Not If Citi Can do something about it.

I thought that negative income was already non-taxable?

I am opening a bank.

It's the only way to survive this mess.

Even if they did pay tax they would get it right back and then some via the TARP. So might as well just keep it.

Maybe the banks want to bankrupt the federal government?

Citi will be thrown to the wolves ...

Because Goldman and I are calling the shots ...

Within a couple of years, banks will be buying back those toxic securities for pennies vs. what they got for them today.

Talk about a great deal!

Thanks for the coke and whore money suckerzzzz!

Goldman and I will buy Citi for peanuts , adding to our wamu coup ...

Hmm... more tax cuts? Plus the $100B in tax cuts in the bailout bill.

There seems to be a lot happening today that will add to the Fed's liabilities while simultaneously reducing it's revenue.

Is the bail out money gone yet?

Amazing, in a morally bankrupt, fascist kind of way.

Textbook.

Filed under ho ho ho...

GM to close Ohio SUV factory Dec. 23
MORAINE, Ohio - General Motors Corp. says it will close its SUV plant in the Dayton, Ohio, suburb of Moraine on Dec. 23.
Yahoo! 404 - Page Not Found

Mentalic

NYC will still have the largest bank ... Goldman Citi Wamu Sachs ...

Does this mean that they have to pay taxes on any gains that they make by selling some of the troubled assets to me/Treasury? Once they write it down, they would have to pay tax on the sales difference, no?

Yal, if thats correct, then my rep still voted no

sparky writes:
Wells Farchovia?

Wells Downey Indy Farchovia ... once those prices are right ...

Wow. That memo is most likely privileged legal advice from Wachtell to WF; it's publication probably waives the privilege for all kinds of documents related to the same subject. Where's my subpoena form?

Paging Tanta...

Buffett moving from Insurance to Banks.

Buffett moving from Insurance to Banks.

Indeed, Insurance is dead money ...

Banks print money ...

I like money ...

GM to close Ohio SUV factory Dec. 23

Dayton is the next Detroit.

Sad.

Every bank that the FDIC doesn't have to close down is one less bank where depositors lose their cash over the insurance limit and where the FDIC has to make good on deposit insurance and spend resources managing the transition. That saves the US govt cash up front. Accelerating the writedowns and eliminating insolvent banks quickly is better than Japan-style zombification.

So that is another -21,000 jobs lost, though in the prelim estimate table they added 56K construction jobs, 85K trade/transport jobs and government jobs 60K (three largest additions). Net of all adds/losses was -21K.

So the private sector lost another 81K jobs in the preliminary estimate.

This plan did not succeed be course there is still one vital part missing from this picture: new tax cuts to the rich. LOL

The only thing we have to fear is fear itself ...

now bend over ... I need more money!

Oh and the birth/death adjustment added 42K jobs to the -159K number (-201K before that adjustment)...

Bloomberg on oil:

"Crude-oil prices may fall as low as $50 a barrel next year, about half current levels, in the ``unlikely'' event of a global recession, weighing on shares of petroleum producers, Merrill Lynch & Co. said.

Such a scenario, where global growth in Gross Domestic Product falls to 1.5 percent, isn't the base-case forecast, the bank said today in a report. Merrill cut its 2009 average price estimate for West Texas Intermediate, the U.S. benchmark oil grade, by 16 percent to $90, citing falling demand and the start of new fields in Organization of Petroleum Exporting Countries.... U.S. oil use is declining faster than expected, while European consumption is falling rapidly,'' and OPEC production capacity isjust about to soar,'' Merrill said.

Combined, these factors represent significant short-term headwinds for both upstream and downstream companies alike,'' Merrill analysts Mark Hume and Alexis Clark said in the report.Notionally it is conceivable that in a worst-case scenario global oil demand actually contracts in the near-term as it did back in the 1980s post the Iranian Revolution.''

$50 a barrel!! OPEC capacity is going up...we reduce the amount of money we're sending over there and they will reduce the amount of Treasuries they buy. Hmmm...

Note for clarity - the initial numbers discussed above were for the preliminary revision over the last year - so the -81K private sector job loss was over the period March 2007 to March 2008.

The 42K birth/death adjustment to the job number was JUST for the month of September, 2008.

born dope energyecon

Creative destruction is just part of the wonderful world of crony capitalism we live in ...

These unemployed people should buy banks like I am ...

MImplode had a link to a WSJ article saying that the exclusivity agreement between Wachovia and Citi would force Wells to pass. It's a good read. Haven't posted links on HaloScan, but may want to go to WSJ.com or MImplode and read up...

On July 29,2008, Wachovia Corp. hired Treasury Undersecretary Robert K. Steel as chief executive,

Late last week FDIC negotiated a deal between Citi and Wachovia,

But according to CNBC on about Tuesday the IRS made a regulation change that increased the value of Wacovia $20 Billion.

Then Wells Fargo steps in to buy Wadchovia.

Helped having a former Treasury man and a Treasury divison, the IRS on one’s side.

Consider this: a tax break means less taxes paid, means less for the “taxpayer” as a whole, more for the recipient.

We had to throw Citi to the wolves ... they were trying to do the right thing and set a bad example.

WachoFargo. An indy label.

If they hadn't slept in days, then the contract might not be considered valid.

So what other regulatory and legal instruments can be altered to "fix" the credit problem?

Brainstorming on this could give the non-insider equivalent of insider information, no?

What does the gov't have left to tinker with?

We've seen FDIC insurance upped, now tax code loopholed, and gov't buying bad assets w/T-bill funds.

All seem to agree that the entire goal of US policy right now is to get credit markets moving again via money to the banks.

Here's the question: What barriers still exist to banks lending? What control does the gov't have over changing/removing those barriers?

An interesting thought exercise.

Nah.. that was easy.. the real fun begins when everyone loses faith in the system. Then you will see my true handiwork.

mykillk writes:
Satan: Just admiring your work in Congress
mykillk | Homepage | 10.03.08 - 5:42 pm | #

Kung Fu Panda:

Welcome to internal workings of the legal industry. you don't think the first year attorney making $160k a year before bonses can be allowed to sleep when he/she must earn his keep and draft all the details of such a low level deal do you?

...the Oversight Committee will hold five hearings in October to examine the regulatory mistakes and financial excesses that led to the market breakdowns on Wall Street.

Since they've only invited the biggest Kool-Aid dealers to testify, they clearly don't intend to hear the truth.

What are you talking about ? Cox was the perfect dumb Goy for the job.

Threatening martial law unless you get the political outcome you want is almost like terrorism.

The only difference is_________ uh ______ mmmm....

"Threatening martial law unless you get the political outcome you want is almost like terrorism."

like that idea, it was mine ... well cheney helped ...

Tulsa World: Fannie Mae forgives loan for woman who shot herself during eviction

Fannie Mae forgives loan for woman who shot herself during eviction

By Staff Reports
10/3/2008 4:33 PM
Last Modified: 10/3/2008 4:44 PM

Fannie Mae said it will set aside the loan of a woman who shot herself as sheriff's deputies tried to evict her from her foreclosed home, according to CNN.

Addie Polk of Akron, Ohio, became a symbol of the nation's home mortgage crisis when she was hospitalized after shooting herself at least twice in the upper body Wednesday afternoon.

On Friday, Fannie Mae spokesman Brian Faith said the mortgage association had decided to halt action against Polk and sign the property "outright" to her.

Fannie Mae forgives loan for woman who shot herself during eviction

Is there an over/under on the number of copycat cases we see over the next few months?

what's the over/under some people will start eating their homes this winter?

What's the over/under some people will start to use their home for fireplace fuel?

there aint no reason in hell, there should be in homeless this year.....hell just pick a house and squat.

lawyerliz, wasn't this rescue plan one big "ex parte"?

or at the least the tyranny of the minority

OT

We have much to learn from the people of Argentina:

YouTube - Argentina's Economic Collapse - Part 1 of 12 

Taken from another post...

So what can we do personally? Now that the ‘‘Emergency Economic Stabilization Act of 2008’’ is law, and banks no longer need to have reserves or have cash on hand. Also, now that mark to market is a thing of the past, and all banks have become like huge institutional "stated income, Alt-a liar loans, what can be done to generate money, protect it, and be able to access it?

bond guy,

The problem is a shortage of money in the interbank then, and forgive me for ignorance if apparent. I usually try to squirrel it away.

Where, then, does the money "come from"? If the Bank prints it, won't that devalue the USD, thereby increasing the amount of USD needed for adequate capitalization?

Sounds like a diminishing returns scenario.

At what amount and value of USD is the asymptote, and could figuring that out let us know when to stop printing and when USD bottoms?

But then...deflation...would make those dollars worth more...and assets worth( )less.

This is becoming quite the balancing act and seems like it could take us straight to zero. E.g. if inflation and deflation cancel out, and banks are never capitalized because of it, they fail regardless of what we do.

I'm beginning to empathize a bit more with a reactionary Fed.

Proactive wasn't a word until 1930 anyway...

I've been on vacation the last two weeks, anything much happen?

KO...when they fininshed, they realized, "wait a dog gone minute!" why did I not get a call from my advisor (small pockets) or....better yet from the mutual fund itself (bigger pockets)....damn, I small a class action suit....hey, if I play it right, I can even cover my losses. yeah, thats it

"what can be done to generate money, protect it, and be able to access it?"
Me in Mass

Got a mattress?

"Fannie Mae forgives loan for woman who shot herself

(CNN) -- Fannie Mae said it will set aside the loan of a woman who shot herself as sheriff's deputies tried to evict her from her foreclosed home."

Fannie Mae forgives loan for woman who shot herself - CNN.com

How long till this gets copy cats?

Anonymous writes:
I'm getting tired of blogging and having my phone calls ignored by congressmen...isn't there any other form of protest we can do, maybe with where we place our money or whatever?
Anonymous | 10.03.08 - 7:15 pm | #

defeat or recall your elected representatives?

I would love to vote out Feinstein and Pelosi. Boxer voted against the war so I will give her a pass.

I'm protesting by not buying a house... or much of anything else.

I would love to vote out Feinstein and Pelosi. Boxer voted against the war so I will give her a pass.
Anonymous | 10.03.08 - 7:19 pm | #

Do you remember how Boxer won her first Senatorial election?

Do you remember how Boxer won her first Senatorial election?

No. Do tell.
Anonymous | 10.03.08 - 7:25 pm | #

wikipedia -

"Senator Boxer's predecessor, Democrat Alan Cranston, retired in 1992. She won the open seat contest in the US Senate elections that year. She defeated Bruce Herschensohn, a conservative television commentator, by 3 percentage points after a last-minute revelation that Herschensohn had attended a strip club [the Seventh Veil 7180 Sunset Blvd. Hollywood, CA]."

Mel: That's only true if you only vote for Democrats and Republicans. There are other options.

Ilargi: If you’d ask around, nearly everyone would say that it’s impossible for a country to go bankrupt. Yet, hard as it may be to imagine, we soon could see a few exceptions to this immovable truth.

After Ireland, under a threat of bank runs, guaranteed all deposits in its banks, which have liabilities that are 300% of the country’s GDP, more events in Europe follow at the speed of light. Greece also gave a 100% guarantee. These are empty promises; if all banks would fail, governments would be incapable of living up to them. These are made to prevent bank failures. But that leaves the cause for those failures unattended. And there lies the rub. The Netherlands, only days after it bought 49% of Fortis with the Belgians for $16 billion, just fully nationalized the bank’s Dutch branches. Price tag: $24 billion.

Iceland is the prime princess of them all. Its banks have liabilities at 800% of GDP. The country bought one of the banks, and the rest are falling. Iceland has been turned into a casino in the past decade, and now the house is broke. It’s just a waiting game by now.

Still, at least Iceland has a central bank. The countries in the European Monetary Union, the ones that use the Euro, do not. And that may have dire consequences. Greece’s example will probably soon be followed by Portugal. That can be managed. But if right afterwards, larger nations like Italy and Spain join the hand-out choir, the ECB will no longer be able to help.

It will be up to the governments, directly, to buy banks left and right, for there is no doubt they will be falling like an avalanche of boulders. To have any chance of success, that will require control over currency and interest rates. Which they no longer have. So now the question is: Will the EU survive till Christmas? Will its member nations start defauling on their debt before then? Can they make a smooth transition back to true nationhood in time?

Along the same line: the US government won’t go broke soon (though we can argue that in theory it already is), but the separate states can. They have no central bank either. California needs $7 billion within days, just to pay state employees’ salaries. Other states have cancelled road building projects, and who knows what else. And we haven’t even started the crisis. Neither will the $700 billion alleviate their problems.

Governments at state, county and town levels face a multifold whammy. They can’t get access to credit, since the bond market died. They have lost billions through faulty investments. Their tax revenues are starting to plummet. And their budgets are all based on insanely positive economic expectations. And this is where we all will first see the crisis turn from a somewhat detached far-away one into a force that hits us smack upside our heads.

We will very soon see widespread cancellations of services, multi-million lay-offs, defaults of pension funds, crumbling roads and even serious challenges to essential provisions such as water treatment. There is no way the federal government can bail out every lower level of government that needs money. It is simply not going to happen. The only remaining option is sharp increases in taxes, but that is a dead end: citizens are already broke, their home values are sinking, they are losing their jobs, and the last thing they’ll accept is rising taxes across the board.

Meanwhile, in dreamland, the Dow is rising, and there are actually people out there who think the Paulson bail-out will restore confidence in the markets. But next week, the next bail-out will be needed. We are in a state of permanent emergency, and there is nothing in sight that can stop the bleeding. We do what we always do, because we are so darn good at it. We make everything worse. Hey, it’s a talent.

Not To Worry,

State, county and local governments will be looted of their public works at fire sale prices. Expect pay toilets in your homes soon ...

No--as long as one or the other wins, you have to make your vote count--and then work at the committee level to improve things.
Mel | 10.03.08 - 7:30 pm | #

As long as we all keep believing this, the two-color single party system will never change.

Although maybe it is a little like being in prison. Join your race gang or be killed. That's a hopeful view of America.

Subcommander Doom

pretty good!

Mel,
Not as malevolent, but just as corrupt as the high levels. The top of both parties serve as faithful representative, but they don't represent us...neither of them.

There are good men kept at bay in both parties. If Paul and Kucinich can't be taken seriously because they buck their leadership, they should leave their parties.

That would send a message. If they don't have to listen to us within the party, then make both parties listen to us mass in another.

Liberals and Conservatives feel that the gov has overstepped its role and stomped our liberties. That sounds like the good basis for a new movement.

I fear it would be snuffed within the current party regimes.

you'be lol, how bout you've

Tuesday is probably the most meaningful data day. The Fed will release the minutes of the last FOMC meeting and Bernanke speaks in Washington DC regarding the economy and the markets. That will certainly be germane to our business.
[hat tip] 

homedad43,

Hat tip to Comrade Baron Von Helmut III?

HaloScan.com - Comments

Patton was a visionary.

“Take calculated risks.
That is quite different from being rash.”
- George S. Patton

Indeed.

"Anyone who believes that it is impossible for a country to go bankrupt is seriously misinformed and should be disabused of that idea in strong terms. There are dozens of examples. Argentina is one that comes to mind."

Don't forget, we're special here in the US.

We've got a financial system that's the envy of the world, the reserve currency, 6000 nukes and political leaders that just gosh darn care about us ...

Sorry, I just re-read what I wrote and I'm feeling a bit queasy and gaseous.

As I understand it, Merril Lynch was actually funding Wells loans, Wells just got the servicing rights.

So that is where the disconnect is. Wells was just fronting for Merril.

Mr. Chichikov,

Yes, martial law was threatened to certain memebers of Congress (according to the floor testimony of one Congressman). Troops were deployed beginning October 1 in a special-response type team. It's a combat brigade, which I believe is about 4000 men. Not certain of the size.

But it's probably nothing.

So, anyone else grateful for Octoberfest beers?

anyone out there & possibly sober who can tell me what's the penalty for withdrawing my entire IRA?

Yes, sir:
YouTube - Rep. Brad Sherman Martial Law

Come back, CSC. I need a hit of your smoky humor.
The Escapist

Some folks were unkind in their remarks the other night and I haven't seen him since. Maybe he went on vacation? We miss you CSC...come back!

Trader Paulson presses through with fear
Trader Paulson presses through with fear

We are indeed in a mess and we indeed are at a point where a real rally could develop but the muck we are in is so deep that it is likely to be a fast pass higher then a retreat ... much like we saw today. I guess now we will start discounting the coordinated Fed cuts around the world on Monday that have been rumored today. Folks, at some points you gotta run out of bullets and we may be fast approaching that time.

We made a little hay early when the markets allowed it but I'm in the Missouri mode now ... prove it! If they can hurdle some key intraday areas I'll see about a run for the roses with some tight stops but my pessimism is thick today.

The Dow closed the day at the lows of the session after dropping 475 points from the day's highs. The index is holding beneath key support, which doesn't bode well for the market Monday morning. Watch 10,400 for early directional bias Monday.
SignalWatch LIVE!

The Escapist writes:
Anyone seen Currently Smoking Cannabis?

Found him hanging here:
YouTube -

I'd like to offer this as a tribute to CSC:

YouTube -

Maybe he can't find his mouse?

Corey 8:10 pm
If I shoot my wife...

Corey, You ain't right.

Comrade Misean is a dope-
Actually, it was a serious inquiry. Rhetorical would be asking if the Fed could create hyperinflation.

Byzantine_Ruins @ 8:15 pm

This is refreshing, although I still wouldn't want to be in any crowd the Army was called in to "control."

I don't mean to suggest that the entire US would be put under martial law. It does seem likely in smaller areas though.

Bailout bill seems to be having its intended affect.

John Jansen reports some signs that money markets are unfreezing, slightly.

Across the Curve » Blog Archive » Closing Comments October 3 2008

Bailout Will Help, but Pitfalls Remain
Bailout Will Help, but Pitfalls Remain - Rick Newman (usnews.com)

Job cuts in September—159,000—were the most in five years. Most economists are betting that additional jobs are going to be cut in coming months as companies hunker down. Worried consumers are likely to cut spending, deepening the dismal cycle.

There's already a recession in the auto industry, for example, which accounts for a big chunk of Americans' economic activity. Sales in September plunged to the lowest levels in 15 years. Deep worries—and profit-crunching discounts—are spreading to other sectors of the retail economy, too.

The bailout might help contain the damage. Theoretically, the feds' shock therapy will lessen the risk that a lot of companies will go bankrupt, which should motivate nervous bankers to start lending once again, with less fear that their money will vanish. If that actually happens, it will help big and small businesses alike continue to meet their payrolls.

My money market source has actually spoken some optimistic thoughts today... he did state that the tenor of the conversation with big money clients shifted today and rather than the clouds they are seeing the gentle rays of the sun.

Across the Curve » Blog Archive » Money Market Turning (Imperceptibly)

Re: is it there enough to take a class in pole dancing?

Yes, that was in bad taste! Please say you are sorry!

"This new rule apparently allows Wells Fargo to accelerate the use of Wachovia's huge write-downs as an offset to their own income."

Oh sure. Well's own income, that is, with their 40 BIL$ plus heloc and other losses safely moved off to the taxpayer's sagging balance sheet?

Thanks, Subcommander Doom at 7:29, I appreciate your analysis of the financial pickle unfolding in Europe and at U.S. State and local government level.
Any suggestions of particular Euro banks to short?

Bang the pots and pans!
Thanks, United Loan Sharks of America, for the Argentinia video.

Thanks mock turtle at 6:12 for the article link to the 2004 lighting of the fuse by the SEC at the request of Hank Pualson's Goldman Sachs and other investment banks.

Hank Paulson is the biggest Wall Street fox ever allowed in the biggest henhouse (U.S. Treasury). Outrageous!
Whatever role Mr. Paulson and his firm Goldman Sachs may have had in the subprime CDO fraud, Ponzi schemes, fleecing of pension funds, and other financial crimes remains to be seen...preferably by a state and federal investigations of Goldman Sachs and other investment banks. Hank "the mole" Paulson is a person of interest. Can Treasury Secretary Paulson be expected to investigate and prosecute Goldman Sachs CEO Paulson? Hank "the mole" Paulson has a screaming conflict of interest.

Now that the TARP is law, Paulson can hire his Wall Street cronies (lawyers, accountants, bankers) to plan the looting of the U.S. Treasury. Under TARP, Paulson can even issue no bid contracts to his Wall Street cronies. In recent months Paulson has increased his staff of Wall Street "advisers" & "consultants". Now with TARP, Paulson will hire a small army of Wall Street scam artists, swindlers, fraudsters, bust out conmen to design the looting of the U.S. Treasury. I don't know what is the previous record, but Hank Paulson, the Ringleader and Grand Master of the Universe, is now free to commit the largest bank robbery in U.S. history.

This is another way to help recapitalize the banking system.

But in that case, taxpayers get nothing in return.