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Author Topic: Trouble in Bank Land II
Fidel
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posted 22 September 2008 12:14 AM      Profile for Fidel     Send New Private Message      Edit/Delete Post
a continuation of this thread

Financial 9/11: Can They Save the System?

quote:
NEW YORK — The world is holding its breath.

Many know and the rest of us are just finding out that in this turbulent month of September, the U.S. is experiencing a financial 9/11, probably worse than the one in 2001, as a series of cataclysmic developments rock our economic system which is, in turn, entangled with others worldwide. Terms like “Armageddon” are now being used in polite company. . .

Barack Obama has so far supported this major intervention into saving the markets that may cost taxpayers a trillion dollars or more although he wants to consult with other countries on what to do.

Much of our media has ignored international fears as this crisis ripples globally. China has already called the crisis a “financial tsunami” and called for a new non-US based currency system. . .

This crisis is hardly over.

Listen to economist Nouriel Roubini who has been on target in most of his forecasts,

He predicts, according to financial writer Felix Salmon, “Credit losses of $2 trillion, half the US banking system nationalized, municipal defaults, house price declines accelerating, a sudden stop in consumer spending, global contagion, stagflation, you name it.”



From: Viva La Revolución | Registered: Apr 2004  |  IP: Logged
Doug
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posted 22 September 2008 03:32 AM      Profile for Doug   Author's Homepage     Send New Private Message      Edit/Delete Post
Thanks for failing, here's $2.5 billion!

quote:
Up to 10,000 staff at the New York office of the bankrupt investment bank Lehman Brothers will share a bonus pool set aside for them that is worth $2.5bn (£1.4bn), Barclays Bank, which is buying the business, confirmed last night.

The revelation sparked fury among the workers' former colleagues, Lehman's 5,000 staff based in London, who currently have no idea how long they will go on receiving even their basic salaries, let alone any bonus payments. It also prompted a renewed backlash over the compensation culture in global finance, with critics claiming that many bankers receive pay and rewards that bore no relation to the job they had done.


I wish I were so well-compensated for screwing up, I'd make mistakes on purpose!


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zazzo
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posted 22 September 2008 06:35 AM      Profile for zazzo     Send New Private Message      Edit/Delete Post
I wonder what these unfettered powers might be?

Quote: "Democrats, who control both chambers of Congress, began to swap proposals with the
Treasury, including suggested checks on the nearly unfettered power the administration sought for the Treasury secretary.

"Democrats believe a responsible solution should include independent oversight, protections for homeowners, and constraints on excessive executive compensation," said California Democratic Rep. Nancy Pelosi, speaker of the House of Representatives."

Taken from this news item:
http://ca.news.yahoo.com/s/reuters/080922/n_business_reuters/business_financial_bailout_col


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ElizaQ
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posted 22 September 2008 06:45 AM      Profile for ElizaQ     Send New Private Message      Edit/Delete Post
They referring to Section 8 of Bush and Co.'s proposed bill.

quote:
Sec. 8. Review.

Decisions by the Secretary pursuant to the authority of this Act are non-reviewable and committed to agency discretion, and may not be reviewed by any court of law or any administrative agency


Which translates into giving one guy the SEC, total and absolute power to distribute the money whatever way he wants with no oversight from anyone, legal or elected.
It's a total and unabashed power grab by the neo-cons.


From: Eastern Lakes | Registered: May 2005  |  IP: Logged
blackhand9
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posted 22 September 2008 11:02 AM      Profile for blackhand9   Author's Homepage     Send New Private Message      Edit/Delete Post
News for Obama: this so called crisis is a scam!

Let the banks go belly up!

Spend the $700 billion on health care, education and
guaranteed incomes for all Americans. Build those wind farms in the coastal waters which could generate three times the US' total energy requirement, replace all of the internal combustion engines with electric motors and batteries, populate our cities with podcars...

All this and much, more urgently needed right now could be done with a fraction of what they "leaders" of America are currently proposing to pay the hedgefund operators...

It's a collossal , suicidal joke...

[ 22 September 2008: Message edited by: blackhand9 ]


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ElizaQ
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posted 22 September 2008 11:13 AM      Profile for ElizaQ     Send New Private Message      Edit/Delete Post
Dirty Secret of the Bailout: Thirty two words that none dare utter.

quote:
A critical - and radical - component of the bailout package proposed by the Bush administration has thus far failed to garner the serious attention of anyone in the press. Section 8 (which ironically reminds one of the popular name of the portion of the 1937 Housing Act that paved the way for subsidized affordable housing ) of this legislation is just a single sentence of thirty-two words, but it represents a significant consolidation of power and an abdication of oversight authority that's so flat-out astounding that it ought to set one's hair on fire.
------------------
n short, the so-called "mother of all bailouts," which will transfer $700 billion taxpayer dollars to purchase the distressed assets of several failed financial institutions, will be conducted in a manner unchallengeable by courts and ungovernable by the People's duly sworn representatives. All decision-making power will be consolidated into the Executive Branch - who, we remind you, will have the incentive to act upon this privilege as quickly as possible, before they leave office. The measure will run up the budget deficit by a significant amount, with no guarantee of recouping the outlay, and no fundamental means of holding those who fail to do so accountable.

Is this starting to sound familiar? Robert Kuttner cuts through much of the gloss in an article in today's American Prospect:

The deal proposed by Paulson is nothing short of outrageous. It includes no oversight of his own closed-door operations. It merely gives congressional blessing and funding to what he has already been doing, ad hoc. He plans to retain Wall Street firms as advisors to decide just how to cut deals to value and mop up Wall Street's dubious paper. There are to be no limits on executive compensation for the firms that get relief, and no equity share for the government in exchange for this massive infusion of capital. Both Obama and McCain have opposed the provision denying any judicial review of decisions made by Paulson -- a provision that evokes the Bush administration's suspension of normal constitutional safeguards in its conduct of foreign policy and national security. [...]


The differences between this proposed bailout and the three closest historical equivalents are immense. When the Reconstruction Finance Corporation of the 1930s pumped a total of $35 billion into U.S. corporations and financial institutions, there was close government supervision and quid pro quos at every step of the way. Much of the time, the RFC became a preferred shareholder, and often appointed board members. The Home Owners Loan Corporation, which eventually refinanced one in five mortgage loans, did not operate to bail out banks but to save homeowners. And the Resolution Trust Corporation of the 1980s, created to mop up the damage of the first speculative mortgage meltdown, the S&L collapse, did not pump in money to rescue bad investments; it sorted out good assets from bad after the fact, and made sure to purge bad executives as well as bad loans. And all three of these historic cases of public recapitalization were done without suspending judicial review.



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ElizaQ
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posted 22 September 2008 12:24 PM      Profile for ElizaQ     Send New Private Message      Edit/Delete Post
Using the Shock Doctrine:Wall Street and Washington’s wrecking crew aim to get the most expensive free lunch in American history

quote:
If a museum in the next superpower nation ever commemorates the decline of the last great superpower, it will make the two-and-a-half page bill introduced this week the center of the display.

Just as they do today at the National Archives’ Declaration of Independence exhibit, tourists in the future—perhaps in Beijing, perhaps somewhere else—will line up to see a framed draft of this week’s White House legislation demanding Congress surrender its power of the purse, and give an unelected appointee—in this case, Treasury Secretary Henry Paulson—the power to hand over $700 billion of taxpayer money to “any financial institution,” “without limitation…on such terms and conditions as determined by [him].” In a nation priding itself on separating powers between the branches of government, the bill explicitly states that decisions by Paulson may not even “be reviewed by any court of law or any administrative agency.”

Whether the bill passes or not, the drafting of it—even the mere thinking of it—is the single most clear sign that all of the major tenets of American democracy are on the auction block these days: from constitutional checks and balances, to legislative and judicial oversight to electoral accountability itself.

In the immediate aftermath of what could be the starting gun of a second Great Depression, the public this week will face a wave of propaganda from Washington. Using the same playbook that succeeded in passing the Patriot Act and the Iraq War authorization with almost no questions, politicians will inevitably invoke love of country, fear, loathing and red-alert emergency—all designed to ram this bill into law as fast as possible, with as little scrutiny as possible. Put in book terms, we will see Thomas Frank’s wrecking crew using Naomi Klein’s shock doctrine to justify a bigger free lunch than David Cay Johnston ever imagined.



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martin dufresne
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posted 22 September 2008 12:30 PM      Profile for martin dufresne   Author's Homepage     Send New Private Message      Edit/Delete Post
Could there have been a general repetition of the current multi-billion grab nine months ago in South Korea. Read what Fred Goldstein wrote at the time:
quote:
Behind their sudden switch: World capitalists buy time
By Fred Goldstein, Workers World, 15 January 1998

A funny thing happened in south Korea on the way to the "free market" as 1997 turned into 1998.

A mighty crowd of free-market oracles—on a journey to crush the south Korean government’s sinful, anti-free-market coddling of conglomerates and protection of workers from mass layoffs—took a slight detour. Suddenly they veered down the perilous road of "statism."

They found a way for the south Korean government to intervene in the economy after all: It should guarantee that the imperialist banks will be repaid the tens of billions of dollars they have loaned to south Korean banks.

United States Treasury Secretary Robert Rubin, Federal Reserve Board Chair Alan Greenspan, International Monetary Fund President Michel Camdessus—free marketeers all—and the commercial and investment bankers they serve were staring a south Korean default in the face. Some $15 billion in debt repayment was due by the beginning of January. Some $80 billion more is due later this year.

The banks decided they had no choice but to roll over some of these short-term loans, which could not be paid anyway. But at a price. They told the south Korean government it would have to convert all the south Korean bank’s private debt into government debt and guarantee repayment.

Now the south Korean capitalist government can sweat the debt out of the hides of the south Korean masses, through taxes.

So much for the free market.(...)


[ 22 September 2008: Message edited by: martin dufresne ]


From: "Words Matter" (Mackinnon) | Registered: Dec 2005  |  IP: Logged
Fidel
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posted 22 September 2008 12:31 PM      Profile for Fidel     Send New Private Message      Edit/Delete Post
Is it just me or does Paulson look like Dr. Evil of Austin Powers movie fame?
From: Viva La Revolución | Registered: Apr 2004  |  IP: Logged
ElizaQ
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posted 22 September 2008 12:51 PM      Profile for ElizaQ     Send New Private Message      Edit/Delete Post
quote:
Originally posted by Fidel:
Is it just me or does Paulson look like Dr. Evil of Austin Powers movie fame?

Yes!

Interesting tidbit about Paulson that I picked up elsenet.

1. Paulson was Goldman Sachs-CEO, before he became US-Secretary of the Treasury.

2. Goldman Sachs is the only invesment-bank, which not only SURVIVED last week's bloodshed, but THRIVED on it. (Question: What did GS know to thrive, while others faltered - something, that other Investment Banks apparently didn't know - and HOW AND WHEN EXACTLY did they get to know this?)

3. Paulson now suggests that the USA shall unconditionally buy toxic debt from the remaining Banks and Investment Banks - aka Goldman Sachs.

4. If that law would pass, Goldman Sachs could shed all remaining toxic debt and sell it unconditionally to the taxpayer - while only keeping the good, profitable debt in her portfolio, and thus become the Shining Star on an otherwise very dim sky.

5. Paulson had $632,000,000 in Goldman Sachs stock when he left.


And no that's not saying that dozens of others both Dems and Rebubs don't have their own connections and portfolios at stake either.


From: Eastern Lakes | Registered: May 2005  |  IP: Logged
ElizaQ
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posted 22 September 2008 02:21 PM      Profile for ElizaQ     Send New Private Message      Edit/Delete Post
And now Republicans are coming out in opposition to the bailout, citing many of the same reasons that the Democrats have stated.
DeMint Opposes Bill

quote:
Sen. Jim DeMint (R-S.C.) said he opposes the $700 billion bailout of Wall Street investment firms, a move that could threaten swift passage of the emergency legislation.

In a statement announcing his objections, DeMint did not say whether he planned to filibuster the proposal.

“After reviewing the administration's proposed bailout plan, I believe it is completely unacceptable,” DeMint, chairman of the Senate Republican Steering Committee, said in the statement. “This plan does nothing to address the misguided government policies that created this mess and it could make matters much worse by socializing an entire sector of the U.S. economy.”

“This plan fails to oversee or regulate the government failures that led to this crisis,” DeMint added.

Treasury Secretary Henry Paulson has pressured congressional leaders to approve the bailout as soon as possible to prevent panic from spreading across the U.S. and world financial markets.

But Paulson’s ambitious schedule may become derailed because of growing opposition from conservative Republicans and rank-and-file Democrats.


Other generally Republican voices such a Newt Gingrich and other pundits are saying the same thing and railing about it.
So basically the worlds going crazy as suddenly opposing sides are actually agreeing with each other, smack dab in the middle of an election. (Not quite together on who caused it though of course)

Interesting times..


From: Eastern Lakes | Registered: May 2005  |  IP: Logged
Fidel
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posted 22 September 2008 07:11 PM      Profile for Fidel     Send New Private Message      Edit/Delete Post
Yay for DeMint.

We Can Stop Paulson's Plunder says Dave Swanson

quote:
There does not seem to be any way we are going to avoid shelling out a major amount of money to save banks from the unregulated greed of bankers. Dean Baker and Doug Henwood and every person with any economic expertise whom I find credible predicts disaster if we don't.

But, as Baker pointed out on Democracy Now! this morning, the bailout can punish those responsible rather than rewarding them. It can also be done without creating new dictatorial powers for the executive branch of our government.

Congress must reject Paulson's Plunder and enact a plan with these progressive principles from the Backbone Campaign see the several point plan), including C. C. Include Main Street in the bailout and invest in a new productive economy


Service-shmervice economy. This isn't quite 1985 Chile after los Chicago boys demolished that economy, but it's close. The U.S. still has a good deal of socialism in place to absorb some of the shock. How far will they fall though?


From: Viva La Revolución | Registered: Apr 2004  |  IP: Logged
SwimmingLee
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posted 23 September 2008 11:24 AM      Profile for SwimmingLee     Send New Private Message      Edit/Delete Post
quote:
Originally posted by ElizaQ:

Yes!

Interesting tidbit about Paulson that I picked up elsenet.

1. Paulson was Goldman Sachs-CEO, before he became US-Secretary of the Treasury.

2. Goldman Sachs is the only invesment-bank, which not only SURVIVED last week's bloodshed, but THRIVED on it. (Question: What did GS know to thrive, while others faltered - something, that other Investment Banks apparently didn't know - and HOW AND WHEN EXACTLY did they get to know this?)

3. Paulson now suggests that the USA shall unconditionally buy toxic debt from the remaining Banks and Investment Banks - aka Goldman Sachs.

4. If that law would pass, Goldman Sachs could shed all remaining toxic debt and sell it unconditionally to the taxpayer - while only keeping the good, profitable debt in her portfolio, and thus become the Shining Star on an otherwise very dim sky.

5. Paulson had $632,000,000 in Goldman Sachs stock when he left.


And no that's not saying that dozens of others both Dems and Rebubs don't have their own connections and portfolios at stake either.


Wow ! Good research.

I have had a feeling since Bush came into power that they are playing "as if there's no tomorrow". For example, Cheney and his "deficits don't matter statement".

One more piece of the puzzle - the Non-Borrowed Reserves graph. In order to meet reserve requirements, the banks are borrowing more, and more, and more money.

http://research.stlouisfed.org/fred2/series/BOGNONBR

I can see a silver lining in this. The US loses its ability to make war. Right now the ability of the US to make war partially depends on the rest of the world's willingness to loan money to the US.

What if the rest of the world said, "if US bonds are such a good deal, why don't you Americans buy them ? We've decided to take a breather on loaning you guys money."


From: LASIK-FLap.com ~ Health Warning about LASIK Eye Surgery | Registered: Dec 2007  |  IP: Logged
blackhand9
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posted 23 September 2008 05:15 PM      Profile for blackhand9   Author's Homepage     Send New Private Message      Edit/Delete Post
Why economists? Why not cartoonists. This plan is just another big scam to impoverish government and make the banks rich...

Reagan is widely lionized in the media aa the great communicator - what absurdity!

he was a total fraud and consummate liar - and like his Republican successors - he didn't care if he was caught.

[ 23 September 2008: Message edited by: blackhand9 ]


From: toronto | Registered: Sep 2008  |  IP: Logged
DrConway
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posted 23 September 2008 07:36 PM      Profile for DrConway     Send New Private Message      Edit/Delete Post
U. S. gets busy printing money

quote:
The U. S. Treasury cranked up its printing press yesterday to help the Federal Reserve extend an US$85-billion loan to American International Group Inc., the latest in hundreds and billions of dollars of government assistance that will undoubtedly end up in the lap of U. S. taxpayers.

But while anxiety is rising over the United States' ability to foot the gargantuan bill for the credit crisis, analysts say the US$14-trillion U. S. economy should be able to absorb the shock.

The key risk is the threat to inflation posed by the seemingly endless expansion of the government's balance sheet if several more financial institutions go belly up.

"Clearly this will widen the deficit by quite a bit," Nariman Behravesh, chief economist of Global Insight, said at a presentation in Toronto yesterday.

"But let's be honest, the U. S. is a very, very rich country."


Translation:

Honest! Believe us! It's not really a problem if we slap an extra few hundred billion extra dollars unbacked by any need for it into the US economy!

These people have less shame than used car salespeople.


From: You shall not side with the great against the powerless. | Registered: May 2001  |  IP: Logged
M. Spector
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posted 23 September 2008 09:42 PM      Profile for M. Spector   Author's Homepage     Send New Private Message      Edit/Delete Post
Son of the Shock Doctrine
quote:
The best summary of how the right plans to use the economic crisis to push through their policy wish list comes from Former Republican House Speaker Newt Gingrich. On Sunday, Gingrich laid out 18 policy prescriptions for Congress to take in order to "return to a Reagan-Thatcher policy of economic growth through fundamental reforms." In the midst of this economic crisis, he is actually demanding the repeal of the Sarbanes-Oxley Act, which would lead to further deregulation of the financial industry. Gingrich is also calling for reforming the education system to allow "competition" (a.k.a. vouchers), strengthening border enforcement, cutting corporate taxes and his signature move: allowing offshore drilling.

It would be a grave mistake to underestimate the right's ability to use this crisis -- created by deregulation and privatization -- to demand more of the same.


- Naomi Klein

From: One millihelen: The amount of beauty required to launch one ship. | Registered: Feb 2005  |  IP: Logged
M. Spector
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posted 23 September 2008 09:53 PM      Profile for M. Spector   Author's Homepage     Send New Private Message      Edit/Delete Post
Corporate communism (a video)
From: One millihelen: The amount of beauty required to launch one ship. | Registered: Feb 2005  |  IP: Logged
M. Spector
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posted 23 September 2008 10:57 PM      Profile for M. Spector   Author's Homepage     Send New Private Message      Edit/Delete Post
quote:
The Bush Administration's "anything goes, just don't get caught" attitude has set the tone for what we are witnessing today. To be sure these problems didn't start in January of 2001, but they sure were allowed to accelerate during the George W. Bush Administration.

For example, what tone was set when the Administration shipped $12 billion to Paul Bremer's provisional government in Iraq in cash on wooden pallets for Iraq reconstruction? No wonder $9 billion of it was "lost." What I'm constantly reminded of is that the money didn't just vanish, somebody got it. Now it's up to us to find out who!

However, the Administration's blatant disregard for good governance, the rule of law, standards of moral and ethical conduct, and even etiquette, when coupled with a laissez-faire, "go-along-to-get-along" attitude from Congress meant that no holes were barred and no hands were on the deck--a sure prescription for disaster.


Cynthia McKinney

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Farmpunk
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posted 24 September 2008 03:52 AM      Profile for Farmpunk     Send New Private Message      Edit/Delete Post
I love McKinney.

Good link, y'all.


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martin dufresne
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posted 24 September 2008 09:12 AM      Profile for martin dufresne   Author's Homepage     Send New Private Message      Edit/Delete Post
quote:
These people have less shame than used car salespeople.
If our lives are now dependent on hyper-capitalists' sense of shame, I am buying Ramen noodles by the gross.

From: "Words Matter" (Mackinnon) | Registered: Dec 2005  |  IP: Logged
Doug
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posted 24 September 2008 09:15 AM      Profile for Doug   Author's Homepage     Send New Private Message      Edit/Delete Post
quote:
The relatively tony city of Santa Barbara has given over a parking lot to people who sleep in cars and vans.

The city of Fresno, Calif., is trying to manage several proliferating tent cities, including an encampment where people have made shelters out of scrap wood.

In Portland, Ore., and Seattle, homeless advocacy groups have paired with nonprofits or faith-based groups to manage tent cities as outdoor shelters.

Other cities where tent cities have either appeared or expanded include include Chattanooga, Tenn., San Diego, and Columbus, Ohio.


Nobody's bailing out the tent city people!


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ElizaQ
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posted 24 September 2008 09:17 AM      Profile for ElizaQ     Send New Private Message      Edit/Delete Post
quote:
Originally posted by martin dufresne:
If our lives are now dependent on hyper-capitalists' sense of shame, I am buying Ramen noodles by the gross.

I'd start stocking up. In hearings yesterday Paulson's response was the whole bailout thing was that it's 'embarassing but necessary...'

Yep Paulson, feel that shame...


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DrConway
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posted 24 September 2008 09:30 AM      Profile for DrConway     Send New Private Message      Edit/Delete Post
It's like the Depression all over again with those tent cities.
From: You shall not side with the great against the powerless. | Registered: May 2001  |  IP: Logged
M. Spector
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posted 24 September 2008 09:31 AM      Profile for M. Spector   Author's Homepage     Send New Private Message      Edit/Delete Post
Buying ramen noodles as a political strategy?

Even buying ramen noodles as a survival strategy is pointless - they have almost zero nutritional value.


From: One millihelen: The amount of beauty required to launch one ship. | Registered: Feb 2005  |  IP: Logged
martin dufresne
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posted 24 September 2008 10:01 AM      Profile for martin dufresne   Author's Homepage     Send New Private Message      Edit/Delete Post
Political schmolitical... I am talking disaster strategy.
quote:
(...)On October 23, 2004, a big earthquake occurred in Niigata prefecture, northwest Japan. Many people suffered as a result of the devastating earthquake, many people lost their homes and provisions were in short supply. After watching news of the quake on television, the owner of Mennya Musashi, a ramen restaurant in Tokyo, took his staff to Niigata and offered his ramen to the people there. Ramen has since been considered as an emergency food source for disasters such as this. (Wikipedia)

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500_Apples
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posted 24 September 2008 10:30 AM      Profile for 500_Apples   Author's Homepage     Send New Private Message      Edit/Delete Post
quote:
Originally posted by M. Spector:
Buying ramen noodles as a political strategy?

Even buying ramen noodles as a survival strategy is pointless - they have almost zero nutritional value.


Also, I'm pretty sure white rice and peanut butter have a higher calorie to unit currency ratio.


From: Montreal, Quebec | Registered: Jun 2006  |  IP: Logged
ElizaQ
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posted 24 September 2008 10:36 AM      Profile for ElizaQ     Send New Private Message      Edit/Delete Post
quote:
Originally posted by 500_Apples:

Also, I'm pretty sure white rice and peanut butter have a higher calorie to unit currency ratio.


Real ramen noodles aren't the same as the crappy Mr. Noodles you by in the store. Same idea with bread, crappy white bread vs real bread.


From: Eastern Lakes | Registered: May 2005  |  IP: Logged
martin dufresne
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posted 24 September 2008 10:45 AM      Profile for martin dufresne   Author's Homepage     Send New Private Message      Edit/Delete Post
I was suggesting that wheat, rice and peanut butter - not to mention fresh produce - might stop being as readily available and affordable when things get really rough and bank withdrawals become a cherished memory. (Sorry for the apparent thread drift.)

[ 24 September 2008: Message edited by: martin dufresne ]


From: "Words Matter" (Mackinnon) | Registered: Dec 2005  |  IP: Logged
ElizaQ
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posted 24 September 2008 10:53 AM      Profile for ElizaQ     Send New Private Message      Edit/Delete Post
quote:
Originally posted by martin dufresne:
I was suggesting that wheat, rice and peanut butter - not to mention fresh produce - might stop being as readily available and affordable when things get really rough and bank withdrawals become a cherished memory. (Sorry for the apparent thread drift.)

[ 24 September 2008: Message edited by: martin dufresne ]


Yeah it is a bit of a drift but I'd say it does have a small connection at least. If the bank go down and the economy tanks even more I can't see how food prices aren't going to go up even more then they are now.


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SwimmingLee
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posted 24 September 2008 04:44 PM      Profile for SwimmingLee     Send New Private Message      Edit/Delete Post
quote:
Originally posted by Farmpunk:
I love McKinney.

me too. i'd like to see a President Obama put her in charge of something major. like Attorney General, investigating the fraud that led to the current bank problems.

quote:
Originally posted by martin dufresne:
If our lives are now dependent on hyper-capitalists' sense of shame, I am buying Ramen noodles by the gross.

On a dare, I ate earthworms after a friend talked about "eating leaves, worms, and dirt" in the situation of a major economic contraction. they're really not that bad. of course, i used a spoonful of honey to help wash them down.

In retrospect, what I did seems cruel. I took a class in composting and happened to have a colony of redworms & a colony of earthworms on the patio.


From: LASIK-FLap.com ~ Health Warning about LASIK Eye Surgery | Registered: Dec 2007  |  IP: Logged
Doug
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posted 24 September 2008 05:11 PM      Profile for Doug   Author's Homepage     Send New Private Message      Edit/Delete Post
George Bush is sounding more pathetic than usual tonight.
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DrConway
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posted 24 September 2008 05:16 PM      Profile for DrConway     Send New Private Message      Edit/Delete Post
From the last link in the Wall Street Socialism thread...

quote:
At the regulatory level, financial enterprises are granted the privilege, and not the right, to practice banking and financial intermediation. Their license should be revocable if they indulge in unsafe banking. This implies that many financial innovations and contracts, specifically those which are not fully understood by regulators and customers, should not be allowed. Speculation should be strictly controlled both in stock, commodities, and housing markets; its main cause, namely excessive and uncontrolled credit expansion should be eliminated. Without fundamental reforms, financial instability is here to stay and economic agony will persist.

Truest words ever written, and by US standards, positively revolutionary!


From: You shall not side with the great against the powerless. | Registered: May 2001  |  IP: Logged
Frustrated Mess
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posted 24 September 2008 05:39 PM      Profile for Frustrated Mess   Author's Homepage     Send New Private Message      Edit/Delete Post
I'm sure most have you have seen this by now, but it is hilarious and even made the Washington Post in its entirety.
quote:

Dear American:

I need to ask you to support an urgent secret business relationship with a transfer of funds of great magnitude.

I am Ministry of the Treasury of the Republic of America. My country has had crisis that has caused the need for large transfer of funds of 800 billion dollars US. If you would assist me in this transfer, it would be most profitable to you.

I am working with Mr. Phil Gram, lobbyist for UBS, who will be my replacement as Ministry of the Treasury in January. As a Senator, you may know him as the leader of the American banking deregulation movement in the 1990s. This transactin is 100% safe.

This is a matter of great urgency. We need a blank check. We need the funds as quickly as possible. We cannot directly transfer these funds in the names of our close friends because we are constantly under surveillance. My family lawyer advised me that I should look for a reliable and trustworthy person who will act as a next of kin so the funds can be transferred.

Please reply with all of your bank account, IRA and college fund account numbers and those of your children and grandchildren to [email protected] so that we may transfer your commission for this transaction. After I receive that information, I will respond with detailed information about safeguards that will be used to protect the funds.

Yours Faithfully Minister of Treasury Paulson



From: doom without the gloom | Registered: Feb 2005  |  IP: Logged
RosaL
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posted 24 September 2008 05:43 PM      Profile for RosaL     Send New Private Message      Edit/Delete Post
quote:
Originally posted by Frustrated Mess:
I'm sure most have you have seen this by now, but it is hilarious and even made the Washington Post in its entirety.

That's very clever


From: the underclass | Registered: Mar 2007  |  IP: Logged
ElizaQ
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posted 24 September 2008 06:38 PM      Profile for ElizaQ     Send New Private Message      Edit/Delete Post
Bush speech was beyond pathetic. Waiting for a transcript to come up.
The synopsis though. Crisis, crisis, calamity, fear, fear, must act now, fear, fear and oh by the way the people at fault here are all the homeowners that got loans they couldn't afford, they broke America...Give me..er I mean us money so we can fix their mistake.
I don't think he even used the words 'wall street.'

From: Eastern Lakes | Registered: May 2005  |  IP: Logged
peskyfly1
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posted 24 September 2008 06:46 PM      Profile for peskyfly1     Send New Private Message      Edit/Delete Post
The Russians are reporting that President Bush will declare an economic emergency the week of Oct.5. He will then tell the American people that the presidential election has been suspended indefinitely.
From: meandering stream | Registered: Sep 2008  |  IP: Logged
martin dufresne
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posted 24 September 2008 07:40 PM      Profile for martin dufresne   Author's Homepage     Send New Private Message      Edit/Delete Post
Source please.
From: "Words Matter" (Mackinnon) | Registered: Dec 2005  |  IP: Logged
peskyfly1
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posted 24 September 2008 07:54 PM      Profile for peskyfly1     Send New Private Message      Edit/Delete Post
I read this on thecrit.com/2008/09/24 russians leak secret bush report.
Democracy Now (Amy Goodman) is reporting that the U.S. army is mobilizing the 3rd infantry for 'domestic emergencies' on Oct. 1.

From: meandering stream | Registered: Sep 2008  |  IP: Logged
ElizaQ
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posted 24 September 2008 08:22 PM      Profile for ElizaQ     Send New Private Message      Edit/Delete Post
I've come across a couple of stories of them being recalled.

Army Times
quote:
Beginning Oct. 1 for 12 months, the 1st BCT will be under the day-to-day control of U.S. Army North, the Army service component of Northern Command, as an on-call federal response force for natural or manmade emergencies and disasters, including terrorist attacks.

It is not the first time an active-duty unit has been tapped to help at home. In August 2005, for example, when Hurricane Katrina unleashed hell in Mississippi and Louisiana, several active-duty units were pulled from various posts and mobilized to those areas.

But this new mission marks the first time an active unit has been given a dedicated assignment to NorthCom, a joint command established in 2002 to provide command and control for federal homeland defense efforts and coordinate defense support of civil authorities.



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Fidel
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posted 25 September 2008 12:05 AM      Profile for Fidel     Send New Private Message      Edit/Delete Post
Canada PM rejects Merrill housing-market warning

Right. And so exactly why are we having an election, Steve Harper?


From: Viva La Revolución | Registered: Apr 2004  |  IP: Logged
mahmud
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posted 25 September 2008 05:18 AM      Profile for mahmud     Send New Private Message      Edit/Delete Post
I have nothing to ad to what the writer of this letter to the editor said.

http://www.thestar.com/comment/article/503888

quote:
LETTER TO THE EDITOR

Sep 23, 2008

Re:Bush lays out $700 billion rescue plan
Sept. 21

What we have on Wall Street now is the death of a religion called free-market capitalism. Now Adam Smith's "invisible hand" is picking the public pocket and making off with the public purse. There is no talk of "getting government out of the way." Far from it. Government is going to stand guard on private enterprise for many years to come. Far from being free, these enterprises have cost the public more than the Iraq war. The real terrorists, as it turns out, are on Wall St.

Michael Callaghan, Toronto


[ 25 September 2008: Message edited by: mahmud ]


From: Nepean | Registered: May 2008  |  IP: Logged
M. Spector
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posted 25 September 2008 06:32 AM      Profile for M. Spector   Author's Homepage     Send New Private Message      Edit/Delete Post
quote:
Originally posted by Farmpunk:
I love McKinney.

quote:
Originally posted by SwimmingLee:
me too. i'd like to see a President Obama put her in charge of something major. like Attorney General, investigating the fraud that led to the current bank problems.
Me, too. I'd like to see a President McKinney put Obama in charge of something major. Like the cleanup of US nuclear waste sites.

From: One millihelen: The amount of beauty required to launch one ship. | Registered: Feb 2005  |  IP: Logged
SwimmingLee
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posted 25 September 2008 08:17 AM      Profile for SwimmingLee     Send New Private Message      Edit/Delete Post
quote:
Originally posted by Fidel:
a continuation of this thread

Financial 9/11: Can They Save the System?


Given that the US is so often a Bad Neighbor, maybe there is a silver lining, that will come at a terrible cost - the "System" won't be saved, and the US will have to start closing down military bases.


From: LASIK-FLap.com ~ Health Warning about LASIK Eye Surgery | Registered: Dec 2007  |  IP: Logged
Fidel
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posted 25 September 2008 10:44 AM      Profile for Fidel     Send New Private Message      Edit/Delete Post
quote:
Originally posted by SwimmingLee:

Given that the US is so often a Bad Neighbor, maybe there is a silver lining, that will come at a terrible cost - the "System" won't be saved, and the US will have to start closing down military bases.


It makes me wonder. Since the 1970's regime of floating exchange rates and petro/U.S. dollar recycling, the rest of the world has essentially financed U.S. debt and U.S. imperialism. That system could be in trouble now with China and Saudis balking at buying more U.S. debt or investing in minority shares of U.S. banks and dollars. Their largest budget expenditure every year is military. They need massive amounts of oil and fuel to keep the imperial armadas and squadrons of bombers and jets in motion, and massive amounts of other imports to keep the whole false and unsustainable ecomomy rolling along. What cannot go on forever will not, as someone once said. The financial system is predatory and requires a beefed-up military to enforce the imperialist system. Would some other country(EU nations? Russia?) simply takeover the duties as imperial enforcer nation and centre of world finance? Or will it become a multi-polar world with no one country the dominant economic or miltary power?


From: Viva La Revolución | Registered: Apr 2004  |  IP: Logged
Brian White
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posted 25 September 2008 11:01 AM      Profile for Brian White   Author's Homepage     Send New Private Message      Edit/Delete Post
I think Merrill is more likely to be correct.
I had a surreal conversation with a financial advisor a couple of months ago.
I was winding up things with him and we got to talking about how much shares and housing prices would drop.
I said I thought houses would drop 10 or 15%
He seemed to think they would drop a lot more.
Lots of people have used their houses as a source of funds to finance their daily lives and I guess the financial advisors see how naked people are in their giant houses.
They might have big houses but little equity left!
Now bambi and all his offspring are coming home to roost.
The merril report says that we are in as bad or a worse position than those in the US.
I see no reason to disbelieve them.
Harper is probably trying to hold off the truth till after the election when he will have dictatorial powers.
quote:
Originally posted by Fidel:
Canada PM rejects Merrill housing-market warning

Right. And so exactly why are we having an election, Steve Harper?



From: Victoria Bc | Registered: Jan 2005  |  IP: Logged
martin dufresne
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posted 25 September 2008 11:19 AM      Profile for martin dufresne   Author's Homepage     Send New Private Message      Edit/Delete Post
Here goes nothing.
quote:
China banks told to halt lending to US banks-SCMP
Wed Sep 24, 2008 9:52pm EDT

BEIJING, Sept 25 (Reuters) - Chinese regulators have told domestic banks to stop interbank lending to U.S. financial institutions to prevent possible losses during the financial crisis, the South China Morning Post reported on Thursday.

The Hong Kong newspaper cited unidentified industry sources as saying the instruction from the China Banking Regulatory Commission (CBRC) applied to interbank lending of all currencies to U.S. banks but not to banks from other countries.

"The decree appears to be Beijing's first attempt to erect defences against the deepening U.S. financial meltdown after the mainland's major lenders reported billions of U.S. dollars in exposure to the credit crisis," the SCMP said.

A spokesman for the CBRC had no immediate comment. (Reporting by Alan Wheatley and Langi Chiang; editing by Ken Wills)


[ 25 September 2008: Message edited by: martin dufresne ]


From: "Words Matter" (Mackinnon) | Registered: Dec 2005  |  IP: Logged
ElizaQ
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posted 25 September 2008 11:34 AM      Profile for ElizaQ     Send New Private Message      Edit/Delete Post
Martin, after that Reuters story came out there were a couple of others that appeared where the Chinese actually denied it.
I'm trying to find the links.

In discussion around it there is speculation that that the Chinese may be applying 'diplomatic' pressure to get the bailout passed and 'leaking' different info to various news sources.

edited to add link:
China denies it

[ 25 September 2008: Message edited by: ElizaQ ]


From: Eastern Lakes | Registered: May 2005  |  IP: Logged
Boom Boom
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posted 25 September 2008 12:23 PM      Profile for Boom Boom     Send New Private Message      Edit/Delete Post
McCain is getting hammered by the pundits on CNN for "playing politics with the nation's deepening financial crisis", and last night Letterman tore McCain a new one.
From: Make the rich pay! | Registered: Dec 2004  |  IP: Logged
Boom Boom
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posted 25 September 2008 01:31 PM      Profile for Boom Boom     Send New Private Message      Edit/Delete Post
Breaking news from CNN at the White House meeting: a conservative Republican study group has proposed rejecting this $700 billion bailout using taxpayer's money, and instead using $700 billion of private money, because there are profits to be made from American's misery. And McCain appears to be supporting this 11th hour proposal. Bush, Obama, Pelosi, and others, are said to be flabbergasted at this turn of events. Secretary Paulson hasn't seen the proposal yet so can not comment.
From: Make the rich pay! | Registered: Dec 2004  |  IP: Logged
ElizaQ
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posted 25 September 2008 01:32 PM      Profile for ElizaQ     Send New Private Message      Edit/Delete Post
quote:
Originally posted by Boom Boom:
McCain is getting hammered by the pundits on CNN for "playing politics with the nation's deepening financial crisis", and last night Letterman tore McCain a new one.

Yep Letterman is a classic. Well worth the watch
Letterman No-show

For those that can't watch the video basically McCain cancelled at the very last minute citing the economic crisis, that he was suspend his campaign how he had to run back to Washington.
Then during the taping Letterman found out that no actually he lied about going to Washington.
some quotes:
"In the middle of the taping Dave got word that McCain was, in fact just down the street being interviewed by Katie Couric. Dave even cut over to the live video of the interview where McCain was getting his makeup put on and said, "Hey Senator, can I give you a ride home?"


Earlier in the show, Dave kept saying, "You don't suspend your campaign. This doesn't smell right. This isn't the way a tested hero behaves." And he joked: "I think someone's putting something in his metamucil."


"He can't run the campaign because the economy is cratering? Fine, put in your second string quarterback, Sarah Palin. Where is she?"


"What are you going to do if you're elected and things get tough? Suspend being president? We've got a guy like that now!"


Oh and also the whole "I'm suspending my campaign" is bogus. Some ads were pulled and a couple of events cancelled but that is it. Both he and Palin did campaign stuff today,his surrogates were on the air on all the nettworks doing their thing and all the campaign offices open.


From: Eastern Lakes | Registered: May 2005  |  IP: Logged
Boom Boom
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posted 25 September 2008 03:03 PM      Profile for Boom Boom     Send New Private Message      Edit/Delete Post
Folks at the University of Mississippi where the debate is scheduled for tomorrow night have invested $5million to host Obama and McCain, and on CNN they're saying they're all going to be pissed off if McCain doesn't show, and the majority of those interviewed will vote for Obama, although a couple are cutting McCain some slack, saying he's demonstrating "leadership" in this crisis.
From: Make the rich pay! | Registered: Dec 2004  |  IP: Logged
Tommy_Paine
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posted 25 September 2008 03:49 PM      Profile for Tommy_Paine     Send New Private Message      Edit/Delete Post
I saw that an anti bail out protest was organized outside the NYSE today. Haven't seen how it went.

I find it interesting that elements of both the right and left in American are agin'it, if for different reasons.

CNN quoted a poll this afternoon that had 1/3 of Americans for the bail out, 1/3 against, and 1/3 undecided. Numbers that twig something in the memory of ol' Tommy Paine.

I started thinking this was all a ruse earlier this week, the more this plays out, the more I am certain of it.


From: The Alley, Behind Montgomery's Tavern | Registered: Apr 2001  |  IP: Logged
ElizaQ
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posted 25 September 2008 04:34 PM      Profile for ElizaQ     Send New Private Message      Edit/Delete Post
Yeah the whole issue is pretty polarizing and it just got even more political.
Both sides of the house have been working on the deal and it was announced earlier that it was basically done.
The McCain showed up and 'something happened'. A contigent of GOPers with McCain's support suddenly came forward and said no, we have a plan. McCain's plan.
McCain Plan

So yeah the main thing here is no 700 billion and big tax cuts.
The kicker is though that in the end as it's been explained to me this plan in the long run will actually cost taxpayers trillions of dollars.
It's basically a bailout fakeout, make the people happy, make McCain seem like a Maverick going against the government and saving the taxpayer from the billions number and paint the Dems and Obama as the ones trying to milk main street. Of course at the same time actually FURTHER deregulating the system. It's ruse, and it's totally political.

The questions are. Was this all staged? Or is it another crazy ass gamble on McCains part because with this plan people are wondering whether it would actually stave off further slide. Plus the fact that he needs something he needs 'something' to try and save probably one of the most pitiful campaign that's ever been run.

The other thing that plays into this is the whole debates. The feeling is this 'whole I won't debate' until the deal is done is as much an attempt to get Palin out of her debate as anything else. All you have to do is watch the Katy Couric interview and you'll see why they'd be desperate to do this.

Obama isn't playing ball though. He's said he's showing up tomorrow no matter what and the idea was floated around that he would do and interview for 1/2 hour plus a townhall type question and answer.
Which would totally be in his favour. He'd potentially get 90 minutes to explain everything.
So that leaves McCain in a bind. If the deal isn't done, which now it doesn't look like it will be, then he's said he won't go. "Country First" but that gives Obama a huge stage with close to 100 million people. If he does show up then he's contradicted what he said he was going to do and that could look bad on him.

I think he's banking on people going with the "Country First He's showing leadership" spin to get political points as well as becoming the hero for
"saving the taxpayer".

It's turning into an absolute farce.


From: Eastern Lakes | Registered: May 2005  |  IP: Logged
Boom Boom
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posted 25 September 2008 04:57 PM      Profile for Boom Boom     Send New Private Message      Edit/Delete Post
That's the privatization plan I mentioned earlier upthread. Bush, Obama, Paulson, and just about everyone else in the room were pissed off to see this new offer when they were already close to a deal. I think it'll be rejected and the original taxpayer-funded bailout will get through - eventually.
From: Make the rich pay! | Registered: Dec 2004  |  IP: Logged
ElizaQ
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posted 25 September 2008 05:09 PM      Profile for ElizaQ     Send New Private Message      Edit/Delete Post
quote:
Originally posted by Boom Boom:
That's the privatization plan I mentioned earlier upthread. Bush, Obama, Paulson, and just about everyone else in the room were pissed off to see this new offer when they were already close to a deal. I think it'll be rejected and the original taxpayer-funded bailout will get through - eventually.

Yeah I think it will, especially if how it was explain to me is true, that this new plan is a several trillion dollar 'bailout'.
It's going to be really interesting to see how this 'stunt' is going to play out with the average voter.
You see it could actually be good for McCain to have Bush pissed of at him. His whole campaign is about separating him from Bush and the Maverick that going to take Washington on and clean it up. It's an illusion of course.


From: Eastern Lakes | Registered: May 2005  |  IP: Logged
Boom Boom
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posted 25 September 2008 05:15 PM      Profile for Boom Boom     Send New Private Message      Edit/Delete Post
The electorate don't seem to be falling in line behind McCain's BS. The polls show him dropping and Obama with a comfortable lead.

I loved that shot of McCain in the White House meeting today - with his shit-eating grin, he looked like a buffoon.


From: Make the rich pay! | Registered: Dec 2004  |  IP: Logged
ElizaQ
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posted 25 September 2008 05:20 PM      Profile for ElizaQ     Send New Private Message      Edit/Delete Post
McCain admits that he hasn't even read the Bill
quote:
What!?!? I thought he suspended his campaign? If this financial crisis is apparently all of a sudden so important to him, then why hasn’t he even bothered to read the bill that would allocate 700 billion dollars to address it?

Although fear not, he’s apparently swooping into Washington tonight to rescue everyone from a bill that he hasn’t even read. Republican are apparently even delaying the compromise long enough so McCain can be present and take credit. Word on the street is that apparently McCain may even “rediscover” his hidden populist side in the next 12 hours and vote No!


I think if there is any question as to whether this is all just a political stunt this pretty much answers it.
Gee, I so hope he gets to be Pres.


From: Eastern Lakes | Registered: May 2005  |  IP: Logged
ElizaQ
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posted 25 September 2008 07:47 PM      Profile for ElizaQ     Send New Private Message      Edit/Delete Post
I think there might be trouble on the markets tomorrow. The futures are already down from the announcement earlier in the evening and the Republicans just walked out of the meeting.
From: Eastern Lakes | Registered: May 2005  |  IP: Logged
DrConway
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posted 25 September 2008 08:01 PM      Profile for DrConway     Send New Private Message      Edit/Delete Post
The President: Bush risks wrath of Main Street to save the banks

quote:
A fictional scenario of financial collapse could not improve on the perfect storm that is battering the US economy. The crisis has been a decade or more in the making, but the hurricane has struck with its full fury at the worst imaginable moment.

The least trusted and mostunpopular president in the country'smodern history is serving his final months, his credibility and moral authority close to zero as he tackles a disaster partly, at least, of his own making. In the partisan heat of the campaign to replace him, politics cannot but intrude on the most sober judgement.

Proof of that came last night when, after a bailout deal seemed close, Republican Congressmen rebelled – against a measure urged by a Republican president. Suspicions were rife that their resistance was largely aimed at giving cover to John McCain, who had rushed back to Washington only for an outline agreement to be reached without him.



From: You shall not side with the great against the powerless. | Registered: May 2001  |  IP: Logged
ElizaQ
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posted 25 September 2008 08:04 PM      Profile for ElizaQ     Send New Private Message      Edit/Delete Post
Government Seizes WAMU

quote:
Washington Mutual, the giant lender that came to symbolize the excesses of the mortgage boom, was seized by federal regulators on Thursday night, in what is by far the largest bank failure in American history.

Regulators simultaneously brokered an emergency sale of virtually all of Washington Mutual, the nation’s largest savings and loan to JPMorgan Chase for $1.9 billion, averting another potentially huge taxpayer bill for the rescue of a failing institution.

The move came as lawmakers reached a stalemate over the passage of a $700 billion bailout fund designed to help ailing banks, and removed one of America’s most troubled banks from the financial landscape.

Customers of Seattle-based WaMu, with $307 billion in assets, are unlikely to be affected, although shareholders and some bondholders will be wiped out. WaMu account holders are guaranteed by the Federal Deposit Insurance Corporation up to $100,000.



From: Eastern Lakes | Registered: May 2005  |  IP: Logged
DrConway
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posted 25 September 2008 08:17 PM      Profile for DrConway     Send New Private Message      Edit/Delete Post
What's interesting is how casually the government seems to be taking the fact of ownership of both the shares and the debts of the banks being seized. Ten years ago this would have made the Cheerleaders of the Paper Economy have collective heart attacks at the idea that the shares of a company could be voided at the flick of a pen, and similarly for debts (bonds).

It just takes that leap of faith, folks, from grasping the idea that shares are not magic to abandoning the idea that the Paper Economy can do anything useful except hobble the Real Economy.


From: You shall not side with the great against the powerless. | Registered: May 2001  |  IP: Logged
Fidel
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posted 25 September 2008 08:21 PM      Profile for Fidel     Send New Private Message      Edit/Delete Post
Michael Hudson thinks the protests of Republicans are for posterity sake only. Not a bailout but a giveaway.

quote:
I worry that Wednesday’s jump in the Dow Jones average signals that the big betters have decided that there is a good chance of the vast giveaway going through. The Republican protests seem to me to aim not so much at really stopping the measure, but on going on record that they opposed it – before they voted for it. When the public wakes up to the great giveaway, the Republicans can say, “It was a Democratic Congress that did it, not us. Read our anguished protests.”

It sounds to me like the banks want not only for U.S. taxpayers to pay for the bad mortgage and other risks gone bad, but they want taxpayers to reimburse them for projected future earnings with interest on those bad mortgage and credit debts. The bankstters are like Russian oligarchs who drafted that country's privatization decrees in the 1990's. Hank Paulson(Dr Evil really) wants the feds to sign off of any oversight whatsoever on a deal he and his bankster friends wrote themselves. It's a huge swindle and as Hudson says, will likely result in delaying the overall problem with housing prices too high and could even collapse the value of the U.S. dollar to new lows. It's not just another bailout of banksters from their bad gambling debts.

[ 25 September 2008: Message edited by: Fidel ]


From: Viva La Revolución | Registered: Apr 2004  |  IP: Logged
DrConway
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posted 25 September 2008 08:24 PM      Profile for DrConway     Send New Private Message      Edit/Delete Post
John Williams of Shadow Government Statistics has been featured on C-SPAN to comment on the recent turmoil.

Jim Stanford has also weighed in. Glad to see he's still showing what's wrong with the primacy of the Paper Economy.

[ 25 September 2008: Message edited by: DrConway ]


From: You shall not side with the great against the powerless. | Registered: May 2001  |  IP: Logged
ElizaQ
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posted 25 September 2008 08:37 PM      Profile for ElizaQ     Send New Private Message      Edit/Delete Post
quote:
Originally posted by Fidel:
[QB]Michael Hudson thinks the protests of Republicans are for posterity sake only. Not a bailout but a giveaway.

It sounds to me like the banks want not only for U.S. taxpayers to pay for the bad mortgage and other risks gone bad, but they want taxpayers to reimburse them for projected future earnings with interest on those bad mortgage and credit debts. The bankstters are like Russian oligarchs who drafted that country's privatization decrees in the 1990's. Hank Paulson(Dr Evil really) wants the feds to sign off of any oversight whatsoever on a deal he and his bankster friends wrote themselves. It's a huge swindle and as Hudson says, will likely result in delaying the overall problem with housing prices too high and could even collapse the value of the U.S. dollar to new lows. It's not just another bailout of banksters from their bad gambling debts.


It's basically one big FUBAR. Damned if you do damned if you don't. Don't think that the plan that was agreed up this afternoon and then scuttled was exactly what Paulson wanted. Oversights were implemented, as well as some other things to do with ensuring taxpayer protection as well as the rumor the the money amount was quite less.
The Republican alternative was about providing insurance for mortgages and cutting the capital gains tax to 0. Packaged as a let "Wall Street buy it's own self out plan." That's just as bogus, because with this plan the taxpayer would end up losing way more then 700 billion over the long run.
And yeah I totally agree with his assessment that the Repub last hour NO way is a political maneuver.

It's all pretty messed up right now.

[ 25 September 2008: Message edited by: ElizaQ ]


From: Eastern Lakes | Registered: May 2005  |  IP: Logged
ElizaQ
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posted 25 September 2008 08:46 PM      Profile for ElizaQ     Send New Private Message      Edit/Delete Post
This NYT opinion piece does a pretty good job at explaining all the political stuff. It might need registration though to read. Not sure, some do and some don't.
NYT

From: Eastern Lakes | Registered: May 2005  |  IP: Logged
Fidel
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posted 25 September 2008 08:46 PM      Profile for Fidel     Send New Private Message      Edit/Delete Post
quote:
Originally posted by DrConway:
John Williams of Shadow Government Statistics has been featured on C-SPAN to comment on the recent turmoil.

Already into inflationary recession now
Non-farm payrolls contracting two quarters
Industrial production negative year-to-year
GDP growth reported is "nonsense"
Greatest financial crisis in the history of the world, in Williams' opinion.

Caller: Federal Reserve is privatized not federal. Go back to GCM? (Or even, what about some combination of GCM-BCM?)

Williams: Goes off on some tangent about which measure of the money supply best tracks inflation.

I thought his answer was a dodge. I dunno though since I'm no financial genie.


From: Viva La Revolución | Registered: Apr 2004  |  IP: Logged
Fidel
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posted 25 September 2008 08:48 PM      Profile for Fidel     Send New Private Message      Edit/Delete Post
quote:
Originally posted by ElizaQ:

It's all pretty messed up right now.

[ 25 September 2008: Message edited by: ElizaQ ]


I'll say. I can't get my head around it. Deregulation was what they pushed both in Canada and the U.S. since the 1980's. And now it's fubar for sure.


From: Viva La Revolución | Registered: Apr 2004  |  IP: Logged
ElizaQ
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posted 25 September 2008 08:58 PM      Profile for ElizaQ     Send New Private Message      Edit/Delete Post
quote:
Originally posted by Fidel:

I'll say. I can't get my head around it. Deregulation was what they pushed both in Canada and the U.S. since the 1980's. And now it's fubar for sure.


I know. It's been a pretty steep learning curve for me to try to figure it all out. I actually read financial pages now! Never did that before.
It's even more difficult to figure out because there's are elections going on, so you have to sort through what's politically motivated explanation action and opinion and what's not.


From: Eastern Lakes | Registered: May 2005  |  IP: Logged
DrConway
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posted 25 September 2008 09:16 PM      Profile for DrConway     Send New Private Message      Edit/Delete Post
John Williams probably doesn't care as such about the Federal Reserve; what he cares about is that the US government has likely compounded the problems it now faces by depending on bad statistics.

When you see that GDP growth has been essentially negative for almost seven years with a minor blip in 2004, and inflation has been above 8% by the SGS measure for that same time period, it's not hard to conclude that the US has got itself into an inflationary recession that simply drags on and on. But the official figures don't reflect this, and so instead of fixing the problem the government's ignoring it, which is why I'm getting a bit concerned about the fact that the US government is making an open secret of the fact that they will essentially be printing money for which there is no economic need.

[ 25 September 2008: Message edited by: DrConway ]


From: You shall not side with the great against the powerless. | Registered: May 2001  |  IP: Logged
peskyfly1
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posted 25 September 2008 09:27 PM      Profile for peskyfly1     Send New Private Message      Edit/Delete Post
It's all allusary, imaginary. None of it really exists...the paper I mean. They can't possibly believe they can imagine a trillion dollars worth of value and that others will choose to believe it. It's madness.
From: meandering stream | Registered: Sep 2008  |  IP: Logged
North Shore
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posted 25 September 2008 10:19 PM      Profile for North Shore     Send New Private Message      Edit/Delete Post
Sure, but if you have a vested interest in believing it - then you'll continue on doing so, because if you don't then the consequences will be so great. An 'emperor has no clothes' sort of thing..
From: Victoriahhhh | Registered: Jan 2005  |  IP: Logged
Unnecessary MountainBoy
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posted 26 September 2008 01:55 AM      Profile for Unnecessary MountainBoy     Send New Private Message      Edit/Delete Post
From Der Spiegel:

"GERMAN ECONOMICS EXPERTS
'The World Shouldn't Have to Bear the Burden for America's Lapses'"

http://www.spiegel.de/international/business/0,1518,579880,00.html


From: Savona, B.C. | Registered: Sep 2008  |  IP: Logged
ElizaQ
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posted 26 September 2008 03:35 AM      Profile for ElizaQ     Send New Private Message      Edit/Delete Post
quote:
Originally posted by North Shore:
Sure, but if you have a vested interest in believing it - then you'll continue on doing so, because if you don't then the consequences will be so great. An 'emperor has no clothes' sort of thing..

Yes, I think it was Intro to Macro Economics class where the topic of the money system. The professor asked, something like, "So what is our money and system based on. It's security?". So the first answer was gold and then the room came up with answer after after answer and he kept shaking his head, 'nope'. This class had a lot of business admin people in it so some of the answers got quite complicated and technical. It was pretty funny.

So finally people couldn't come up with anything else and he answered with one word, 'faith' and totally grinned at the sorta of 'Wha? Huh?' looks that he got in return. That's about the only thing that I really remember about that class.


From: Eastern Lakes | Registered: May 2005  |  IP: Logged
SwimmingLee
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posted 26 September 2008 05:55 AM      Profile for SwimmingLee     Send New Private Message      Edit/Delete Post
quote:
Originally posted by ElizaQ:
So finally people couldn't come up with anything else and he answered with one word, 'faith' and totally grinned at the sorta of 'Wha? Huh?' looks that he got in return. That's about the only thing that I really remember about that class.

Sounds like you got the essentials. Also it's normal for it not to make sense, we're used to thinking that money is 'worth something'.

Very interesting blog-post I can't find right now - a list of the banks on the receiving end of the $700 billion. = the same banks that buy Treasury securities, i.e., loan money to the government.

The point being that the bailout is to make sure that, in 2009, when the US government tries to sell more debt, someone shows up at the party.

OK, found it

- - -

"As far as the US Treasury and Federal Reserve is concerned, there are 16 VERY good reasons why this "bailout" MUST go through ASAP. They are:

BNP Paribas Securities Corp.
Bank of America Securities LLC
Barclays Capital Inc.
Cantor Fitzgerald & Co.
Citigroup Global Markets Inc.
Credit Suisse Securities (USA) LLC
Daiwa Securities America Inc.
Deutsche Bank Securities Inc.
Goldman, Sachs & Co.
RBS Greenwich Capital
HSBC Securities (USA) Inc.
J. P. Morgan Securities Inc.
Merrill Lynch Government Securities Inc.
Mizuho Securities USA Inc.
Morgan Stanley & Co. Incorporated
UBS Securities LLC.

These are the primary dealers in US Treasury securities. Between them, THEY PURCHASE THE VAST MAJORITY OF US GOVERNMENT SECURITIES SOLD AT AUCTION and then re-sell them to their foreign and domestic customers.

When they have a problem (like hopelessly impaired balance sheets), the US Treasury has a problem. The impaired balance sheets of many of the primary dealers is starting to hinder their ability to participate in Treasury auctions. This could lead to failed Treasury auctions in the very near future."

[ 26 September 2008: Message edited by: SwimmingLee ]


From: LASIK-FLap.com ~ Health Warning about LASIK Eye Surgery | Registered: Dec 2007  |  IP: Logged
Tommy_Paine
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posted 26 September 2008 06:28 AM      Profile for Tommy_Paine     Send New Private Message      Edit/Delete Post
quote:
Originally posted by Unnecessary MountainBoy:
From Der Spiegel:

"GERMAN ECONOMICS EXPERTS
'The World Shouldn't Have to Bear the Burden for America's Lapses'"

http://www.spiegel.de/international/business/0,1518,579880,00.html



I can understand that sentiment, but it's probably a dumb one coming from one of the Marshall Plan recipients.


From: The Alley, Behind Montgomery's Tavern | Registered: Apr 2001  |  IP: Logged
DrConway
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posted 26 September 2008 07:09 AM      Profile for DrConway     Send New Private Message      Edit/Delete Post
So? They have a point. Why should the rest of the world be the dumping ground for America's crap? It already is, literally, when companies like Metalclad run shakedown operations on cities in Mexico when Mexicans refuse to have Americans' waste crap dumped on 'em, and when Canadians see those SUV-driving idiots who think speed limits are a worse sin than adultery sucking up all our oil and gas and guffawing about how neatly they rooked us with SHAFTA.

Why should Europe, which has long since learned lessons the US will have to learn about the dangers of religious fanaticism and exceptionalism, have to listen to the hectoring finger-wagging of the sanctimoniously insular gang of morons that runs the United States and represents a population that couldn't have found Iraq on a map with a flashlight and a magnifying glass in broad daylight?

I have had the (mis)fortune to see exactly this ignorant, deeply racist, self-righteously insular attitude among otherwise intelligent representative samples of the American population because I used to frequent (still do for the most part) places on the Internet where people feel free to say whatever they want behind a keyboard and a monitor. People on babble used to think I was overexaggerating about how fundamentally stupid and ignorant a good segment of Americans really are, until it became noxiously toxic with that asshat Bush as President proving every one of my words precisely correct, right along with all the Americans that actually think Saddam Hussein was behind 9/11.


From: You shall not side with the great against the powerless. | Registered: May 2001  |  IP: Logged
martin dufresne
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posted 26 September 2008 02:31 PM      Profile for martin dufresne   Author's Homepage     Send New Private Message      Edit/Delete Post
I am curious as to how Christian fundamentalist pundits and leaders are spinning the current financial meltdown to their followers in North America. With so many middle-class, God-fearing households seeing the hyper-rich cleaning up while they are left with the shitty end of the stick and losing their house & savings, you'd think there would be some rustling in the pews. Is anyone monitoring the Buchanans etc.?
From: "Words Matter" (Mackinnon) | Registered: Dec 2005  |  IP: Logged
Tommy_Paine
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posted 26 September 2008 02:48 PM      Profile for Tommy_Paine     Send New Private Message      Edit/Delete Post
quote:
Why should Europe, which has long since learned lessons the US will have to learn about the dangers of religious fanaticism and exceptionalism, have to listen to the hectoring finger-wagging of the sanctimoniously insular gang of morons that runs the United States and represents a population that couldn't have found Iraq on a map with a flashlight and a magnifying glass in broad daylight?


Oh Dr., and for lo these many years we usually see eye to eye on things. But here we are different.

Who taught Europe the social and economic value of separation of church and state-- showed them it was possible?

And, on these pages here at babble did we not learn that France-- who took this American lesson first-- banned Islamic school girls from wearing what they called a religious icon, but did not ban Crucifixes and other Christian idols.

And, when you read "Shake Hands with the Devil", you must have forgotten how countries like Belgium and France, given their petty chances, will resurect their petty dellusions of Imperial grandure.

And, after what the Germans did in the 30's and 40's, I think they should go about 200 years before they emerge from their glass houses to throw rocks.

And, lets not forget that it's pretty certain in 2000, and most likely in 2004, that most Americans who voted, didn't vote for King George W. Bush.

And let us not forget that the rank and file of Americans and Europeans are pretty much like us. But do not ask me to choose between the avarice of American leadership and the perfidiousness of European leadership.


From: The Alley, Behind Montgomery's Tavern | Registered: Apr 2001  |  IP: Logged
Boom Boom
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posted 26 September 2008 03:17 PM      Profile for Boom Boom     Send New Private Message      Edit/Delete Post
You should all be watching CNN right now and see Lou Dobbs rant and rave against this proposed bailout! Hilarious!
From: Make the rich pay! | Registered: Dec 2004  |  IP: Logged
SwimmingLee
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posted 26 September 2008 04:02 PM      Profile for SwimmingLee     Send New Private Message      Edit/Delete Post
quote:
Originally posted by DrConway:
John Williams probably doesn't care as such about the Federal Reserve; what he cares about is that the US government has likely compounded the problems it now faces by depending on bad statistics.

When you see that GDP growth has been essentially negative for almost seven years with a minor blip in 2004, and inflation has been above 8% by the SGS measure for that same time period, it's not hard to conclude that the US has got itself into an inflationary recession that simply drags on and on.[ 25 September 2008: Message edited by: DrConway ]


I love
http://www.shadowstats.com/

That's the URL for John Williams website. I think they should call them Real Stats. What he does is try & compute accurate inflation & employment numbers, among other statistics.

The sleight of hand that you're talking about that the government practices, legerdemain - is that another term that would describe it ?

"Definition: trickery; deception
Etymology: French 'light of hand'"
from
http://dictionary.reference.com/browse/legerdemain

anyway, America used to actually MAKE STUFF. Be nice if they'd get back to it.


From: LASIK-FLap.com ~ Health Warning about LASIK Eye Surgery | Registered: Dec 2007  |  IP: Logged
DrConway
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posted 26 September 2008 05:43 PM      Profile for DrConway     Send New Private Message      Edit/Delete Post
Oh, I love the website, all right. I've been following it for a year now, mostly just to goggle at the insanely high SGS adjusted inflation numbers when using the methodology present in 1980.
From: You shall not side with the great against the powerless. | Registered: May 2001  |  IP: Logged
Fidel
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posted 26 September 2008 07:54 PM      Profile for Fidel     Send New Private Message      Edit/Delete Post
Canadian William Krehm said this about stagflation:

The “Stalinization” of Economic Theory

quote:
When their inflation theory proved lame, right-thinking economists proclaimed it a mystery: “stagflation.” However, COMER identified a new factor in price behaviour2. In the postwar, the neglect of ten years of depression and six of war was caught up with. Housing, hospitals and schools were provided for one of the greatest refugee movements in history Inevitably this led to a deeper layer of taxation in price. This I called the “social lien.”

And,

Neither Keynes Nor Friedman Will Do

quote:
While the last quarter of the 20th century was an unmitigated disaster compared to the "golden years" of the '50s and early '60s, neither Keynes nor Friedman hold the key to a sane, stable and sustainable economic system. Neither offers a solution to the absolutely fundamental question of how new money is created and put into circulation.

It is unquestionably the most poorly understood aspect of economics. One of the most devastating consequences of the "monetarist counter-revolution" was to return to the privately- owned banks the virtual monopoly to "print" money which they had enjoyed prior to World War II. This was a major contributor to the rapid increase in debt due to compound interest


Europe and Japan have financed U.S. deficits for decades after collapse of fixed exchange rates in the 1970's. And some thirdworld principal debts have been paid back three times due to the magic of compound interest.

le Monde on the new and globalizing capitalist octopus, start of the 2000's:

quote:
The US began by abandoning the system of fixed exchange rates established by the Bretton Woods Agreements in 1944 (1) and introducing a system of generalised floating exchange rates. There was a strong economic motive for the decision, which the US authorities took unilaterally in 1973. They were seeking to compensate for declining competitiveness and a growing national debt by exporting the country’s macroeconomic imbalances. The floating exchange rate system provided a flexible and efficient monetary tool that enabled them to avoid the adjustments that would otherwise have been required by America’s new situation as a debtor. In a system of fixed exchange rates and gold convertibility, the US would have been obliged, like every third-world country today, to pay for its indebtedness with a relative loss of sovereignty and highly unpopular domestic austerity measures.

The new system also allowed the US to maintain a high standard of living at home by dipping into the planet’s savings. ..



From: Viva La Revolución | Registered: Apr 2004  |  IP: Logged
DrConway
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posted 26 September 2008 08:51 PM      Profile for DrConway     Send New Private Message      Edit/Delete Post
I've been reading news recently that Venezuela, China, Russia and France are developing more interlocking energy-based relationships. This is the tip of the iceberg, it seems. Countries outside the US are working to insulate themselves from the inevitable fallout of the collapse of American Empire, and carve out new hegemony where possible, just as Charlemagne did after the Roman Empire fell.

Even a benign multipolar world that is not democratic in nature still represents a new hegemonic state of affairs that will take some adjusting to get used to.


From: You shall not side with the great against the powerless. | Registered: May 2001  |  IP: Logged
Fidel
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posted 26 September 2008 09:22 PM      Profile for Fidel     Send New Private Message      Edit/Delete Post
quote:
Originally posted by DrConway:

Even a benign multipolar world that is not democratic in nature still represents a new hegemonic state of affairs that will take some adjusting to get used to.


Hey doc, I think China and the U.S. are the only countries in that list which don't use proportional voting systems.

Besides, I wasn't all that crazy about the unipolar world since 1991. I agree with some of what Putin said about it, that the world feels less safe - and that terrorism has only increased since the U.S. became the only superpower, and was-is the only superpower with nuclear-armed armadas roaming the seven seas and stationed on foreign soil. Over 700 military bases around the world still.

Pre-election Militarization of the North American Homeland. US Combat Troops in Iraq repatriated to " help with civil unrest"


From: Viva La Revolución | Registered: Apr 2004  |  IP: Logged
Tommy_Paine
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posted 27 September 2008 04:26 AM      Profile for Tommy_Paine     Send New Private Message      Edit/Delete Post
Gore Vidal had it recently that the American Empire began when New York took over as the money capital of the world from London, and that it has shifted now to Hong Kong or Tokyo.

As much as I like and admire Vidal, I think this "crisis" shows that the money capital is still in New York, and will probably stay there for some time yet, for good or ill.

I take a broader view of all this. I can't hope to understand the the interlocking of all the insurance companies, mortgage companies, home owners and the politics. So many trees obliterating my view of the forest. So, I move back to get a better view.

Paulson wants people to buy into something. Instead of the trillion dollars, think of it as buying into the purchase of a car, or stereo. If you were buying such and item, and the salesperson was using fear, and yelling BUYNOW BUYNOW BUYNOW you'd walk away, wouldn't you? After all, this "crisis" was, in the words of George W. Bush, at least a decade in the making. Why, with only a few months left in the tenure of both Bush and Paulson, is there such a rush...?

And there's the old Cicero test: Cui Bono? Paulson used to be CEO of the newly chartered bank, Sachs Goldman, who is positioning itself to use the bail out to get the profitable mortgages.

Modus operandi? The last time we had a "crisis" where we had to "act now while quantities last", was the imminent destruction of the Excited States of America by Saddam Hussien's Weapons of Mass Destruction.

And how did that turn out? Lots of tax payer money funneled to contractors like Haliburton.

Dick Cheney's old company.

So. While there may be turmoil in the markets and maybe something has to be done, I think it's mostly bullshit.

[ 27 September 2008: Message edited by: Tommy_Paine ]


From: The Alley, Behind Montgomery's Tavern | Registered: Apr 2001  |  IP: Logged
DrConway
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posted 27 September 2008 07:46 AM      Profile for DrConway     Send New Private Message      Edit/Delete Post
quote:
Originally posted by Tommy_Paine:
Oh Dr., and for lo these many years we usually see eye to eye on things. But here we are different.

Who taught Europe the social and economic value of separation of church and state-- showed them it was possible?


Just because a stopped clock is right twice a day does not mean you'd use it to tell time.

quote:
And, on these pages here at babble did we not learn that France-- who took this American lesson first-- banned Islamic school girls from wearing what they called a religious icon, but did not ban Crucifixes and other Christian idols.

That I will agree is something squint-worthy. But it is a far cry from the de facto pillorying of atheists that occurs in the USA. Can you imagine the uproar if a President did not swear on a Bible and could not provide a religious reason not to do so? Quakers don't swear on Bibles, so Richard Nixon had an "out".

You do know Congress opens with a Christian prayer, right? You do know that the US has done France one better and extended not just official oppobrium to certain religious symbols, but official preference to others? Does the Ten Commandments in a court of law not remind you of something? "In God We Trust" on the US currency?

quote:
And, when you read "Shake Hands with the Devil", you must have forgotten how countries like Belgium and France, given their petty chances, will resurect their petty dellusions of Imperial grandure.

I have not read it, so I did not know that.

quote:
And, after what the Germans did in the 30's and 40's, I think they should go about 200 years before they emerge from their glass houses to throw rocks.

The above is a subjective statement. Does this also mean that the Russians, formerly the Soviets, lose the moral cachet to warn us of the dangers of another kind of fanaticism?

People who have made the mistakes others are about to make are usually in the best position to say, "Hey. Bad idea."

quote:
And, lets not forget that it's pretty certain in 2000, and most likely in 2004, that most Americans who voted, didn't vote for King George W. Bush.

And let us not forget that the rank and file of Americans and Europeans are pretty much like us. But do not ask me to choose between the avarice of American leadership and the perfidiousness of European leadership.


Since the split was almost 50-50 in both votes, even after factoring in fraud and rigging, I can only conclude that 50% of the American population still believes in the rah-rah macho kind of BS the Republican Party shoves out as an alternative to intelligent political discourse.

When you talk about perfidiousness of European leadership, I will give you that for how cravenly Tony Blair became Dubya's little attack poodle, but I won't take it from you particularly for the Scandinavian nations.


From: You shall not side with the great against the powerless. | Registered: May 2001  |  IP: Logged
SwimmingLee
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posted 27 September 2008 01:36 PM      Profile for SwimmingLee     Send New Private Message      Edit/Delete Post
quote:
Paulson wants people to buy into something. Instead of the trillion dollars, think of it as buying into the purchase of a car, or stereo. If you were buying such and item, and the salesperson was using fear, and yelling BUYNOW BUYNOW BUYNOW you'd walk away, wouldn't you? After all, this "crisis" was, in the words of George W. Bush, at least a decade in the making. Why, with only a few months left in the tenure of both Bush and Paulson, is there such a rush...?

And there's the old Cicero test: Cui Bono?


good points about the Cui Bono and the normal reaction to pushy sales tactics.

but, the US economy is - having some major problems ?

i agree, tax the people who benefited, don't protect wealthy hedge fund investors who may have invested using borrowed money & are getting hammered.

commentary from John Mauldin. copy of the letter he wrote to his elected rep. Mauldin is a financial journalist like Jim Cramer, though Mauldin's a writer, Cramer's a TV journalist. in the actual email, there are some charts.


It's the End of the World As We Know It

Dear Joe,

I understand your reluctance to vote for a bill that 90% of the people who voted for you are against. That is generally not good politics. They don't understand why taxpayers should spend $700 billion to bail out rich guys on Wall Street who are now in trouble. And if I only got my information from local papers and news sources, I would probably agree. But the media (apart from CNBC) has simply not gotten this story right. It is not just a crisis on Wall Street. Left unchecked, this will morph within a few weeks to a crisis on Main Street. What I want to do is describe the nature of the crisis, how this problem will come home to your district, and what has to be done to avert a true, full-blown depression, where the ultimate cost will be far higher to the taxpayers than $700 billion. And let me say that my mail is not running at 10 to 1 against, but it is really high. I am probably going to make a lot of my regular readers mad, but they need to hear what is really happening on the front lines of the financial world.

First, let's stop calling this a bailout plan. It is not. It is an economic stabilization plan. Run properly, it might even make the taxpayers some money. If it is not enacted very soon (Monday would be fine), the losses to businesses and investors and homeowners all over the US (and the world) will be enormous. Unemployment will jump to rates approaching 10%, at a minimum. How did all this come to pass? Why is it so dire? Let's rewind the tape a bit.

We all know about the subprime crisis. That's part of the problem, as banks and institutions are now having to write off a lot of bad loans. The second part of the problem is a little more complex. Because we were running a huge trade deficit, countries all over the world were selling us goods and taking our dollars. They in turn invested those excess dollars in US bonds, helping to drive down interest rates. It became easy to borrow money at low rates. Banks, and what Paul McCulley properly called the Shadow Banking System, used that ability to borrow and dramatically leverage up those bad loans (when everyone thought they were good), as it seemed like easy money. They created off-balance-sheet vehicles called Structured Investment Vehicles (SIVs) and put loans and other debt into them. They then borrowed money on the short-term commercial paper market to fund the SIVs and made as profit the difference between the low short-term rates of commercial paper and the higher long-term rates on the loans in the SIV. And if a little leverage was good, why not use a lot of leverage and make even more money? Everyone knew these were AAA-rated securities.

And then the music stopped. It became evident that some of these SIVs contained subprime debt and other risky loans. Investors stopped buying the commercial paper of these SIVs. Large banks were basically forced to take the loans and other debt in the SIVs back onto their balance sheets last summer as the credit crisis started. Because of a new accounting rule (called FASB 157), banks had to mark their illiquid investments to the most recent market price of a similar security that actually had a trade. Over $500 billion has been written off so far, with credible estimates that there might be another $500 billion to go. That means these large banks have to get more capital, and it also means they have less to lend. (More on the nature of these investments in a few paragraphs.)

Banks can lend to consumers and investors about 12 times their capital base. If they have to write off 20% of their capital because of losses, that means they either have to sell more equity or reduce their loan portfolios. As an example, for every $1,000 of capital, a bank can loan $12,000 (more or less). If they have to write off 20% ($200), they either have to sell stock to raise their capital back to $1,000 or reduce their loan portfolio by $2,400. Add some zeroes to that number and it gets to be huge.

And that is what is happening. At first, banks were able to raise new capital. But now, many banks are finding it very difficult to raise money, and that means they have to reduce their loan portfolios. We'll come back to this later. But now, let's look at what is happening today. Basically, the credit markets have stopped functioning. Because banks and investors and institutions are having to deleverage, that means they need to sell assets at whatever prices they can get in order to create capital to keep their loan-to-capital ratios within the regulatory limits.

Remember, part of this started when banks and investors and funds used leverage (borrowed money) to buy more assets. Now, the opposite is happening. They are having to sell assets into a market that does not have the ability to borrow money to buy them. And because the regulators require them to sell whatever they can, the prices for some of these assets are ridiculously low. Let me offer a few examples.

Today, there are many municipal bonds that were originally sold to expire 10-15 years from now. But projects finished early and the issuers wanted to pay them off. However, the bonds often have a minimum time before they can be called. So, issuers simply buy US Treasuries and put them into the bond, to be used when the bond can be called. Now, for all intents and purposes this is a US government bond which has the added value of being tax-free. I had a friend, John Woolway, send me some of the bid and ask prices for these type of bonds. One is paying two times what a normal US Treasury would pay. Another is paying 291% of a normal US Treasury. And it is tax-free! Why would anyone sell what is essentially a US treasury bond for a discount? Because they are being forced to sell, and no one is buying! The credit markets are frozen.

Last week, I wrote about a formerly AAA-rated residential mortgage-backed security (RMBS) composed of Alt-A loans, better than subprime but less than prime. About 5% of the loans were delinquent, and there are no high-risk option ARMs in the security. It is offered at 70 cents on the dollar. If you bought that security, you would be making well over 12% on your money, and 76% of the loans in the portfolio of that security would have to default and lose over 50% of their value before you would risk even one penny. Yet the bank which is being forced to sell that loan has had to write down its value. As I wrote then, that is pricing in financial Armageddon. (You can read the full details here.)

Let's look at the following graph. It is an index of AAA-rated mortgage bonds, created by www.markit.com. It is composed of RMBSs similar to the one I described above. Institutions buy and sell this index as a way to hedge their portfolios. It is also a convenient way for an accounting firm to get a price for a mortgage-backed security in a client bank's portfolio. With the introduction of the new FASB 157 accounting rule, accountants are very aggressive about making banks mark their debt down, as they do not want to be sued if there is a problem. Notice this index shows that bonds that were initially AAA are now trading at 53 cents on the dollar, which is up from 42.5 cents two months ago.

Accountants might look at the bond I described above, look at this index, and decide to tell their clients to mark the bonds down to $.53 on the dollar. The bank is offering the bond at $.70 because it knows there is quality in the security. They are being forced to sell. And guess what? There are no buyers. An almost slam-dunk 12% total-return security with loss-coverage provisions that suggest 40% of the loans could default and lose 50% before your interest rate yields even suffered, let alone risk to your principal – and it can't find a buyer.

jm092608image001

One of the real reasons these and thousands of other good bonds are not selling now is that there is real panic in the markets. The oldest money market fund "broke the buck" last week, because they had exposure to Lehman Brothers bonds. We are seeing massive flights of capital from money market funds, including by large institutions concerned about their capital. What are they buying? Short-term Treasury bills. Three-month Treasury bills are down to 0.84%.

It gets worse. Last week one-month Treasury bills were paying a negative 1%!!! That means some buyers were so panicked that they were willing to buy a bond for $1 that promised to pay them back only $.99 in just one month. The rate is at 0.16% today. If something is not done this weekend, it could go a lot lower over the next few days. That is panic, Joe.

I don't want to name names, as this letter goes to about 1.5 million people and I don't want to make problems for some fine banking names; but there is a silent bank run going on. There are no lines in the street, but it is a run nevertheless. It is large investment funds and corporations quietly pulling their money from some of the best banks in the country. They can do this simply by pushing a button. We are watching deposit bases fall. It does not take long. Lehman saw $400 billion go in just a few months this summer. Think about that number. Any whiff of a problem and an institution that is otherwise sound could be brought low in a matter of weeks. And the FDIC could end up with a large loss that seemed to have come from out of nowhere.
The TED Spread Flashes Trouble

There is something called the TED spread, which is the difference between three-month LIBOR (the London Inter Bank Offered Rate which is in euro dollars, also called The Euro Dollar Spread, thus TED) and three-month US Treasury bills. Three-month LIBOR is basically what banks charge each other to borrow money. Many mortgages and investments are based on various periods of LIBOR. Look at the chart below. Typically the TED spread is 50 basis points (0.50%) or less. When it spikes up, it is evidence of distress in the financial markets. The last time the TED spread was as high as it is now was right before the market crash of 1987. This is a weekly chart, which does not capture tonight's (Friday) change, which would make it look even worse. Quite literally, the TED spread is screaming panic.

jm092608image002

The Fed has lowered rates to 2%. Typically, three-month LIBOR tracks pretty close to whatever the Fed funds rate is. Starting with the credit crisis last year, that began to change. Look at the chart below.

jm092608image003

Remember, LIBOR is what banks charge to each other to make loans. Lower rates are supposed to help banks improve their capital and their ability to make loans at lower interest rates to businesses and consumers. Look at what has happened in the past few weeks, in the chart above. The spread between three-month LIBOR and the Fed funds rate is almost 200 basis points, or 2%! That is something that defies imagination to market observers. On the chart above, it looks like it has not moved that much, but in the trading desks of banks all over the world it is a heart-pounding, scare-you-to-death move. The chart below reflects what traders have seen in the past two weeks, and it moved up more today.

jm092608image004

Now let's look at the next chart. This is the amount of Tier 1 commercial paper issued. This is the life blood of the business world. This is how many large and medium-sized businesses finance their day-to-day operations. The total amount of commercial paper issued is down about 15% from a year ago, with half of that drop coming in the last few weeks. Quite literally, the economic body is hemorrhaging. Unless something is done, businesses all over the US are going to wake up in a few weeks and find they simply cannot transact business as usual. This is going to put a real crimp in all sorts of business we think of as being very far from Wall Street.

jm092608image005

I could go on. Credit spreads on high-yield bonds that many of our best high-growth businesses use to finance their growth are blowing out to levels which make it impossible for the companies to come to the market for new funds. And that is even if they could find investors in this market! There are lots of other examples (solid corporate loans selling at big discounts, asset-backed securities at discounts, etc.), but you get the idea. Suffice it to say that the current climate in the financial market is the worst since the 1930s. But how does a crisis in the financial markets affect businesses and families in Arlington, Texas, where my office and half of your district is?
The Transmission Mechanism

The transmission in a car takes energy from the engine and transfers it to the wheels. Let's talk about how the transmission mechanism of the economy works.

Let's start with our friend Dave Moritz down the street. He needs financing to be able to sell an automobile. To get those loans at good prices, an auto maker has to be able to borrow money and make the loans to Dave's customers. But if something does not stop the bleeding, it is going to get very expensive for GM to get money to make loans. That will make his cars more expensive to consumers. Cheap loans with small down payments are the life blood of the auto selling business. That is going to change dramatically unless something is done to stabilize the markets.

Credit card debt is typically packaged and sold to investors like pension funds and insurance companies. But in today's environment, that credit card debt is going to have to pay a much higher price in order to find a buyer. That means higher interest rates. Further, because most of the large issuers of credit cards are struggling with their leverage, they are reducing the amount of credit card debt they will give their card holders. If they continue to have to write down mortgages on their books because of mark-to-market rules which price assets at the last fire-sale price, it will mean even more shrinkage in available credit.

Try and sell a home above the loan limits of Fannie and Freddie today with a nonconforming jumbo loan. Try and find one that does not have very high rates, because many lenders who normally do them simply cannot afford to keep them on their balance sheets. And a subprime mortgage? Forget about it. This is going to get even worse if the financial markets melt down.

We are in a recession. Unemployment is going to rise to well over 6%. Consumer spending is going to slow. This is an environment which normally means it is tougher for small businesses and consumers to get financing in any event. Congress or the Fed cannot repeal the business cycle. There are always going to be recessions. And we always get through them, because we have a dynamic economy that figures out how to get things moving again.

Recessions are part of the normal business cycle. But it takes a major policy mistake by Congress or the Fed to create a depression. Allowing the credit markets to freeze would count as a major policy mistake.

I have been on record for some time that the economy will go through a normal recession and a slow recovery, what I call a Muddle Through Economy. This week I met with executives of one of the larger hedge funds in the world. They challenged me on my Muddle Through stance. And I had to admit that my Muddle Through scenario is at risk if Congress does not act to stabilize the credit markets.
Let's Make a Deal

Why do we need this Stabilization Plan? Why can't the regular capital markets handle it? The reason is that the problem is simply too big for the market to deal with. It requires massive amounts of patient, long-term money to solve the problem. And the only source for that would be the US government.

There is no reason for the taxpayer to lose money. Warren Buffett, Bill Gross of PIMCO, and my friend Andy Kessler have all said this could be done without the taxpayer losing money, and perhaps could even make a profit. As noted above, these bonds could be bought at market prices that would actually make a long-term buyer a profit. Put someone like Bill Gross in charge and let him make sure the taxpayers are buying value. This would re-liquefy the banks and help get their capital ratios back in line.

Why are banks not lending to each other? Because they don't know what kind of assets are on each other's books. There is simply no trust. The Fed has had to step in and loan out hundreds of billions of dollars in order to keep the financial markets from collapsing. If you allow the banks to sell their impaired assets at a market-clearing fair price (not at the original price), then once the landscape is cleared, banks will decide they can start trusting each other. The commercial paper market will come back. Credit spreads will come down. Banks will be able to stabilize their loan portfolios and start lending again.

Again, the US government is the only entity with enough size and patience to act. We do not have to bail out Wall Street. They will still take large losses on their securities, just not as large a loss as they are now facing in a credit market that is frozen. As noted above, there are many securities that are being marked down and sold far below a rational price.

If we act now, we will start to see securitization of mortgages, credit cards, auto loans, and business loans so that the economy can begin to function properly.

What happens if we walk away? Within a few weeks at most, financial markets will freeze even more. We will see electronic runs on major banks, and the FDIC will have more problems than you can possibly imagine. The TED spread and LIBOR will get much worse. Businesses which use the short-term commercial paper markets will start having problems rolling over their paper, forcing them to make difficult cuts in spending and employment. Larger businesses will find it more difficult to get loans and credit. That will have effects on down the economic food chain. Jim Cramer estimated today that without a plan of some type, we could see the Dow drop to 8300. That is as good a guess as any. It could be worse. Home valuations and sales will drop even further.

The average voter? They will see stock market investments off another 25% at the least. Home prices will go down even more. Consumer spending will drop. What should be a run-of-the-mill recession becomes a deep recession or soft depression. Yes, that may be worst-case scenario. But that is the risk I think we take with inaction.

A properly constructed Stabilization Plan hopefully avoids the worst-case scenario. It should ultimately not cost the taxpayer much, and maybe even return a profit. The AIG rescue that Paulson arranged is an example of how to do it right. My bet is that the taxpayer is going to make a real profit on this deal. We got 80% of AIG, with what is now a loan paying the taxpayer over 12%, plus almost $2 billion in upfront fees for doing the loan. That is not a bailout. That is a business deal that sounds like it was done by Mack the Knife.

This deal needs to be done by Monday. Every day we wait will see more and more money fly out the doors of the banks, putting the FDIC at ever greater risk. Panic will start to set in, moving to ever smaller banks. Frankly, we are at the point where we need to consider raising the FDIC limits for all deposits for a period of time, until the Stabilization Plan quells the panic.

I understand that this is a really, really bad idea according classical free-market economic theory. You know me; I am as free market as it comes. But I also know that without immediate action a lot of people are really going to be hurt. Unemployment is not a good thing. Losses on your home and investments hurt. It is all nice and well to talk about theories and contend the market should be allowed to sort itself out; and if we have a deep recession, then that is what is needed. But the risk we take is not a deep recession but a soft depression. The consequences of inaction are simply unthinkable.

Joe, I am telling you that the markets are screaming panic. Yes, Senator Richard Shelby has his 200 economists saying this is a bad deal. But they are ivory tower kibitzers who have never sat at a trading desk. They have never tried to put a loan deal together or had to worry about commercial paper markets collapsing. I am talking daily with the people on the desks who are seeing what is really happening. Shelby's economists are armchair generals far from the front lines. I am talking to the foot soldiers who are on the front lines.

Every sign of potential disaster is there. You and the rest of the House have to act. It has to be bipartisan. This should not be about politics (even though Barney Frank keeps talking bipartisan and then taking partisan shots, but I guess he just can't help himself). It should be about doing the right thing for our country and the world. I know it will not be fun coming back to the district. Talking about TED spreads and LIBOR will not do much to assuage voters who are angry. But it is the right thing to do. And I will be glad to come to the town hall meeting with you and help if you like.

With your help, we will get through this. In a few years, things will be back to normal and we can all have stories to tell to our grandkids about how we lived through interesting times. But right now we have to act.


From: LASIK-FLap.com ~ Health Warning about LASIK Eye Surgery | Registered: Dec 2007  |  IP: Logged
Frustrated Mess
rabble-rouser
Babbler # 8312

posted 27 September 2008 02:21 PM      Profile for Frustrated Mess   Author's Homepage     Send New Private Message      Edit/Delete Post
quote:
Financial industry rep. Paulson is the ringleader in a banker's coup the results of which will decide America's economic and political future for years to come. The coup leaders have drained tens of billions of dollars of liquidity from the already-strained banking system to trigger a freeze in interbank lending and hasten a stock market crash. This, they believe, will force Congress to pass Paulson's $770 billion bailout package without further congressional resistance. It's blackmail.

As yet, no one knows whether the coup-backers will succeed and further consolidate their political power via a massive economic shock to the system, but their plan continues to move jauntily forward while the economy follows its inexorable slide to disaster.

The bailout has galvanized grassroots movements which have flooded congressional FAXs and phone lines. Callers are overwhelmingly opposed to any bailout for banks that are buckling under their own toxic mortgage-backed assets. One analyst said that the calls to Congress are 50 percent "No" and 50 percent "Hell, No". There is virtually no popular support for the bill.

From Bloomberg News: "Erik Brynjolfsson, of the Massachusetts Institute of Technology's Sloan School, said his main objection "is the breathtaking amount of unchecked discretion it gives to the Secretary of the Treasury. It is unprecedented in a modern democracy."

"I suspect that part of what we're seeing in the freezing up of lending markets is strategic behavior on the part of big financial players who stand to benefit from the bailout," said David K. Levine, an economist at Washington University in St. Louis, who studies liquidity constraints and game theory." (Mish's Global Economic Trend Analysis)

Brynjolfsson's suspicions are well-founded. "Market Ticker's" Karl Denninger confirms that the Fed has been draining the banking system of liquidity in order to blackmail Congress into passing the new legislation. Here's Denninger:

"The Effective Fed Funds rate has been trading 50 basis points or more below the 2% target for five straight days now, and for the last two days, it has traded 75 basis points under. The IRX is demanding an immediate rate cut. The Slosh has been intentionally drained by over $125 billion in the last week and lowering the water in the swamp exposed one dead body - Washington Mutual - which was immediately raided on a no-notice basis by JP Morgan. Not even WaMu's CEO knew about the raid until it was done....The Fed claims to be an "independent central bank." They are nothing of the kind; they are now acting as an arsonist. The Fed and Treasury have claimed this is a "liquidity crisis"; it is not. It is an insolvency crisis that The Fed, Treasury and the other regulatory organs of our government have intentionally allowed to occur."

Bingo.



Trouble in Banktopia

From: doom without the gloom | Registered: Feb 2005  |  IP: Logged
Doug
rabble-rouser
Babbler # 44

posted 27 September 2008 05:26 PM      Profile for Doug   Author's Homepage     Send New Private Message      Edit/Delete Post
How does $14 million for three weeks' work strike you?

As Washington Mutual is folding, it will no longer require a CEO, that means...

quote:
there appears to be yet another interesting beneficiary: Alan Fishman. He is WaMu's CEO, who took the top job 18 days ago.

As should be no surprise, he signed a juicy contract: a $7.5 million signing bonus and a lump-sum payment for severance that comes to $6.15 million. In other words, if he leaves the company, he'll walk away with $13.65 million.

That's a pretty good deal in light of the fact that WaMu is the biggest bank collapse ever.


How sad it is to be an unemployed CEO


From: Toronto, Canada | Registered: Apr 2001  |  IP: Logged
DrConway
rabble-rouser
Babbler # 490

posted 28 September 2008 08:28 AM      Profile for DrConway     Send New Private Message      Edit/Delete Post
If the government hadn't re-sold WaMu they could have stripped the golden parachute from the employment agreements (as Gordo showed, governments can and do rewrite contracts post facto, though in the BC case that led to the very well-deserved blowback of a court decision enshrining public sector union bargaining into the Constitution), and in this case the US government could easily have made it a condition of purchase and resale that the exec pay be canned.
From: You shall not side with the great against the powerless. | Registered: May 2001  |  IP: Logged
Frustrated Mess
rabble-rouser
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posted 28 September 2008 10:23 AM      Profile for Frustrated Mess   Author's Homepage     Send New Private Message      Edit/Delete Post
quote:
A medium-sized 4x4 pulls into the parking lot and 66-year-old Barbara Harvey gets out.

She opens the back door and two large Golden Retrievers jump out.

Barbara begins her nightly routine. She moves a few bags from the boot to the front seat and takes out pyjamas and a carton of yoghurt (her dinner). She then arranges blankets in the back of the car.

Barbara used to work in housing finance - this is the double whammy of the housing collapse where many who worked in the sector lost their jobs and their homes.

But since April, she and her dogs, Ranger and Phoebe, have spent every night in her car. It's cramped, but she says if they sleep diagonally they can all fit.



http://news.bbc.co.uk/2/hi/americas/7585696.stm

From: doom without the gloom | Registered: Feb 2005  |  IP: Logged
Fidel
rabble-rouser
Babbler # 5594

posted 28 September 2008 11:16 AM      Profile for Fidel     Send New Private Message      Edit/Delete Post
More blow by blow from Mike Whitney

Trouble in Banktopia: The financial system is blowing up

quote:
The Fed's rotating loans are just a way to perpetuate the myth that the banks aren't flat-lining already. Bernanke has tied strings to the various body parts and jerks them every so often to make it look like they're alive. But the Wall Street model is broken and the bailout is pointless.

Last week, there was a digital run on the banks that most people never even heard about; a "real time" crash. An article in the New York Post by Michael Gray gave a blow by blow description of how events unfolded. Here's a clip from Gray's "Almost Armageddon":

"The market was 500 trades away from Armageddon on Thursday...Had the Treasury and Fed not quickly stepped into the fray that morning with a quick $105 billion injection of liquidity, the Dow could have collapsed to the 8,300-level - a 22 percent decline! - while the clang of the opening bell was still echoing around the cavernous exchange floor. According to traders, who spoke on the condition of anonymity, money market funds were inundated with $500 billion in sell orders prior to the opening. The total money-market capitalization was roughly $4 trillion that morning.

The panicked selling was directly linked to the seizing up of the credit markets - including a $52 billion constriction in commercial paper - and the rumors of additional money market funds "breaking the buck," or dropping below $1 net asset value." . . .

Most people who follow these matters would trust Faber's assessment way over Paulson's. In his latest blog entry, economist Nouriel Roubini said that "no professional economist was consulted by Congress or invited to present his/her views at the Congressional hearings on the Treasury rescue plan." Roubini added:

"The Treasury plan is a disgrace: a bailout of reckless bankers, lenders and investors that provides little direct debt relief to borrowers and financially stressed households and that will come at a very high cost to the US taxpayer. And the plan does nothing to resolve the severe stress in money markets and interbank markets that are now close to a systemic meltdown."

Roubini is right on all counts. So far, more than a 190 prominent economists have urged Congress not to pass the $700 bailout bill. There is growing consensus that the so-called "rescue package" does not address the central economic issues and has the potential to make a bad situation even worse.


"One analyst said that the calls to Congress are 50 percent "No" and 50 percent "Hell, No". There is virtually no popular support for the bill."


From: Viva La Revolución | Registered: Apr 2004  |  IP: Logged
DrConway
rabble-rouser
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posted 28 September 2008 11:42 AM      Profile for DrConway     Send New Private Message      Edit/Delete Post
Hello, and Welcome to the Third World


From: You shall not side with the great against the powerless. | Registered: May 2001  |  IP: Logged
DrConway
rabble-rouser
Babbler # 490

posted 28 September 2008 12:47 PM      Profile for DrConway     Send New Private Message      Edit/Delete Post
IHT: U.S. lawmakers rush to complete U.S. rescue plan

quote:
"All of this was done in a way to insulate Main Street and everyday Americans from the crisis on Wall Street," Pelosi said at the news conference. "We have to commit it to paper so we can formally agree, but I want to congratulate all of the negotiators for the great work they have done."

*squints*

I'll wait and see as to the actual text of the bill before I cheer the Dems on this one.

[ 28 September 2008: Message edited by: DrConway ]


From: You shall not side with the great against the powerless. | Registered: May 2001  |  IP: Logged
SwimmingLee
rabble-rouser
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posted 28 September 2008 05:27 PM      Profile for SwimmingLee     Send New Private Message      Edit/Delete Post
of all the different news articles about the TiBL2, the ones that seem the most cogent (is that a word ?) are the ones that acknowledge the enormity of the situation in terms of debts and defaults on credit default insurance. the conservative among them, e.g. from Bloomberg, had acknowledged losses of $500 billion that have shown up on bank's income statements. With total losses expected to be $1.4 trillion.

This goes along with a curve of mortage resets that are occurring. There is a huge wave of mortgages that are resetting to their higher interest rate. And fewer people able to make their mortgage payments, in the US.


From: LASIK-FLap.com ~ Health Warning about LASIK Eye Surgery | Registered: Dec 2007  |  IP: Logged
jrootham
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Babbler # 838

posted 29 September 2008 10:40 AM      Profile for jrootham     Send New Private Message      Edit/Delete Post
The rescue bill failed.

The problem is that conservative Republicans took it down, getting them onside will make the bill immeasurably worse. Unless the left Democrats can belt Pelosi over the head enough to get a bill that is actually good this is going to help Republicans.


From: Toronto | Registered: Jun 2001  |  IP: Logged
DrConway
rabble-rouser
Babbler # 490

posted 29 September 2008 10:52 AM      Profile for DrConway     Send New Private Message      Edit/Delete Post
The conservative Repubs have a point: Why should the government hand out $700 billion of taxpayer money to businesses when the free market is supposed to reward success and punish failure?

Quarrel or not with their ideology, but all the litany of complaints they have about the government rewarding failure is neatly encapsulated in the very thought of bailing out banks and near banks when they made bad decisions and purposely weakened regulatory oversight that would have protected them from making bad decisions.

It's like the stock market. Do you expect the government to rush in and give you the money you lost if you placed your bets on bought stock in a company that tanked?

More than likely they'd tell you take a hike and the capital loss on next year's taxes and live with a hole in your pocketbook.


From: You shall not side with the great against the powerless. | Registered: May 2001  |  IP: Logged
jrootham
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posted 29 September 2008 11:11 AM      Profile for jrootham     Send New Private Message      Edit/Delete Post
I don't disagree with that. I just don't think that there will be no bill. I think the Democrats will cave on letting truly bad things (no capital gains tax, less regulation, etc.) into a new version of the bill.

This is not a rational response, but I have no faith in the rationality or spine of Democrats. The TED spread (difference between interbank loan rates and US T bills) has spiked higher in the past.

With huge luck the Democrats will start listening to people who predicted this mess and start ignoring the ones who caused it.

But I am not holding my breath.


From: Toronto | Registered: Jun 2001  |  IP: Logged
DrConway
rabble-rouser
Babbler # 490

posted 29 September 2008 11:28 AM      Profile for DrConway     Send New Private Message      Edit/Delete Post
Too bad they didn't listen to the "Hell no!" people.

quote:
Republicans blamed her scathing speech near the close of the debate — which attacked Bush's economic policies and a "right-wing ideology of anything goes, no supervision, no discipline, no regulation" of financial markets — for the current turmoil.

Oh, please. It was the same Repubs not even ten years ago jeering at Democrats because the Dems didn't want to zero out capital gains taxes and Bill Clinton threatened to veto any such legislation.

And it was Phil Gramm who helped spearhead the destruction of Glass-Steagall, which in turn helped this mess get started.

[ 29 September 2008: Message edited by: DrConway ]


From: You shall not side with the great against the powerless. | Registered: May 2001  |  IP: Logged
jrose
babble intern
Babbler # 13401

posted 29 September 2008 11:33 AM      Profile for jrose     Send New Private Message      Edit/Delete Post
Closing for length.
From: Ottawa | Registered: Oct 2006  |  IP: Logged

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