Well said, Dean.

Amen.

-G

Well, they got what they wanted. I’m sure they padded their bank accounts nicely by shorting the DOW. Why should they change anything now? They appointed another Goldman Sachs Paulson crony (aptly named Cash and Carry) to dispense the funds.

http://blogs.wsj.com/deals/200.....ng-banker/

WTF!?!

What happened to the Summner Redstone thread?

yeah - we were right and they were wrong. but the bill passed and paulson has our money to do with what he pleases. that doesn’t make me think we’re up by one.

I make a comment on debtor’s prison in the Redstone thread and poof. I swear I ran into the following story right after I posted that comment.

Did I just mention debtor’s prisons?? Suggest putting remaining 401k in high growth prison industry. No need to thank me for the tip.

So it begins. Here’s a story on an old man being put in jail because he can’t afford to maintain the covenants in his neighborhood because of predatory interest rises in his ARM. Jailed, broke and denied bail, the 66 year old has effectively been incarcerated by actions of his homeowners association!!

http://www.tampabay.com/news/h.....847365.ece

Enjoy.

Seems to have gone to the same place as a lot of paper wealth.

Its just a bit “frothy”….

now look over here at how poor people and ACORN brought down billionares that have been in charge for the last 100 years.

Great post, Dean!

BushCo looked around and figured, Hey, we’ve only got three months left to starve the beast, let’s soak the suckers for another trillion (that’s one million million) bucks that they don’t have. Grover Norquist gets his wish.

But Dean! This is just like how all the VSP (Very Serious People) operated in the run-up to the Iraq war. After all, they knew better than the DFHs and the great unwashed masses so we just needed to sit down and STFU and let them rule.

Ya ever notice how easily “rule” rhymes with “drool”?

Exactly Dean! Great post. There was never any urgency. The only urgency was being felt by the Masters of the Shadow Economy who needed close to a trillion dollars to steal what’s left and to use this money for their next phase of treason (global control)!

Paulson proclaims the urgency of a surge of buying up toxic debt, right here and now. Democrats suggest investment with equity for the public in the banks. That’s the politics of defeat, he says. The surge means victory. Fast forward two weeks. We must invest in the banks themselves, declares Paulson, while his $700 billion surge stash from the taxpayers lies a’molding.

I remember Sir Thomas More, at least the Robert Bolt version, amused at his future son-in-law who was by turns an ardent churchman and a fire-breathing Lutheran. “I should hope when your head stops spinning your face is to the front.”

That’s how it looks to me, too. Another apparent failure by Bush (by our point of view) is really another neocon success.

To pick up on your point. I am not sure how much the government has spent on its program to help out homeowners. I’m thinking not that much. But here are some other costs:

Bear-Stearns: $30 billion
AIG: $122.8 billion (to date)
Fannie and Freddie: potential liabilities ~$2 trillion
Paulson bailout: $700 billion
Congressional add-ons: $110 billion
Paulson directs Fannie and Freddie to buy more bad paper: $200 billion
Fed currency swaps: $620 billion
Fed’s Commercial Paper Funding Facility to replace money markets (planned for end of November): $900 billion

Some of this money had yet to be spent. Some will not be entirely wasted. Some is in relatively short term loans and should be paid back in 4-6 months. Some involve losses that make take years to work through. But the sums involved are staggering. Just what I have up there is $4.682 trillion, and I have likely left somethings out.

Stolen in Plain Sight

(No need for Stealth)

In View of the Plain Folk,

Their children’s Wealth

“Look, Chris, I think we have to take this very seriously,” Davis told Fox News Sunday host Chris Wallace. “And the kind of comments made by Congressman Lewis, a big Obama supporter, are reprehensible. The idea that you’re going to compare John McCain to the kinds of hate spread in the ’60s by somebody like George Wallace is outrageous. Where was John McCain when George Wallace was spreading his hate and segregationist policies at that time? He was in a Vietnam prison camp serving his country with his civil rights also denied.”

Well, the real story here is that the elites brought us this mess. They were too dumb to see an $8 trillion housing bubble and to recognize the damage it would cause when it burst. They didn’t know what they were doing then and they still don’t know what they are doing now.

Excellent!!! Thanks.

One question: where does the figure of $8B come from?

Where the heck is that audio of Bush in 2003 saying he told Fannie, Freddie, that a first home shouldn’t be a starter home, and to start giving out sub-primes?

That needs to be played over and over, before the Dems are blamed for this debacle.

He’s a POW so he can say anything he likes. These people are despicable. John Lewis was not over the line by calling them on it. They need to learn that we will not tolerate that sort of thing in this country. Enough.

Will the elite corporate media ever put the burden of responsibility for the economic meltdown on the shoulders of the ruling elites? I don’t think so. They will be complicit in trying to blame the Democrats, the middle class and the poor.

One question: where does the figure of $8B come from?

Oops! Make that “8 trillion”.

BTW GM is in talks with Cerberus the holding company that owns Chrysler about the possibility of a merger. I believe the thinking is that, by combining, they will achieve synergies that will help them sink faster.

http://www.nytimes.com/2008/10.....ref=slogin

But don’t telegraph your punches:

ISLAMABAD, Pakistan (CNN) — A suspected U.S. missile strike killed four people and wounded two others in Pakistan’s tumultuous North Waziristan region, Pakistani military sources said Sunday.
A man inspects rubble in North Waziristan. It’s unclear if the strike was one of two reported Sunday to CNN.

The Saturday strike hit a home in the village of Khatai Qila, the sources said, speaking on condition of anonymity because they are not authorized to speak to the media.

The attack was one of two suspected missile strikes on Saturday in the tribal region that borders Afghanistan.

Who knew? *g*

Bankers welfare

Does it work? No. Why? Banks are a for profit institution that provide services for fees and charges. Want to borrow the other depositors money you pay according to your security and credit worthiness.
Banks attract depositors based on location and benefits they offer the customer. They give commercial accounts special service.
Any customer mistakes or overdrafts are costly.
Banks do not give they take as much as the law allow, Their credit lines are usurious.
So after all the points and fees why should we give them money for free?
Large bank chains play monopoly with each other trying to get bigger pieces of the pie. Since Treasury Secretary Simon leveraged unfriendly buyouts (using other peoples money) has consolidated these and other corporations into top heavy mega corporations called the Oligarchy.
Now after screwing everyone they can over and over for 30 years they want out tax dollars cheap…less than 8%. Check the average credit card rates…considerably more than double what they are willing to give us.
That is called a scam.

Too bad McC didn’t say it.

McCain was may have been in a prisoner of war camp or was he staying in more comfortable surroundings after his participation with North Vietnam in producing anti-American propaganda?

Correspondance from Sen Lieberman. I file this one under “Oh really daddy?” Apologies for the length. But I need someone to share my pain.

Dear X:
Thank you for contacting me concerning the current financial crisis and economic downturn. I am pleased to hear from you on this matter.
Our financial markets are experiencing a once-in-a-lifetime event, the full consequences of which are just now unfolding. Short-term credit for borrowers is unavailable or prohibitively expensive. The balance sheets of banks include illiquid assets of questionable value. Equity prices have fallen, and even the safety of money market funds has been called into question. Unable to meet their contractual commitments to creditors, a number of prominent financial institutions have failed or required significant federal assistance.
In my view, a confluence of factors has contributed to the current credit crisis, including irresponsible actions by financial institutions, excessive borrowing, a severe decline in the housing market, and the inadequacy of our depression-era financial regulatory structure. In the years leading up to 2007, lenders in the competitive mortgage finance business increasingly sought to maximize profits by extending mortgages to borrowers that were less and less credit worthy. Through the securitization process, new mortgages were packaged and sold to investors in the form of mortgage-backed securities. The investment return was tied to the mortgage payments made by the underlying homeowners. Many investors purchased de facto insurance policies, such as credit default swaps, to protect against losses on their securities. However, the insurance policy is only valuable if the party writing and selling the policy remains solvent. As delinquencies and foreclosures increased, the mortgage-backed securities lost value. The interconnectedness of financial institutions and the uncertainty of who holds the ultimate risk with respect to these asset-backed securities have discouraged potential buyers, undermined investor confidence, and increased market volatility. The result has been the dissolution, acquisition, or federal takeover of several large financial firms.
In order to restore liquidity and stability to the financial system, I supported the passage and enactment of the Emergency Economic Stabilization Act (P.L. 110-343), which the President signed into law on October 3, 2008. Let me be clear, I supported the federal financial rescue package because the health of the financial system affects every American - even those without bank accounts, credit cards, or loans. Small and large businesses rely on the credit markets to run their companies and pay their employees. If the credit markets dry up, businesses who need credit have to close and employees lose their jobs. Moreover, many workers rely on the markets for their retirement security and for the financing of their homes, their cars and their children’s college tuition.
The Administration’s original $700 billion proposal was only three pages in length. If Congress had passed the President’s blank check proposal without changes, it would have committed legislative malpractice. Unlike the original proposal, the enacted version seeks to: (1) hold Wall Street accountable by prohibiting excessive compensation and severance packages for top executives; (2) preserve homeownership and mitigate additional home foreclosures; and (3) protect the interests of taxpayers through aggressive oversight and measures that increase the likelihood that taxpayers will be repaid. The legislation authorizes the U.S. Department of the Treasury to establish the Troubled Asset Relief Program (TARP) to buy up to $700 billion in mortgage-backed securities and other distressed financial assets.
The financial rescue plan, as modified and improved by Congress, includes a number of important oversight and transparency measures to ensure that the funds are used responsibly. The government must publicly disclose the details of every transaction within 48 hours. The Treasury Department must provide Congress with regular reports and financial statements regarding expenditures, transactions, and pricing mechanisms. The U.S. Government Accountability Office - which reports directly to Congress - is required to review progress and report on the program every 60 days. The bill establishes two separate oversight boards. One will consist of senior officials from other federal agencies. The second oversight board will consist of private sector members appointed by Congress. Lastly, Congress authorized the creation of a special inspector general position to coordinate audits and investigations of actions under the program.
Notwithstanding the oversight and transparency provisions, additional measures were needed to protect the interests of taxpayers. The bill requires the Treasury Secretary to obtain an equity position (e.g., stock) or a debt instrument from the financial institutions selling the troubled assets. If taxpayers do not recoup their investment in five years, the President must submit a plan to cover taxpayer losses.
In order to ensure that Wall Street executives do not escape with “golden parachutes” while taxpayers are left with the bill, the rescue plan requires the Treasury Secretary to develop appropriate standards for executive compensation and corporate governance. Certain large financial institutions will be prohibited from extending, in any new employment contract, a golden parachute that provides compensation in the event of an involuntary termination, bankruptcy filing, insolvency, or receivership. Tax provisions restrict a participating employer’s deductibility of current or deferred compensation exceeding $500,000 for top executives. Lastly, the current 20-percent excise tax on executives receiving large severance packages when a company changes hands is expanded to cover departures that occur for other reasons.
The bill will help preserve homeownership by directing federal agencies to modify the troubled mortgages they acquire in order to prevent and minimize foreclosures. Federal entities are directed to work with mortgage servicers to encourage loan modifications. The bill also expands U.S. Housing and Urban Development’s (HUD) Hope for Homeowners Program, created in July 2008. The program facilitates the refinancing of homes facing foreclosure. Other important provisions increase the level of deposits guaranteed by the Federal Deposit Insurance Corporation from $100,000 to $250,000 and allow banks that owned preferred shares of Fannie Mae and Freddie Mac to deduct losses realized as a result of the federal takeover as ordinary income.

Going forward, I am particularly pleased that the financial rescue plan includes a modified version of a proposal I introduced with Senator Maria Cantwell (D-WA) to jump-start the fundamental reform of our financial regulatory structure. Our proposal was introduced in the Financial Market Investigation, Oversight, and Reform Act (S. 3652). This enacted provision establishes a bipartisan oversight panel consisting of five private sector representatives appointed by congressional leaders. The panel is charged with conducting a comprehensive review of the financial regulatory system and reporting back to Congress in approximately four months with specific recommendations on how to overhaul and modernize our financial regulatory structure to prevent credit and liquidity crises from occurring in the future. The current regime was constructed in the aftermath of the Great Depression, and it desperately needs reexamination and reform in order to prevent a repeat of the current crisis. We must take steps to ensure that we never again find ourselves in the same position - where Main Street taxpayers are bailing out Wall Street financial institutions.

When Congress reconvenes, both the House and Senate will get to work on reforming and modifying our financial regulatory structure to prevent future crises. Fundamental financial reform will require Congress to come together in a bipartisan fashion and confront a number of vested interests that benefit from the current rules. Please be assured that I will closely monitor the Treasury Department’s implementation of the financial rescue plan and will continue my efforts to forge a bipartisan solution to this economic crisis.

Thank you again for sharing your views and concerns with me. I hope you will continue to visit my website at http://lieberman.senate.gov for updated news about my work on behalf of Connecticut and the nation. Please contact me if you have any additional questions or comments about our work in Congress.

Sincerely,

Joseph I. Lieberman

UNITED STATES SENATOR

Nah, he was in the same shit hole as the rest of em. What they don’t tell you is that the “get out of jail free card” was offered to all of them and none of them took it.

Don’t laugh. I asked Mr.Solai if we should be buying some GM stock. Or GE. Or Intel. Maybe make up for what we lost. Is that a good idea or idiocy?

FWIW, I think the $700 billion is like a guaranteed credit line. It actually does a lot more good in terms of confidence/hope before Paulson uses it. More banks think they have a shot at it. In reality, Paulson is selecting the winning banks. This is the same strategy Paulson tried unsuccessfully in July 2008 to use Fannie and Freddie as firebreaks save Fannie and Freddie.

Paulson Pushes For Fannie Freddie Laws This Week

Paulson got the legislation he wanted, but he didn’t use it immediately. He hoped that the guarantee would make it unnecessary for him to actually take them over. Currently, I think we’re all hoping there doesn’t have to be a 100% nationalization of the banking industry.

On the flip side of all this for liberals/progressives, I think there is incredible and brand new momentum to pass legislation that would remove corporate donations from local, state, and federal elections.

Thanks for the post. I think what’s critical is that liberals/progressives stay on top of how Paulson/Bernanke actually uses the $700 billion, and all the cash the FED is shoveling out the door. Paulson/Bernanke may have the legal authority, but the legacy media is providing some sunlight on their actions. IMHO, that’s good for liberals/progressives.

Paulson would have nothing to do earlier with the “injection” notion, yet someone put it in the Bailout Bill anyway (as an option). Do we know which Senator is responsible?

Check out what Barry had to say:

10 Bullish Charts, Signals, Indicators

Thanks.

And back in 2006 iirc US Gross Domestic Product was around $13 trillion.

It will be way down in the coming years.

OT - sorry, but the Palins aren’t out of the soup yet. File this under “oops”:

Some weeks ago, the McCain team devised a plan to have Palin file an ethics complaint against herself with the State Personnel Board, arguing that it alone was capable of conducting a fair, nonpartisan inquiry into whether she fired Monegan because he refused to fire Wooten, who had been involved in a messy custody battle with her sister. Some Democrats ridiculed the move, noting that the personnel board answered to Palin. But the board ended up hiring an aggressive Anchorage trial lawyer, Timothy Petumenos, as an independent counsel. McCain aides were chagrined to discover that Petumenos was a Democrat who had contributed to Palin’s 2006 opponent for governor, Tony Knowles. Palin is now scheduled to be questioned next week, and the counsel’s report could be released soon after. “We took a gamble when we went to the personnel board,” said a McCain aide who asked not to be identified…..

http://www.newsweek.com/id/163465

Glenn Smith up at FDL.

From Lieberliar:

…the inadequacy of our depression-era financial regulatory structure.

I keep seeing this from the rethugs and their enablers. But isn’t the real problem that the “depression-era financial regulatory structure” was gradually dismantled and worked around (via holding banks, hedge funds, etc.)?

I was not in favor of the bailout, either editions v1 nor v2 nor v2.5 but I would say you have to give them at least 3 weeks. It will take a while to set up a whole organization, including phones, offices, hiring people, interviewing, all while trying to adhere to what ever federal guidelines they are under (maybe not many , not sure how much leeway they were given - do you?). Don’t attack people using unfair measurements. That’s the republican way.

Paulson not using the $700 billion has not worked out particularly well so far. I am not sure a 100% nationalization of banks is necessary but a partial nationalization is imperative to free up credit an assess solvency wth a view toward recapitalization. These moves will be futile, however, unless derivative, meaning the swaps, are nullified and meaningful re-regulation of markets instituted.

John McCain can just kiss off support of Republicans in affluent Monterey County, CA. Guess someone forgot to tell him Clint Eastwood and Rupert Murdoch are the favored real estate moguls on the central California coast.

http://www.montereyherald.com/ci_10703347

Thanks.

Dean,

I agree with the gist of your post. But I wish you wouldn’t put it in terms of “elites” vs. “ignorant masses”. That’s Governor Palin’s shtick. That’s President Bush’s silliness. The anti-knowledge, “anti-elite” route will leave the Republican party in ruins.

I know you’re not really taking that approach, but by essentially borrowing that terminology, you do yourself a disservice.

Hugh, if you have the time or the inclination, would you be interested in doing a post about the “burn rate” of the US government.

IMHO, that’s what your comment above, and other similar ones you have made, appear to me to be about.

Paulson appears to be injecting capital in, before he has plugged the leaks. Per Ian Bailout 101, patch the hull or taxpayers will be paying forever.

Thanks again for all your work.

Hugh, this would appear to really confirm your point about CDS’.

“Insurance on Lehman Debt Is the Industry’s Next Test”

[…] The magnitude of the exposure came into focus on Friday, when the price of Lehman’s bonds was set via a closely watched auction on Wall Street. The debt was priced at a little above 8 cents on the dollar, leaving companies and funds that insured these debts against default on the hook for the remainder.

The price determined the amount that sellers of bond-default protection would have to pay those who bought their protection, called counterparties. The lower the bonds’ price fell, the higher the payouts were going to be.

But even now, the total amount coming due is unknown because the market for credit-default swaps is not regulated or tracked through any clearinghouse of data. “The huge value of credit-default swaps on Lehman Brothers, and the low price obtained in this auction, mean there are billions of dollars in obligations,” said Eric R. Dinallo, the New York State insurance superintendent. “No one knows who owes this money, how much each counterparty owes, or whether any of these counterparties will now be in trouble themselves, with further potential problems for the financial markets.”

Some of those on the hook will quietly settle their trades as they come due, mostly within the next two weeks, and keep doing business as usual. To the extent there are problems, the world may find out about it only when another financial services company discloses its exposure or perhaps even collapses.[…]

too many zeros.

But the sums involved are staggering. Just what I have up there is $4.682 trillion, and I have likely left somethings out.

Chris Floyd had a great post on what this means yesterday:

This was the cult that captured the governments of the United States and Britain (among others), as well as the Republican and Democratic parties, and the Conservative and Labour parties as well. And for almost thirty years, its ruthless doctrines have been put into practice. Regulation and oversight of financial markets were systematically stripped away or rendered toothless. Essential public services were sold off, for chump change, to corporate interests. Public spending on anything other than making war, threatening war and profiting from war was pared back or eliminated. Such public spending that did remain was forever under threat and derided, like the remnants of some pagan faith surviving in isolated backwaters.

Year after year, the ordinary citizens were told by their governments: we have no money to spend on your needs, on your communities, on your infrastructure, on your health, on your children, on your environment, on your quality of life. We can’t do those kinds of things any more.

Of course, when talking amongst themselves, or with the believers in the think tanks, boardrooms — and editorial offices — the cultists would speak more plainly: we don’t do those things anymore because we shouldn’t do them, we don’t want to do them, they are wrong, they are evil, they are outside the faith. But for the hoi polloi, the line was usually something like this: Budgets are tight, we must balance them (for a “balanced budget” is a core doctrine of the cult), we just can’t afford all these luxuries, sorry about that.

But now, as the emptiness and falsity of the Chicago cargo cult stands nakedly revealed, even to some of its most faithful and fanatical adherents, we can see that this 30-year mantra by our governments has been a deliberate and outright lie. The money was there — billions and billions and billions of dollars of it, trillions of dollars of it. We can see it before our very eyes today — being whisked away from our public treasuries and showered upon the banks and the brokerages.

Let’s say it again: The money was there all along.

highly recommend the whole post.

I know why Paulson proposed his initial idea, only to quickly abandon it for equity positions once approved by Congress — he and Bush knew they’d never, ever get their own party to approve such a plan. Only by crafting a non-equity, cash-for-trash program could he get the GOP leadership in Congress to sign on, and press some members to approve it. And the equity positions he’s taking in “banks” don’t even include voting rights!

They are hanging on to the last vestiges of corrupt crony capitalism.

Paulson and Bernanke lied to Congress to get the plan approved.

Why do they still work for the US government? It is a wonder.

I re-dub the “elites” the “ignorant hordes”. Those of us who knew this was bad can be the elites, because the elites are always correct (by their own lights.)

After reading this, I would say the ’scoreboard’ needs to be changed:

Elites 1, ‘ignorant masses’ 0.

This article is worthy of an FDL article (IMO).

oh come on, it can’t be so bad, Barack Obama was fully behind the bailout, and worked hard to get his fellow Democrats to pass it, against the wishes of their constituents.

Thats the way causality flows in the Progressive Blogworld - top down - and if the Candidate supports it, it must be good!

or are you hoping we forget how much Obama supported the bailout?

I’ve long had a real problem with the East Coast Democrats having so much financial power in the party. Democrats under Emanuel and McAulife brought in even more pro business candidates to appeal to the big east coast donors.
Now we’re all paying the price, and we all know they collude with the market.

Today’s cry is now “The banks are afraid to lend to each other?” s Oh, really you lying bastards??

This is the same scam oil companies pulled back in the 80’s that caused the gas crisis. I know because I worked with them.
What did they do?? They all capped their wells - in a petulant F*** You to the American people - they deliberately withheld supplies because the price of oil dropped so low they weren’t making a big enough profit.

The banks too, have just shut off the supply of money to everyone because interst rates are so low - they’re just not making big enough profits. Not any profits- just the killing kind they’ve grown accustomed to.

Like many of you, I have accounts with all the major banks. All of my long held low interest high credit lines were suddenly reduced when I became seriously ill , couldn’t work and all the credit reporting sharks sent warnings to my banks that I was now actually using my cards and increasing my debt. Something I did not do before and in fact fought against most of my life. All did that Chase, WaMu, Capitol and Citi. The worst are WaMu and Chase.

But oddly enough, they began flooding me with new offers. Actually pulled me inside the Chase bank office/closing booth where I hold my main accounts and are offering new cards, additional cards with fairly high credit lines - but at double my current interest rates.

So let be perfectly clear, my friends, it is NOT that they don’t have the capital to lend to other banks, to each other. Why should they when they can hold on to it because you’ll pay more - 20-30-40-50% - anything -to save your home and family?

And our government and Congress know it.

Dean, you have 7 DIGGS, box above shows 0

Fine article!

Also Hugh, Boo, Selise, Teddy - your comments deserve a full article.

wikipedia on Paulson tells me Paulson is the Grand Poohbah of Economic Hitmen, with Cox Chief Toadie.

I’m too overwhelmed to write more.

Thank each and every one of you!