BERNANKE WANTS MORE OVERPOPULATION WITH $1 TRILLION ENTITY BAILOUTHis quote today:”…”The intensification of financial stress in recent weeks, which will make lenders still more cautious about extending credit to households and business, could prove a significant further drag on growth,” …”The rest of the URL:http://news.yahoo.com/s/nm/20080924/bs_nm/us_usa_fed_bernankebizIs this bailout entity like that Sci Fi horror movie about the devil demon, called “The Entity”?Perhaps we need to let the banks tighten their belts and raise interest rates to stay afloat; rather than slap us taxpayers with a corporate welfare bailout population “growth” bill?

To avoid another bubble by rewarding ruthless risk taking? Give me a break, the fact of matter is this country needs a depression to restore financial order, without that, a even bigger bubble is in the works.You advocated regulation, regulation, regulation, yet you blamed “where are the regulators”? Do you think it’s not contradictory? The bottom line, my dear professor, is that Americans can not live beyond their means forever. And you seem to think they can by doing some gimmicks. That’s flat false. Let the house prices fall, teach everyone a lesson that they need to live within their means, that’s only solution.

I cannot agree with you more.

This excerpt from FT article on Bernanke’s address:”In response, Bernanke replied that every American would feel “direct” negative effects if the credit crunch was allowed to continue or worsen. He said it would be difficult for consumers to get auto loans and for small businesses to expand.”Our modern economy cannot grow, cannot create jobs, cannot provide housing without effectively working credit markets,” the chairman told the Joint Economic Committee a day after being grilled by members of the Senate Banking panel.”My only concern here today is to try to find a solution that will stabilize credit markets so they can do their job,” Bernanke said.Credit markets were the “plumbing” for the “lifeblood” of the U.S. economy, according to Bernanke. If consumers and businesses go to turn on the tap and credit is not available, the economy would face a “grave threat.”Members of Congress continue to be uncomfortable with the $700 billion price tag. Still, no one on Capitol Hill has ever said that the plan was dead.One member argued that restricting car loans and small business loans was no justification for such a large expenditure.Taking another bite at the apple, Bernanke painted a very grim picture of the economic outlook with no passage of the Paulson plan.”This is not an inconvenience. What that is going to do is effect spending and economic activity and it will cause the economy as a whole to decline and be much weaker than it otherwise would be. It will affect the unemployment rate. It will affect job creation. It will affect real incomes. It will affect everyone’s standard of living. It is much more than car loans. It is really about the overall performance of the U.S. economy, perhaps over a period of years,” Bernanke said.”It almost seems as if they want to create a backlash against this bailout plan- that is how ridiculous it sounds. Oh how sad- people won’t be able to live on credit. We may actually have to pay with real cash??!!! We may actually have to save up for capital improvements and only buy what we can really afford. Credit won’t dry up either- it will just be harder to get. Without easy credit Household debt will eventually resolve itself- painfully yes, but in the long run it will be better for the country. People will have to wait to buy that wide screen TV, or vacation property, and instead pay off their loans.What really needs to happen is we need to hire a new “plumber” to rip out the old plumbing and put in the new improved plumbing. Get rid of Fractional banking- reinstate the laws against Usury, and let the wall street chips fall where they may- rather than saddling generations to come with a gargantuan tax burden. I prefer to live a lower standard of living, and ensure that my kids will still enjoy the benefite of a free republic. Rather than keeping the status quo on wall street and central banks.As for the Professor’s HOME plan, I am not qualified to comment- other than I think that any plan that continues to feed the beast that got us into this mess- is a plan we need to avoid. I understand the moral Hazards involved, and yes something should be done to keep people in their homes- I say lets sue the Fed- let those who are responsible pay. How about some of these very wealthy people donating some of that wealth to help their fellow citizens secure their homes- give them a tax write off or something. Give tax incentives to those of us who are responsible consumers, to purchase these homes at fair market value, and rent them to those who were not smart enough to know better. There has to be a better way than continuing to line the pockets of financiers at the taxpayers expense.Am I first???

I’m on your side. As long as we keep rewarding wall street criminals and punishing good honest people, there is no end of bubble in sight, there is no end of wealth transfer in sight (from poor to rich).Put the criminals behind the bar, even China will do that. I’m losing my confidence in this country, I came here hoping this country is a better place to live!

Let the credit markets lock up.If it is profitable to extend credit thensomeone will find a way.NO BAILOUT!

Where will the money come from? Does the treasury have money? No, they don’t! So? Yeah, printing. OK, but…, should Zimbabuwei the richest country if you can print to thrive?Shhhh…., don’t tell the foreigners that we are just making a show to lure them in to foot the bill. Will the foreigners that dumb? Yeah maybe, but even if so, this will be the last time. The American empire will fall and has to fall.

If the financial system can not operatewithout a bail out, then they shouldn’tbe operating.

There it is, you’ve said it: “I prefer to live a lower standard of living, and ensure that my kids will still enjoy the benefite of a free republic. Rather than keeping the status quo on wall street and central banks.”America’s international bankers are smashing our existing economy and creating a chaos in which they alone will pick up the pieces. They’ve engineered the greatest crack in America’s financial history and now they want to be reimbursed.There can be no happiness for the people in this kind of economic life.

Professor, with all due respect, I have three questions/remarks concerning your 10-step HOME program:- The question about how to price these toxic assets is of paramount importance. Saying the price should be somewhere between mark-to-market and hold-to-maturity is not enough. We need a pre-conceived and exact pricing method/ formula, as pricing would differentiate between a successful and a costly bailout.- If the market itself, in these conditions, is not able to sort out between and solvent and the unsolvent banks, how could anyone claim is able to make that distinction (with all moral hazard, conflict of interest and profiteering ensuing from this situation)- How much will your HOME program cost, and how could it be financed?- How can we ensure that the bubble is not being reinflated (or attempted to anyway). Home prices, as well as corresponding mortgages NEED to go down significantly to sustainable levels. Therefore any solution should focus both on debt relief as well as orderly price deflation (for the best interests of new homeowners).Otherwise, without these details, it would seem that any bailout plan is similar to a 1st year business school student case-study: a solution without any details, implementation plan, strategy or financing plan.Sincerely,

LOOK AT MISH WEBSITE FOR ALL THE FAX # DETAILS. HE HAS DONE A GOOD JOB OF PROVIDING THEM

Lehman Brothers went bankrupt but still plans on paying out $2.5 billion in bonuses. No wonder Paulson wants no oversight. China and Saudia Arabia will be reimbursed $100 billion or more for investment in mortgage securities before any US banks get $1 so we can borrow more from them.This sounds a lot like a credit card junkie that uses money from new cards to pay off old cards.

He is not ready It’s too complicated That’s OK, just send in the head of the Palin/McCain ticket.

I agree.

Paulson’s “quickie” – 2 1/2 page proposal – shows that he and Bernanke are in panic modeobviously, they never planned in advance- if they had, the plan would have been detailedbut instead, Paulson yelled “Fire!”the politicians are putting on a “show” to shift voter blame away from themselvesperhaps, a few actually are concernedit’s hard to tell with such consummate actorsquite a difference in how they questioned Bernanke from less than 2 years agothey used to treat B. as if were a reincarnation of the Great Greenspan

That’s Dr. Doom to you, Guest

Buffet buying in on Goldman reminds me of JP Morgan going onto the stock floor and buying stocks in October of ’29. History doesn’t repeat itself, but it does rhyme.They’ve lost control. He amounts are too much to bail out. The panic has set in. No matter what anyone does, it will make no difference now.

When you remove selective pressure, the organism weakens. The Eskimo say that the wolf keeps the Caribou strong. When you remove light, the blind cave fish loses its sense of vision. If a nocturnal hebivore ventures into the daylight, it soon becomes lunch for a daylight predator. It survives by altering its behavior to avoid selection. If you remove pathogens, immunity becomes impaired. If you bail out banks that ventured into dangerous waters, the banks will ultimately weaken and fail. Let the sharks prevail aand let selection fulfill its role.

I agree, Paulson and Bernanke are using the classical either/or fallacy to cheat the public and their representatives. It is proposed as either Paulson’s plan or disaster.This is a lie (a classical one, used very often). Alternative proposals like this HOME, where Bank shareholders are diluted, may well have superior effects. These alternatives must be urgently proposed to public and congress members before it is too late.

Don’t Sell Us Out,Don’t Bail Them Out!

This HOME plan, like other alternatives to the Paulson plan, must urgently be presented to public and congress members before it is too late.Paulson and Bernanke are using the classic either/or fallacy to cheat the public and its representatives. It is proposed as either Paulson’s plan or disaster.This is a lie (a classical one, often used).Alternative proposals like this HOME, with dilution of bank shareholders, may well have superior results and must be urgently proposed to public and congress.

I’m changing my name to Chryslerby Tom PaxtonOh the price of gold is rising out of sightAnd the dollar is in sorry shape tonightWhat the dollar used to get usNow won’t buy a head of lettuceNo the economic forecast isn’t rightBut amidst the clouds I spot a shining rayI can even glimpse a new and better wayAnd I’ve demised a plan of actionWorked it down to the last fractionAnd I’m going into action here todayCHORUS:I am changing my name to ChryslerI am going down to Washington D.C.I will tell some power brokerWhat they did for IacoccaWill be perfectly acceptable to meI am changing my name to ChryslerI am headed for that great receiving lineSo when they hand a million grand outI’ll be standing with my hand outYes siree I’ll get mineWhen my creditors are screaming for their doughI’ll be proud to tell them all where they can all goThey won’t have to scream and hollerThey’ll be paid to the last dollarWhere the endless streams of money seem to flowI’ll be glad to tell them what they can doIt’s a matter of a simple form or twoIt’s not just remuneration it’s a liberal educationAin’t you kind of glad that I’m in debt to youCHORUSSince the first amphibians crawled out of the slimeWe’ve been struggling in an unrelenting climbWe were hardly up and walking before money started talkingAnd it’s sad that failure is an awful crimeWell it’s been that way for a millennium or twoBut now it seems that there’s a different point of viewIf you’re a corporate titanic and your failure is giganticDown to congress there’s a safety net for youCHORUS

“We are in a War. It is clearly Main Street against Wall Street. Everyone is taking sides. You must continue to email and fax and call your Senators and Congressman. We go into a Depression either way. But if Wall Street wins, we come out of this naked, crawling on our hands and knees. If Main Street wins, at least we come out with our dignity, standing tall to fight another day like Americans . . . not slaves to Wall Street pigs. “http://realestateandhousing2.blogspot.com/

We don’t have any resource in the first place, it’s all borrowed money.

The professor does not give any reason why he thinks it is a U shaped recession, why it is so different from the Japanese problem back then. The only difference I can see is Japanese save a lot and Americans don’t. But is that enough to make this country better in coping with crisis? Sounds like no to me.I understand after being so bearish and bold for so long, the good professor wants to put up a happy face and present himself as an ultimate optimist, otherwise, he will be remembered as an un-patriotic citizen. But, I truly suspect his prediction of an 18 month recession will be correct. Common sense tells me you can’t live with other people’s money for ever, 18 months are enough for American people to pay back, as simple as that. Give it a decade!

I believe we (main street) want to see “blood in the streets”. Therefore implement emergency “clawbacks”. No questions ask. Implement them by the end of the week. Come back Monday and tell us how much private money sitting on the sidelines was made off this mess and we (main street) collected from the clawbacks which can now be allocated to this mess. Force the private equity to fix this. It kills me this money sitting on the sidelines is just waiting to make a 50 percent return off the back of the middle class STILL !!

Paulson Plan:- blank check- no oversight- no questions asked- open-ended, could go higher than 700B

The credit markets are frozen because lenders realize that there is too much credit extended as it is. This is the free market working. Naked debtors need to be identified and their credit worthiness needs to be adjusted… be they overextended consumers or insolvent banks.The argument Bernanke & Paulson put forth credit being frozen keeps people from getting car loans as a bad thing mystifies me. We need to be making fewer car loans and live within our means.

the ban on short selling appears targeted to retail investors – all you have to do to short sell even the financials is to buy put options and sell call options (synthetic shorting) and you get exactly the same effect

@GG: Those of you who want the blood to flow ought to recall that no one is an island. Because a systemic breakdown will seriously touch everyone here and likely overseas, we all have a huge stake in avoiding one. Rather than seeking revenge, I’d urge you to focus instead, as Dr. Roubini has, on how to avoid such a breakdown in a way that protects society without, to the extent possible, rewarding those who got us into this mess.”You make a good point in support of what Dr. Roubini is saying. But certain provisions in his proposal resemble the FDR approach that, in the end, created the opposite of a republic and destroyed it.The central point is that America’s financial system is a service industry and its primary product is credit. This industry is failing and failing in its mission to America, not due to outside events, but because its practices and its customs have become fraudulent to the core.In order to take steps to remedy the situation to the point where America can again benefit from the service of such an industry, America needs to begin steps to change the core operational principles of this system. Reformers such as Roubini (who, let me say,is the most brilliant economist of our times) offer many steps and programs that are good, and eventually, would restore the system to its usefulness. But the problem is that these workable proposals are handed over to politicians who pick out the things they like and ignore the others. And the last thing these politicians will pick is reform of the system, which is the first thing they should pick.Politicians, including Ronald Reagan, have been fooled repeatedly. It is politically naïve not to assume that the politicians will pick out what they like in Roubini’s reforms, while leaving the same basically flawed system intact. In exchange for “fixing things,” they will mire Americans deeper and deeper in socialism. When the Great Depression came along it brought big problems — people stood in lines for jobs and food, people lost their farms and homes. But the end result of all the reforms and programs, primarily introduced by Hoover and carried out by FDR, destroyed the republic. It was world war that finally put Americans back to work.If every single proposal in Roubini’s plan works the way he thinks, it would get us through this crisis but water the seeds for an even deeper crisis, IMO. Saying we need more regulatory oversight is not enough. Even Paulson says that. Americans have had it with words, words, words.Before any proposals are implemented, Americans first want a plan that takes the evildoers out of the system, a plan that allows honest bankers to operate and profit. Professor Roubini’s Step 10 outlines the reforms. I suggest a better approach would be the following two steps. Step One: Punish to the full extent the fraud creators and separate them from legitimate, healthy operations. Step Two: All of the fixes shall not begin until Step One is completed

As to Buffett, there’s no question that in buying a piece of Goldman Sachs as an insider, he is obviously getting something other than an investment (access to the vault?).

But the financiers want us to be indebted upto our eyeballs for eternity, so they can continue to make a killing. Otherwise they may have to change jobs.

The taxpayer is too big to fail

Well for one things we (the voters, the taxpayers) aren’t overseas. This debate in large part is about who recapitalizes the banks. Do the taxpayers pay for all of it (the Paulson plan, probably also all its derivatives like the Dodd plan) or do the foreigners share the pain.Since I’m an American, I want the foreigners to share the pain. No bailout on Paulson’s terms.

They said yesterday that they had cooked this up months ago and discussed it for a long time. But that they just decided to spring it on Congress this past week, because one week should be enough to get it done.

Yes, he said that he would not have bought if he did not expect the bailout to pass! He even said so!!You can’t make this stuff up …

appears to be a huge disconnect between the regular population and the government leadership – there should be a 100% link

“We the People of America must not reward our government with more money and power for failure, as we did after 9/11,” says William Gheen (ALIPAC’s president.) “Otherwise, we have created a grand political and financial incentive for failure that will be repeated many times in the future.”ALIPAC is opposing the bailout of Wall Street with taxpayer debt because of the scale of the costs, the radical restructuring of governmental power, and the fact the Bush administration is seeking Amnesty for potential suspects who are at fault for the financial meltdown.”Instead of a bail out, we need immediate investigations, prosecutions and seizures of assets of any American or foreign business leaders who have violated laws and we need to hold politicians in DC and regulators accountable.

(NECN) – President Bush says he is confident that Congress will pass a $700 bailout bill to deal with the financial meltdown that has shaken the global economy.Mr. Bush is in New York talking with world leaders before addressing the U.N. General Assembly today.He says he has been asked frequently about the U.S. financial problems.The president says he assured the leaders that the financial package making its way through Congress is “a robust plan to deal with serious problems.”He said there are ideas about how to change it, but that there is a desire to get a package done quickly.Mr. Bush said there will be natural give and take, but “There will be a bipartisan bill. Democrats and Republicans will come together” to pass this “rescue plan.”

If today’s prices were firesale prices more people would be buying.

My guess is that those Pew poll numbers are out of date. Things have changed fast; Paulson overplayed his hand, and he’s lost control of the debate. People are hip to President Bush’s scare tactics, so we may see even more backlash after his speech tonight.Man the phones, write those letters, tell your friends. There’s an unscripted moment headed your way, and the PTB are scared witless. Get a front-row seat, and bring your tomatoes!

Oh, don’t worry, we will and we shall feel much pain too. You will not be alone but your pain will be far worse.Ho hum

OK so were being told by the leaders of our country and economy that if we don’t give them a no strings attached $700 billion bailout that it’s going to be Great Depression all over again. The main problem though is that they are asking us the taxpayer to bailout the same Wall Street criminals that caused the mess, and if we don’t do it soon there is no doubt a collapse of our banking system like none of us have ever seen. Few details are being offered as way of proof of this, we have yet to see one balance sheet, or one technical analysis showing this doomsday scenario, but if we take them for their word they will save us all. I say thanks but no thanks for that check to nowhere.

why not give the 700 Billion for infrastructure projects across the US to US construction and engineering companies, with the banks investing in that?

There is hope that we can overcome the darkness and find a right path into the future.We need more disclosure and stronger controls over the actions of those with unusual power in our economy.

Mr. Paulson is incoherent, confused and sometimes disoriented, and doesn’t give answers clearly to the questions of comgressmen and is repetitive and mumbling. As a physician, I wounder his status of mind. Could he have Alzheimer’s disease? I feel he should be relieved from his duties managing this monumental economic crisis of our country.

This plan is so obscene. Is the government / FEDdeliberately trying to provoke the people?

Don’t waste food! You might need it. And keep the seeds, you never know. If your grocery can no longer get credit.Mud will do…

What is the “real” bogey man that the boys from Wall Street are afraid of? It’s not just a market crash…Anyone?

Damned good question, me thinks!!! Whatever, it is good reason for a revolution!Ho hum

How can Pew use the alleged fact that “by a margin of nearly two-to-one, Americans surveyed say the federal government is doing the right thing in intervening in the financial market credit crunch,” as “the public’s reaction to the bailout”? Sounds like a skewed poll to me.

If the free markets aren’t buying this debt then yes it is a bail out with potential for serious losses of tax payers money. But this bail out won’t solve anything unless it includes provisions for debt repudiation for consumers and even then there will be consequences. The finance economy or Fractional Reserve lending is a pyramid scheme and the underlying problem is at the base of the pryamid the consumers has no more capacity for further debt. When this tipping point occurs debt repudiation or deflation followed by bankruptcies is the only way to prime the system for further credit capacity. Of course the government can shift the burden or monetize the debt but there is no escaping the loss of wealth that will ensue.

The FBI investigation is frosting on a turd congress is about to feed the tax payers a big turd but don’t worry because we promise to get the bad guys because we care about tax payers.When you read between the lines you see how manipulative and sinister government is, they mistake us all for fools most of the time!

McCain didn’t do his homework and should go immediately to the infirmary to get an excuse for missing class as well.

Wow. McCain suspends his campaign to go to Washington to push the bailout bill per orders from Lynn Rothschild!http://www.politico.com/blogs/bensmith/0908/A_nonemergency_meeting.html?showallA non-emergency meetingThe McCain campaign’s new urgency about the financial crisis didn’t entirely clear his schedule this morning.My colleague Amie Parnes reports that he made it to his scheduled morning meeting with Lady Lynn de Rothschild, a Clinton backer who recently came out in support of him.All while Obama was waiting by the phone for a returned call.

I’ve got a great live recording of Arlo Guthrie and Pete Seeger doing this number. Almost thought it had lost its relevance!SWK

Perhaps it is those who are attempting to control all the world’s finances through a the world central bank as Keynes had planned, that issues an international fiat currency. Once that is implemented, the game plan is to “collect unlimited resources from the citizens of the world through the hidden tax called inflation so the money stream can be sustained indefinitely.”According to G.Edward Griffin, “[This] game results in a hemorrhage of wealth from the industrialized nations…with a severe lowering of their living standards and their demise as independent nations…a new, high-tech feudalism, paying homage to their Lords in New York.” In short, world socialism.

@Europen guestshave a look at RGE article “European banking on borrowed time” by Daniel Gross and Stefano Micossihttp://www.rgemonitor.com/euro-monitor/253731I have no idea where they get their data, but they claim a few euro area banks sport amazing leverage ratios, up to 50 (!!) for Deutche Bank.@London Bankerthe article also claims that Barclays has leverage of 60 (!!!) and liabilities for 100% UK GDP. Can you confirm or deny?You said Barclays is far too big to fail. But it also look far too big to save.

That is lack of sleep talking. But don’t be fooled. Mr. Paulson is a formidable, clever, intensely purposeful man. Do not make the mistake of underestimating him or his allies.

Also, Ms. Pelosi/DEMs are further clouding the immediate issues with the distraction of “Blank Check” and “Executive Compensation.” Are people in California really going to re-elect her?To sum it up :A Shadowy Bailout Plan to perpetuate the remnant Shadow Financial System in an IB style “negotiation.”Obama has a real oppty. here.He should not only insist that McCain proceed with the scheduled debate on Friday, but declare that the entire debate will be focused on this “crisis” in order to clarify the situation to all Voters/Taxpayers/Consumers/…Citizens.Best…

When asked point blank why he needs $700 billion and exactly what he would do with it, Paulson stammers, stutters, and mumbles. WTF! We are talking about $700 billion and this slob just give it to me. I mean it makes me angry just thinking about it.

NEW YORK (Reuters) – An unusual surge in Goldman Sachs’ share price in the last 10 minutes of trading on Tuesday raised eyebrows on Wall Street, as it came two hours before news of Warren Buffett’s big investment in the bank.Wasn’t that Buffett buying shares?

friends, its time to make our standwhat we do now will decide the future of our kids and theirs,most of us have lived a good life,i want my kids to have that opportunity too, i know there will be hardship,but i would like to endure it together with my family as freemen not slaves———————————————–hattip to:- Merrillgrinch from tickerforumYep. Wall Street must not be allowed to go bankrupt, whil Main Street must not be allowed NOT to go bankrupt.Paulson: Oppose Bankruptcy Help For Homeowners In Rescue PlanLast update: 9/24/2008 5:30:53 PMBy Michael R. Crittenden Of DOW JONES NEWSWIRESWASHINGTON (Dow Jones)–U.S. Treasury Secretary Henry Paulson on Wednesday reiterated his opposition to Congress including a provision in the Wall Street rescue passage intended to help homeowners facing bankruptcy.”We oppose it on policy grounds and believe it is inconsistent with what we are trying to do here which is to increase the flow of funds,” Paulson said in response to a question during a House Financial Services Committee hearing Wednesday afternoon.Consumer groups and many Democrats have repeatedly pushed to allow bankruptcy judges the authority to modify the terms of mortgage loans on a borrower’s primary residence during the bankruptcy process. Current bankruptcy law prevents such modifications on loans for a primary residence but allows it for other assets, including vacation homes.The banking industry has vocally opposed attempts to alter current laws, and has thus far been successful in blocking congressional attempts to move legislation.The bankruptcy language is one of a number of provisions that lawmakers are discussing adding to the Treasury’s proposal to buy up to $700 billion of toxic assets from troubled financial firms.-By Michael R. Crittenden, Dow Jones Newswires; 202-862-9273; michael.crittenden@dowjones.com

In the words of my Chicago school biased, laissez-faire loving, neo-liberal high school economics teacher:”Let the boogers die.”I bet he never imagined the greedy bankers would be the boogers.

Amen, OB–here’s our rallying cry. Our bumper sticker.

Love it!

Completely irrelevant…and how excellent is the W.S. extortion. You must submit to this bill and pay its onerous costs or you will pay much more later. In other words, you get the downside of risk and no participation in the upside. We butter sliced you from your richer and better connected superiors.

Re “The professor does not give any reason why he thinks it is a U shaped recession, why it is so different from the Japanese problem back then”, the Professor does give an explanation in today’s Conference Call which you may be able to access, certainly if you are a subscriber. I don’t recall the explanation exactly. Part of it is that Japan waited 2 years before lowering their discount rate whereas the US Fed has responded quicker during the current year. There was additional explanation but it has gone from my memory … Japon was slow in recognizing the need to recapitalize/liquify their banks. Japon allowed insolvent banks to exist too long.

Very RELEVANT!!! If you had republican Congress (with McCain in the middle), this SCAM would have been already accepted.

Full agreement!!! Another 3 better plans comparing to Paulson’s SCAM.

Clarification: vote the incumbents OUT – incumbents who will support Paulson’s SCAM.

Well what do you think is going to happen in Costa when this thing goes global, which it already sort of is. Seems to me there would be lots of pressure put on Costa from left down there, but I guess if you’re going to be in the middle of chaos, that would be the place to be, outasight waves. Watch out for Danny boy next door.(

The Rothschilds and the Rockefellers know the CDSs are unwinding with Lehman gone.

What seems to have caused the panic reaction by Paulson/Bernanke in requesting $700 billion to purchase assets is that supposedly the financial markets came close last week, Wednesday, to a complete financial meltdown. In today’s conference call for which there is an audio link attached to the above article, the Professor made reference to the threat of the meltdown. Personally, I don’t understand what is meant by a complete financial meltdown. The choice of words does suggest why Congress’ first reaction was to say that they would roll over immediately. I would surmise that somehow or other the liquidity problems on Wall Street must be affecting the liquidity/solvency of Main Street. There is also the issue that last week a money market fund “broke the buck”, whatever that means. I interpret this to mean that people’s pension funds are in jeopardy. If so, the anger of the electorate will be fueled when they see their 401k statements. I think government is doing a disservice to its citizens by not clarifying the financial situation.

Now that will definitely hold its value through this long mess !Best regards andHappy listening …

1)Equity Participation will be the big sticking point. Paulson does not wantequity participation in the reverse auctions. He will concede equity participation in takeover of insolvent banks. His buddies are ready for thereverse auctions. He wants to cull the heard on community banks!2)Mortgage Mitigation is taboo to Paulson’s buddies3)Reregulation is anathema! They would not be able to do it one more time!4)They may concede Bankruptcy Cramdown in a pinch!5)Oversight and review are already conceded.THE MOTTO IS DEAL TO STEAL ANOTHER DAY!!!!WATCH THEM EXPAND THE FDIC LIMITS AFTER THE DEAL IN DONE!!!by the way! Hank Paulson has an inherent conflict of interest and isviolating the trust of the american people. He is negotiating for thebanks while claiming to represent the taxpayers! He should be forcedto recuse himself!

From a comment above this bailout sounds like getting a new loan to make a payment for a bad loan so that you can get a bigger new loan all from the same creditor.

Yep. How about this Hank…we’ll give you the money we don’t have. However, as to oversight, every dollar spent will be accounted for in the national papers for the public to peruse along with your physical address and all your contact information. And no, we aren’t going to provide you with a security detail.

Here’s my prediction …At the end of the week, maybe Friday around noon (Eastern), a great pronouncement comes out of Washington. “Hooray folks! We’ve reached a comprommise and passed the rescue bill. The country and Wall St are saved … and everything is great”. The Dems claim a victory because they knocked the amount down from $700 billion to $600 billion and tacked on some minor bailout allowance for homeowners. And the Republicans claim a victory because they’re all supporting the President, and isn’t it great to reach a victory ahead of the Nov elections? So we’re one big happy family.But the real reason for all this cr** – if it trasnspires – is simply this … why do you think the big Wall St banks have been dumping huge sums of money into the election campaigns of all the senators and congressmen on the Senate Banking Committee and the House Financial Services Committee? C’mon now. When the chips are down – Wall St is going to collect on that tab. In a big way. It wasn’t done for nothing.I sure hope this prediction doesn’t happen, and by some miracle the rescue fails. But I can practically smell this outcome in the wind. And if it does happen they we’ll all know one thing … Hank Paulson is now running our country.PeteCA

Watched Bush, then watched Rachel Maddow. Good show and worth checking out. She reported that the Democratic Finance Commitee chairs in both the House and the Senate have indicated that some form of this bailout bill will pass within the next 2-3 days. Another commentator said may be done late Friday.

Someone must have the statistics on donors and amounts they are spending on all top government officials and the presidential candidates. Care to share?This would be an eye opener, I’m sure.

By the way, Greenspan is now an advisor to John Paulson’s hedge fund, the guy who made billions shorting the housing market.

Updated polling:33% Against31% For28% No Opinionhttp://blogs.wsj.com/economics/2008/09/24/wsjnbc-poll-voters-split-on-bailout-plan/?mod=googlenews_wsjTonight’s Presidential Address was a push to sway that 28%.

Interesting…Independents had highest rate of disapproval. So maybe the candidate who stands against this could gain an edge in the polls.Independent voters registered some of the highest levels of disapproval, with 45% opposing the plan, while 29% approved, and just 22%–the lowest of any subsection of voters—had no opinion.

Naked Capitalism is reporting there’ll be an announcement tomorrow at 10:00 Eastern that an agreement has been reached–they don’t need John McCain to swoop in and save the day, after all. Gawd help us all. Barney Franks is standing in for me, the feckless taxpayer. He is not up to the task.

Easy.Just turn over the toxic waste a little bit more than 7 times and it will do the trick. That is a 2.4 turnover per month, or a $700 every two business weeks, if Paulson wants to finish his work before leaving office.With a 33% loss upon sale, he can sell toxic assets as fast as 4 days after their purchase, for him to be always keeping a $700B outstanding balance at any time (which will require him a weekly injection of capital of $460B.

More threats of WMD- Weapons of Mortgage Destruction!”The whole aim of practical politics is to keep the populace alarmed (and hence clamorous to be led to safety) by an endless series of hobgoblins; all of them imaginary.” – H.L. Mencken, 1923

The whole aim of practical politics is to keep the populace alarmed (and hence clamorous to be led to safety) by an endless series of hobgoblins; all of them imaginary.” – H.L. Mencken, 1923I don’t know if J6P, aka John Q. Public and John Q. Taxpayer are particularly alarmed by the phantoms presentedby Bush, BB and HP. I think resistance is strong among the constituents. They can scare politicians with votes morethen these anecdotal wall street monster stories.

And now the FBI is going to investigate to see if there was fraud by Lehman, AIG and Fannie and Freddie – after they’ve all failed and been bailed, except Fuld, and he’s probably going to receive a bonus. So why the mock investigation after the wheeling and dealing is a fait accompli? It’s because Congress is getting unbelievable heat from back home that Wall Street investment bankers are fraudsters, cheaters, and crooks who have manipulated their situations to take money from other people and now want tax money to get through their “crisis.” Thank heaven there’s an American economy out here, like a huge buffer, that will only take so much from them without coming back and cutting them to pieces.These are private, eight-figure bankers to whom Congress is giving our money, for crying out loud, and the Fed is a private cartel, for Pete’s sake. Tonight the Fed is thinking of pushing interest rates down even more and generating more inflation tax and trashing the dollar, which gets me to thinking a lot more big casino player are on the edge of total meltdown. Once the public sees a few of them melt down and nothing happens, then those of us who helped build this economy can get on with rebuilding our livelihoods.

gee, but it would sure be nice to have back that 2.3 trillion don rumsfeld announced on september 10, 2001 the pentagon couldn’t find, wouldn’t it? since we need money, maybe we could close down a military overseas base or two – you know, leaving ourselves with only 750 or so? i know that after dick cheney took away our breadwinner’s job years ago, i had to sell my grandmother’s few small, sentimental treasures just to feed my kids…anyway, i really would give anything to know if a soul in congress has read Mr. Roubini’s plan. Thanks, Mr. Robini, for trying so hard to help.and ya know what george bush? GO TO HELL, You little fraction of a man. what an utterly disgusting speech tonight.China has stopped lending to us??????????

For the sake of fairness, the threat is real. The problem is that those in power found the infallible strategy: Represent an “unimaginable” threat as being the alternative of whatever they want/plan to do. But why not push it a little bit farther: Create a false-flag operation from which an “unimaginable” and “unacceptable” threat may develop an alternative of whatever they want/plan to do. It is the Village all over again.Haven’t we seen this plot playing over and over again? I am sorry, but I have reasons to become that cynical/paranoid.

I am sorry for the suffering you have endured.The Chinese are probably trying to make sure there’s a deal that does not involve Bernanke inflating. But that’s exactly what Bernanke should do.See, the banks will be recapitalized. The only question is whether the money for that will be added to the money supply, or taken out of the hides of US taxpayers.Simply printing money and giving it to banks is the first option. The Chinese don’t want that.Printing the money and giving it to the banks, then “sterilizing” by taking that money back from taxpayers, is the Paulson/Dodd/Bush/China option.Needless to say whatever China says, I vote for the first option. Let China stop buying our bonds. It will destroy us to be required to pay back all the money the bankers lost. It will ruin our lives and make us slaves.

US government, administration, media, politicians and people in power have been fooling its people for decades. Be it Iraq, Afghanistan, WTC, Iran or be it in financial markets, citizens of US and International community has been fooled. Now comes an event when it requires a thought, a moment “Tryst with destiny” even then these guys are fooling all of us. For last 2 years NR and lot of other bloggers predicted in detail how things will unfold in US markets. During this time Administration, Media (CNBC in particular) and Fed made US citizens believe that everything is fine, orderly and under control and there is no reason to feel concerned. People who were predicting a fall were branded as Lunatic, Mad etc. Facing the realities administration has suddenly pressed a panic button just as they did for Iraq and Afghanistan. Paulson and Bernanke’s team wants to move forward as quickly as possible. But It will be in interest of US that this bailout is debated and different scenarios drafted to come to most viable scenario. That may not lead to same respect (read power) US had in past internationally but it will surely give a food for thought for power brokers and US citizens. This is the moment for US to face “Tryst with destiny”

Good, China, stop lending money to US Banks.No money to buy stuff you produce withexploited labor. Time for you to crash anyway.

@JP: “2 – How many Baby Boomers do you know who are waiting for their depression-era parents to kick so they can afford to retire on the inheratence? Looking at my parents and their Boomer friends, they are all living at their means with little savings and have no chance of maintaining their lifestyle during retirement. The Boomer generation is in power in Washington and on Wall Street and they have never figured out how to be fiscally responsible.”JP, I think you have been misled by the MSM. Most baby boomers, those born between 1946 and 1964, are the salt of the earth and have worked hard, many of them having to live on the paychecks of two wage earners. A miniscule percentage send their elderly parents to nursing homes. Many must absorb expenses from their elderly parents who increasingly are being forced into reverse mortgages just to stay in their homes.I remember receiving a newsletter around 2001 from Aetna, my 401k plan provider, containing a small news item that Fed Chair Alan Greenspan was concerned over the adverse effects the large inheritances that boomers would receive from their parents would have on the economy. Well, I believe he and Bernanke and Congress have taken care of that worry, as more and more boomers taste the bitter fruit of despair and disillusionment as their social security and 401k pensions devalue daily by double-digit inflation.Definitions used in 1985 to describe yuppies and yuffies illustrate my point that boomers have been exploited the same as everybody else. The information is from Probe Ministries:Yuppies were defined as 25- to 39-year-olds who live in metropolitan areas, work professional or managerial occupations, and earn at least $30,000 if living alone and $40,000 if married or living with someone else. Using that definition, there were only four million yuppies in 1985—constituting just 5 percent of all baby boomers.Yuffies were defined as baby boomers making less than $10,000 a year…a full 40 percent of the baby boom generation. In 1985, yuffies were roughly eight times as numerous as yuppies. In the 1990s the trend continued…By 1983…a 30-year-old man needed to commit 44 percent of his income to meet the carrying charges on a median-priced house. That same year, 65 percent of all first-time homebuyers needed two paychecks to meet their monthly payments…By the end of the 1970s, Fortune magazine estimated that baby boomers had effectively lost ten years’ income when compared with the earnings of the generation just preceding them… Changes in the corporate world throughout the 1980s exacerbated the problem. “Downsizing,” “streamlining,” and “merging”… by major corporations eliminated whole levels of middle and upper management… Belt-tightening measures in the 1980s forced employees to be content with lower wages and smaller wage increases.It was predicted salaries would “probably barely keep up with the cost of living and taxes…looking at very modest wage increases in the 1990s.”http://www.leaderu.com/orgs/probe/docs/disillus.html

The threat may be real to a point, but really how large?Who would die?How many less meaningless widgets would “consumers” be unable to buy and throw away?Would the sun rise and set?This is decidedly NOT the end of any real world.

I’m with you. Freedom is beyond price.

Prediction OneThe deal will be done for sure.Prediction TwoOpen market operations will follow with a big share market hike to prove how successful the deal was (even though nothing has yet been done).Prediction TheeMetals will be taken down to prove they are not needed as a hedge anymore.Prediction FourUSD will rally and gain back all the ground lost to the Euro to prove all is well.

Your two prospective next presidents have no academic learning and little to no experience in macroeconomic matters. Much better would be a debate between their economic advisory teams.

if so it was a coordinated effort involving not just mortgages but also credit cards. At least that is the impression I get from this article:Credit card insiders tell of deceptive practiceshttp://news.yahoo.com/s/nm/20080924/us_nm/us_usa_economy_creditcards

Two former employees of credit card issuer MBNA, now owned by Bank of America, said on Wednesday they were forced to use aggressive and deceptive practices with customers in order to boost revenues.Cate Colombo, from Maine, said she signed up for a customer service job but was instead instructed to make insistent sales pitches aimed at getting MBNA customers deeper into debt.”I was hired to sell money,” she said on a conference call organized by Americans for Fairness in Lending, an advocacy group. “We had a goal of selling $25,000 an hour, $4 million per month. And I was one employee among hundreds, just at this one site.”

We are still alive and fighting. There is still hope to defeat this deal, because if it’s approved, it means the taxpayers of America are bailing out Warren Buffett!It might be OK if it’s really as Bush said tonight, because he said “current prices” will be paid. Fine, hold him to that. Pay only current market price for the thing that is bought (not for something else, or for the “average” thing in an auction). The weasel word is intended to make us miss that I think, to do something like saying “we paid the current price for a Chevrolet car” when we got the cheapest one and paid the price of the mid-line model.No weaseling, fair current market pricing, strong oversight, enforcement and transparency, watch them like a hawk. OK maybe now we’re talking.

The bailout is not only for GS. It’s for MS too. They must have a lot of over-rated stuff that may still carry a AAA rating, just the sort of stuff the deal proposes to buy.Hint: don’t buy it. Kill this deal and start over.

ekk missing the bigger picturethey are securing US energy needs & other imperial agenda Via military power..they need the economy / ponzi scheme running so they can support the troopsthats all, moral hazard, inflation baaahhUS economy have been dead for a long timethe scary part is, China is taking advantange of this process /ponzi scheme by strenghtening their armee,securing resources, and what is scarier US know about thisIMHO when the time comes [when they are strong enough, politically, economy, military, signing pacts with other nations, (hey its happening now)] they will stop buying US debt papers.thats when all hell break loose.its not depressionits Thermo-nuclear destructionthe longer the US play the game, the stronger its competitors becomes (venuezvela,russia, brazil – hence the activation of an old navy fleet to “safeguard” the carribeans)]the promoted capitalist free market of the US is a failure..so what’s nextwhat will US do??? When will US act??iraq checked, iran??a missile ICBM interceptor in Poland, navy fleet in the black sea gives you some hints

Bush is a fool. I am sure he doesn’t even know or understand what he has been ordered to repeat.Unless, in his twisted encyclopedia of definitions, “current prices” stands for “current marked-to-model prices”.

It is a politician’s primary goal to hold on to power. Having a big campaign war-chest is an important mean to that end. If the taxpayers cannot match or exceed the contributions given by financial institutions to elected politicians, these will normally vote in favor of their biggest contributors. If opposers or modifyers of the proposed bailout cannot conform a representative group (with an adequate name) and contribute more money to the election campaigns of the relevant politicians than the financial institutions will, then the financial institutions will carry the day.Your guess seems right. The timing might change.

Yes. As we wildly overuse antibacterial soaps, alcohol drugs infections just seem to be getting wortse -staph, c difficile etc

NR’s point about debt forgiveness for the underlying consumer is required (as abhorrent as it is to someone like myself who has always lived below his means). However, he raises the point of the next bubble. Why, if banks are limited to 12x leverage (or whatever the ratio is) aren’t consumers held to the same standard. Should there not be a “clearing house” to see the outstanding debt/credit lines that individual consumers have so companies can make sure they are not extending credit to someone who is juggling 30 credit cards (ie family makes 2 x $60k = $120k but has $700k mortgage + 1 car loan of $28k + 1 student loan of $50k + 1 HELOC of $50k + credit card debt of $10k, etc). If not, then why wouldn’t I go and move my money offshore, overpay for a house now, max out all my credit cards now and wait for my personal bailout . I don’t know what the appropriate leverage ratio for an individual would be, but clearly that has to be part of the solution as well no ?

All this is fine and hunky dory Mr Roubini, but the question is, where is the money coming from. The taxpayer is tapped out on credit and things are getting worse. So who is going to finance this, the Chinese? Will they not want those preferred shares in financial institutions themselves if they lend the money to Uncle Sam to effect all this? Your scheme is a roundabout way of saving the banks with their money ultimately and keeping the potential benefits for the US. Correct?Hmmm, and what about reducing that defence budget, which is a threat to them directly,as a condition to lending the money eh?And, since you are at it, how about restructuring Bretton Woods on some sort of commodity standard, just to make sure Uncle Sam does not decide to go haywire and continue with that cosy “seigneurage” racket and decides to print his way out of the debt. They do currently lend him at least 60 billion a month and with your current scheme, this is due to double, no?I think this is all in fantasy land. The Rubicon has been crossed.

I fully agree with Martin Wolf’s analysis in the Financial Times and with a two-page analysis from the University of Chicago. Here they are.From Martin Wolf:The fundamental problem with the Paulson scheme, as proposed, is then that it is neither a necessary nor an efficient solution. It is not necessary, because the Federal Reserve is able to manage illiquidity through its many lender-of-last resort operations. It is not efficient, because it can only deal with insolvency by buying bad assets at far above their true value, thereby guaranteeing big losses for taxpayers and providing an open-ended bail-out to the most irresponsible investors.Furthermore, these assets are illiquid precisely because they are so hard to value. The government risks finding its coffers stuffed with huge amounts of overpriced junk even if it tries not to do so. Also objectionable, though more in design than in the fundamentals, were the unchecked powers for the Treasury. Such a fund should be operated professionally, under independent oversight. Finally, if the US government is to bail out incompetent investors it should surely also provide more help to the poor and often ill-informed borrowers.From the University of Chicago (Why Paulson is Wrong):http://faculty.chicagogsb.edu/luigi.zingales/Why_Paulson_is_wrong.pdf

Artichoke, I believe GSM is right. The US financial industry has pissed away our savings and as much of the savings of the rest of the world as it could get its hands on. It’s a little circumspect to blame the savers for not having done their due diligence. We have been conned. We all went for it.Whatever your opinion as to who is responsible, to borrow a further $700,000,000,000 only pushes that burden down the road. By definition it transfers it into the future. I don’t see how that works either. We consign the future to slavery. How does borrowing to “recapitalize” our banks today make us more productive and better able to amortize that debt in the future?

TED Spread STILL over 300 bps, unprecedented…

316 and still rising

Ha, Ha, Ha…. !!!!. China has already cut her hands and given them to US. Stopping small credit lines for Banks wont help (as compared to what China has invested in Treasuries and in failed entities). Hope that developing countries will wake up and reassess AAA rating for US. Likely fallout will be fall of Bretton II and Gold going through roof.

nothing seems to work. All “isms” had their problems.In fact the isms all seem to fail due to greed (either a desire for more power or desire for money) and dishonesty.(incidentally greed for more sex has not caused the collapse of any civilizations…or maybe I am wrong)

in the 1987 crash, it was only around 220

When you remove selective pressure on the ability to match liquid investor needs with illquid investment needs, the organism weakens.P1AQL.

greenspan, bernanke, paulson, cox, bush, cheney, and now the 2 weakest candidates since carter and ford. i guess we are getting what we deserve.

IfYouHadReadThisYoudaKnownMorganAndGoldmanWouldWin

http://www.reuters.com/article/reutersComService4/idUSTRE48O3QS20080925?sp=trueHold-to-Maturity is the new Mark-to-Myth: James SaftThu Sep 25, 2008 8:30am EDTPost Your Comments | All CommentsEmail | Print |Share| Reprints | Single Page | Recommend (0)[-] Text [+]Featured Broker sponsored linkMoney CenterTrading will never be the same.– James Saft is a Reuters columnist. The opinions expressed are his own –By James SaftLONDON (Reuters) – Paulson and Bernanke’s ‘Hold-to-Maturity’ plan is really just the new ‘Mark-to-Myth’, and even its heroic proportions are not likely to paper over solvency problems in the banking system.The Federal Reserve Chairman told lawmakers the plan to spend $700 billion to buy up bad assets would allow banks to avoid unloading loans at fire sale prices.”Auctions and other mechanisms could be devised that will give the market good information on what the hold-to-maturity price is for a large class of mortgage-related assets,” Ben Bernanke said, trying to persuade a skeptical Congress that the plan he has been pushing along with Treasury Secretary Henry Paulson will give value for taxpayers’ money.Banks are forced to mark their assets to market, a process that has become increasingly painful and likely to lead to bank failures as a shortage of investors and the swiftly declining performance of the underlying collateral have driven prices lower.As many securities are so complex that they seldom trade, and given that few want to buy them now anyway, banks sometimes must mark the assets according to modeled prices, a process sometimes referred to as ‘marking-to-myth’ by doubters.”Now what the hell is a ‘held-to-maturity’ price, and how in the world can an auction or ‘other mechanism’ be devised that gives the market a good idea of ‘hold-to-maturity’ prices — since there is no such thing?” economist Thomas Lawler, a former Fannie Mae portfolio manager and founder of Virginia-based Lawler Economic & Housing Consulting, wrote in a note to clients.”Of course, everyone knew what he meant: ‘held-to-maturity’ means ‘above market.’”The hope, presumably, is that the subsidy given by buying up debt for more than it will fetch on the open market will be enough to prop banks and attract new investors.If it is a subsidy, what not call it one?And though $700 billion is a lot of money, it is not enough to wipe the slate clean and leave banks with workable balance sheets; the plan only works if that $700 billion, which equates to far less in terms of capital relief, is leveraged by attracting new money from outsiders now sitting on the sidelines.But I find it hard to credit that the sovereign wealth funds of the world, having already been burned though their disastrous investments in banking last year and this, will feel that a price arrived at through what promises to be an opaque process gives them the confidence to buy in now.”It is hubris to say they are going to set the prices and everyone will just mark to market their assets accordingly,” said Tim Brunne, a credit strategist at Unicredit in Munich.GARBAGE IN, GARBAGE OUTOne possibility being discussed is a reverse auction, where banks will compete to sell bonds to the government. Given that private label securities are often unique, that may be a very difficult process to do in a competitive and transparent way. And seeing as how the purpose of the exercise is in part establishing a mark for banks to use on their portfolios, there is scope for collusion.If banks do compete and bid down the prices of debt instruments the authorities may be faced with another round of failures, as ailing banks are forced to use new marks and find their capital wanting in the new light.Alternatively, the government, which has bottomless pockets and no liquidity risk, may simply arrive at a price based on what it, or its advisors — and one wonders who they could be and if they saw this whole disaster coming — think is a fair bet on what repayment flows will be.There is also the issue of protecting the taxpayers, who may justifiably argue that they should share in the benefit of any subsidy offered to the industry in return for footing the bill.But taking equity stakes in banks in exchange for below market funding or asset sales probably would, as it did with Fannie Mae and Freddie Mac, choke off any hope of new equity infusions from actual investors seeking profits.It’s easy to understand why the United States is placing a low value on moral hazard and is considering an apparently indiscriminate reward for those who took too much risk.The stakes are very high, and a disorderly deleveraging will be worse than an orderly one, even if the orderly one isn’t perfect.The debate about what whether or not the U.S. will need a massive intervention of public capital into its banking system and wider economy is over. The crisis requires a huge outlay of public funds, both to clean up after the many banks that will fail and to soften the blow to homeowners and consumers.Banking is a confidence game, even if done soberly and responsibly. But this plan, because it fails to meet the issue of insolvent and failing institutions head on, is not likely to work.– At the time of publication James Saft did not own any direct investments in securities mentioned in this article. He may be an owner indirectly as an investor in a fund –(Editing by Ruth Pitchford)

U.S. losing financial superpower status: Steinbrueckhttp://www.marketwatch.com/news/story/us-lose-financial-superpower-status/story.aspx?guid={AAD822C1-BC7E-4178-9BFE-F9A8C897D209}

LONDON (MarketWatch) — Germany’s finance minister on Thursday laid the blame for the global banking crisis on the Anglo-American free-market model’s quest for ever-higher near-term profits, predicting the United States would soon lose its role as the world’s dominant financial power.”The U.S. will lose its status as the superpower of the global financial system, not abruptly but it will erode,” Finance Minister Peer Steinbrueck told the lower house of Germany’s parliament in Berlin, according to published reports. “The global financial system will become more multi-polar.”Steinbrueck criticized the United States for failing to adequately regulate investment banks and said free-market policies embraced by the United States and Great Britain that emphasized a short-term “insane drive for higher and higher profits” were partly to blame for the crisis.”Wall Street will never be what it was,” he said.The finance minister said he would push for a global ban on speculative short selling and would use next month’s meeting of the Group of Seven finance ministers and central bankers in Washington to press for new rules that would prevent banks from fully securitizing loans and selling them to third parties.Steinbrueck said U.S. authorities were late in undertaking rescue efforts, but said he welcomed the decision to attempt to bail out only organizations whose collapse would threaten the world financial system.He repeated that he felt there was no need for Germany or Europe to echo the U.S. Treasury’s proposal to spend around $700 billion to buy up toxic assets from distressed banks’ balance sheets, saying the financial crisis is largely an “American problem.” The minister warned, however, that the fallout from the crisis would make for lower growth in the near future and eventually impact the labor market.

The most funny thing is that no economist realized that this crisis is linked to a false theory that demands eternal growth in a finite planet, claiming that human needs are infinite. To justify world devastation, job creation and human well being would be damaged without growth. The economic system is an animal without mouth and stomack (from where the material come is not a problem) and without intestine (to where the residuals go is not a problem). That animal is not in contact with the environment that economists consider inexhaustible. Infinite growth is all we need, always and forever. This is very good for companies to save billions of dollars while they promote job extinction along with life extinction and a huge wealth concentration. Thanks dear economists!The crisis of the crisis is the rude awakening about the real possibilities about growth, in planetary and physical ways. In 1900 US had 1.000.000 houses, in 2000 190.000.000. Keeping the same growth, in 2100 US will have 36.100.000.000 houses… The territory will have always the same size. One day someone will receive a Nobel prize to remember us that the country territories is finite.How the hell this new houses will be built if there is no territory for them anymore? Oh, I forgot: we destroy to build. Simple as that, it was Keynes that showed this formula. Good, thanks again economists. Let us start to destroy brand new houses to build new ones. Since when houses are being built for people? They are being built for companies to profit. Urban sprawl that polluted 50% of US water resources is not a problem, keep in mind that the economic system is an animal without mouth, stomach and intestine… Thanks economists.Let us discuss now the rescue plan to make new buildings, new consumers, new flows in a infinite Earth.Hugo Penteado

The US taxpayers didn’t decide the Fed policies that fed this beast. We didn’t invent CDOs. In fact the so-called American financial institutions are in many cases purely international. For example Morgan Stanley has NY headquarters but no preference for the US as a matter of policy or hiring (quite the opposite as regards hiring, in fact.)As is clear from the “legislative process” now underway, we even have to work very hard to influence our representatives who write laws.The US went to the G7 for help, and Germany said “no, it’s an American problem.” I suppose we might remember that the next time Germany asks for help. I guess the G7 is now dead; there is no reason for the US to stay involved.

I’ve always thought that China was funding our massive debt as a way of eventually getting Taiwan…

Prof. Roubini wrote:

Eighth, you need an HOLC-like program for debt reduction of the household sector. Households in the US have too much debt (subprime, near prime, prime mortgages, home equity loans, credit cards, auto loans and student loans) while their assets (values of their homes and stocks) are plunging leading to a sharp fall in their net worth.

Prof. Roubini, in addition to size of debt, please could you throw light on required coverage ratios. The high banker salaries were from a small percentage of population but a significant source of NYC revenue. Plus the bankers were putting in 18 hour days. Now that revenue will have to come from less efficient longer hours of the general populace. Since the unemployment rate is increasing, shouldn’t the govt. have to generate more employment through infrastructure building (investments to compensate loss of coverage), etc?I will appreciate any comments in this regard. That’s why I proposed that the ARMs be linked to some govt. index for a while to increase coverage ratios.Best,P1AQL.

“The richest 5% in every nation, rich and poor, North and South, East and West, now own between 70% and 95% of their own countries.”Land monopoly is the very back bone of rule by the rich. Land monopoly exists because the human species is in love with the idea of having other-earned wealth, and no one will even TALK about taking out of the pool of wealth only what you put in being the rule.Insane Ownership of this PLANETWinston Churchill: “Land Monopoly is not the only monopoly, but it is by far the greatest of monopolies – it is perpetual monopoly, and it is the mother of all other forms of monopoly.”“Archimedes” by Mark Twain“It is evident that he was an over-rated man. He was in the habit of making a lot of fuss about his screws and levers, but his knowledge of mechanics was in reality of a very limited character. I have never set up for a genius myself, but I know of a mechanical force more powerful than anything the vaunting engineer of Syracuse ever dreamed of. It is the force of land monopoly; it is a screw and lever all in one; it will screw the last penny out of a man’s pocket, and bend everything on earth to its own despotic will.Give me the private ownership of all the land, and will I move the earth? No; but I will do more. I will undertake to make slaves of all the human beings on the face of it. Not chattel slaves exactly, but slaves nevertheless. What an idiot I would be to make chattel slaves of them. I would have to find them salts and senna when they were sick, and whip them to work when they were lazy.No, it is not good enough. Under the system I propose the fools would imagine they were all free. I would get a maximum of results, and have no responsibility whatever. They would cultivate the soil; they would dive into the bowels of the earth for its hidden treasures; they would build cities and construct railways and telegraphs; their ships would navigate the ocean; they would work and work, and invent and contrive; their warehouses would be full, their markets glutted, and:The beauty of the whole concern would beThat everything they made would belong to me.It would be this way, you see: As I owned all the land, they would of course, have to pay me rent. They could not reasonably expect me to allow them the use of the land for nothing. I am not a hard man, and in fixing the rent I would be very liberal with them. I would allow them, in fact, to fix it themselves. What could be fairer? Here is a piece of land, let us say, it might be a farm, it might be a building site, or it might be something else – if there was only one man who wanted it, of course he would not offer me much, but if the land be really worth anything such a circumstance is not likely to happen.On the contrary, there would be a number who would want it, and they would go on bidding and bidding one against the other, in order to get it. I should accept the highest offer – what could be fairer? Every increase of population, extension of trade, every advance in the arts and sciences would, as we all know, increase the value of land, and the competition that would naturally arise would continue to force rents upward, so much so, that in many cases the tenants would have little or nothing left for themselves.In this case a number of those who were hard pushed would seek to borrow, and as for those who were not so hard pushed, they would, as a matter of course, get the idea into their heads that if they only had more capital they could extend their operations, and thereby make their business more profitable. Here I am again. The very man they stand in need of; a regular benefactor of my species, and always ready to oblige them. With such an enormous rent-roll I could furnish them with funds up to the full extent of the available security; they would not expect me to do more, and in the matter of interest I would be equally generous.I would allow them to fix the rate of it themselves in precisely the same manner as they had fixed the rent. I should then have them by the wool, and if they failed in their payments it would be the easiest thing in the world to sell them out. They might bewail their lot, but business is business. They should have worked harder and been more provident. Whatever inconvenience they might suffer, it would be their concern, and not mine.What a glorious time I would have of it! Rent and interest, interest and rent, and no limit to either, excepting the ability of the workers to pay. Rents would go up and up, and they would continue to pledge and mortgage, and as they went bung, bung, one after another, it would be the finest sport ever seen. thus, from the simple leverage of land monopoly, not only the great globe itself, but everything on the face of it would eventually belong to me. I would be king and lord of all, and the rest of mankind would be my most willing slaves.It hardly needs to be said that it would not be consistent with my dignity to associate with the common rank and file of humanity; it would not be politic to say so, but, as a matter of fact, I not only hate work but I hate those who do work, and I would not have their stinking carcasses near me at any price. High above the contemptible herd I would sit enthroned amid a circle of devoted worshippers. I would choose for myself companions after my own heart. I would deck them with ribbons and gewgaws to tickle their vanity; they would esteem it an honour to kiss my glove, and would pay homage to the very chair that I sat upon; brave men would die for me, parsons would pray for me, and bright-eyed beauty would pander to my pleasures.For the proper management of public affairs I would have a parliament, and for the preservation of law and order there would be soldiers and policemen, all sworn to serve me faithfully; their pay would not be much, but their high sense of duty would be a sufficient guarantee that they would fulfil the terms of the contract.Outside the charmed circle of my society would be others eagerly pressing forward in the hope of sharing my favours; outside of these would be others again who would be forever seeking to wriggle themselves into the ranks of those in front of them, and so on, outward and downward, until we reach the deep ranks of the workers forever toiling and forever struggling merely to live, and with the hell of poverty forever threatening to engulf them. The hell of poverty, that outer realm of darkness where there is weeping and wailing and gnashing of teeth – the social Gehenna, where the worm dieth not, and the fire is not quenched – here is a whip more effective by far than the keenest lash of the chattel slave owner, urging them on by day, haunting their dreams by night, draining without stint the life blood from their veins, and pursuing them with relentless constancy to their graves.In the buoyancy of youth many would start full of hope and with high expectations; but, as they journeyed along, disappointment would follow disappointment, hope would gradually give place to despair, the promised cup of joy would be turned to bitterness, and the holiest affection would become a poisoned arrow quivering in the heart!What a beautiful arrangement – ambition urging in front, want and the fear of want bringing up the rear! In the conflicting interests that would be involved, in the throat-cutting competition that would prevail, in the bitterness that would be engendered between man and man, husband and wife, father and son, I should, of course, have no part. There would be lying and cheating, harsh treatment by masters, dishonesty of servants, strikes and lockouts, assaults and intimidation, family feuds and interminable broils; but they would not concern Me. In the serene atmosphere of my earthly paradise I would be safe from all evil. I would feast on the daintiest of dishes, and sip wines of the choicest
vintage; my gardens would have the most magnificent terraces and the finest walks. I would roam mid the umbrageous foliage of the trees, the blooming flowers, the warbling of birds, the jetting of fountains, and the splashing of pellucid waters. My palace would have its walls of alabaster and domes of crystal, there would be furniture of the most exquisite workmanship, carpets and hangings of the richest fabrics and finest textures, carvings and paintings that were miracles of art, vessels of gold and silver, gems of the purest ray glittering in their settings, the voluptuous strains of the sweetest music, the perfume of roses, the softest of couches, a horde of titled lackeys to come and go at my bidding, and a perfect galaxy of beauty to stimulate desire, and administer to my enjoyment. Thus would I pass the happy hours away, while throughout the world it would be a hallmark of respectability to extol my virtues, and anthems would be everywhere sung in praise.Archimedes never dreamt of anything like that. Yet, with the earth for my fulcrum and its private ownership for my lever, it is all possible. If it should be said that the people would eventually detect the fraud, and with swift vengeance hurl me and all my courtly parasites to perdition, I answer, “Nothing of the kind, the people are as good as gold, and would stand it like bricks – and I appeal to the facts of today to bear me witness.” – Mark Twain“The patience of the oppressed has always been the most inexplicable, as well as probably the most important, fact in all history.” Author Amos Elon from The Pity of it All

Here came the PPT into gold this AM, notice the straight down curvature in a period of about 15 minutes, dropping over 20 an ounce. Oh,,..I forgot, the 700 Billion bailout is actually dollar positive move and not inflationary after all, what was I thinking,..

So lets see…*Jobless claims soar to almost 500M, a 7 year high*Durable goods orders PLUNGE*GE warns, cuts estimates SUBSTANTIALLY*30 year mtg rates leap 31 bps points even with the “bailout” looming*TED spread now surpassing 1987 by a wide margin even thought “bailout” looming*Employer health care cost grow another 5% on average in 2008, to impact year end earnings*Largest bailout in hostory to collapse US Pesoand yet, stocks are up 2% today…go figure.

“How to avoid” it, you want to discuss right now? How to avoid being chained to decades of slavery, is what you want to discuss right now? As in it MIGHT come in the future? Is that what you mean, Precious Petal???????????You wanna know what astonishes the Mother of God?It’s that the size of the rock we are all living under hasn’t crushed us to death already.

incompetent investors? did he mean criminal investors? Shouldn’t his last sentence read,”Finally, if the US taxpayer is to bail out criminal investors he should surely also provide more help to the poor and often ill-informed borrowers, primarily the immigrant Mexican homeowners.”

THE REAL CRISIS…The world is about to run out of the Internet addresses that allow computers to identify each other and communicate, the man who co-developed the system has told The Times.Vint Cerf, often called the “father of the Internet” and one of the world’s leading computer-networking scientists, said that businesses and consumers needed to act now to switch to the next generation of Internet addresses.Unless preparations were made now, he said, some computers might not be able to go online and the connectivity of the Internet might be damaged.Cerf said that Internet service providers in particular needed to prepare, and that time was running out for a smooth transition.Every computer and online device is assigned a unique Internet Protocol address — Windows users can look up theirs by opening a command-prompt window and typing “ipconfig” — but the pool of unallocated numbers is about to dry up.”This is like the Internet running out of telephone numbers and with no new numbers, you can’t have more subscribers,” he said.

I wish I, as an American taxpayer, had a way to “erect defences against the deepening U.S. financial meltdown after…reported billions of U.S. dollars in exposure to the credit crisis.”

Watch a debate between these candidates’ economic advisory teams?And here I was thinking we had already reached the zenith of humanity’s masochism.Never mind.

Gross already whining for another $500 billion AFTER the $700 billion…http://www.cnbc.com/id/26885559So PeteCA was right when he wrote “why do you think the big Wall St banks have been dumping huge sums of money into the election campaigns of all the senators and congressmen on the Senate Banking Committee and the House Financial Services Committee? C’mon now. When the chips are down – Wall St is going to collect on that tab. In a big way. It wasn’t done for nothing.”By going along with the bailout (actually “bailouts” since if we let this one through, the others will follow much more easily) we just get more of the ‘boomer behavior’ which got us to this point, that is, not being willing to accept responsibilities of our decisions. And GSM is right to keep hammering us about the main point: Confidence in the US will return only when there is something really there to be confident in, and the only way to restore credit is to stop this “massive effort directed at avoiding debt payment”.So IMO everyone who called & wrote their congressmen/women earlier this week needs to DO IT AGAIN since we know that everything so far has been just a “phase” in the already done deal. Dodd & Paulson are master politicians and knew the complete script of the drama this week. They were probably rehearsing this theater piece weeks ago: Dodd would wear the White Hat and Paulson the Black Hat (does anyone notice the similarity of him to those nazis whose faces melted in “Raiders of the Lost Ark”?). You’ve been allowed to “hiss” the villain and cheer the hero. Or in the foam-rubber words of modern management: you’ve had your “input” and they’ve been “responsive”. (I loved one economist’s depiction (on an NPR show this morning) of Paulson as like a “crack addict” coming in for a fix.)Cheers,One-Eyed Fiona

No I think you have it backwards. It is dollar positive:1. They will bail out the banks. This cannot be avoided, damn it.2. So who pays? If the taxpayer pays all, then we can have a strong dollar. This is the Paulson / government plan. It will crush the American people, in my opinion.3. Or if Bernanke inflates, everyone pays a bit, the Americans and the foreign dollar creditors. Given point 1., this is the better way to go. But Bernanke’s policy for the past year has been to make sure debtors never get a single break.

Interactive Brokers has done something like this. You cannot make an option trade that gives you a net short notional position, or anything close to it, in the un-shortable stocks.

We need a commission that determines pricing, in line with Bush’s promise last night of “current prices”. The methodology must be transparent and approved separately, and there must be independent oversight with public members and stiff penalties for fraud. We need enforcement here.I think this is where they will try to weasel on us, to cheat on the “current pricing”. We need just as much as one of those scared counterparties would do, in buying this stuff. We need to pay the “current price”.Thanks Pres. Bush. I’m going to hold you and the Congress to your promise.

“THE MOTTO IS DEAL TO STEAL ANOTHER DAY!”word, said the sound of the hammer hitting the nail on the headwe’re not watching the News unfold, we’re watching the Olds.

I think that the finaincials over-inflated, exaggerated our savings. I don’t think that they ever really existed. Well, that is, they existed on PAPER, but that was never to be for very long. Think of it in the context of the Clinton years- a big bubble that would never hold.It’s been the big American Illusion. As long as everyone was asleep the Dream was on… Now that the sedatives have worn off the Dream can no longer be maintained and the Illusion is becoming clear for what it really was, an illusion!

This is a long post. I hope some readers find it worthwhile. PeteCA.———————————————-COMMENTS ON JOHN HUSSMAN’S WEEKLY ANALYSISI’d like to make some comments on the latest analysis by Dr. John Hussman. Readers can find it under Dr. Hussman’s weekly commentary at http://www.hussmanfunds.com .Incidentally, I always enjoy reading what Dr Hussman has to say. He became popular with many readers because of his helpful analysis of funds flows at the Fed. But he continues to keep his cool on Wall St, in spite of the most egregious activities going on at high levels in the system. Let me pick up his last series of comments, and then I’ll add mine at the end.———————-John Hussman:talking about a hypothetical bank on Wall St.Consider a simplified balance sheet of a typical investment bank:Good assets: $95Assets gone bad: $5TOTAL ASSETS: $100Liabilities to customers/counterparties: $80Debt to bondholders of company: $17Shareholder equity: $3TOTAL LIABILITIES AND EQUITY: $100Now, as these bad assets get written off, shareholder equity is also reduced. What has happened in recent months is that this equity has become insufficient, so that the company technically becomes insolvent provided that the bondholders have to be paid off:Good assets: $95Assets gone bad (written off): $0TOTAL ASSETS: $95Liabilities to customers/counterparties: $80Debt to bondholders of company: $17Shareholder equity: ($2)TOTAL LIABILITIES AND EQUITY: $95These institutions are not failing because 95% of the assets have gone bad. They are failing because 5% of the assets have gone bad and they over-stretched their capital. At the heart of the problem is “gross leverage” – the ratio of total assets taken on by the company to its shareholder equity. The sequence of failures we’ve observed in recent months, starting with Bear Stearns, has followed almost exactly in order of their gross leverage multiples. After Bear Stearns, Fannie Mae, and Freddie Mac went into crisis, Lehman and Merrill Lynch followed. Morgan Stanley, and Hank Paulson’s former employer, Goldman Sachs, remain the most leveraged companies on Wall Street, with gross leverage multiples above 20. … Look at the insolvent balance sheet again. The appropriate solution is not for the government to replace the bad assets with public money, but rather for the government to execute a receivership of the failed institution and immediately conduct a “whole bank” sale – selling the bank’s assets and liabilities as a package, but ex the debt to bondholders, which preserves the ongoing business without loss to customers and counterparties, wipes out shareholder equity, and gives bondholders partial (perhaps even nearly complete) recovery with the proceeds.—————————————————Now my own additional comments:First, thanks to Dr Hussman for writing a letter to Congress. Why do I get the feeling that no-one on Capitol Hill is bothering to consider any alternative commentary? That may be the real cause of the economic hardship that is destined for America. We’ve got leaders who are just not listening – especially when they SHOULD be listening!Second. What’s wrong with Dr Hussman’s analysis? Answer – absolutely nothing … if that’s what the true holdings of the bank really are. It’s a perfectly good solution and we should adopt it, if this is the real state of affairs on Wall St.But I want to take the above analysis and examine it a little bit more. Let’s suppose at the hypothetical bank described above, this bank made some very greedy choices in mortgage assets a long time ago. They have acquired mortage-based assets (securities) that are now highly sensitive in value to downturns in the US housing market. As a result, in a relatively short period of time, the bank’s assets now change to look more like this …Good assets: $80Assets gone bad: $0 (it was $20 of assets at one time)TOTAL ASSETS: $80Liabilities to customers/counterparties: $80Debt to bondholders of company: $17Shareholder equity: ($2)TOTAL LIABILITIES AND EQUITY: $95Notice that in my new example, a whopping 20% of the banks assets have soured and need to be written off. Notice also that the total assets of the bank now equal the liabilities to counterparties. This bank is at serious risk – for not meeting its contracts, such as CDS contracts negotiated in over-the-counter deals.Now imagine that you (the reader) happen to be Mr Paulson or Mr Bernanke, and you do a survey of this bank’s assets. You quickly discover that the bank is ready to collapse and then fail to meet its obligations in the CDS and derivatives markets. So what do you do?Well the answer is quite simple …You PANIC … and then you do the following:1) Call an emergency meeting with Congress – and tell them all to panic too!2) Pull together a massive rescue effort that shoves all the costs of the bad assets onto the taxpayers.3) Attempt to prevent any further price deterioration in the financial sector by banning all short sales.So here are my conclusions from this hypothetical study:* Based on the actions of Mr Paulson and Mr Bernanke, it is likely that the true state of affairs inside the major Wall St banks may be much WORSE than most people believe.* If a rescue bill is passed, it means that all the major Wall St banks have been put on critical life support. We don’t have even one single bank that can stand on its own feet. They are all on CPR. Draw your own conclusions about what this means about the real state of financial health in the USA.PeteCA

“No matter how paranoid or conspiracy-minded you are, what the government is actually doing is worse than you imagine.” William Blum (former State Dept.)Killing Hope.orgIt’s all just a little bit of history repeating. BCCI is a forgotten memory.hi, AfA. be well.

Teach everyone a lesson? …like they learned after the Great Depression? …after the S&L scandal? The lessons don’t get learned, it’s a dysfunctional society. We just need to do what we can to ease the pain. Pain which will be disproportionately on the poor. The bankers can live off their fat for quite a while!

99% of the world is underpaid. 99% of the world works for 1% of the world. it really is that simple.HOMEH sounds like Homer (Simpson) to me, btw…

And Jesus wept

Congress is bought and paid for by the lobbyists for the wall street bank et al.Until we stop this from continuing to happen, nothing will change. Follow the money!!!!!!!!!!!!!!!!!

Everyone in this country can bitch-slap wall st by putting all of their 401K money in the now 100% gauranteed money market funds. Oh yeah, that will probably be made illegal soon too…protect your capital, shes coming down hard…

Ahhhh, finally found out why stocks are rallying today…bad news is good news and the worse the news, the better the rally!New home sales plunge 11.5% in August. Down 34.5% from this same time last year and inventories are now at 10.9 months. Yup, that is worth a couple hundred points for sure!

Yes, Wall Street, that bordello where Congress beds down with its keepers. I would give a $1000 Grover Cleveland to be there. GO GO GO

what do the richest do?they steal 98% of world wealth, thus creating giant misery for humanity – not only the deprivation for 50 million a year, not only causing one million girls to be sold into a life of brutal sex slavery a year, not only depriving 2 million a year of sight for lack of 4 cents worth of vitamin A per year, not only blowing the limbs off millions of people, but throwing the world into unnecessary financial chaos, extreme violence, danger terror misery hardship suffering, violence which gets to everyone including themselves, violence proportional to the inequality [highest pay per year is a billion times lowest pay/yr], warmongering and cannonfoddering millions a year, violence which escalates endlessly, now close to extinction of all life, forcing millions to kill and be killed, who would never otherwise leave their honest decent happy lives, putting everyone on a racking ladder of desperate striving to climb, climb, climb [and for 99%, to still end up with less money than they would have had without superoverunderpay] to create giant fear and stress, labour of war, diplomacy, war materiel making, legal argybargy, court cases, hospital cases, corrupting medicine and science, poisoning for profit, imprisoning for profit, wasting 99% of brains through serving violence and through poverty, shrinking the world market to a tenth of what it would be with fairpay, lying cheating, deceiving, controlling, spoiling, littering history with corpses and tragedies, wastes and griefs, torturing at will, far above the law in everything, bringing destruction down on their heads in revolutions and conquerings – stealing everything – stealing everyone’s future, stealing everyone’s freedom, safety and pleasure, everyone’s sanity and responsibility and integrity, befouling religion with falsehoods, rewriting editing scriptures till all true religion is utterly lost, beyond imagination for all, causing the loss of all world topsoil in this century, ——“If there were but one person in the world, it is manifest that he could have no more wealth than he was able to make and save. This is the natural order.” – Henry George.This is the sanity, the common sense, the whole-picture reality that the richest have driven us all far from.Injustice creates divisions and hatreds and fighting, and justice imparts harmony and friendship, said Plato – this is the simple sense we have departed from – have forgotten, because an example of a just world is just too far back to remember.By abolishing covetousness, Lycurgus removed all motive for civil broil and contest. – said Polybius.Inequalities between rich and poor had come to a head. Athens stood on the brink of revolution. Equality breeds no strife, was widely repeated. Plutarch said.Pay justice can be restored, gently, without economic disturbance, without bureaucracy, without making economic waves, with capitalism, by making everyone in the world equal heirs to large deceased estates – to overfortunes, to other-earned fortunes – to fortunes raked by the legal thefts, by the many pays for no work, which mean work for no pay for others, which means violence, ever-escalating, as both sides try to prevail, which means ever-bigger weaponry ever-bigger wars such as we see in our wake going back 3000 years.Legal theft: the two things in a transaction cannot have exactly equal workvalue, therefore there is a drop of inequality, of theft, in every transaction. With trillions of transactions, this becomes an ocean of inequality, violence misery – growing with every transaction. A company is a funnel, a centre of transactions. We have to introduce a counter to this endlessly growing injustice: The purpose of government is justice, said James Madison.So the richest have stolen most wealth, most happiness, most safety, all of the future of humanity except the next 30 years or so, give or take the next 30 years or so, till the violence reaches the level to use the bombs.Governments cannot save us – they have been devoured by superwealth. Only a grassroots growth in awareness, realism, sobriety, simple good sense, maturity, and practicality in the people can drive events to safety and peace.If each teach just two, every adult can be reached in just 31 times the time to teach two – by word of mouth alone. There are 3 billion to reach but 3 billion to reach them – with all their resources and media. Culture is ideas. Only change of ideas changes culture: change your ideas, survive, be far happier.In Crete, they had 3000 years of peace, and multi-room houses with plumbing for everyone, before trade, with its drop-drop-drop of inequality, got away. What have we got now? 9/11 and 40% of people in slums, rampant disease, ignorance, dirt – a future of tyranny-slavery unto irradiated oblivion, disgrace, dishonour.

BULLETIN U.S. STOCKS SURGE TO DAY’S HIGH AS SENATE BANK CHIEF HAILS ‘FUNDAMENTAL’ BAILOUT AGREEMENT

Your crude name does not belong on a blog with such distinguished people.

the 700 billion bailout is enough moneyTO PAY THE ENTIRE MORTGAGAE OF EVERY SUBPRIME HOME OWNER WHO IS IN TROUBLE OF DEFAULTwe are being robbed by wall street and bush pure and simple

Breaking News >> Lawmakers Say Financial Bailout Agreement Reached

Here we go!! US stocks to the moon! Can’t sell off and show disappointment now that teh US taxpayer has been wiped out…

Pete, small correction in your above example. Remember Asset = Liabilities + Shareholder Equity.Thus, Shareholder Equity would now be (17) rather than (2).But point well stated … now if you go to the future with Fed ‘bail out’ purchasing bad assets. Look at what price the Fed has to buy the bad assets at to make the shareholder go to zero (0). That’s the issue!The Fed will have to pay inflated prices just to bring the bank back to minimum solvency. Now somebody (More Fed?) needs to inject capital into them to open up lending.It’s a much bigger mess than most know!

WOOOOOOOOOO!!! BOOM!

ALL THE PROTESTS BY US CITIZENS WON’T MATTER-IT NEVER DOES…go home and hug your kids tonight for today, the world has changed and it was not for the better…politicains and their wall street financiers a=hve ruined America.

1:40 p.m.[WM] Washington Mutual shares plunge 30%, to $1.56Don’t worry Wamu, the govt is coming, the govt is coming….

How about my “crude” name, Hazleton? Anybody who reminds us to consider the words of one of our best spiritual fathers (Mark Twain) at a time like this is OK with me, whatever name they use.#8>)

2:00 p.m.$250 bln in bailout funds to be ready immediately: report1:59 p.m. Bill to OK $700 bln fund but paid in installments: report1:58 p.m. Congress reaches tentative agreement on bailout bill: report

Hee, hee!! He also says he’ll manage the bailout FOR FREE!!! What a great guy!!http://www.nytimes.com/2008/09/25/business/economy/25pimco.html?_r=1&ref=business&oref=sloginCan anyone tell me who’s writing these scripts and making up these characters? This is ‘reality tv’ at its most post-modern!

http://online.wsj.com/article/SB122235295272975207.html?mod=googlenews_wsj“IN CERTAIN CASES,the government COULD receive warrants that would give itthe right to acquire shares in a company.THEY ARE TRYING TO FOOL US AGAIN! I am assuming the reverse auctions will not have equityparticipation. Paulson is going to bail out his buddies and the companieswithout the debt will get the potential upside.Nothing to assist the debt load of the homeowners!We need a copy of the draft!Can somebody leak it to us??

Thank you HSchmazleton. I was stunned and hurt by hazleton’s cruel remark.”When moralists are on the rise, true goodness is in decline.”

2:19 p.m.China bank regulator denies report of lending ban to U.S. banks

2:19 p.m. Rep. Bachus statement doesn’t say deal reached

FDIC according to some experts will require at least another 150 billion

profit taking. Institutions know this wont work.

Pas de quoi, MoG (or is it OMG?). (Where is “Archimedes” from BTW? I’ve read literally everything published and ‘unpublished’ by MT and can’t remember where that one comes from. I love Twain because he’s our Schopenhauer but with humorous hope…)

There is going to be quite a bit of money made off of this bill. With $700 billion in LEMONS there’s going to be a lot of lemonade to be made!

Looks like some conservatives (that is if you can call a French conservative a conservative)no long believe in the markets.TOULON, France, Sept 25 (Reuters) – French President Nicolas Sarkozy demanded an overhaul of the world’s capitalist system on Thursday, saying the financial crisis had laid bare serious flaws in international banking.In a keynote speech on the market mayhem, Sarkozy said the crisis would weigh on the French economy for months to come, but promised that nobody in France would lose their bank deposits.”A certain idea of globalisation is drawing to a close with the end of a financial capitalism that had imposed its logic on the whole economy and contributed to perverting it,” Sarkozy told some 4,000 supporters at a rally in southern France.”The idea of the absolute power of the markets that should not be constrained by any rule, by any political intervention, was a mad idea. The idea that markets are always right was a mad idea,” he said.He repeated his call for major power leaders to meet before the end of the year to map out a new financial system and said it was vital to review currency levels, adding that both the dollar and Chinese yuan were undervalued.”We cannot continue to manage the economy of the 21st century with the instruments of the economy of the 20th century,” he said.He also warned bankers and business leaders to curb their salary levels, saying the government would introduce legislation by the end of the year if they failed to reform themselves.

we could all refuse to pay our federal income tax.which from all I’ve read is not technically required by law anyway.

I must say that these house representatives have got some real chutzpah. Their peers are all jumping off the bridge and their in line right behind them!• Has anyone told them that the bridge they are jumping off of has nothing but rocks below!• Has anyone told them that it’s a one way trip!• Have you told your representatives that they have whopping zero percent chance of ever receiving your vote again!Folks, I strongly believe that out of this a new political party will be formed. Not akin to the independent party, but a mainstream high profile party that eventually takes command within 2 to 6 years. There are simply too many people pissed at what is happening. My 80 year old parents tell me of how the older people are simply disgusted. They tell me how many have actually contacted there representatives for the first time in their lives to express their anger! My 20 something nieces and nephews have talked about how their peers are all over the internet blasting this bill! As I said folks this bill has united a broad spectrum of the population against the establishment. The unity is there. All that is needed is a leader to rise and lead this new group into the future!

PPT gonna double this beyotch in the magic hour…

Ron Paul

“There is no subtler, no surer means of overturning the existing basis of society than to debauch the currency. The process engages all the hidden forces of economic law on the side of destruction, and does it in a manner which not one man in a million is able to diagnose.” Lord John Maynard Keynes (1883-1946), renowned British economist.

Always wanted to live in Alabama, maybe I’ll move there and vote FOR Shelby.

INVESTOR ALERT Bailout breakthrough spurs Wall Street rallyThe healines tonight, “Wall Street Cheers Charity From US Taxpayer”

Bank buys toxic asset from hedge fund at slightly above market price. Bank sells that toxic asset to Treasury at “hold-to-maturity” price. Bank makes a nice spread. Oh, to be a banker in the good ol’ USA.Ernst

“Warren E. Buffett, known as a sharp investor with an eye for undervalued securities, has agreed to pay $700 million for a 12 percent stake in Salomon Inc., the parent company of Salomon Brothers Inc., Wall Street’s largest investment banking house.”- September 28, 1987, New York TimesYes, September 1987, almost 21 years to the day. This is one weird rabbit hole we’ve tumbled down, Alice.

Why are you guys so concerned, this bailout is very good for the US economy … and other unfathomable things. Sarah Palin got it all right. I like her logic.http://www.youtube.com/watch?v=npUMUASwaecAmerica is SOOOO doomed.Is Montreal far enough?

“Warren E. Buffett, known as a sharp investor with an eye for undervalued securities, has agreed to pay $700 million for a 12 percent stake in Salomon Inc., the parent company of Salomon Brothers Inc., Wall Street’s largest investment banking house.”- September 28, 1987, New York TimesYes, September 1987, almost 21 years to the day. This is one weird rabbit hole we’ve tumbled down, Alice.

Charity from Japan, China, Saudi, etc…

I agree. I’d vote for Ron Paul in a minute. He seems to be the only one that understands the real reasons behind how we got here. The FED and fractional reserve banking! His book “the Revolution” says it all! Close the military bases in the 130 countires that we have them in, bring the troops home, stop the wars, bring the troops home, stop the aid to all the countries that currently get it by the billions………….These steps alone would bring us significantly back toward fiscal balance and cut the budget significantly! This is not rocket science! It’s all basic math!

More bad news for stocks to rally on tommorow…4:10 p.m.Chrysler to fire about 300 salaried employees

I have no doubt the entire three page document was carefully crafted and presented by a master negotiator. Paulson presenting a short document with outrageous demands guaranteed to outrage congress knowing that the first thing congress would do is tack on extra restrictions. Paulson knew he would be negotiated down, so he set the bar high enough so that when the dust settles he still has the money and the power needed to do the job, and congress gets to pat themselves on the back for a job well done. Add the short timeframe, a spooked president ‘guaranteeing’ a resolution by week’s end, and two presidential hopefuls struggling to demonstrate each is the most competent and you’re guaranteed to have the bill passed. Probably because no one wants to be the one to stop this thing because it’s much easier to say “we tried but it didn’t work” than to try to justify inaction with no data on whether it might have worked or not. I am sure Paulson and Bernanke have had many discussions on how to craft their proposal in such a manner as to guarantee passage and still leave everyone involved with a positive spin on the event. Well everyone but the sheeple, but who cares about them right?

Don’t believe the MSM buffalo-stampede press. The bailout is NOT a done deal.Just got off the phone with 2 senators, 1 rep. Call volume higher than ever, massive rejection by public of the bailout. Of ANY bailout.The Congressional staffers are looking forward to your call. It’s their money, too, that’s being stolen and given to Wall Street. They want you to call!This is not a done deal. The entire congress has to vote on it, and the formal bill has not yet been written, let alone voted upon. Congress is nervous – they don’t really understand this, and they need your support to buck the President and Wall Street. They need your help to fend them off.Persistence is key. Wall Street is going for the “too late, it’s over!” trick. Don’t let them get away with it! Rise up, and roll them over.We must not give in. Fight! Fight! Fight!www.house.govwww.senate.gov

It is not a done deal. My congressman is listening to reason and I think he’s on the cusp. Every single Representative is up for election in a few weeks.They care what you think, and don’t acquiesce so that later they can say “you should have spoken up”. Now is the time to speak up, to fight! This will be a busy weekend, hang in there and keep the pressure on.We need:1. Equity acquisition like with AIG.2. True valuation, independent members of valuation committee (e.g. academics) because Bush promised us “current prices” last night.3. No secrecy, normal court oversight.The tranching doesn’t do it. It just means they will bail out Morgan Stanley first and maybe not get to others because the money ran out.

CNNMoney.comBailout protesters plan day of action ThursdayThursday September 25, 3:47 pm ETThe public backlash against the Bush administration’s proposal to use tax dollars to bailout Wall Street spilled into the streets Thursday.”People all over the country are up in arms about this,” said David Elliot, a spokesman for grassroots advocacy group UsAction. “Our members are livid, and they’re hitting the streets.”At present, there are 251 events planed in more than 41 states to protest the bailout, according to organizers at TrueMajority.com.Several organizations have contributed to the planning of the protests, including Democracy for America, the Association of Community Organizations for Reform Now (Acorn) and labor unions.A protest organized by the New York Central Labor Council took place this afternoon on Wall Street near the New York Stock Exchange.Another protest, which was spontaneously organized online, is also targeting New York’s financial district, where protestors plan to build a “pile of citizen junk” near the famous Wall Street bull statue later Wednesday.”Since Bush wants to buy up Wall Street’s worthless investments with Main Street’s hard-earned tax dollars, some folks are planning to bring their OWN junk to Wall Street to see if they can get a bailout, too,” citizen organizer Arun Gupta said in a statement.Gupta is the author of an e-mail message that initially inspired plans for the protest in New York.Protests are also planned in Washington. Events are scheduled to coincide with a 4 p.m. ET meeting at the White House between Bush administration officials, Congressional leaders and the presidential candidates to discuss the final details of the bailout plan.”The people we entrusted to run our economy have failed us,” said Alan Charney, program director of UsAction. “We can no longer trust them to get us out of this financial mess.”http://biz.yahoo.com/cnnm/080925/092508_bailout_protests.html

Does anyone know of a way to get a look at the final draft?

The Ones who are destroying American Financial System and Economy1) Mr. Phil Gramm, and Mr. James Leach – Repealer of the Glass-Steagall Act by Gramm-Leach-Bliley Act – allowed massive securitization by the Wall Street Investment Banks and other financial entities2) Mr. Alan Greenspan – Fed’s irresponsible Monetary Policy maker and bubble blower – made a massive tech stock bubble and the biggest housing bubble3) Mr. Ben Bernanke – Irresponsible Monetary Policy maker and stock market manipulator – is killing the dollar and tanking the stock market4) Mr. Hank Paulson – Irresponsible Bailout King – is destroying American financial system and tanking American economy by incompetence and causing substandard living for Americans and making rich for the Wall Street manipulators by bringing in socialism for the rich and fraudster5) Mr. Christopher Cox – Flagrant violator of Capital Market and manipulator of the US Stock Market – causing the demise of capitalism6) Mr. Barney Frank and Mr. Christopher Dodd – Incompetent Accomplices destroying sound American Monetary, Financial and Fiscal Policies – is taking American people to a poor house at the expenses of self interest of reelection7) Mr. Timothy Geithner – Market Manipulator – is destroy American banking system in the behind scene

Doesn’t surprise me. I had that happen several times when I called Bank of America about various pieces of business. I always asked the agent why I would take their suggestions because it would only increase my debt, and most of the time the agent agreed with me and dropped the pitch.

If you try and get your contressman’s contact info, not suprisingly, the page will haang on you.

Well put. However, the Democrats didn’t cave in, IMO, they took the lead all along – the voices we heard, Paulson, Dodd and Barney, are all Democrats. They were overjoyed at this opportunity: Number 1, they could criticize the Republicans. Number 2, they can get goodies beyond their dreams. They, and most of the rest of the pols, have their sticky fingerprints all over this heist. It’s time we the people realize most all these people are bought and paid for. Then, maybe, we can get somewhere.

Bailout Pushback Talking PointsWhen you call your congressional reps, here are some more talking points you can use. I’m cross-posting from the Calculated Risk blog:

Equity sharing is a distraction. The key missing piece … is pricing.The acceptability of the entire proposal hinges on this. Everything else is irrelevant by comparison. And we have heard not a peep about this at all…

Afa;I am concerned that Montreal will NOT be far enough. I have been reminding my friends and family that it was only after the French had a majority starving before they stormed the Bastile – We should not wait so long!!!!

This open-ended bailout deal is going to be the tar baby for every political complaint that’s coming down the pike — as well it should. Reich knows what the politicos are going to do, i.e., they’re going to posture and say they’ve forced the bankers into taking this concession and that concession before we handed them your money, and he’s already made a pre-emptive hit on that.Everybody, when this is over, is going to be saying we’ve been robbed, that Congress and those rich billionaires have taken us all for a ride. It’s going to be one story after the other because the public, in my opinion, was paying attention for once in its life.With Reich’s hit, it begins. And I say, Go for it!!

If an economics student proposed a pile of dogcrap like this as a solution to this problem, he would find himself as a former economics student, invited to join the political science department.

Yep! Good sign: their servers are overloaded.Tidal wave, baby! Do your part!

William Greider(Secrets of the Temple) is quoted in Huffington Postand the concept is simple enough for Congress to understand!The smartest sage on all of this, William Grieder of The Nation, has the best possible fallback position. “We should make one simple demand:If taxpayer money is used, we want the same deal Buffett got.” (Buffett’s deal was preferred stock with 10% annual return and the right to convert to stock if the stock takes off after the bailout. Taxpayers should get the same deal.)WE NEED SOMETHING EASY TO UNDERSTAND!!!WE WANT THE SAME DEAL BUFFETT GOT! IF THEY DON’T PARTICIPATE, LET THEM FAIL!

I just did – again!The servers were not operating, so I went to the senator’s own home page to threaten them.

Hi Pete,I hope it is not quite “DONE” yet:The tentative accord would give the Bush administration just a fraction of the $700 billion it had requested up front, with half that total subject to a congressional veto, Capitol Hill aides said. But nothing appeared final. Amid several signs that conservatives were balking, Sen. Richard Shelby of Alabama, the top Republican on the Senate Banking Committee, emerged from the White House and said the announced agreement “is, obviously, no agreement.”

The tentative accord would give the Bush administration just a fraction of the $700 billion it had requested up front, with half that total subject to a congressional veto, Capitol Hill aides said. But nothing appeared final. Amid several signs that conservatives were balking, Sen. Richard Shelby of Alabama, the top Republican on the Senate Banking Committee, emerged from the White House and said the announced agreement “is, obviously, no agreement.”

For years Paulson, tells us everything is fine. Trust me. Then he declares an economic disaster is inevitable if in 2 weeks we don’t give him a blank check equal to 1/10 of the debt of the most powerful economy of the world.If Paulson was a CEO of a truly shareholder friendly company, the board of director would have requested his resignation for unspeakable incompetence. That’s what congress should do.”More than 150 prominent U.S. economists, including three Nobel Prize winners, urged Congress to hold off on passing a $700 billion financial market rescue plan until it can be studied more closely.In a letter yesterday to congressional leaders, 166 academic economists said they oppose Treasury Secretary Henry Paulson’s plan because it’s a “subsidy” for business, it’s ambiguous and it may have adverse market consequences in the long term. They also expressed alarm at the haste of lawmakers and the Bush administration to pass legislation. ” (Bloomberg)We’re not alone in calling Paulson’s bluff

I’m not sure where you’re living, but in my area most of our defaulters were Californians who thought they could make a quick buck “flipping” houses. The migrant Mexicans are doing just fine thanks.

166 academic economists, including 3 Nobel prizewinners, sent letter to Congress urging NOT to pass Paulson’s BAILOUT NOW proposal.http://www.bloomberg.com/apps/news?pid=20601087&sid=aNKGD.bJwmRA&refer=homeIf they pass the package, shame on them. If the situation is so dire can’t they postpone their recess? I guess not. Holiday is more important than studying the largest bailout proposal in human history. Which, by the way, bails out bankers. Not the common citizen who, to add insult to injury, will have to pay for this.Ernst

Yes, his original proposal was such an overt testimony of arrogance, stupidity and selfishness that it had to hit a wall of rejection by any intelligently reflecting human being. It exposed the real intentions, lack of insight and selfishness of those in charge. We must thank him for that.

Did WaMU just fail ?

Stephanopoulos: Paulson Fears Deal May CollapseSeptember 25, 2008 6:05 PMABC News’ George Stephanopoulos Reports: Treasury Secretary Henry Paulson fears the Wall Street bailout deal is falling apart after a chaotic White House meeting, sources say.Paulson walked into the room where Democrats were caucusing after today’s meeting at the White House and pleaded with them, “Please don’t blow this up.”Rep. Barney Frank, D-Mass., chair of the House Financial Services Committee was livid saying, “Don’t say that to us after all we’ve been through!”House Speaker Nancy Pelosi said, “We’re not the ones trying to blow this up; it’s the House Republicans.”"I know, I know,” Paulson replied.Democrats believe that House Republicans are torpedoeing the framework deal reached in the bipartisan agreement of principles released by the Senate Banking Committee on Thursday.ABC News’ Jake Tapper contributed to this report.

Alternative plans, they are urgently needed. It is not either Paulson’s plan or disaster. What alternatives are discussed?

The economists who signed the letter represent various disciplines, including macroeconomics, microeconomics, behavioral and information economics, and game theory. They also span the political spectrum, from liberal to conservative to libertarian.Some lawmakers are already citing the letter as reason not to endorse the Paulson plan. Today Senator Richard Shelby, a Republican from Alabama, said he has “five pages of the leading economists in America that wrote to me and the leadership saying the Paulson plan is a bad plan. It will not solve problems. It will create more problems…”David I. Levine, a professor of economics at University of California-Berkeley, says the current plan being discussed has the wrong structure…Advocates for a rescue plan this week point to a seizing up of credit markets, reflected in elevated inter-bank lending rates, as reason for action. Some economists are unconvinced.“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.

7:19 p.m. Dodd says Paulson, Bernanke to work on mortgage plan tonightOh no, these two that didn’t see problems coming are going to work out a quick solution? Are they asking the opinion of those who saw problems coming alreday years before and have been reflecting on possible solutions all that time?Curious to see the plan.

Team II, Get Ready to Attack!Everybody, we’ve got to turn up the heat. The bailout wall’s starting to show cracks, but remember who you’re up against!We’re going to need reinforcements tomorrow. All you readers that have not yet picked up the phone to contact your congresspeople, get suited up now.Salvo 1: Tomorrow AM, how about everyone that hasn’t already called, hit them with the first wave of calls. Do it between 10 and Noon tomorrow (Friday). Wear out the phones.Salvo 2: Early afternoon, all you guys that have already hit ‘em once over the last day or two, save up your best lines, and lay it on them one more time between 1 and 3 PM on Friday.We need to bring this thing to a crescendo on Friday, so you loom large on their mind all weekend. Friday PM, bring your cell phone to happy hour, and pass it around. Let your friends in on the action. When Congressman Highhead walks out the door Friday night, make sure the last thing they see a smoking, molten glob where the phone was.Remember, politics is the contest between a few powerful people .vs. everyone else. To win, we need vast numbers of cranky, highly motivated voters ridin’ tall in the saddle. Scare the hell out of ‘em.www.house.gov (your representative)www.senate.gov (your two senators. call both!)Team II, we’ve softened ‘em up. Now put this baby to bed!

@MOG – Your writings are so visceral. Please keep posting here. I thank you.

@Guest 18:08:32According to Dealbreaker:We will see if the 9:15 eastern conferencecall is a confirmation that JPMorganis getting the deposits and some branchesof Washington Mutual.

hihihi, Paulson deserved this

Don’t cross the American Taxpayer!

Washington Mutual just went under, and all debt/equity holders are wiped out. This has massive implications, especially for debt holders of entities like Countrywide. Remember that BoA have not guaranteed the debt of CFC. This allows them to let go the toxic waste and keep the good servicing entity of CFC and protect the depositors. Bond holders beware…..

Just like Pentagon projects, Congress will ensure that every district has a stake in this. Once established this cancer will spread until it consumes us (like is happening with “defense” spending).

I’m reading the undernews at prorev.com (sam smith’s progressive review). This is from there:Carolyn Betts – I agree with every point in Bernie Sanders’ proposal but have a suggestion. I worked with lead counsel to the RTC (the government entity that served as receiver for defunct savings & loans) in designing and implementing the sealed bid auction program for non-performing commercial mortgage loans during the S&L crisis. I also worked for FHA’s lead financial advisor in carrying out the congressional mandate that HUD enter into “negotiated” sales of its nonperforming multifamily loans to state housing finance agencies.Based on what I saw in these contexts and in carrying out sales of pools of VA, Farmers Home and HUD performing and nonperforming single-family loans, both in auctions and in mortgage backed securities form, my conclusion is this: the Wall Street players made out like bandits, ultimately at taxpayer expense and borrowers were not helped.I suggest we try another tack, in addition to what Congressman Sanders proposes: support the borrowers of the troubled loans, not the owners of the loans.I believe there is a good chance that there is collateral and other fraud in these mortgage loan portfolios. I.e., loans with no properties to support them, multiple loans secured by a single property, loans used to launder money through government guarantees.This conclusion is based in part on the numbers, which don’t make sense, and upon observation of the number of HUD-insured loans that have gone into default before a single payment was received. If the lenders are just paid for these loans what is the theoretical value in a good market for these loans, assuming they are performing (i.e., above current market value), the lenders will get a windfall and be rewarded for making fraudulent and/or predatory loans.And the bailout as proposed will be a perfect way to hide the evidence of wrongdoing.Would it cost anywhere near $700 billion to have the government stand behind the borrowers’ obligations, in concert with a program to address unemployment/underemployment and health care issues that are the primary sources of financial problems that cause these loans to go into default? I think not. I would impose a condition that the existing “problem” home loans in portfolio, and maybe also related home equity loans, be marked to decent rates of interest and reamortized over 30 or 35 years, with write-off of penalty interest, late fees, etc., at lender expense. Then, to the extent the borrowers still cannot make their payments but want to stay in their homes, have the government funding program (with a local-level administrator not controlled by those who caused the current crisis) make up the difference. Perhaps the government gets a lien on the property for only the amount of the borrower’s shortfall after a period of time during which the health care fix and jobs programs can take effect (say, 18 months).I agree that the bailout bill will be a disaster, in so many ways I can’t even list them all. Allowing the market to crash, with all its consequences, would be better than giving away $700 billion plus to the perps that brought us to the brink of world economic collapse. The longer we keep putting fingers in the dikes to avoid the consequences of bad decisions, money laundering and theft by the corporados, the worse the eventual flood will be.

more found at prorev:Look at all the pretty colorscolorful spots comparing the size of bailouts

again from prorev.com’s undernewsDennis Kucinich’s plan -Reinstatement of the provisions of Glass-Steagall, which forbade speculationRe-regulation of the finance, insurance, and real estate industriesAccountability on the part of those who took the companies down: a) resignations of management b) givebacks of executive compensation packages c) limitations on executive compensation d) admission by CEO’s of what went wrong and how, prior to any government bailoutDemands for transparency a) with respect to analyzing the transactions which took the companies down b) with respect to Treasury’s dealings with the companies pre and post-bailoutAn equity position for the taxpayers a) some form of ownership of assetsSome credible formula for evaluating the price of the assets that the government is buying.A sunset clause on the legislationFull public disclosure by members of Congress of assets held, with possible conflicts put in blind trust.A ban on political campaign contributions from officers of corporations receiving bailoutsA requirement that 2008 cycle candidates return political contributions to officers and representatives of corporations receiving bailoutsAnd, most importantly, some mechanism for direct assistance to homeowners saddled with unreasonable or unmanageable mortgages, as well as protection for renters who have lived up to their obligation but fall victim to financial tragedy when the property they live in undergoes foreclosure.

one more from pro rev, hope no one minds me sharing all these. I think they’re good reads to pass along:John Halle -What is missing from all of the discussion is any mention of how the plan will be paid for, as it is taken for granted that the average taxpayer is sure to be stuck with the ultimate cost of the $700 billion dollar price tag. But we don’t need to pay. And in this case we should not. For very few Americans have benefited from the giant casino which Wall Street has become over the past generation. Yes it has spun off enormous wealth but this has gone overwhelmingly to a small number at the top. . . It is time to make those who have danced their jigs on our backs pay the fiddler. And that means that not one dime of the bailout should come from the 99.9% of Americans who are the victims of Wall Street. All of it should come from the enormous store of assets controlled by the upper . 1%.The way to do this is by instituting a wealth tax – a tax on accumulated assets above $10 million. . . Eight-figure salaries have been routine in investment banking firms for two decades with Henry Paulson himself having earned $35 million in 2005 on the road to socking away accumulated assets of more than $700 million (not including stock options). His Democratic Party counterpart and predecessor at Goldman Sachs, key Obama advisor Robert Rubin, received similar compensation before moving to Citibank, where his wealth ballooned still further. Hedge fund operators, who have benefited from the absurd exemption on capital gains tax, have accumulated wealth beyond their dreams of avarice, one of them, John Paulson, of Paulson & Co. raking in a cool $3.7 billion for one years work. . . Simple arithmetic demonstrates that more than enough is available from these and other charter members of the plutocracy to fully finance the bailout, as well any additional items those with sufficiently resourceful minds would like to make part of the package.. . . Pushing for all of this, and more, should be the bottom line of progressives right now and we should be in the streets and in our representative offices demanding it.

very refreshing. thanks

US Economists rebel against bailout, and send a signed letter to both houses:FacultyTo the Speaker of the House of Representatives and the President pro tempore of the Senate:As economists, we want to express to Congress our great concern for the plan proposed by Treasury Secretary Paulson to deal with the financial crisis. We are well aware of the difficulty of the current financial situation and we agree with the need for bold action to ensure that the financial system continues to function. We see three fatal pitfalls in the currently proposed plan:1) Its fairness. The plan is a subsidy to investors at taxpayers’ expense. Investors who took risks to earn profits must also bear the losses. Not every business failure carries systemic risk. The government can ensure a well-functioning financial industry, able to make new loans to creditworthy borrowers, without bailing out particular investors and institutions whose choices proved unwise.2) Its ambiguity. Neither the mission of the new agency nor its oversight are clear. If taxpayers are to buy illiquid and opaque assets from troubled sellers, the terms, occasions, and methods of such purchases must be crystal clear ahead of time and carefully monitored afterwards.3) Its long-term effects. If the plan is enacted, its effects will be with us for a generation. For all their recent troubles, America’s dynamic and innovative private capital markets have brought the nation unparalleled prosperity. Fundamentally weakening those markets in order to calm short-run disruptions is desperately short-sighted.For these reasons we ask Congress not to rush, to hold appropriate hearings, and to carefully consider the right course of action, and to wisely determine the future of the financial industry and the U.S. economy for years to come.Signed (updated at 9/25/2008 8:30AM CT)Acemoglu Daron (Massachussets Institute of Technology)Adler Michael (Columbia University)Admati Anat R. (Stanford University)Alexis Marcus (Northwestern University)Alvarez Fernando (University of Chicago)Andersen Torben (Northwestern University)Baliga Sandeep (Northwestern University)Banerjee Abhijit V. (Massachussets Institute of Technology)Barankay Iwan (University of Pennsylvania)Barry Brian (University of Chicago)Bartkus James R. (Xavier University of Louisiana)Becker Charles M. (Duke University)Becker Robert A. (Indiana University)Beim David (Columbia University)Berk Jonathan (Stanford University)Bisin Alberto (New York University)Bittlingmayer George (University of Kansas)Boldrin Michele (Washington University)Brooks Taggert J. (University of Wisconsin)Brynjolfsson Erik (Massachusetts Institute of Technology)Buera Francisco J. (UCLA)Camp Mary Elizabeth (Indiana University)Carmel Jonathan (University of Michigan)Carroll Christopher (Johns Hopkins University)Cassar Gavin (University of Pennsylvania)Chaney Thomas (University of Chicago)Chari Varadarajan V. (University of Minnesota)Chauvin Keith W. (University of Kansas)Chintagunta Pradeep K. (University of Chicago)Christiano Lawrence J. (Northwestern University)Cochrane John (University of Chicago)Coleman John (Duke University)Constantinides George M. (University of Chicago)Crain Robert (UC Berkeley)Culp Christopher (University of Chicago)Da Zhi (University of Notre Dame)Davis Morris (University of Wisconsin)De Marzo Peter (Stanford University)Dubé Jean-Pierre H. (University of Chicago)Edlin Aaron (UC Berkeley)Eichenbaum Martin (Northwestern University)Ely Jeffrey (Northwestern University)Eraslan Hülya K. K.(Johns Hopkins University)Faulhaber Gerald (University of Pennsylvania)Feldmann Sven (University of Melbourne)Fernandez-Villaverde Jesus (University of Pennsylvania)Fohlin Caroline (Johns Hopkins University)Fox Jeremy T. (University of Chicago)Frank Murray Z.(University of Minnesota)Frenzen Jonathan (University of Chicago)Fuchs William (University of Chicago)Fudenberg Drew (Harvard University)Gabaix Xavier (New York University)Gao Paul (Notre Dame University)Garicano Luis (University of Chicago)Gerakos Joseph J. (University of Chicago)Gibbs Michael (University of Chicago)Glomm Gerhard (Indiana University)Goettler Ron (University of Chicago)Goldin Claudia (Harvard University)Gordon Robert J. (Northwestern University)Greenstone Michael (Massachusetts Institute of Technology)Guadalupe Maria (Columbia University)Guerrieri Veronica (University of Chicago)Hagerty Kathleen (Northwestern University)Hamada Robert S. (University of Chicago)Hansen Lars (University of Chicago)Harris Milton (University of Chicago)Hart Oliver (Harvard University)Hazlett Thomas W. (George Mason University)Heaton John (University of Chicago)Heckman James (University of Chicago – Nobel Laureate)Henderson David R. (Hoover Institution)Henisz, Witold (University of Pennsylvania)Hertzberg Andrew (Columbia University)Hite Gailen (Columbia University)Hitsch Günter J. (University of Chicago)Hodrick Robert J. (Columbia University)Hopenhayn Hugo (UCLA)Hurst Erik (University of Chicago)Imrohoroglu Ayse (University of Southern California)Isakson Hans (University of Northern Iowa)Israel Ronen (London Business School)Jaffee Dwight M. (UC Berkeley)Jagannathan Ravi (Northwestern University)Jenter Dirk (Stanford University)Jones Charles M. (Columbia Business School)Kaboski Joseph P. (Ohio State University)Kahn Matthew (UCLA)Kaplan Ethan (Stockholm University)Karolyi, Andrew (Ohio State University)Kashyap Anil (University of Chicago)Keim Donald B (University of Pennsylvania)Ketkar Suhas L (Vanderbilt University)Kiesling Lynne (Northwestern University)Klenow Pete (Stanford University)Koch Paul (University of Kansas)Kocherlakota Narayana (University of Minnesota)Koijen Ralph S.J. (University of Chicago)Kondo Jiro (Northwestern University)Korteweg Arthur (Stanford University)Kortum Samuel (University of Chicago)Krueger Dirk (University of Pennsylvania)Ledesma Patricia (Northwestern University)Lee Lung-fei (Ohio State University)Leeper Eric M. (Indiana University)Leuz Christian (University of Chicago)Levine David I.(UC Berkeley)Levine David K.(Washington University)Levy David M. (George Mason University)Linnainmaa Juhani (University of Chicago)Lott John R. Jr. (University of Maryland)Lucas Robert (University of Chicago – Nobel Laureate)Luttmer Erzo G.J. (University of Minnesota)Manski Charles F. (Northwestern University)Martin Ian (Stanford University)Mayer Christopher (Columbia University)Mazzeo Michael (Northwestern University)McDonald Robert (Northwestern University)Meadow Scott F. (University of Chicago)Mehra Rajnish (UC Santa Barbara)Mian Atif (University of Chicago)Middlebrook Art (University of Chicago)Miguel Edward (UC Berkeley)Miravete Eugenio J. (University of Texas at Austin)Miron Jeffrey (Harvard University)Moretti Enrico (UC Berkeley)Moriguchi Chiaki (Northwestern University)Moro Andrea (Vanderbilt University)Morse Adair (University of Chicago)Mortensen Dale T. (Northwestern University)Mortimer Julie Holland (Harvard University)Muralidharan Karthik (UC San Diego)Nanda Dhananjay (University of Miami)Nevo Aviv (Northwestern University)Ohanian Lee (UCLA)Pagliari Joseph (Unive
rsity of Chicago)Papanikolaou Dimitris (Northwestern University)Parker Jonathan (Northwestern University)Paul Evans (Ohio State University)Pejovich Svetozar (Steve) (Texas A&M University)Peltzman Sam (University of Chicago)Perri Fabrizio (University of Minnesota)Phelan Christopher (University of Minnesota)Piazzesi Monika (Stanford University)Piskorski Tomasz (Columbia University)Rampini Adriano (Duke University)Reagan Patricia (Ohio State University)Reich Michael (UC Berkeley)Reuben Ernesto (Northwestern University)Roberts Michael (University of Pennsylvania)Robinson David (Duke University)Rogers Michele (Northwestern University)Rotella Elyce (Indiana University)Ruud Paul (Vassar College)Safford Sean (University of Chicago)Sandbu Martin E. (University of Pennsylvania)Sapienza Paola (Northwestern University)Savor Pavel (University of Pennsylvania)Scharfstein David (Harvard University)Seim Katja (University of Pennsylvania)Seru Amit (University of Chicago)Shang-Jin Wei (Columbia University)Shimer Robert (University of Chicago)Shore Stephen H. (Johns Hopkins University)Siegel Ron (Northwestern University)Smith David C. (University of Virginia)Smith Vernon L.(Chapman University- Nobel Laureate)Sorensen Morten (Columbia University)Spiegel Matthew (Yale University)Stevenson Betsey (University of Pennsylvania)Stokey Nancy (University of Chicago)Strahan Philip (Boston College)Strebulaev Ilya (Stanford University)Sufi Amir (University of Chicago)Tabarrok Alex (George Mason University)Taylor Alan M. (UC Davis)Thompson Tim (Northwestern University)Tschoegl Adrian E. (University of Pennsylvania)Uhlig Harald (University of Chicago)Ulrich, Maxim (Columbia University)Van Buskirk Andrew (University of Chicago)Veronesi Pietro (University of Chicago)Vissing-Jorgensen Annette (Northwestern University)Wacziarg Romain (UCLA)Weill Pierre-Olivier (UCLA)Williamson Samuel H. (Miami University)Witte Mark (Northwestern University)Wolfers Justin (University of Pennsylvania)Woutersen Tiemen (Johns Hopkins University)Zingales Luigi (University of Chicago)Zitzewitz Eric (Dartmouth College)

Luxury goods retailer, Neiman Marcus, famous marketer of assorted holiday items, says its quarterly loss more than doubled from a year earlier and offers a bleak outlook for the holidays as the wealthy and upper-middle-class cut back, according to today’s Wall Street Journal.Neiman posted a $35.7 million loss for its fiscal quarter ended Aug. 2.Saks reported a 5.9% decline in August same-store sales and a $32 million loss for its fiscal quarter ended Aug. 2.Nordstrom Inc. cut it’s outlook for the second half in mid-August.Tiffany & Co. said same-store sales in the U.S. declined 4% in the quarter ended July 22.

http://www.bloomberg.com/apps/news?pid=20601087&sid=ajvJdZpdH3LQ&refer=home

Good for you. Okay. I’ll do it.sue

I’m not especially curious to see their next iteration. It will involve cheating like everything from those guys does. Because they want to cheat, that’s their entire goal.Go with the sort of plan the economists recommend. They are collectively knowledgeable and, just as important, disinterested. Furthermore, according to my understanding, they are right and Paulson / Bernanke are wrong.

Test

If you’re set on a bailout then NR’s plan is better than the rest; however, the crux of the problem is our unjust, unequal financial system which is essentially set up like a Las Vegas casino: the house always wins!How many generations must pass where the people are told and believe the same things: not enough money for healthcare, education, social security, etc; But think, there is always UNLIMITED money for WAR and CORPORATE BAILOUTS and all the while, the top 1% of this country become wealthier and wealthier. If education is to cease to be an oxymoron, then the “sheeple” must begin the process of critical thinking and see what’s really going on! IQB (I Quit Believing)

The shouts I’m hearing on the street are that constituents are demanding that Paulson, Bernake and Cox be replaced pronto or House members will find themselves replaced Pronto!What are people saying in your neighborhod?

Thank you, Jane. That means a lot more to me than you know. You wouldn’t believe the abuse I have endured for simply speaking of equal pay for equal sacrifice/equal work. I so hope I am planting seeds in people’s minds. I never know if anyone agrees – no one will say, though no one will point out where they think I am getting it wrong. I truly believe we, this tragi-comedic species, are so far from our natural senses that we have brought our geno-sadistic selves to the precipice. I am watching closely the news from especially Pakistan, and Lebanon Border, Russia, South America, Israel with new thermo-nukes, etc etc. I do suspect (I’m really almost certain) that war is to follow this financial crisis – it’s the pattern followed by the world’s most wealthpowerful ones.I see nothing to do to counter global insanity and the globalocal emergency we are in, but to keep saying and saying the good sense of peace and plenty for all through the pay justice we keep trying to do an end run around.We are not going to win this game. Justice bats last, and there is no heavier hitter.People still are convinced we have to give our money away to make it work for commerce, but that’s a lie. People are still convinced pay justice will mean less money for them, when it will in fact enormously enrich everyone in quality of life, and will give 99% of people more money.Education must prevail, or catastrophe will.Why is it that people have never said: “Hey, I work as hard as you, in fact I work harder than you – you can’t have any more than me.” Why has overwealth never been universally condemned by all? Why has no one ever worked out that; transaction shifts money from earners to non-earners? Why is no one even interested in the fact that transaction automatically steals earnings from earners and gives them to non-earners?I may die still wondering those ‘whys’, but my children will know their mother fought for them ceaselessly and fiercely, with everything she had.small consolation for them. sigh.

personally i hope they do that..that’s the opening for an investigation

Shame on me

Saw this sign with following article:No Bail OutNo $700 BillionNo Loan Sharks(Rochester, N.Y.) – A protest started about 5 p.m. Thursday in front of the Federal Building on State Street downtown.Dozens of protestors represented organizations around the city as they marched carrying signs to protest the $700 billion bailout. As they marched, they encouraged drivers to honk their horns in agreement.Many of them were on their cell phones, calling a toll free number. The goal was to express their opinions to Congress.Anti-bailout protesters marched in 100 other cities across the nation.Organizers from several different groups, including Metro Justice, emphasized how important it is for local people to get involved.Organizers said even if there is a decision from Congress on the bailout, they’re going to keep calling…keep using the toll free number to call congress and let their voices be heard.http://www.13wham.com/news/local/story.aspx?content_id=bc9e1711-37fe-451a-a0e5-dbbf53a60fce&rss=102There were three protests going on near me in San Jose.

Since when do slaves ask their masters to pay them for some of the work they perform on their behalf, let alone sharing the proceeds?The masters used to be make Eunuchs out of their slaves. The only difference now is that today’s slaves are morally and intellectually castrated.

Wow! I’ve never seen such widespread discontent! The sleeping giant is awakening!

I was there also. In a derby.

It was a poor move to stop regulating lending practices – what just unfolded was a [rather bad] example of what can happen to a market economy without good oversight.I agree that maybe there needs to be a cap on the amount a company can charge interest – it’s one of the causes of this financial problem. Furthermore, those that have been struck by this problem (struggling or ex-homeowners) need some sort of debt aid. But, the steps outlined in this article are right on the nail, and therefore nothing further needs to be said about this financial problem except that I hope our government listens.Also, there are other problems that have appeared that spell doom-and-gloom for a market economy that many economists would actually argue against. That is because there are flaws in some of what is accepted and taught in economic studies. These are also becoming evident with our economy and we need to learn from it.

Last I heard it’s not finally decided nor written up yet. I am eagerly awaiting the final wording, and we’d better parse every single word of it. Any lawyers in here?

It is the mothers of this world who fight the hardest and fiercest. Mine certainly did, up to the very moment she died in a hospital bed, gorked out on morphine, to her very last breath. Our fellow poster, Afa, knows this of which I speak. Keep fighting, all.

Yes, these three must go.

try this link:http://truemajority.wiredforchange.com/o/8/t/107/event/attendTellafriend.jsp?event_KEY=342&key=2603805Follow the prompts for a ‘protest’ in a town/city near you.Went to Courthouse here in Eugene,Or, today (5-6:30). About 50 unorganized folks showed up with signs to show the rush hour workers. Not crazies, real people.I was amazed that 95% of the thousands of folks heading home from work whooped and hollered, thumbed-up and honked, in support. (My sign said simply, “No BailOut for the Banksters”.)I think if ongoing rallies and ‘come join us’ signs were posted, huge numbers of folks would turn out within a week.

I am living in California and anyone who checks out the demographics of California can verify my point. And, if you have kept up with your California news, you may also verify my point from the many published articles on “flippers” – on those who had up to 10 houses with imploding mortgages after spending only a few years in this country.

It is amazing, how that people who foresaw this brewing crisis, as well as those who felt it, like the ones here on this board after continuous warnings of the coming “train wreck” and that we should rush to find a solution before it is too late, were being ridiculed because “it was not that bad” and “it’s not Armageddon”.A total Reversal in sentiments.Now pundits are screaming “the sky is falling” everywhere they go and are rushing to pass something, anything. While people on boards like this one are keeping a relatively calm and positive attitude, “it will not be as bad as Paulson is threatening”, “we need to take our time to work out a feasible solution” and are calling for citizenship participation and involvement.I have never felt so proud to be sitting in the front row watching and, from time to time, commenting on this distasteful movie being played, for little the producer and its crew take note and notice from this failure.HO MEH – indeed

Leave it to the feckless Democrats to clutch defeat from the jaws of victory. They are on the wrong side of this thing, instead of demanding Paulson & Bernacke’s resignations and telling the administration:”Your unfettered free markets created this mess, now let them(and the bankruptcy courts) clean it up.” Instead, they are negotiating with a reviled regime over the biggest heist in American history. Also interesting is JPM timing on WAMU. Did they jump the gun, expecting the bailout to go through so they could rake the deposits and leave the trash with the Treasury?

So if congress pass an alternative solution,one with proper punitive consequences, canPaulson or Bernanke do anything about it?

Yes. It is ironic that the ones who see this coming and know of what is to come is rejecting the plan. That is probably because we had more time to understand the issues and also realise what actually needs to be done to get Ameerica back on its feet. It cannot be done without pain and suffering, but that is the price to be paid for the mistakes of the past. Americans have to make sure that the COUNTRY comes out of this crisis stronger than before, and more stable. Not the banks. Not the fat cats.Although I am in the industry, I am disgusted by what Paulson and Bernanke are trying to pull on the American tax payer. Risk takers, like me, know that we reap the profits when they get it right and pay the price when they get it wrong. Its part and parcel of what we do. And as a true and blue capitalist, I totally oppose this plan. Letting risk takers get away from paying the price of taking excessive risk is unacceptable. There will be no markets, balance going forward. We need the potential to LOSE MONEY to ensure risks are managed realistically and properly. No bailout.

…A decade ago, when Japan’s government was devising schemesto deal with its own mountain of bad debt, local bankers used to joke:”You can put rotten meat in a freezer, but it doesn’t remove the rot.It just takes away the smell – for a while.” Wall Street would do wellto remember that now.

Entire FT Article => Putting dodgy assets in deep freeze will not remove the rot

Washington Mutual Just Collapsed. One has to be truly stupid to pour money into this stock market.

It’s clear that that these fools don’t understand how US capitalism actually works. They think that it is all about “free markets”. Do you think they understand BWII? HAHA!But the gov’t gets what it deserves. If they want to keep them dumb and ideological then they will get a dumb and ideological reaction. Another proof that the Republicans are speeding the demise of the US empire.Darkie

This unfolding drama is becoming much like a Greek Tragedy Amid GOP revolt, bailout deal breaks downWASHINGTON – A Republican rebellion stalled government efforts Thursday to avoid economic meltdown, a chaotic turnaround that disrupted the choreography of an extraordinary White House meeting meant to show joint resolve from the president, the political parties and the presidential candidates. Instead, the summit broke up so bitterly that Treasury Secretary Henry Paulson got on one knee before Democratic leaders in a theatrical attempt to salvage talks.

That is what we have been thought in Schools and rethought in the market.In the world of a religious person, Paulson’s plan bailing out Wall Street firms is equivalent to discovering during the Judgment Day that Hell does not exist and that it was just a trick to make as many people endure believing and worshiping as possible.One question thought. Does the following summarizes the two alternatives we face:Either save the credit/money markets by screwing the Treasury market OR safeguard the Treasury market and take the risk of a frozen/collapsing money market.Is there an in-between alternative?

Can some one please enlighten me as to why the following statement is true?From http://www.bloomberg.com/apps/news?pid=20601087&sid=aEvb987RgbsQ&refer=homeSome very creditworthy issuers are only able to issue overnight rather than the more typical 30 days or longerIs someone keeping issuers from issuing for longer? Or is it, as I suspect, that issuers don’t WANT to issue for longer than overnight? Wouldn’t this suggest that that’s how the market is operating? Prices are going up!Interesting also is that fact that what is being impacted are two of the most abusive sectors: automotive and financial. These sectors represent the greatest wastes of energy… It’s a clear sign that the realities of energy are starting to set in; Mother Nature (natural laws) are reverting back toward balance.Soon we shall see a big hit to the airline industry.

yeah, what happened to the “economy is resilient” mantra

Yes, the talks broke down, as EXACTLY I had predicted in my reply to Pete. These political animals only care about being in power, and right now they know they can’t vote for this.

Bernanke?

Ya’ll think this is bad now? Wait ’til the jobs numbers come out next week….why do you think DC is pushing this so hard and fast?

A week overdue. UBS and Wachovia are next.

and then the regional banks are next after that

Ah, see I’m in New Mexico. We have had quite a few Californians driving up the housing prices in the last five years because they figured they could sell their house in CA, and use the money for downpayments on multiple houses in NM, live in one and rent the others for a couple of years and then sell them at a profit when the homes started to become bothersome as rentals. Unfortunately for us New Mexicans, we ended up importing several CA gangs, and when housing prices started going back down, our CA investors were stuck with houses no one would buy. So we literally have whole subdivisions that are now empty or in forclosure. I guess I haven’t had the inspiration to keep up with CA news.

A force-five hurricane blowing out of Wall Street – parallels to 1929.Galbraith on the stock market Crash of 1929:”Had the economy been fundamentally sound in 1929 the effect of the stock market crash might have been small…. But business in 1929 was not sound; on the contrary it was exceedingly fragile. It was vulnerable to the kind of blow it received from Wall Street. Those who have emphasised this vulnerability are obviously on strong ground. Yet when a greenhouse succumbs to a hailstorm something more than a passive role is normally attributed to the storm. One must accord similar significance to the typhoon which blew out of lower Manhattan in October 1929″ (Galbraith, J.K (1966), The Great Crash, 1929 Hammondsworth: Penguin Books p. 204)While the nature of the crisis in Wall Street is differs in character – a crisis in the financial system rather than a stock market crash – to my mind the two are akin. The stock market is one area of our financial system that is more regulated today than in 1929. The same cannot be said for our financial system – hence the crisis is emerging first in the financial system because that is where the greatest excesses were. However the hurricane blowing out of Wall Street will gather momentum, first engulfing the stock market as it then proceeds to topple the already unsound U.S. economy.

This plan is still grossly unfair. It punishes those of us who have been fiscally responsible. Most of us who have been responsible will manage well enough during a recession or depression. Were is our incentive?Here are some ideas:1) give every renter who has been waiting on the sidelines for this insanity to end, an REO home at it’s 1992 price. The home should come from any bank that participates in the bailout.2) Instead of increasing taxes, relocate them. Need to withdraw from Iraq immediately (to hell with the supposed consequences). Can’t pay those overpriced teachers their cushy retirement packages? Tough shit for them.3) Give homeowners who don’t participate in any handouts some incentive like a future real estate tax cut.4) REDUCE SPENDING.5) REDUCE SPENDING.6) REDUCE SPENDING.

What a great idea, instead of freeing up the clogged credit markets, let’s bailout the stupid homeowners who overpaid for property and lied about their income to get loans they could never afford. i am sure that’s wal streets fault not the mortage banker or real estate agents, or heaven forbid, the jerks who signed the loan agreement. We should let them walk away from THEIR financial obligations. that’s a great concept. remind me to borrow money from you some time.

THE RIGHT-WING LOBBY GROUPS HAVE WON. RESISTANCE IS FUTILE AMERICA. The country has been turned into a Banana Republic.- RGE’s overly complex musings are futile – he’s kidding himself if he reckons anyone in power will listen – they’re all on The Lobby Payroll and are captive to too many favours to stop this bail out give-away. It is surprising RGE does not acknowledge this.- Bush will wait until after the November election then direct Paulson to buy toxic assets with the remaining TARP $500 billion using Bernanke’s hold-to-maturity pricing. It’ll all be a done-deal by January and the swearing in of a new president. Bush will use the excuse of “too important to wait”.- the nation’s fiscal wealth will be basically plundered.- the wars will consume what remains.- the new president will not be able to CHANGE anything – no health care reforms, no changes to social security, no “new deal” because there is no more money; exactly what certain right wingers wanted. Baby boomer retirement plans have been squandered in the process.- America will continue a “sink or swim” culture and maintain a poor under-class to serve others. Business as usual.

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