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September 20, 2008

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» My Response To An Economist Who Plays Dumb from Joust The Facts
Paul Krugman finds a snippet of a John McCain article on healthcare that he finds amusing. It's a short, snide comment, so I'll quote most of it. Here’s what McCain has to say about the wonders of market-based health reform:... [Read More]

Comments

bgates

TM, since I have a chance to get in here early - is it possible under typepad to add an ip address or cookie or some kind of unique id to the signature line? Ace of Spades does the kind of thing I have in mind. One of the trolls in the last thread noticed the troll blocker script I've been advertising, and is now writing each comment under a different name. I have no interest in the attention-starved idiot, and I think several other regulars feel the same.

kim

That's just Leo playing childish games. He'll get tired of it because it makes him seem more incoherent than usual.
====================================

kim

Nice to snap to the distinction between solvent and liquid. Solvency was indeterminate because liquidity froze up from lack of information, no? And now, still with no information but artificial liquidity, solvency can manifest itself. Close enough for a tyro?
================================

Charlie (Colorado)

Nice to snap to the distinction between solvent and liquid. Solvency was indeterminate because liquidity froze up from lack of information, no? And now, still with no information but artificial liquidity, solvency can manifest itself. Close enough for a tyro?

Pretty close, except it's not artificial liquidity. Once people can trust their valuations --- which, as Tom alludes, are actually a statistical distribution --- then the market will become liquid again automatically: people will be able to estimate risk and value credit. That's real liquidity by the usual mechanism.

The point about the variance is this: statistically, uncertainty about the value becomes variance in the distribution --- you know the odds are at least, say, 95 percent that the value lies between a low and a high bound.

If I sell you an apple for a dime, the value of that apple is 10 cents, with very little variance. If I want to give you my dime to hold and ask for 9 cents back (a loan with collateral) you and I both know the collateral asset is worth a dime.

But say instead I gave you the *apple*. If you're pretty sure it's worth a dime, we have the same deal. On the other hand, you don't know whether the apple would sell for a dime, or two for a penny, you won't be likely to loan me 9 cents against it.

If you're sure it's a dime, the variance is low; if you don't know whether it's a mil or a dollar, the variance is high.

(Is that the example you wanted, Tom?)

bgates

Kim - I stopped going to movie theaters because I don't want to listen to other people's shrieking children. Hate to see the same thing happen here.

Emile Zola

Solvency, then, is your basic balance sheet: Do you have more assets than debts? In a strictly budgeted scenario, if you have more debts than assets, you are not (very) solvent; all your income goes to servicing those debts.

Thats' the algebraic equation 'a negative plus a negative equals a positve' I used to distinguish this Financial debacle from algebra that was so childishly dismissed by the mass of miscreants here.

It's pretty simple really. Most of a mortgage pmt goes to interest, not principle. If the debt service of the lending institution eclipses the income from payments, they're in the RED. Get it?

Mr Rogers Neighborhood

"I stopped going to movie theaters because I don't want to listen to other people's shrieking children."

How childish..........

Mr Rogers Neighborhood

Ian Welsh on 'Paulson's Blank Check'

"I've pasted the text of the bill below the jump. Everyone should read it. But here are the key points:

* No one who foresaw the crisis, such as Krugman or Stiglitz, is involved in making the plan to fix it.
* The man overseeing the bailout is the ex-CEO of Goldman Sachs, a Wall Street Company. He helped cause the crisis.
* Paulson helped obtain the SEC exemption which allowed brokerages to increase leverage to 60:1 from 12:1.
* The money is Paulson's to use for buying commercial and residential mortgages and mortgaged backed securities as he chooses. No one has any oversight over him, and he can pay any price he wants to, including face amount of the debt.
* Courts cannot review his decisions, not can any regulators. He has to report to Congress once every six months.
* He gets 700 Billion dollars to use as he sees fit, looking after the taxpayer is a "consideration" not a requirement.
* Bet on that 700 Billion dollars being gone before January 20, 2009. Bet on Treasury asking for more.
* That is $2,324 dollars per man, woman and child in America
* There is no bailout for mortgage holders. Banks get bailed out, but not ordinary people.
* Banks and brokerages made record profits these last eight years. Ordinary Americans barely broke even.
* In 2007 Wall Street paid itself bonuses equal to the raises of 80 million Americans.
* Banks bailed out by this plan need make no changes in how they do business.
* Banks bailed out need not replace the management which drove them into insolvency.
* Shareholders and bondholders of such banks do not lose a cent.
* The securities which caused this crisis are still allowed.
* Expect the 700 billion dollars to increase inflation, especially in oil.
* Bush is asking you to trust his administration with 700 billion after spending 580 billion on the Iraq war. Do you trust him?"

Semanticleo

"Shareholders and bondholders of such banks do not lose a cent."

That includes me, and I don't think that is right.

kim

Leo, watch the Democrats in Congress go right along with it. They know something you don't.

Yes, bgates, but Leo's diluting his brand, such as it is. He'll tire of it. Just like the screaming kid. Be glad the whole theatre isn't full of 'em.
==========================================

kim

Read above, Leo, you'll see they weren't necessarily insolvent; crooks, read Democrats, had provoked the liquidity crisis.
=========================================

Semanticleo

From Yglesias:

" Raghuram Rajan and Luigi Zingales of the University of Chicago suggest ways to force the banks to raise capital without tapping the taxpayers. First, the government should tell banks to cancel all dividend payments. Banks don’t do that on their own because it would signal weakness; if everyone knows the dividend has been canceled because of a government rule, the signaling issue would be removed. Second, the government should tell all healthy banks to issue new equity. Again, banks resist doing this because they don’t want to signal weakness and they don’t want to dilute existing shareholders. A government order could cut through these obstacles.

Meanwhile, Charles Calomiris of Columbia University and Douglas Elmendorf of the Brookings Institution have offered versions of another idea. The government should help not by buying banks’ bad loans but by buying equity stakes in the banks themselves. Whereas it’s horribly complicated to value bad loans, banks have share prices you can look up in seconds, so government could inject capital into banks quickly and at a fair level. The share prices of banks that recovered would rise, compensating taxpayers for losses on their stakes in the banks that eventually went under."

Verner

So Krugman's panties are in a wad because he doesn't get to write the plan. Booo Hoo.


* Bush is asking you to trust his administration with 700 billion after spending 580 billion on the Iraq war. Do you trust him?"

Well, let me see, the alternative is the Obama team! Robert Rubin, Franklin Raines, that horrid Prinsky woman and a bunch of other Clinton retreads who started all this mess in the first place! Not to mention, Chris Dodd and Barney Frank would be in positions of power in the congress.

In that case, Hell yes I trust Bush! At least he was trying to reform this mess in 2005.


kim

Adding capital to incalculable solvency still sums to incalculable solvency. Even I know that. So should you. Read up on the thread.
======================================

kim

Only 580 billion? You know, Leo, the Twin Towers catastrophe caused a trillion dollar hit to the economy. Bush seems quite prudent with his Iraqi adventure. Probably so with Paulsen and Bernanke's plan, too. Like Verner says, better he or McCain than to let the foxes into the henhouse.

You haven't figured out how stupid, corrupt and dangerous these Democrats have been have you? They sold out for fractions of a penny on dollars lost by taxpayers.

If the Democrats are so happy to bend to Paulsen's will, watch them telegraph to Obama not to make a big deal of this. They are on thin ice, I'll bet.
=====================================

PeterUK

"Thats' the algebraic equation 'a negative plus a negative equals a positve' I used to distinguish this Financial debacle from algebra that was so childishly dismissed by the mass of miscreants here."

-1 + -1 = 2 ?
You lose on of your balls in a tragic zip accident the other your irate partner tears of with his bare hands, that is -1ball add to other sad accident -iball that = -2 balls.You are bollockless,

bad

Peter, you have such a knack for putting things into perspective. Even Barbie would find that to be easy math.

Verner

Since the Bots are flinging neo-marxist claptrap throughout the comments, I hope TO won't mind me copying the full test of this WaPo piece--just a gentle reminder of who did what:

Where Was Sen. Dodd?
Playing the Blame Game On Fannie and Freddie

By Al Hubbard and Noam Neusner
Friday, September 12, 2008; A15

Taxpayers face a tab of as much as $200 billion for a government takeover of Fannie Mae and Freddie Mac, the formerly semi-autonomous mortgage finance clearinghouses. And Sen. Christopher Dodd, the Democratic chairman of the Senate Banking Committee, has the gall to ask in a Bloomberg Television interview: "I have a lot of questions about where was the administration over the last eight years."

We will save the senator some trouble. Here is what we saw firsthand at the White House from late 2002 through 2007: Starting in 2002, White House and Treasury Department economic policy staffers, with support from then-Chief of Staff Andy Card, began to press for meaningful reforms of Fannie, Freddie and other government-sponsored enterprises (GSEs).

The crux of their concern was this: Investors believed that the GSEs were government-backed, so shouldn't the GSEs also be subject to meaningful government supervision?

This was not the first time a White House had tried to confront this issue. During the Clinton years, Treasury Secretary Larry Summers and Treasury official Gary Gensler both spoke out on the issue of Fannie and Freddie's investment portfolios, which had already begun to resemble hedge funds with risky holdings. Nor were others silent: As chairman of the Federal Reserve, Alan Greenspan regularly warned about the risks posed by Fannie and Freddie's holdings.

President Bush was receptive to reform. He withheld nominees for Fannie and Freddie's boards -- a presidential privilege. While it would have been valuable politically to use such positions to reward supporters, the president put good policy above good politics.

In subsequent years, officials at Treasury and the Council of Economic Advisers (especially Chairmen Greg Mankiw and Harvey Rosen) pressed for the following: Requiring Fannie and Freddie to submit to regulations of the Securities and Exchange Commission; to adopt financial accounting standards; to follow bank standards for capital requirements; to shrink their portfolios of assets from risky levels; and empowering regulators such as the Office of Federal Housing Oversight to monitor the firms.

The administration did not accept half-measures. In 2005, Republican Mike Oxley, then chairman of the House Financial Services Committee, brought up a reform bill (H.R. 1461), and Fannie and Freddie's lobbyists set out to weaken it. The bill was rendered so toothless that Card called Oxley the night before markup and promised to oppose it. Oxley pulled the bill instead.

During this period, Sen. Richard Shelby led a small group of legislators favoring reform, including fellow Republican Sens. John Sununu, Chuck Hagel and Elizabeth Dole. Meanwhile, Dodd -- who along with Democratic Sens. John Kerry, Barack Obama and Hillary Clinton were the top four recipients of Fannie and Freddie campaign contributions from 1988 to 2008 -- actively opposed such measures and further weakened existing regulation.

The president's budget proposals reflected the nature of the challenge. Note the following passage from the 2005 budget: Fannie, Freddie and other GSEs "are highly leveraged, holding much less capital in relation to their assets than similarly sized financial institutions. . . . A misjudgment or unexpected economic event could quickly deplete this capital, potentially making it difficult for a GSE to meet its debt obligations. Given the very large size of each enterprise, even a small mistake by a GSE could have consequences throughout the economy."

That passage was published in February 2004. Dodd can find it on Page 82 of the budget's Analytical Perspectives.

The administration not only identified the problem, it also recommended a solution. In June 2004, then-Deputy Treasury Secretary Samuel Bodman said: "We do not have a world-class system of supervision of the housing government-sponsored enterprises (GSEs), even though the importance of the housing financial system that the GSEs serve demands the best in supervision."

Bush got involved in the effort personally, speaking out for the cause of reform: "Congress needs to pass legislation strengthening the independent regulator of government-sponsored enterprises like Freddie Mac and Fannie Mae, so we can keep them focused on the mission to expand home ownership," he said in December. He even mentioned GSE reform in this year's State of the Union address.

How did Fannie and Freddie counter such efforts? They flooded Washington with lobbying dollars, doled out tens of thousands in political contributions and put offices in key congressional districts. Not surprisingly, these efforts worked. Leaders in Congress did not just balk at proposals to rein in Fannie and Freddie. They mocked the proposals as unserious and unnecessary.

Rep. Barney Frank (D-Mass.) said the following on Sept. 11, 2003: "We see entities that are fundamentally sound financially. . . . And even if there were a problem, the federal government doesn't bail them out."

Sen. Thomas Carper (D-Del.), later that year: "If it ain't broke, don't fix it."

As recently as last summer, when housing prices had clearly peaked and the mortgage market had started to seize up, Dodd called on Bush to "immediately reconsider his ill-advised" reform proposals. Frank, now chairman of the House Financial Services Committee, said that the president's suggestion for a strong, independent regulator of Fannie and Freddie was "inane."

Sen. Dodd wonders what the Bush administration did to address the risks of Fannie and Freddie. Now, he knows. The real question is: Where was he?

Al Hubbard was director of the National Economic Council and assistant to the president from 2005 to 2007. Noam Neusner was a speechwriter and communications director in the Bush administration from 2002 to 2005.

Semanticleo

PUKe; Champion of Idiocracy. If it wasn't tragic, it would be funny.

I thought Brits were smart?

Rick Ballard

bgates,

The other thing to do is to put anyone toying with trolls in the same bin with the trolls. It tightens up the thread quite a bit.

Semanticleo

"anyone toying with trolls in the same bin with the trolls."

That's just what Marmalard told Dean Wormer about Bluto.

Ann

Bad,

This room smelled funny until around 8:05. Is it safe to enter?

Ann

Nevermind Bad :)

baked alaska

Obama is No. 2 on the list, with $126,349, right after Sen. Chris Dodd, D-Conn., chairman of the Senate Banking Committee, who had $165,400.

...

analysis found Fannie and Freddie-related contributors gave $116,000 to John McCain and his related committees, compared with $16,000 to Obama and his related committees.


http://www.politifact.com/truth-o-meter/statements/727/

Semanticleo

"Nevermind Bad :)"

Danger! Danger! Will Smith, there is information afoot!!!!!

baked alaska

The soft bigotry of low expectations:

At the insistence of the McCain campaign, the Oct. 2 debate between the Republican nominee for vice president, Gov. Sarah Palin, and her Democratic rival, Senator Joseph R. Biden Jr., will have shorter question-and-answer segments than those for the presidential nominees, the advisers said. There will also be much less opportunity for free-wheeling, direct exchanges between the running mates.

McCain advisers said they had been concerned that a loose format could leave Ms. Palin, a relatively inexperienced debater, at a disadvantage and largely on the defensive.

http://www.nytimes.com/2008/09/21/us/politics/21debate.html?hp

bad

Ann

What is the latest from your Lib SIL? Is she receiving the troll marching orders from Obama?

ROA

If Obama and the Democrats are so concerned about free-wheeling direct exchanges, why didn't Obama take McCain up on his offer of 10 town hall meetings?

JM Hanes

Ann:

Think of it as doing a public service, keeping trolls busy where they can't possibly make any difference.

Ann

bad,

SIL could very well be one of these remarkable intellectuals here tonight. She is also a big fan of "Chain of fools", "I'm every woman"and
paid to go see Sandra Bernhard Live. :)

Captain Hate

Krugman has never shown the slightest understanding of anything pertaining to economics. I don't recall him ever being right about anything; strangely it doesn't seem to embarrass him at all (not that he'd ever be so humble as to admit it). No wonder he's in the tank for Ozero along with everybody else in Pinch's crew of losers.

DebinNC

Someone here this morning mentioned hearing Mark Levin's excellent take on the who/what/whys of the financial situation. Ace">http://podloc.andomedia.com/dloadTrack.mp3?prm=2824xhttp://abcrad.vo.llnwd.net/o1/levin/rss/levin09192008.mp3">Ace now has the audio [9:19 min.].

PaulL

Obameh did agree to debate McCain anytime anywhere. But then when someone in his campaign explained to him that there would be no teleprompters, he chickened out, and his agreement became inoperative. I think Obameh explained that he was too busy.

DebinNC

"will have shorter question-and-answer segments than those for the presidential nominees, the advisers said."

Anyone who has ever watched Judiciary Committee confirmation hearings with Joe Biden bloviating endlessly, never getting to an actual question during his alotted time, knows why McCain would insist on short segments. They'd like Palin to have a chance to answer as many questions as possible.

Ann

JMH,

I see your point but like you I sometimes prefer the dead of night around here at JOM.

How's the wardrobe coming for the cruise? I haven't been very impressed with the cruise wear this year. (Let's just kill 'em with girl talk. They are bound to go away. LOL)

Paul Zrimsek

McCain advisers said they had been concerned that a loose format could leave Ms. Palin, a relatively inexperienced debater, at a disadvantage and largely on the defensive.

O yes, I'm sure they said exactly that. If you can't trust an anonymously sourced indirect quote in a NYT story, what can you trust?

I see Deb has already beaten me to the real explanation.

Porchlight

Let's just kill 'em with girl talk

Sounds good to me, Ann! FWIW I put my hair up Sarah-style this morning to see if my husband would notice. He did, and he wants me to get Sarah-style glasses to go with it. :)

This from someone who's never voted Republican in his life. (Okay, he's probably only voted about four times ever. Maybe.)

bad

This book came out Sept. 8th or thereabouts. It quotes Steve Diamond in several areas.

Brad O'Leary, author of "The Audacity of Deceit, Barack Obama's War on America."

LUN

tbrosz

What I've found amusing is all the rending of garments liberals have been doing lately because the government is coming in and grabbing hold of the tiller.

I suspect that if the President was a Democrat, these actions would be held up as a "bold and far-reaching solution" for the failures of the private sector.

During a time of financial crisis, Franklin Roosevelt brought the Federal government down on America and the private sector like a ton of bricks, and liberals have worshipped him for it ever since.

Ann

Porchlight,

I have always had long blonde hair (blonder some years than others :)) but my husband always liked it back in a French twist or pulled off my face. It must be the librarian thing..who knew!

You realize if we keep this up our names will be added to the "Block Troll List" software. (Or maybe NOT. LOL)

narciso

Right about now, taking Krugman on his suggestion to Spiegel, that he would wind up at Gitmo; seems to have been a safe bet.
Krugman would have perfection, be the enemy of the possible; more grist for his column. So we are left with Barry Soetoro Dunham, the reformer who got the lion's share of funds from Fannie,Freddie, Countrywide, probably AIG and Lehman too; who has the track record of being up front on the issues of the . . .Well his wise advisers like Johnson, Raines, Gorelick, well the last is more a Hillary place holder, Pritzker representative Valerie Jarrett,
the colleague of REzko, Auchi, and Al Samarrai. . .no wonder he was so confidant in his statements, this week, he doesn't have a clue. Yet he is given the benefit of the doubt. One investment show analyst pointed out, those in the know, don't have a clue; those clueless are more likely to have made a decision and 'jump the gun' erroneously. In these condition it's left to Paulson, given the second most thankless job in the US govt; no pressure. It is left to the old warhorse, 'TR with a tailhook', Colonel Tigh, to others, who at one time or another aggravated every financial and policy group in the GOP (pharmaceuticals, aerospace, evangelicals, immigration activists, energy exploration enthusiasts, intelligence officials) who ran aground against the Fannie Freddie juggernaut,in 2003-2005 which included some of his current staff (Davis & Culvahouse) to regretably have to say I told you so; reduced to the ultimate pass the buck suggestions. fact finding commissions which outline the facts, we already knew but didn't have the guts to implement; except with Gorelick and Kean/Hamilton, probably obscure the real nature of the problem.

Yes, the point about whether SS can survive in the stock market is to be taken into consideration; however, the realization that regardless, it is not sustainable under
the current model, should also be taken into account. The fact that T-bills and other more dependable government securities
have to make up the SS portfolio seems to escape those making this argument.

He signed Palin, because unlikely the character out of "Mad Men" Mitt Romney, who will probably end up at Treasury, Pawlenty, Lieberman, a decent fellow, who sounds like Droopy; Ridge, really has challenged the often comatose GOP establishment, and has the credential of expertise in the critical issue of energy development. Plus she shores
up almost all the other groups, he's ticked
off over the years. It was a 'hail mary pass' which I think will bear fruit. The only thing that really concerns me, is the unabashed hatred that has been let loose by all the unusually deranged suspects. To see some tell it, Palin is the creature from Species, the alien SIL whose procreation threatens humanity as a whole. That does seem to be the Dowd, Quinn, even Fey and Lohan reaction; eerily echoing the tropes of the Plastics in "Mean Girls". But all this was written about many years ago, in the world's most published tome.

Porchlight

Ann,

I'll play troll for a night if it keeps the real ones at bay! Bristol Bay, heh.

Librarian power is strong. ;)

hef

If you look at 9/11 as Bill's bill that's why they put Bush in,the food and poverty bill and the mortgage bill; the bill is easily 4 to 5 trillion.

It's okay that the the building was going bankrupt as the government bought a brand new one.

bad

The only thing that really concerns me, is the unabashed hatred that has been let loose by all the unusually deranged suspects.

The goal seems to be to make her more reviled than Bush, Cheney, Rove, Halliburton and oil companies, put together.

I wonder what President Bush thinks watching her get the accelerated version of his treatment.

Sara (Pal2Pal)

bgates: if you want the ip, click on the site meter and get it from the stats.

Sara (Pal2Pal)

Take a musical break and clear the mind of all this financial stuff and then come back with a clearer head.

Moose Shootin' Mama

The Pirates of UnRepentance.

More Ian Welsh on Paulson's raid on the Treasury:

Palin’s Long Lost Brother

Paulson after Congressional Testimony

The more I look at the Paulson "plan" the more I come to the conclusion it's just an old fashioned stickup. A scam. The Republicans know they have only a few more months, and this is their last raid on the treasury. Republicans created this crisis, and in the way of scam artists everywhere now that there's a crisis they're demanding money and power to fix their own mistakes.

What I'm hearing is that the gun being held to Congress's head is the fear of a money market meltdown. These funds are integral to the economy, yes, but 700 billion is far more than is needed to bail them out. They aren't all going to fail tomorrow, which that number assumes - that they'll zero out on Monday, and then a few banks will fail simultaneously. A few money market funds may break the buck, but you can deal with that with, oh, 25 billion, and with change to spare. Frankly the Fed's Bernanke can deal with it with the authority he already has."

M. Simon

Eve'nin ladies.

The Pirates of UnRepentance.

"when she looks you in the eye, you know that girl don’t lie...” sang Garrett.

Moose shootin' mama, eh?

Did you also fall for Bush's line that he 'looked into Putin's soul'?

M. Simon

Pirate,

It is a confidence builder.

We are in a market where sentiment is more important than fundamentals. Thus people want to see a 105 where a 9 mm would do. It builds confidence.

Once things get sorted out the money can sit idle in the no bank bank.

An authorization to spend is not the same as writing a check.

Rick Ballard

Krugman is just tweaked because Darth Paulson will be making the life and death decisions if the plan passes as proposed. I just wish there were some way for Paulson to slip a coup de grace for the NYT into the deal.

The solvency/liquidity 'problems' will resolve fairly quickly once the terms of purchase are clarified. If a reverse auction is used then the folks with solvency problems will be lined up at the bankruptcy court the day after the first auction is held. Perhaps Paulson will ask JPM to cough up the Bear Stearns junk on the first pass? JPM can't exactly lose on the deal and they would be foolish to give the Feds the upside potential on paper that had been written down below its actual value.

M. Simon

Pirate,

I was under the impression that the Democrats with their hands in the FN tills caused the problem now left for the Rs to clean up.

Simon

Captain Hate

Ace now has the audio [9:19 min.].

It's much longer that 9:19; I think it was broadcast on 9/19. It should be required listening to some of our dumbass trolls that recite "Republicans created this crisis" which was obviously one of their talking points from fearless moron Obonics.

bgates

Sara, thanks for the tip, but I need some text tied to each comment. It could be done through the sitemeter data, but at some point troll blocking becomes more trouble than it's worth. I guess it was only a matter of time before Leo started posting under multiple names anyway; I'm just surprised none of them are his imaginary son the pretend Marine.

The rest of you ladies are killing me. My wife has "Pride and Prejudice" on the tv, then I go online and see nothing but hairstyles and dress talk...
Good thing it's football season. :)

Porchlight
The rest of you ladies are killing me. My wife has "Pride and Prejudice" on the tv, then I go online and see nothing but hairstyles and dress talk... Good thing it's football season. :)

bgates,

Which Pride & Prejudice is your wife watching? I think I've seen the BBC production approximately 25 times. It never wears out its welcome.

P.S. I am 2-0 in my all-male-except-me fantasy league. We JOM ladies can do it all. ;)


Martin Morgan

No offense, but if you're taking finance lessons from MarkLevin you're a fucking idiot.

DebinNC

I'm online because my husband is simultaneously watching two games [GA/AZ State and LSU/Auburn]. Mr. Darcy would never leave Lizzie to find entertainment elsewhere.

bad

The rest of you ladies are killing me.

Watch who you're calling a lady, mister.

(Was that Mae West or John Wayne?)

DebinNC

It's much longer that 9:19; I think it was broadcast on 9/19.

Thanks for the correction, CH. My speakers are kaput, so I couldn't listen.

tmer

Yup, too much of a problem all those IPs and real science stuff like Foxy proxy. Best not do too much work. Reminds me of that perverted blog guy who was looking up people's addresses.

The real reason you change names is the search for name function.

sbw

Someone want to help me with this?

Headline: Who's doing what to whom

Emotionally charged words about the current financial problem are being used in the hopes you will be stampeded to vote in the upcoming election out of fear. Before you vote, sort through this carefully.

"Bailout" is not what is happening. The U.S. Treasury is injecting $700 billion to temporarily establish credit so that you can continue to borrow money from banks for houses, credit purchases, and businesses. The injection is needed because mortgage-backed securities (MBS) are not worthless, but they have been packaged so that their value is opaque. If they are not easily valued, they can't be traded. Liquidity is the problem, not solvency. No bank or investor wants to gamble on any single MBS bundle. The government called a time out that gives the economy time to digest the pieces.

The MBS packages, taken together, probably have enough value to get close to $700 billion back and perhaps even turn a profit for Treasury. What is more, the Treasury will see that the investors and the investment houses that brought about this crisis are going to take a financial beating.

But wait. This is at odds with the loud political posturing of Democratic politicians like Nancy Pelosi and Chuck Schumer, who posture with words like "bailout", "poor homeowner", failure of de-regulation", "big business", and "taxpayer". The phrases are used even when they don't apply. Their tactics ought to embarrass them but do not. They would play this dangerous game only if they thought they would not get caught. They'd play only if the prize were worth it. Only if they wanted power so badly would they risk screwing up society to win.

This smells more like an "October Surprise" to stampede voters towards a particular vote on Election Day.

Congress did nothing to head off the problem. President George W. Bush warned them to solve the problem in 2001. To clean up the risk, Senator John McCain sponsored legislation two years ago that Democrats scuttled. Why? To understand the problem, think ACORN, Democratic congress, Fannie Mae, greedy banks, and a lust for power.

Follow the money to find who has consistently opposed tightening Fannie Mae guidelines. Since the middle 1990s, Democrats have been using Fannie Mae and friendly outside groups to build a political base. ACORN is the "sounds-good-at-first" community organization, operating all over the country, whose subsidiaries repeatedly get hauled into court for bogus voter registrations. Evidence suggests ACORN subsidiaries shake down corporations for funding. ACORN received grants from friendly Fannie Mae executives and from the $50 million Chicago Annenberg Challenge back when Barak Obama was its CEO. Democratic congressional bigwigs have slipped your tax money to ACORN subsidiaries through earmarks.

Barak Obama, received Fannie Mae money and likely benefited from votes ACORN voter registrations generated. Obama represented ACORN to sue Fannie Mae to reduce the requirements for getting mortgages. Lowering those mortgage requirements set the stage for waves of big bank scams that lined the pockets of the banks, bank officials, Fannie Mae executives, and -- surprise -- Democratic politicians.

So the stage is set with ACORN, Fannie Mae, Congressional Democrats, greedy banks, and Obama … just in time for a presidential election. Breathless words reverberate over today's news to whip up the masses. Don't swallow the bait.

When Chuck Schumer wants to take more tax money out of your pocket to prop up mortgages that never should have happened in the first place, laugh at his audacity. Reckless deregulation didn't cause this problem, Congressional meddling did.

Remember, Wall Street is only a small corner of a broad economy. Furthermore, the underlying economy is sound. If it weren't, unemployment would be at 25 percent instead of 5-6 percent. Don't let political theater stampede you to the wrong decision on Election Day.

These people want power. They would undermine the institutions that make this country work to make you dependent on them.

JM Hanes

Captain:

"Krugman has never shown the slightest understanding of anything pertaining to economics. I don't recall him ever being right about anything; strangely it doesn't seem to embarrass him at all (not that he'd ever be so humble as to admit it)."

It's worse than that. Krugman understands economics perfectly well, he's just a slut.

As for required listening, you could feed trolls the entire New York Public library intravenously or make them look like idiots all day long and it wouldn't make a bit of difference. They just don't care. If you hand 'em a grocery list and call it talking points, and they'll post it.

bvl

No, it's not the posting, it's the volume. They don't realize most people look at the size of the post and just write them off. I don't even read the first sentence. So, they can't do anything but take more space.

sbw

I've put the draft editorial on my website.

clarice

sbw--that's very fine, I think. I couldn't add anything to what you've written.

clarice

I'm back---I have TWO pistolas now. And they'll be aimed at anyone who feeds the trolls. If you haven't a damned troll blocker, read the threads from the bottom up.
BTW thanks for reminding us of Cathyf's fabuloso slide show--pass it around. It's a brilliant piece of work.

M. Simon

Fortunately the Crook from Crook County - Mr. Obama has sense enough to keep his mouth shut lest he give away the whole game and be forced to turn his house into a homeless shelter for the denizens of 63rd and Cottage Grove.

BobS

Thanks for the link, SBW....I've put you on my favorites.

JM Hanes

sbw:

I'm not sure where all the folks who really know their stuff have gotten to (Was it something we said?) because anything you write deserves a careful reading. I'm afraid this one's above my paygrade.

BobS

Yikes, Clarice. I'll stay in line. Gotta know how to use that troll blocker gadget I've only heard things about. Its not like our southern snipe hunting I trust.

bad

BobS

I've often thought Obama was the perfect snipe hunter.

JM Hanes

Or the snipe.

BobS

More likely the perfect one to lead the hunt. And more amazing than most as he can do it Nuremburg style with all those folks and fires and pagan mombo jumbo.

BobS

Hmmmmmm....smell that wood burning JOMers? Thats methinking bad is well known conservative idealogue author as evidenced from his LUN.

M. Simon

SBW,

Very nice. One point you might want to emphasize is the connection between ACORN and voter fraud/mortgage fraud.

i.e. a one stop shop for those needing dirty deeds done dirt cheap.

Mustang0302

sbw -

I hate to descend into conspiracy-theory-speak, but are you saying that the October surprise was:

a. The dems LIHOP (let it happen on purpose)

or

b. The dems MIHOP (made it happen on purpose)

That they did not have the best interests of America or Americans in mind, of course goes without saying.

BobS

Sucks for me...my servers down.

bad

sbw, great editorial. Even for those of us who are struggling to learn the details of naked shorts, etc., it puts recent financial news into context.

The Corner has a link to Obama's attempt to scare voters about Social Security payments cut in half.

LUN

M. Simon

Bob S,

Would that be the NRO Web Team?

Mustang0302

sbw -

I should have added:

c. The dems are shamelessly exploiting the situation for partisan political gain.

BobS

ROTFLMAO, MSimon

bad

JMH

Then I'm a snipe hunter.

M. Simon

Mustang,

King of the Shorts is Soros.

How many dots do you need?

BobS

Oh, do you mean MY blog MSimon?,

M. Simon

Bob,

The link you gave goes to that page (NRO Web Team).

Did you have something more specific in mind?

Mustang0302

M.Simon -

Yeah, I read your article(s) on that at P&C.

I'm asking the "Goldfinger" question:

Happenstance, coincidence, or enemy action?

If the third, will proof be the October surprise? Or was the action itself planned for that?

Elroy Jetson

Obama would be the one to organize the hunt.
He wouldn't go out with the hunters. If they came back w/o a snipe he would have plausable deniability.

sbw

Mustang0302 - LIHOP or MIHOP


A third alternative is DGADIIH - Don't give a damn if it happens -- because before or after the election they can play it for this election or the next.

I don't think they wanted the collapse. I think they wanted the votes, the money, and the power.

They think its a game. It's all a game. Society isn't at risk.

Mustang0302

Snipe hunt? BHO couldn't find his own ass with a mirror, both hands, a flashlight and two bloodhounds. (IXNAY on the IPESNAY ORYSTAY while he's around...)

Rick Ballard
"Bailout" is not what is happening. The U.S. Treasury is injecting $700 billion to temporarily establish credit so that you can continue to borrow money from banks for houses, credit purchases, and businesses. The injection is needed because mortgage-backed securities (MBS) are not worthless, but they have been packaged so that their value is opaque. If they are not easily valued, they can't be traded. Liquidity is the problem, not solvency. No bank or investor wants to gamble on any single MBS bundle. The government called a time out that gives the economy time to digest the pieces.

Suggested -

The treasury will purchase mortgage backed securities (MBS) with a face value of between $1.075 and $3.5 trillion for the discounted price of $700 billion dollars in order to furnish desperately needed liquidity to the financial system of the United States. Without that liquidity, people might not be able to continue to borrow money from banks for houses, credit purchases, and businesses.

The MBS are complex debt instruments which have become impossible to properly value due to their opacity. The government's action will allow the time necessary for the underlying value of the MBS to become clear. As their value clarifies, the government will dispose of them and may even turn a profit. The actual cost of the entire process will be no more than some fraction of the $700 billion.

NOTE: That's a first pass. I need to think a little more. I thought the balance of the editorial was excellent.

BobS

nah...I'm on a friends NYSportsPage site. I've gone all neocon on my former readers with my radical McCainism, My Sarah Palin Crush and my David Petraus man crush.

Maybee nine or so former Mets readers still endulge political proclivities. The other 99% find me one of Earth's lower life forms.

Probably need to freee my host of my politics although he is a strange long island McCain bird.

So maybee I need a new host...one that does what it should

Mustang0302

sbw -

Yes, I added choice (c) a few minutes later.

That is the most obvious one, IMHO, but I have seen indirect references to explicit foreknowledge, involving equal parts malice and ignorance.

I don't consider an October surprise, from either side, as a target of opportunity, but an on-call target...guns laid, data applied, fuses cut, etc...just awaiting the
command "fire".

DrJ

sbw-

One minor detail on your editorial. Obama was Chariman of the Board, and has also been referred to as President of the CAC. Ken Rolling was the executive director, who held the day-to-day power. A detail, surely, but better to be accurate.

sbw

Thanks, Rick. That's clear and useful. I'll sleep on it and see how to weave it in in the morning.

Mustang, Your question is relevant. And a proper mix of malice and ignorance leavened with shallowness seems about right.

Intent does seem to be implied in an October Surprise. I'm going to have to mull that.

They wanted to milk it for all it was worth, and then when everything collapsed around them, their natural instincts asked, how can we use this to win. Now THERE is patriotism that Joe Biden could be proud of.

sbw

DrJ. Good catch. Not CEO, COB.

Notice I didn't even mention the bomb-maker.

sbw

Night all! Work is done for now. Time to sleep and dream about wining the Ryder Cup tomorrow.

Thanks for your help.

Mustang0302

The Al Davis Party: "Just win, baby!"

Pofarmer

I don't think they wanted the collapse. I think they wanted the votes, the money, and the power.

They think its a game. It's all a game. Society isn't at risk.

I think you're exactly right there, and it's extremely frustrating. Some folks have the good of the country in mind, some folks just want to "win" whatever that means. Mark Levin Showing Schumers complete, utter, and transparent flip-flop on regulation proves it.

bad

Al Franken helped write the anti McCain skit on SNL tonight.

LUN

M. Simon

Mustang,

I can only tell what is going on underneath by watching the froth on the surface. Much is obscured.

So was this the October surprise or will there be more? I can't say.

All I know is that McCain threw a monkey wrench into their works by raising Republican morale with Palin. We were depressed - which is the first step on the way to defeat. Demoralization.

We were lucky to have such a woman in the wings. Luckier to have Johnny Mac make the right XO decision.

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