo sunk.
zeropointzero | 09.22.08 - 4:03 pm | #
Well, yes, however, I still build sandcastles when at the beach with my kids, even though the tide takes them out, every time.
I also sent emails to about 200 people, including a bunch of college kids I coach, asking them to read and contact their congress critters.
Pointless, probably. But there's not enough ponies around for us to make like Paul Revere.
I could not get but two people to agree to protest at Buckingham Fountain today, and one of those bailed. I might go hand out leaflets or something by myself. But to be honest, I'm not even sure exactly what I'd be protesting any more.
CR,
What about equity stakes in the homes of all the mortgages the Feds are about to write down once they assume them?
Please don't tell me someone who paid a million for a house they had no business buying gets a free cut of the principal to 500K from the Feds...
I'm all for the banks ponying up shares and CEOs taking pay restrictions for Federal assistance. I think the homebuyers should have to cut the Feds in for any future appreciation in their homes as well.
Nemo: Thanks for the link. BTW, I officially cannot keep up with the blog.
So apologies if posted, but that order is slightly insane:
However, this exception now requires that, for new positions, a market maker may not sell short if the market maker knows a customer or counterparty is increasing an economic net short position in the shares of the Included Financial Firm.
Huh? I have to discern the intentions of my customer?
NEW YORK, (Reuters) - Morgan Stanley (nyse: MS - news - people ) agreed to sell an equity stake of as much as $8.5 billion to top Japanese bank Mitsubishi (other-otc: MSBHY.PK - news - people ) UFJ Financial Group Inc , speeding up its transformation into a commercial bank and improving its survival prospects in turbulent times.
Anonymouse,
You're forgetting that volume is light because people can't short. It's a one sided trade until there are no buyers. Then there's a slow trickle down. Until people panic...
Oil and gold are speaking loud and clear for those who can set aside their preconceived notions (i.e. that deflation is inevitable) and just buy what's going to work in a massive reflation attempt.
When the US economy ends, CR's tagline will need to be changed to "Begging & Barter" and the power balance on CR will shift from the suits to the hippie-types amongst us. I look forward to writing ubernerd posts on dumpster diving.
Huh? I have to discern the intentions of my customer?
Yeah, that strikes me as insane, too. As far as I know, the markets are anonymous.
Not to mention that you could buy the stock, then buy the put and sell the call (which does not create an "economic net short position"), then just sell the stock and you are left with your synthetic short.
The emanations from our government are becoming more and more bizarre.
From JP: "Confidence is evaporating. And I can't wait to see legislation to forbid loss of confidence."
Tomorrow's headline: "Paulson proposes mandatory uppers for all US citizens over 21 to shore up confidence". At least then we can take it in the shorts with a smile on our faces.
Kenworthey writes:
well, zeropointzero, you'll be sad to hear that:
IN CHICAGO, THE REVOLUTION HAS BEEN CANCELLED!
~~~~~~~~~
thanks for putting the time and effort in! grassroots is tricky, hard work. I've done it for quite awhile. ain't what it used to be in the current media and average citizen environment.
couple of tips - keep it fun, have clear talking points, write a good press release, cultivate and cherish new leaders and delegate.
To be fair to the sunshine patriots and assorted electronic heirs to Tom Paine who may be offended by my ealier comment, I offer an admission:
I've done little more in response to unfolding economic events than stare dumbfoundedly at my computer screen - looking and feeling like Roy Schneider, circa 1975, as he suggested: "We need a bigger boat"
I'm having some trouble understanding what gives Paulson the leverage to say "no deal" to a piece of Congressional legislation. Is he threatening a Bush veto? Or is he the front man for the banks in a business deal?
I am doing my part to help. I am gambling on short term financial institution debt. Just took a $25K chance on 3mo. Morgan Stanley debt at YTM 18% (annualized).
I might be mistaken, but the constitution might be working and the tables might be turning against Paulson.
Getting the bill written and passed in congress is the part that takes the most time. So congress can pretty much write anything it wants, send it to the president, and then tell him he needs to sign "because it's urgent". If he vetos, then fk him, it's urgent so we'll override.
Paulson is a bankster ... he trumps Congress as he noted in his original proposal ...
mmckinl | 09.22.08 - 4:16 pm | #
I know that's what's going on in his mind. But in reality, what's he got if Congress passes legislation he doesn't like? Is he going to lead the banks out on strike?
According to a couple lobbyists I know, e-mail is ignored and snail mail won't get read until January (due to anthrax regs). Calling, however, actually works because every call gets logged. And volume of calls gets noticed too.
I couldn't get through to Pelosi, Dodd or Feinstein due to call volume. I did reach Boxer, though.
But the debate is over for all intents and purposes. Everyone is on board with the bailout, the only thing anyone is discussing is what little provisions to add for political cover. The $700 billion is as good as spent.
ReadingNLearning writes:
Paulson, Bernanke, Bush must have something up their sleeve to agree so easily and quickly. They have a hidden agenda not readily apparent hidden here in this massive bailout.
ReadingNLearning | 09.22.08 - 3:45 pm | #
Yes, I agree.
There are two things, I think.
Quite convoluted, so I'll link
1 responsibility for this falls on Hank Paulson and other CEOs who created the crooked derivatives market that drove the bubble
2 falls on Alan Greenspan for running negative real interest rates for years
3 is Bush for blocking investigations of mortgages fraud
Congress is #4, at most, for letting 1, 2 and 3 get away with it. And, for the most part, Hillary has been pushing for balanced budgets and better regulations. She could have been better, but she wasn't the problem.
who blinks first ?
mmckinl | 09.22.08 - 4:21 pm | #
Yeah, I was suggesting this a few threads back. I think it would be wise to have a fallback plan, a conduit that could be used to temporarily roll over short-term paper as it comes due. One thing I'm guessing we can almost all agree on is that we don't really want solid companies with sound balance sheets doing productive work to collapse when they couldn't roll over some piece of investment-grade debt because of a bankers' strike.
Maybe take the $700B and use it to beef up the balance sheets of some solvent banks that aren't even in need of the facility that's proposed now, then send them in as scabs? Not sure how something like that could work in practice, but there's got to be some way of providing a conduit that bypasses Paulson and his bankers union.
They have a hidden agenda not readily apparent hidden here in this massive bailout.
The agenda's of the plans are the same. Only the name of the new controlling partner is at issue - the government or the finance industry (rentier industry).
Under both plans, the level of interest borne by the existing infrastructure of our society will be increased without ANY increase in output.
This is an abomination to increase the interest payments from the public at large.
I think it would be wise to have a fallback plan, a conduit that could be used to temporarily roll over short-term paper as it comes due. One thing I'm guessing we can almost all agree on is that we don't really want solid companies with sound balance sheets doing productive work to collapse when they couldn't roll over some piece of investment-grade debt because of a bankers' strike.
We'll probably need that even if we bailout, because of the magnitude of the losses. Capital loss = credit crunch. Who knows, with a good plan for short-term paper we won't have a problem requiring bailout.
I've proposed an idea for guaranteeing short-term CP and bank loan rollovers. Feds roll pretty much anything over for a 1% premium on the annual rate and going to the head of the line of the creditors. Not too tied to details, just a general idea. Could also be done as an insurance plan with banks still making loans, backed by a greatly enlarged Fed window.
Actaully Obama fully supports what Bernanke and Paulson are doing even before any details were available. Wouldn't expect anything less from a socialist. Well, maybe more once he adds his special interest group spending on top of Dodd's and Frank's spending.
McCain has said he wants to review the proposal, fire the head of the SEC and cap compensation for those firms that take the bailout. That is on top of what he proposed in 2004/2005.
sorry to say that the financial industry will be down sized by 50% ...
That will take 10-15% out of the economy, not real production but jobs and taxes ...
This is the fallacy that is being fed to the public at large. It is total nonsense.
Go to the fed flow of funds historical records. Real GDP was higher (and more realistic) when finance was a much smaller part of the economy. This is undeniable.
A smaller interest burden will free up capital for productive use.
3 is Bush for blocking investigations of mortgages fraud
Don't disagree on 1,2 and 4. As for #3 the only proposals I have found that proposed increasing regulation and oversight were Bush in 2002/2003 and McCain in 2004/2005. Both blocked by Congress. Why? Because the increased regulation would have upset the gravy train being skimmed from "affordable housing" initiatives.
I remember that plan, Fair Econ, I just couldn't remember who proposed it.
Something like that is essential, I think. That, plus some way to clear some of the banks' detritus (something painful for the banks, preferably), plus vigorous safety and soundness exams for all.
We can't let the economy's IV get cut off, and we need to find some way of getting capital into the hands of people who have shown they know how to lend it, not just recapitalize those who have shown that they don't.
If the admin is conceding these points, maybe they really ARE scared, not just faking it. Or maybe this is all part of an elaborate plan to enable the Democrats to feel as though they are taking a role, even tho maybe this is what the PTB wanted all along??? Or not.
MPinCO, there were numerous state attempts to investigate crooked lending, back to 2003. Bush blocked them all, using a strange interpretation of a Civil-War-era commerce bill.
"Carl Icahn is angry and when the Queens-born billionaire gets angry, he also gets rich. He's angry now because in his 47 years on Wall Street he's never seen wealth destroyed on a scale quite like this. The financial meltdown this month could have been prevented, he says. Icahn, the world's most famous capitalist, has amassed his fortune by punishing the actions of greedy, incompetent CEOs and unlocking value for shareholders in the process. He said the boards of many companies in America are "completely" and "totally" out of it. He says there is no accountability in corporate America at the CEO level. "For the most part, CEOs are inept," he said. "What's amazing to me is that Lehman Brothers CEO Dick Fuld made $17,000 an hour last year." In other words ineptitude has led to companys taking excessive risk. He says it's time to see the laws changed in America so that corporate boards are held more accountable."
Seems to make sense, although "world's most famous capitalist" is surely over the top.
The answer to them backing down on equity stakes (and whatever else they end up backing down on) might be pure politics, as they're trying to make sure that the Democrats are deep in this, enabling Republicans (including McCain) to run against it.
I've proposed an idea for guaranteeing short-term CP and bank loan rollovers. Feds roll pretty much anything over for a 1% premium on the annual rate and going to the head of the line of the creditors. Not too tied to details, just a general idea. Could also be done as an insurance plan with banks still making loans, backed by a greatly enlarged Fed window.
If we could combine that with Chapter 11 and writedowns of bad debt for insolvent banks, we'd actually have the start of a plan.
Instead our elected representatives, aided and abetted by the "it's contained" crew, are going to blow up the dollar and complete the impoverishment of the country.
have written to my senator/congressman.
1. the price of the equity should be based on lower of the price prevailing before the announcement of the bailout or the 14 days prior to the sale.
2. All financial institutions should be required to surrender some equity just for the option to be able to use the facility (sort of the commitment fee they charge their borrowers)
3. They need to give up more equity
4. The price that the Treasury pays has to result in a probability that the sale price generates a profit is greater than the probability of a loss.
WASHINGTON (AP) -- It's the largest government bailout in U.S. history and two days after it was introduced to the Americans paying for it, the proposal is still largely a mystery.
Among the unanswered questions: How will the government mop up the bad mortgage debt on banks' books, who will run the process and how much will it cost?
ADVERTISEMENT
Key elements of the plan remain in flux as behind closed doors Democrats demand modifications that would provide more help for ordinary Americans in return for bailing out the country's financial giants.
This will only bring the finance companies down further. Warrents do not mean money goes into the market. It only means that someday when they are cashed in the government hopes they will be worth more than they are worth today. What easier way to accomplish that than to bring the stocks down 90% now so that they are more likely to go up later and net the government some profit. Another hidden tax on the back of present stockholders. Another dillution.
First, finally?
Nemo beat you, at least in spirit.
Congrats, OCDan.
So now we nationalize the banking system? Brilliant.
Stocks are falling fast.
Now its time for those who previously sold short to provide liquidity and keep the market from falling precipitously.
Right?
Now, things are moving in the right direction.
Still needs a lot of fixing, but that's one step in the right direction.
wow, must be bad if they are giving equity
Great.
Equity in moonbeams and fairy pies.
You all realize that the SEC modified the short-selling ban to revoke it, for practical purposes?
They exempted options market makers, which means hedge funds can just use synthetic shorts and the market makers will short on their behalf.
Barney Frank seems to be quite talkative about serious negotiations. I am sure Paulson just loves it when Frank runs out the door to announce some other detail.
NOBODY PANIC! WE MUST KEEP OUR COMPOSURE! THE END IS NOT NEAR!
I just emailed my senators for the first time in my life. Don't think it will help but I can at least tell my kids I tried!!
China sources are calling for a currency New World Order after this "financial tsunami". I think they are a tad premature and optimistic. The water has indeed retreated to reveal the floundering undertoads. I fear that the tsunami has not yet appeared and that people may be playing in the newly exposed sand when they clutch at these equities. I hope I'm wrong.
There's no empirical or scientific basis for making any of these decisions. It's all guesswork.
Likewise for the outcome.
It's like watching a bunch of people who've never built a skyscraper before go into a panic and try to erect one overnight because they think that's what necessary.
Maybe it is; maybe it isn't. Either way I wouldn't want to be within 10 miles of the thing because I value my life.
PTDBD --
China sources are calling for a currency New World Order after this "financial tsunami".
The old paper's no good. Need new paper.
equity stake: ok.
pay cut: no way
Read it, where does it say that when assets are sold the money has to be used to reduce the debt incurred to buy the asset? It says it has to go back to the Treasury? Am I missing something, or is that implicit in how the plan is written.
Uh Oh - if they agreed to something the Democrats put in, what are we missing?
All of you who are cheering the idea of taking equity are being had. If nobody else wants to buy it, why do you?
The only fix to this situation is writing off bad debt. Period. Everything else is pissing away money this great country of ours is going to need to feed hungry people next year.
SEC. 15. ANNUAL FINANCIAL REPORTS AND AUDITS
COMPTROLLER GENERAL AUDITS
Annual?
Why not quarerly?
And why not a slimed down Audit covering the big numbers (not the petty cash) Monthly?
Doesn't the market need to know what waste has been disposed of of confidence if to be fully restored.
A year from now is a long long time under current circumstances.
I don't even have faith in equities anymore?
Woo!! Hoo!
Now, I am going to be a private equity investor.
"I just emailed my senators for the first time in my life. Don't think it will help but I can at least tell my kids I tried!!"
As ineffective as it may seem, this was my reasoning behind the exact same action.
HP could hardly argue against that, could he, not after taking equity in AIG and conservatorship of F/F. That he didn't offer this at first makes one wonder at his motives. Perhaps it's a good thing he probably will not be running Treasury after January. Will he wanted back on WS?
Interesting. The European and US markets both began dropping around the same time. Approx 2:37
The water has indeed retreated to reveal the floundering undertoads.PTDBD | 09.22.08 - 3:41 pm | #
I like undertoads
They exempted options market makers, which means hedge funds can just use synthetic shorts and the market makers will short on their behalf.
Nemo: Link for modification?
So maybe mortgage writedowns will help current homeowners in trouble, but how is it going to help the house purchase market?
House prices are still fundamentally disjointed from income. What's going to change that?
Are they going to send some of that 700B to supplement everyone's income?
The Congresscritters are getting warmer but I still wonder if the equity bit will be sufficiently punitive.
Still no word on how to P... oh, nevermind, it's pointless.
Paulson, Bernanke, Bush must have something up their sleeve to agree so easily and quickly. They have a hidden agenda not readily apparent hidden here in this massive bailout.
Equity in moonbeams and fairy pies.
Charles
No sh*t.
I want some debt! F' the equities...
........
I don't even have faith in equities anymore?
Confidence is evaporating. And I can't wait to see legislation to forbid loss of confidence.
I actually emailed my congressman, senator, and both nominees. Like it was said above, I tried.
China sources are calling for a currency New World Order after this "financial tsunami".
IMO China could really stage a coup and catapult themselves to the top of the financial food chain by converting to a gold-backed currency.
Yeah they'd have to suffer through deflation for a while, but they'd be the most credible destination for investment and intellectual capital in the world if they managed to pull it off.
there's 20 minutes left....
Markets aren't liking this news.
Worries over dilution?
Au up almost 5%!!
Don't email - call, fax, or snailmail.
TED 2.34 woo hoo
Oh look, in 20 minutes we get another hourly revision to the bailout plan. Anyone remember what the original bailout was for?
Hurry cover your shorts!
Oh wait...
Nationalize, Evaluate , Liquidate , Recapitalize ... Fire the Banksters ...
~ Nationalize all the banks and declare a bank holiday.
~ Evaluate the banks assets ...
~ Liquidate failed banks ...
~ Re-capitalize healthy banks and take a stake for any investment ...
~ Fire the Banksters and the boards ...
This is the only way to cleanse the system. Without getting rid of the toxic waste the few will always pollute the many causing credit seizure.
Things I'm willing to accept in lieu of debt:
Gold,
Oil.
CEO's first born.
Not garbage...
.........
If you truly value your children's futures...you could try harder.
If a letter is all you got. I mean, seriously.
"Well honey, I wanted to keep you from having to devote your entire life to cleaning up my checked-out bullshit...but ya know...It would have meant like...effort and stuff."
Equity? In what?
I want a pony, dammit!
I've got one thing I'd like to say to MS, GS, and MER:
Welcome to retail banking bitches!
Interesting Times writes:
Hurry cover your shorts!
Oh wait...
Oh wait indeed.
The Congresscritters are getting warmer but I still wonder if the equity bit will be sufficiently punitive.
Still no word on how to P... oh, nevermind, it's pointless.
I think what it comes down to is there's only two possible outcomes:
1) Debt-Deflation
2) Money printing and implicit default on the national debt
Bailout plans are just window dressing for the horror show.
JP --
Nemo: Link for modification?
Well, I have been blogging about it.
But the source material is here.
Intelligent bank investors ought to welcome dilution if it is the cost of preserving the banks. An undiluted share in an insolvent enterprise isn't worth much.
o shorts and here we come s&p 1100 again
unintended consequences or intended, here we go agai
-370.. this is deteriorating fast.
Kneel_before_Zod writes:
If you truly value your children's futures...you could try harder.
If a letter is all you got. I mean, seriously.
Ok, I get it. Mail them cookies?
Me wonders if we aren't witnessing brinksmanship extraordinaire.
WallStreet: Any oversight, any equity swap, any compensation reform, we take the whole thing down. Let it burn.
Congress: We can't give in this time.
WallStreet's all-in. Will Congress call or fold. What say ye?
...going down?
yes, the blame the shorts mantra of the banksters is kaput ...
The financial melt down scenario is BS. We don't need a bailout. We have a system in place already.
Equity holders are wiped out and bond holders like Pimpco take haircuts. Bondholders get issued stock in receivership. Old hat.
This is a massive sham to preserve the assets of investors at the expense of taxpayers.
WTF!
Ohh boy, what a disaster.
damondidit - you are dead on
if the govt is going to bow to mr. market, it will win
and it is showing its pocket aces right now
Kneel_before_Zod:If you truly value your children's futures...you could try harder.
If a letter is all you got. I mean, seriously.
Right, and you're spending your time wisely fighting the battle in the slow motion chat room of calculated risk.
Good effort!
just saw -390 briefly
Meanwhile, USD continues its downhill toboggan race
.
Helleuva job, George & Co.
The old paper's no good. Need new paper.
Nemo | Homepage | 09.22.08 - 3:42 pm | #
will it still be green??
Just got a new Visa in the mail with Zero interest til 10/09. Should I max it out?
"and it is showing its pocket aces right now"
a new economics team will be required
did I just hear on Bloomberg a 400 billion dollar Money Market bailout figure?
OY VEY
I've been away since this morning - HOLY CR*P with the oil future$!
Re: snailmailing in order to be able to hold your head up a little with the kids:
Congressians' websites still warn that anthrax screening adds hella days to snailmail delivery. Fax or call, then.
Oh no, DJIA approaching 11K... can it hold? I say yes...another festivus miracle.
...going to warp speed
If this bail out must happen and I am not sure that is the case, then make wall street pay.
Why not a processing fee of 5% on each security that the gov. buys to fund the bailout. Call it an origination fee or a funding fee or *** fee.
Next we should only pay fair market value.
This is insane!!! The dollar is tanking.
Hey Anonymouse --
You still in the "deflation" camp?
Just curious.
nades writes:
Things I'm willing to accept in lieu of debt:
Gold,
Oil.
CEO's first born.
Not garbage...
Wait, the CEO's first born isn't garbage?
Anonymouse, I've been hoping you'd show up today and let us know your take on today's fireworks.
Dow 11,000 by the time I get this posted?
mr. market is showing its pocket aces - sorry bad syntax in prev post
I think what it comes down to is there's only two possible outcomes:
1) Debt-Deflation
2) Money printing and implicit default on the national debt
The above are side shows. The money is an illusion and the real wealth will of America will remain. The main event is that we are forfeiting our constitutional rights and future as a free country.
932 Comrades Online
Persecuted Comrade, simple dollar slide oil goes up.
Angry Saver
yep , there is no reason not to declare a bank holiday, evaluate the books and liquidate the insolvent banks ...
Then you bail the insured deposits, not the stock holders or the bond holders ...
Maybe if the bondholders get some hair cuts they will keep track of regulation and transparency in the future ...
"ac writes:
IMO China could really stage a coup and catapult themselves to the top of the financial food chain by converting to a gold-backed currency.
Yeah they'd have to suffer through deflation for a while, but they'd be the most credible destination for investment and intellectual capital in the world if they managed to pull it off."
well, they would first have to solve the small issue of intellectual property rights - both domestically and internationally.
OK, so great that the taxpayers get some equity, compensation is limited blah blah blah - so what!?!
If Krugman says the only way this will work is IF Paulson pays a PREMIUM for the toxic assets otherwise the banks will still be insolvent then isn't all this oversight and audit and accountability of Paulson going to ensure that the toxic assets are not bought at a premium and hence the plan WILL NOT WORK!?!?!
Seriously, aren't we, by doing this 'right' going to make sure we get it wrong and hence the whole venture should be abandoned....??
I love complexity, it's fun.
monta's ankle writes:
no shorts and here we come s&p 1100 again
and this is why the ban on short selling. they get in the way of the big boy's exodus from US markets. Fat Cats and Big Wigs first.
bounced off 11k
Persons who think closing down only less than 5% week over week isn't what all the intervention was about are suffering myopia. Last week was almost flat, an amazing feat in the face of fundamentals. Down only 400? Barely a bear confirmation.
Happy days are hear again....
Stock pick - go long in Campbells soup
and Kraft for all your soup line and cheese wheel futures.
well, they (China ) would first have to solve the small issue of intellectual property rights ...
Why ?
JP Morgan worst performing stock in the DOW today.
Giggle.
Oversight board, no premium for the crud. If a premium is paid then the sellers have to take the crud back on their books.
Nemo,
As long as the broadest classes of household assets are declining - destroying purchasing power faster than credit can be thrown at them - then YES I'm in the deflation camp.
JS,
My take on today is beyond shock at the extremely light volume accompanying such wide price destruction in the equities market. If price had been rejected today, I'd say the market wants to head higher. The test will be as we come into just a few points lower on the SPX. If volume remains this light - something has changed, possibly a major reversal top side.
thank goodness i have my rydex reverse index funds still in play, along with my reverse us dollar, and lovely glod of course.
don't know how long they'll let my reverse funds stay part of the free market. i had to call rydex to double check things were fine.
we'll soon all be argentinian.
Barney Frank may be dumb like a fox.
He's taking a page from Paulson's playbook. The inevitable bandwagon effect. Now, the "equity idea" will start to sound baked in, right?
For all their cajones, there one big job that Bush and Paulson can't do. They can't make laws. Pretty soon, they'll be on the outside of the process looking in, wondering what's going on in there.
Whatever it is, however strange it is, they'll have to agree with it in the end.
I thought I'd never say this but an economy circuit breaker may be inevitable. I don't say good, just inevitable.
bounced off 11k
Yeah, like nine years ago.
Inflation in commodities as the dollar is devaluated. Assets, like houses and stocks deflate.
Well, good news.
Mountain House has once again resumed sales of #10 cans to the civilian market.
Stock up folks!
Today's prices won't last!
On other fronts, financial stock still went down in spite of the ban on short selling.
Someday this war's gonna end...
I'm still surprised Our Glorious Leader General Secretary George W. Bush is open to compromising on anything.
I have to agree with the general sentiment: They expected the bill to be modified and all they cared about was making sure the bailout happens.
ades writes:
Things I'm willing to accept in lieu of debt:
Gold,
Oil.
CEO's first born.
Not garbage...
How about garbage in the form of the CEO's chopped head? GLD is better, though
bang! 10993
Ok, so you can't sell your house and it costs $100 to buy a loaf of bread.
nova writes:
Kneel_before_Zod writes:
If you truly value your children's futures...you could try harder.
If a letter is all you got. I mean, seriously.
Ok, I get it. Mail them cookies?
nova | 09.22.08 - 3:50 pm | #
PONY cookies yes
For the amount of money, why not just buy them out, throw out the management, and then sell them off?
Carl Ican where are you?
Wow - some people are emailing their Congressmen !!! Gee - you're a regular bunch of John Adams / Nathan Hale / George Washington-style patriots.
"I regret that I had but 3 minutes to give for my country"
Ahhhh - that state of what passes for outrage and activism in our fair land these days. We're sooooo sunk.
Our Glorious Leader General Secretary George W. Bush is open to compromising...
Not as long as he has a signing statement in his back pocket.
Why is the link you posted earlier with the text of the administration's proposed "bailout bill" missing?
Original link was: Blogger: Page not found
anyone has any idea what McCain and Obama thought about this bailout plant? I assume both of them are still trying to get to 1600 pen. ave. next jan?
JESUS! I just looked at the oil chart for the first time...un freaking real! Touching $130.
"I guess another 300+ points down day on the DOW is scaring a few people."
It should, now any company that goes to the government and wants to suck on the tit in this tightening credit environment is subject to semi-nationalization. Risk up = lower price.
We're all Hugo Chavez's now.
Any new plan will be a big LOSER for the taxpayer.
Under Paulson's plan, foolish banks and investors get bailed out. Under Dodd/Frank plans, the government grows enormously.
Either way we are screwed.
NO NEW PLAN IS REQUIRED. It's all a BS scam to extract wealth from the public at large.
wow,
no deal on equity stakes, paulson says. (CNBC)
It's like Friday never happened.
Obama and McCain are both for it. McCain would fire the head of the SEC, Obama wants to keep Paulson for the the great job he's doing.
"mmckinl writes:
Why ?"
A Chinese person with a bright idea is best off developing it somewhere else. (because of little existing protections) That kind of road block is a huge long term drag.
JJL writes:
Barney Frank seems to be quite talkative about serious negotiations. I am sure Paulson just loves it when Frank runs out the door to announce some other detail.
I, for one, am happy to have some semblance of openness in government decisions instead of having them treated as closed-door boardroom discussions. Treasury isn't Goldman Sachs; Congress isn't Cerberus.
o deal on equity stakes? who is right paulson wsj nytimes barney frank
wtf is going on?
zeropointzero writes:
Wow - some people are emailing their Congressmen !!! Gee - you're a regular bunch of John Adams / Nathan Hale / George Washington-style patriots.
"I regret that I had but 3 minutes to give for my country"
Ahhhh - that state of what passes for outrage and activism in our fair land these days. We're sooooo sunk.
zeropointzero | 09.22.08 - 4:03 pm | #
Well, yes, however, I still build sandcastles when at the beach with my kids, even though the tide takes them out, every time.
I also sent emails to about 200 people, including a bunch of college kids I coach, asking them to read and contact their congress critters.
Pointless, probably. But there's not enough ponies around for us to make like Paul Revere.
More ponies would solve that problem.
well, zeropointzero, you'll be sad to hear that:
IN CHICAGO, THE REVOLUTION HAS BEEN CANCELLED!
I could not get but two people to agree to protest at Buckingham Fountain today, and one of those bailed. I might go hand out leaflets or something by myself. But to be honest, I'm not even sure exactly what I'd be protesting any more.
I'll be sending them a message in Nov.
"JESUS! I just looked at the oil chart for the first time...un freaking real! Touching $130."
Why? The worlds reserve currency is dying.
i guess jas did have a point. And harvard law review doesn't guarantee anything.
Pointless, probably. But there's not enough ponies around for us to make like Paul Revere.
It's not pointless. It's a damn good start. Kudos to you!
wow,
no deal on equity stakes, paulson says. (CNBC)
Right as the markets closed. lol
Will the Democrats show any backbone?
CR,
What about equity stakes in the homes of all the mortgages the Feds are about to write down once they assume them?
Please don't tell me someone who paid a million for a house they had no business buying gets a free cut of the principal to 500K from the Feds...
I'm all for the banks ponying up shares and CEOs taking pay restrictions for Federal assistance. I think the homebuyers should have to cut the Feds in for any future appreciation in their homes as well.
Nemo: Thanks for the link. BTW, I officially cannot keep up with the blog.
So apologies if posted, but that order is slightly insane:
However, this exception now requires that, for new positions, a market maker may not sell short if the market maker knows a customer or counterparty is increasing an economic net short position in the shares of the Included Financial Firm.
Huh? I have to discern the intentions of my customer?
NEW YORK, (Reuters) - Morgan Stanley (nyse: MS - news - people ) agreed to sell an equity stake of as much as $8.5 billion to top Japanese bank Mitsubishi (other-otc: MSBHY.PK - news - people ) UFJ Financial Group Inc , speeding up its transformation into a commercial bank and improving its survival prospects in turbulent times.
I just gambled $25K on two month Wachovia bonds. YTM (annualized) about 17%. Anyone want to wish me luck?
P.S. Some other person has been signing their posts "Eric". I was here first!
Anonymouse,
You're forgetting that volume is light because people can't short. It's a one sided trade until there are no buyers. Then there's a slow trickle down. Until people panic...
Damn it, what's happenning?!! Why is oil so high? What's this crap with Barney and Hank?
Where is everyone?!
Ah, two bounces off 11K to close. My mind is at ease now. Thank you...whoever you are...Santa Festivus.
IN CHICAGO, THE REVOLUTION HAS BEEN CANCELLED!
How about protesting at the Federal Reserve Branch in Chicago, and call the media when you get there.
Federal Reserve Bank of Chicago
230 South LaSalle St.
Chicago, IL 60604
(312) 322-5322
995 and counting
Actual quote from the guy sitting next to me at work: "They pumped all that money into the oil market over the weekend and it shot back up!"
We are soooooo f'n doomed....
Oil and gold are speaking loud and clear for those who can set aside their preconceived notions (i.e. that deflation is inevitable) and just buy what's going to work in a massive reflation attempt.
AM I the only one that can see it for the sham it is????
WTF!
Both the Paulson and Dodd/Frank plans preserve bad debts. Hence the unpayable interest bills will remain.
The end games are the same. More interest is foisted upon society at large.
1010 !!!!
gn -
Keyword "attempt".
Remove symbol
WM\t3.40\t-0.85 (-20.00%)\t5.80B\tRemove symbol
WB\t15.32\t-3.43 (-18.29%)\t33.44B
blaming short sellers = iraq caused 9/11!!
When the US economy ends, CR's tagline will need to be changed to "Begging & Barter" and the power balance on CR will shift from the suits to the hippie-types amongst us. I look forward to writing ubernerd posts on dumpster diving.
"I just emailed my senators for the first time in my life. Don't think it will help but I can at least tell my kids I tried!!"
Me too.
JP --
Huh? I have to discern the intentions of my customer?
Yeah, that strikes me as insane, too. As far as I know, the markets are anonymous.
Not to mention that you could buy the stock, then buy the put and sell the call (which does not create an "economic net short position"), then just sell the stock and you are left with your synthetic short.
The emanations from our government are becoming more and more bizarre.
The visitor count here has a clear positive correlation with the fever pitch of the US economy.
damondidit -
I hear you. I just have faith that the gov't can add more zeros as needed to any programs they design.
Damnit, UYG down 10% and SKF barely up a lick?
From JP: "Confidence is evaporating. And I can't wait to see legislation to forbid loss of confidence."
Tomorrow's headline: "Paulson proposes mandatory uppers for all US citizens over 21 to shore up confidence". At least then we can take it in the shorts with a smile on our faces.
Kenworthey writes:
well, zeropointzero, you'll be sad to hear that:
IN CHICAGO, THE REVOLUTION HAS BEEN CANCELLED!
~~~~~~~~~
thanks for putting the time and effort in! grassroots is tricky, hard work. I've done it for quite awhile. ain't what it used to be in the current media and average citizen environment.
couple of tips - keep it fun, have clear talking points, write a good press release, cultivate and cherish new leaders and delegate.
To be fair to the sunshine patriots and assorted electronic heirs to Tom Paine who may be offended by my ealier comment, I offer an admission:
I've done little more in response to unfolding economic events than stare dumbfoundedly at my computer screen - looking and feeling like Roy Schneider, circa 1975, as he suggested: "We need a bigger boat"
I'm having some trouble understanding what gives Paulson the leverage to say "no deal" to a piece of Congressional legislation. Is he threatening a Bush veto? Or is he the front man for the banks in a business deal?
Nationalize, Evaluate , Liquidate , Recapitalize ... Fire the Banksters ...
~ Nationalize all the banks and declare a bank holiday.
~ Evaluate the banks assets ...
~ Liquidate failed banks ...
~ Re-capitalize healthy banks and take a stake for any investment ...
~ Fire the Banksters and the boards ...
This is the only way to cleanse the system. Without getting rid of the toxic waste the few will always pollute the many causing credit seizure.
1000 exactly
thats my upper
ain't what it used to be in the current media and average citizen environment
It sure ain't. The media are now Judases. At least Judas got silver - something of value.
Yalt
Paulson is a bankster ... he trumps Congress as he noted in his original proposal ...
One more
~ Prosecute based on Sarb-Ox or anything else applicable...
I am doing my part to help. I am gambling on short term financial institution debt. Just took a $25K chance on 3mo. Morgan Stanley debt at YTM 18% (annualized).
Jesus, what's going on here.
We don't need to nationalise. The existing bondholders will own the existing entities. They can issue stock or sell the assets.
Life will go on - at a more affordable level too.
It seriously would have been all over today if they didn't ban shorts.
We're talking 1000 + drop easily.
But ya... banning shorts sure did help! lol.
Is he threatening a Bush veto?
I might be mistaken, but the constitution might be working and the tables might be turning against Paulson.
Getting the bill written and passed in congress is the part that takes the most time. So congress can pretty much write anything it wants, send it to the president, and then tell him he needs to sign "because it's urgent". If he vetos, then fk him, it's urgent so we'll override.
Just a thought.
I think people contacted Congress ...
otherwise the Dems would have folded by now ...
The Dems know they have political capital ... very important this close to an election ...
Dollar did a teensy uptick. Only down 2.35% since open.
Don Paulson represents the interest of the American people. It is his patriotism that requires he stand up to congress.
Viva la hoopajoop!
But ya... banning shorts sure did help! lol.
Interesting Times
Scarier, what if this is BECAUSE the ban on shorts DID help?
Is he threatening a Bush veto?
Easy if Bush has an Executive Order as plan B.
Paulson is a bankster ... he trumps Congress as he noted in his original proposal ...
mmckinl | 09.22.08 - 4:16 pm | #
I know that's what's going on in his mind. But in reality, what's he got if Congress passes legislation he doesn't like? Is he going to lead the banks out on strike?
ew thread people
According to a couple lobbyists I know, e-mail is ignored and snail mail won't get read until January (due to anthrax regs). Calling, however, actually works because every call gets logged. And volume of calls gets noticed too.
I couldn't get through to Pelosi, Dodd or Feinstein due to call volume. I did reach Boxer, though.
But the debate is over for all intents and purposes. Everyone is on board with the bailout, the only thing anyone is discussing is what little provisions to add for political cover. The $700 billion is as good as spent.
Yalt
the banks just refuse to lend , system freezes ...
who blinks first ?
New York Senator Hillary Clinton said the federal government should establish a special entity that would buy mortgages from Americans and later sell them just as it did during the Great Depression.
UPDATE 1-Sen. Clinton: gov't should help buy back home loans
| Reuters
Someone needs to inform this stupid bitch that thanks to her and the rest of CONgress we are going to have a Great Depresion II
Richard Shelby: plan 'not workable' (bloomberg TV)
rosebud writes:
wow, must be bad if they are giving equity ...
~~~~~~~~~~~~~~~~
Republicans are just as furious as Democrats ...
The Banksters have gone too Far !
For those of you who wrote your senators today - tomorrow write them again - Filibuster.
Let the emperor lose naked.
There will be no new clothes...
This is well-timed highway robbery.
I guess another 300+ points down day on the DOW is scaring a few people."
This down move was expected anyway
exploring the boundaries of the "trading range" "they" are working on
nobody would pile onto a short covering !!
Anonymous
stow it ... and tell us about Greenspan refusing to regulate loan brokers , touting dodgy loans and reducing the interest rate to 1% ...
ReadingNLearning writes:
Paulson, Bernanke, Bush must have something up their sleeve to agree so easily and quickly. They have a hidden agenda not readily apparent hidden here in this massive bailout.
ReadingNLearning | 09.22.08 - 3:45 pm | #
Yes, I agree.
There are two things, I think.
Quite convoluted, so I'll link
rigorousintuition.ca :: View topic - The White House Bailout Proposal
Hey, Anonymous, your mother is a stupid bitch.
This is what happens when you propose to bail out wealthy stock & bond holders.
Everybody is now in line for a hand out. And I mean EVERYBODY!
We're about to witness the greatest expansion of government in our history.
Our Republic is in jeopardy!
1 responsibility for this falls on Hank Paulson and other CEOs who created the crooked derivatives market that drove the bubble
2 falls on Alan Greenspan for running negative real interest rates for years
3 is Bush for blocking investigations of mortgages fraud
Congress is #4, at most, for letting 1, 2 and 3 get away with it. And, for the most part, Hillary has been pushing for balanced budgets and better regulations. She could have been better, but she wasn't the problem.
Johnc
Paulson and Bernanke have the IMF and Central Bankers looking over their shoulder with the rest of the world looking over theirs.
This is much bigger than just American politics
who blinks first ?
mmckinl | 09.22.08 - 4:21 pm | #
Yeah, I was suggesting this a few threads back. I think it would be wise to have a fallback plan, a conduit that could be used to temporarily roll over short-term paper as it comes due. One thing I'm guessing we can almost all agree on is that we don't really want solid companies with sound balance sheets doing productive work to collapse when they couldn't roll over some piece of investment-grade debt because of a bankers' strike.
Maybe take the $700B and use it to beef up the balance sheets of some solvent banks that aren't even in need of the facility that's proposed now, then send them in as scabs? Not sure how something like that could work in practice, but there's got to be some way of providing a conduit that bypasses Paulson and his bankers union.
They have a hidden agenda not readily apparent hidden here in this massive bailout.
The agenda's of the plans are the same. Only the name of the new controlling partner is at issue - the government or the finance industry (rentier industry).
Under both plans, the level of interest borne by the existing infrastructure of our society will be increased without ANY increase in output.
This is an abomination to increase the interest payments from the public at large.
What a scam.
On June 21 of last year, I thought the investment banks had less than five years to live.
They died in less than sixteen months.
The investment banks are dead! Long live the investment banks!
ps- Conjure says, "Banker, are you out there? Life goes on."
Yalt ...
Tax Payer ownership is now baked in ...
Should Paulson renege the Dems won't bare the consequences of a meltdown now ... the Republicans will ...
Paulson tried his bluff but sec 8 through gas on the fire of public opinion ...
"Someone needs to inform this stupid bitch that thanks to her and the rest of CONgress we are going to have a Great Depresion II
Anonymous"
Your intelligence is matched only by your politeness.
Angry Saver
sorry to say that the financial industry will be down sized by 50% ...
That will take 10-15% out of the economy, not real production but jobs and taxes ...
I think it would be wise to have a fallback plan, a conduit that could be used to temporarily roll over short-term paper as it comes due. One thing I'm guessing we can almost all agree on is that we don't really want solid companies with sound balance sheets doing productive work to collapse when they couldn't roll over some piece of investment-grade debt because of a bankers' strike.
We'll probably need that even if we bailout, because of the magnitude of the losses. Capital loss = credit crunch. Who knows, with a good plan for short-term paper we won't have a problem requiring bailout.
I've proposed an idea for guaranteeing short-term CP and bank loan rollovers. Feds roll pretty much anything over for a 1% premium on the annual rate and going to the head of the line of the creditors. Not too tied to details, just a general idea. Could also be done as an insurance plan with banks still making loans, backed by a greatly enlarged Fed window.
Fair Economist
until the system is purged the problems of toxic paper will not go away ...
~ Nationalize all the banks and declare a bank holiday.
~ Evaluate the banks assets ...
~ Liquidate failed banks ...
~ Re-capitalize healthy banks and take a stake for any investment ...
~ Fire the Banksters and the boards ...
This is the only way to cleanse the system. Without getting rid of the toxic waste the few will always pollute the many causing credit seizure.
mmckini, I hear quite enough of "purging the system of toxic waste" from the local wierdos into high colonics.
We can't let the short-term working capital markets freeze up. That is death for the economy, GDII, and 95% unneeded and wasteful.
Having a plan to keep the capital markets going is needed to be able to clean out high finance.
Actaully Obama fully supports what Bernanke and Paulson are doing even before any details were available. Wouldn't expect anything less from a socialist. Well, maybe more once he adds his special interest group spending on top of Dodd's and Frank's spending.
McCain has said he wants to review the proposal, fire the head of the SEC and cap compensation for those firms that take the bailout. That is on top of what he proposed in 2004/2005.
Ah yes, McCain -- the guy who wants to cap the pay of all the Wall Street guys he's got running his campaign. Guy changes his tune every day.
sorry to say that the financial industry will be down sized by 50% ...
That will take 10-15% out of the economy, not real production but jobs and taxes ...
This is the fallacy that is being fed to the public at large. It is total nonsense.
Go to the fed flow of funds historical records. Real GDP was higher (and more realistic) when finance was a much smaller part of the economy. This is undeniable.
A smaller interest burden will free up capital for productive use.
Fair Economist writes:
3 is Bush for blocking investigations of mortgages fraud
Don't disagree on 1,2 and 4. As for #3 the only proposals I have found that proposed increasing regulation and oversight were Bush in 2002/2003 and McCain in 2004/2005. Both blocked by Congress. Why? Because the increased regulation would have upset the gravy train being skimmed from "affordable housing" initiatives.
I remember that plan, Fair Econ, I just couldn't remember who proposed it.
Something like that is essential, I think. That, plus some way to clear some of the banks' detritus (something painful for the banks, preferably), plus vigorous safety and soundness exams for all.
We can't let the economy's IV get cut off, and we need to find some way of getting capital into the hands of people who have shown they know how to lend it, not just recapitalize those who have shown that they don't.
Where is tennis_8?
LOL.
MPin CO, lying crapsack GOP shill.
By the way, Congress in those years was controlled by the GOP.
But you knew that, you worthless wretch.
If the admin is conceding these points, maybe they really ARE scared, not just faking it. Or maybe this is all part of an elaborate plan to enable the Democrats to feel as though they are taking a role, even tho maybe this is what the PTB wanted all along??? Or not.
MPinCO, there were numerous state attempts to investigate crooked lending, back to 2003. Bush blocked them all, using a strange interpretation of a Civil-War-era commerce bill.
Interesting bit on Icahn at SeekingAlpha:
"Carl Icahn is angry and when the Queens-born billionaire gets angry, he also gets rich. He's angry now because in his 47 years on Wall Street he's never seen wealth destroyed on a scale quite like this. The financial meltdown this month could have been prevented, he says. Icahn, the world's most famous capitalist, has amassed his fortune by punishing the actions of greedy, incompetent CEOs and unlocking value for shareholders in the process. He said the boards of many companies in America are "completely" and "totally" out of it. He says there is no accountability in corporate America at the CEO level. "For the most part, CEOs are inept," he said. "What's amazing to me is that Lehman Brothers CEO Dick Fuld made $17,000 an hour last year." In other words ineptitude has led to companys taking excessive risk. He says it's time to see the laws changed in America so that corporate boards are held more accountable."
Seems to make sense, although "world's most famous capitalist" is surely over the top.
compensation limits versus jail time or hanging??
The answer to them backing down on equity stakes (and whatever else they end up backing down on) might be pure politics, as they're trying to make sure that the Democrats are deep in this, enabling Republicans (including McCain) to run against it.
More on that here: Hullabaloo
I've proposed an idea for guaranteeing short-term CP and bank loan rollovers. Feds roll pretty much anything over for a 1% premium on the annual rate and going to the head of the line of the creditors. Not too tied to details, just a general idea. Could also be done as an insurance plan with banks still making loans, backed by a greatly enlarged Fed window.
If we could combine that with Chapter 11 and writedowns of bad debt for insolvent banks, we'd actually have the start of a plan.
Instead our elected representatives, aided and abetted by the "it's contained" crew, are going to blow up the dollar and complete the impoverishment of the country.
I think any bailout should be required to guarantee an immediate increase in the minimum wage.
I don't like the idea of people staying "their" home unless they have equity. If the government owns the home then they are renting from us.
have written to my senator/congressman.
1. the price of the equity should be based on lower of the price prevailing before the announcement of the bailout or the 14 days prior to the sale.
2. All financial institutions should be required to surrender some equity just for the option to be able to use the facility (sort of the commitment fee they charge their borrowers)
3. They need to give up more equity
4. The price that the Treasury pays has to result in a probability that the sale price generates a profit is greater than the probability of a loss.
If they agreed that quickly, we're missing something. They're gonna screw us...
Perhaps it's the "Paulson gets to do whatever he wants without supervision or recourse of any kind" clause?
I'm just sayin'...
-ek
$700 Billion Dollar Bailout Good For Economy
WASHINGTON (AP) -- It's the largest government bailout in U.S. history and two days after it was introduced to the Americans paying for it, the proposal is still largely a mystery.
Among the unanswered questions: How will the government mop up the bad mortgage debt on banks' books, who will run the process and how much will it cost?
ADVERTISEMENT
Key elements of the plan remain in flux as behind closed doors Democrats demand modifications that would provide more help for ordinary Americans in return for bailing out the country's financial giants.
This will only bring the finance companies down further. Warrents do not mean money goes into the market. It only means that someday when they are cashed in the government hopes they will be worth more than they are worth today. What easier way to accomplish that than to bring the stocks down 90% now so that they are more likely to go up later and net the government some profit. Another hidden tax on the back of present stockholders. Another dillution.