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September 24, 2008

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Pofarmer

only the one where the Treas buys the securities doesn't increase the money supply dramatically.

Yep, what I want right now is the LEAST inflationary option and no more easy money in the housing market, nada, don't need it, got plenty of houses.

Ranger

Now Obama is trapped in DC. Debate on the bill will go through the weekend and if he leaves early he looks like he is abandoning his post for political advantage. I hope he didn't have any big fundraisers scheduled for this weekend.

sbw

Listen to the low chant in the background...


OODA! OODA! OODA!

Jim Miller

Here's a tidbit for serious readers: In 2007, Obama advisor Austan Goolsbee was telling us not to worry about subprime mortgages.

Jim Ryan

Sara, your 9:41 and my 9:43 concur.

But the debate can be postponed.

Bob, heh. Why that guy spelled it "Ryun" is one of the world's great mysteries.

clarice

Here's another-- Jim Johnson (FM) is one of the guys prepping him for the debate..HEH!!
OODAOODAOODA

Charlie (Colorado)

Gingrich is smart, he's on H and C and hates the plan. I think some of his criticisms are valid BUT none of us were able to come up with something better and Newt's strategic choice some years ago to shut down Congress suggests to me he's no strategic genius.

It's worth remembering that Newt's PhD is in military history, not mathematics. "Ride to the sound of the guns" is noble, but sometimes really stupid.

What he wanted was for the Republicans to hold out, even at the risk of the crash we've talked about, saying there was no political downside for the Republicans. Maybe he's right, maybe not --- but the ethics of it are pretty suspect.

clarice

Well, he wasn't the only one wanting things to get worse, charlie--the Dems were happy to stall this figuring they could get more tinsel from an increasingly desperate Administration and AT THE SAME TIME, the crisis was helping Obama.
Now--NO.

prtymbl

TCO - please resume your meds. The guys with the white coats are coming after you.

Ann

My second degree blackbelt , thirteen year old broke a board in half tonight with her hand. Her sixth degree blackbelt instructor was holding the board. She broke it so hard and so fast that her hand went through the board and hit the sixth degree blackbelt in the face. Most moms would be afraid to brag about something like that but not I. The TCO's of this world make me even prouder.

OK, got that off my chest. :)

Jim Ryan

You have to admit, for a puppet fed through a teleprompter, he's almost competent.

Yes, he has millions eating out of his hand who can give no reason for their preference and who will flock to the polls. On November 4th we'll see whether this is now their country.

Charlie (Colorado)

Jim, speaking of, it sure would be nice if you had RSS so I could add you to my Google Reader.

Extraneus

I highly recommend the Talisman book, Clarice. My mother always had an old dog-eared copy, and I bought a new one of my own years ago. (I make a mean Scungilli Fra Diavolo, as a matter of fact, but probably not as good as your eggplant, which I'll have to try this weekend. I've been through a bunch of the recipes in the Talisman book, and would especially like to methodically go through the desserts one by one, maybe after I get a cow to go with my pigs and chickens and get some time after the crash.) I've seen recipes online from the Italian Regional Cooking book, and will now go order that one based on your recommendation. (They only have used copies on Amazon, apparently. Maybe I can get a discount if I mention your name.)

Charlie (Colorado)

Well, he wasn't the only one wanting things to get worse, charlie--the Dems were happy to stall this figuring they could get more tinsel from an increasingly desperate Administration and AT THE SAME TIME, the crisis was helping Obama.

The difference: I think Newt's ethics on this are suspect, where I don't even suspect Pelosi and Reid of having ethics.

Charlie (Colorado)

(I make a mean Scungilli Fra Diavolo,...

Little cut up cubes of foam rubber pillow Fra Diavolo would be good.

centralcal

Ann: Way to go girl! (your daughter and you too!)

clarice

Another barracuda, it seems, ann.

RichatUF

Pofarmer-

I'm going to go out on a limb and say that if this bailout package is passed it will be counter-inflationary on the headline numbers. The Treasuries to be committed are buying undervalued assets.

It will put a floor under the dollar-euro cross and probably take some of the panic and hot money flows (wonder where all that CDS money has been going?) out of the oil and gold markets. YMMV.

Patrick R. Sullivan
Warren Buffet is bailing out Goldman Sachs to the tune of $5 billion.

Warren's not bailing out anyone. He's seeing an opportunity to make huge profits, and I'm guessing he's right. I'm wondering if he's re-evaluating his support for Obama, because he appears to be oblivious to what the problem is (and it's magnitude).

McCain is no economics genius, but he at least appears to realize how serious a position we're in. Maybe Cindy took him aside and said; 'Honey, you know the beer distributorship I own? It's ability to continue doing business relies on access to credit markets.'

clarice

Thanks for the tip, Extraneus. I have in the past bought out of print books thru Amazon ..If they say in very good condition, generally they are as if new..And very worthwhile--besides you have no choice, do you for out of print books.

DrJ

I have to try the eggplant recipe. We have a half dozen in the garden ready to be picked. The Japanese ones are for something else, but the bit, fat, meaty ones sound like just the treat for this recipe.

Maybe time to pull out a ten-year-old Pinot?

Jim Ryan

This is not an ideological, moral or political issue but an empirical one: To what extent is a plan like Paulson's necessary to stop a financial collapse that will cause deep and wide misery with little to no redeeming upside. You first decide that extent and then you amend the plan as needed, such that it is just large enough - and no larger - a buyout to stop that misery from occurring. Then you implement and execute the plan.

After cleaning up the mess, you then go about changing government so that it doesn't cause this sort of thing to happen again: You stop government from causing the private sector to make bad loans by the billion. You institute financial regulations (uptick rule, no naked shorting, what have you) that will make it unlikely that the government will be needed to socialize the financial sector again. That's where you champion liberty and small government. But not until then.

Patrick R. Sullivan
...macro isn't my strong point, so correct me if I'm wrong --- but it seems as if of the three, only the one where the Treas buys the securities doesn't increase the money supply dramatically.

Actually, Charlie, that's exactly the classic way the Fed expands the money supply. They buy securities and 'pay' for them by creating new money; a deposit in a bank.

Charlie (Colorado)

Warren's not bailing out anyone. He's seeing an opportunity to make huge profits, and I'm guessing he's right.

He said exactly that on NPR this afternoon.

kim

I hope you never asked some woman to make that for you, Charlie. Or worse, served it to one.
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Sara (Pal2Pal)

Should I give any weight to the president saying "up to $700 billion" rather than flat out $700 billion?

centralcal

Oh gawd, I think Barney Frank had cocktails (several) before going on Greta tonight.

Sara (Pal2Pal)

Best suggestion I've seen so far from WLS at Pattericos:

“Dear Senator Obama:

Our first Presidential Campaign Debate is scheduled for Friday, September 26, 2008, at the University of Mississippi. I asked you first, in light of the current events happening in Washington, to postpone this debate until after congressional action could be taken on the bipartisan financial rescue plan now being considered. You have declined my request.

Here is my reply to your position.

I agree to hold the debate on Friday. I will be standing at the lectern on Republican side of the Senate floor in the Capitol at 9:00 p.m. I look forward to seeing you there. No moderators, no audience. Simply you and I debating the issues of the campaign man-to-man. The press can watch from the press gallery, and the networks can cover it via the C-Span cameras.

Regards,

John.

Ann

I love JOM. Where else can you talk about delicious Italian dinner recipes, financial bail outs, politics, and kicking your opponents arse.

Hit, if you read this in the morning, you should spend the night at Clarice's house. With a menu like that for dinner just imagine what she will serve you for breakfast. :)
Plus, I would love for you both to dual snark Friday night. That should be pay per view blogging.

I have arranged for my husband to take my daughter to a football game so I can stay home and read all the excellent comments here... so lets hope the game is on.

Patrick R. Sullivan

Interesting, someone I never paid any attention to, Greta Van Sustern, just said she has a degree in economics. Her instincts aren't that bad, maybe that explains it.

I thought GWB's little speech was weak. Explaining complicated things in simple language has always been a problem for him. Otherwise his Air Nat'l Guard service would never have been an issue (nor an opportunity for JOM commenters to destroy Dan Rather).

I don't think I've ever made personal appeals here--maybe I'm forgetting some since I turned 60 last Spring--but since so many here don't realize what's at stake, I'm going to make an exception.

I'm a small businessman...a very, very, very small businessman. Yet, I've got employees, some of them salesmen/techies out on the road right now, thousands of miles away from my office. We sell a somewhat complicated product that requires constant support. If we don't offer the support, our customers will stop buying it.

To keep our workforce in the field, we use CREDIT.

Hotel rooms. Gas (and diesel fuel). Meals. Tools and equipment rentals.

We sell products on CREDIT, and we buy things on CREDIT. It's known as CASH FLOW MANAGEMENT. And every business__small, medium, big--has to deal with it.

If American Express and VISA/Mastercard tell me I can't have access to credit to keep my people out in the field, I can't afford to have them out there.

Nor can I pay their wages and bonuses. Which spirals into their inability to meet their mortgage obligations, their car payments, their personal credit card payments. Their ability to to take their families out for pizza this week-end.

I'm sorry to sound bitter, but there are a lot of people commenting here who don't have a clue what's at stake.

Charlie (Colorado)

Actually, Charlie, that's exactly the classic way the Fed expands the money supply.

I told you macro wasn't my strong point.

Charlie (Colorado)
If American Express and VISA/Mastercard tell me I can't have access to credit to keep my people out in the field, I can't afford to have them out there.

Nor can I pay their wages and bonuses. Which spirals into their inability to meet their mortgage obligations, their car payments, their personal credit card payments. Their ability to to take their families out for pizza this week-end.

I'm sorry to sound bitter, but there are a lot of people commenting here who don't have a clue what's at stake.

...and who should have this comment tattooed, upside down so as to be readable, onto their chest and abdomen.

M. Simon

Classical Values

Start with "Harry Reid Can't Make Up His Mind" and work your way up.

I document how McCain got the Democrats totally off message.

OODA OODA - McCain made the Dems shoot at each other. He looks Presidential and Obama and team look like fools.

And for those of you blogging: links. And I'm not fussy about credit this election season. As long as we defeat ∅.

Charlie (Colorado)

I do have a chili recipe....

Jane

Maybe time to pull out a ten-year-old Pinot?

What does one have to do to get an invitation?

kim

Stock up on foam rubber, Patrick. We can serve it au Mephistophele or drenched in dibbuk to TCO every time he comes calling.

'I should have insinuated that he best consult his dentist. There were two. It was one of the cowardly moments in my life I rang for more wine and asked the professor's opinion on James Joyce. There are, simply, people to whom one can explain that one shoots chickens for the table and people to whom one cannot-----'

H/t Marjorie Kinnan Rawlings, 'Cross Country Cookery'.
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clarice

Jane--Come tomorrow--I'm thinking of making mac and cheese with applewood bacon,thyme and black truffle oil..I really think you'd love it.

M. Simon

sym,

You are two talking points behind.

That is what happens when some one gets inside your OODA loop.

Jim R. - loved:

By withdrawing into inaction, McCain leaves Obama with two intolerable options: follow McCain the leader or be left standing there with his dick in his hand.

Charlie (Colorado)

Jane--Come tomorrow--I'm thinking of making mac and cheese with applewood bacon,thyme and black truffle oil..I really think you'd love it.

Oh stop.

Charlie (Colorado)

Jane--Come tomorrow--I'm thinking of making mac and cheese with applewood bacon,thyme and black truffle oil..I really think you'd love it.

Trayf. Definitely trayf.

Rick Ballard

"...and who should have this comment tattooed, upside down so as to be readable, onto their chest and abdomen."

Branding would be quicker. Probably more memorable too.

clarice

Charlie--that is essentially how I make chili--love it best with ground venison when I can get it..I don't have that chili powder here but I make a nice mix of spices ..

Charlie (Colorado)

I don't have that chili powder here but I make a nice mix of spices ..

I could make you a care package.

I'm sure if I were more ambitious I could come up with a chili mix recipe that I like, but the Fernandez Brothers are from Alamosa, it's pretty much identical to what I grew up with, so what the hell.

kim

Everybody likes my spaghetti. The key is lots of fat and I start the garlic and onion first. The secret ingredient is usually either garam masala or rasam podi, and not much of either.
=======================================

Jane

Jane--Come tomorrow--I'm thinking of making mac and cheese with applewood bacon,thyme and black truffle oil..I really think you'd love it.

Geez Clarice I almost made that tonite! Great minds - or should it be stomachs, and all that!

DrJ

What does one have to do to get an invitation?

Jane, anything for you!

Sadly it will take another year or two for our Zin vines to mature. The deal is that my wife grows them, and I will vint them. Should be fun! I suppose it helps that she has a green thumb and I have a full chemistry lab...

M. Simon

Re: no campaign spending.

McCain builds up a reserve with out looking weak.

clarice

Charlie, Bring it next time you're in town.

Jane, I found the recipe in an ad in this month's Gourmet mag and it looked so good..I have to try it.

Sara (Pal2Pal)

I made mac and cheese tonight, but dang it, the macaroni was cooked, the cheese melted and there was no applewood bacon,thyme or black truffle oil in the house. Doncha just hate it when that happens? Oh well, my family had to suffer through with mac & cheese with a little paprika on top to make it look purdy.

DrJ

Sara,

A good Zin cures all ills, like the lack of applewood bacon. With all due respect to hit and his favored hops-base beverages...

Ann

Jane,

I started to answer your RUSH question today and the school bus landing got in the way. Anyways, I only heard some of his radio broadcast today but my feeling is he knows we have to do something BUT he thinks this should be a Democrat scandal not a bail out.

Democrats caused this financial mess and we should make them pay Nov. 4th. He calls it "Hindsight Hearings" vs. Oversight Hearings. Mainly, like us, he thinks the crooks that broke the system should not be rewarded with leadership in fixing it. It will be a disaster in the making if we let the crooks act like innocent bystanders.

Other people that listen to RUSH should add something to this but I think if McCain comes up with another "gang of" consensus he will loose the conservative vote and the election. Considering McCain's distain for earmarks he better keep it simple with no other bailouts like what the House passed today. (I think they passed a vote to bail out the auto industry on top of all the other carp at the tune of 25 billion)

clarice

I haven't had mac and cheese in years because I have to be careful about starches and I could eat a ton of it because I like it so much..Why is it that everybody loves it no matter how fancy or plain it i?.It's one of those creations from God or something, Sara.

kim

Paprika's hard to beata.
===============

kim

It's cow and grain, clarice, very basic, very ancient.
===============================

Sara (Pal2Pal)

It is the ultimate comfort food.

Sara (Pal2Pal)

Heck I raised my kids on it. Used to buy it at 10 cents a box at the Navy commissary and in those days, we couldn't afford much more.

Sara (Pal2Pal)

Sometimes when we were flush, I'd add a can of tuna and some sour cream to camouflage the fake cheese taste.

cathyf

I'm a big fan of any cookbook by Biba Caggiano. This was her first cookbook. (Actually, that's the second edition. I have both the first and second editions; my old one has the cover half off...) When my son was born he used to eat every 3 hours like clockwork, and Biba was on the Discovery channel at 9:30am and 3:30pm every day. (The like clockwork thing was downright weird -- I have no sense of time whatsoever, and this 3 month old baby wanted to eat at 9:30, 12:30, 3:30, 6:30, 9:30, 2am, 6:30... Not 5 minutes before, not five minutes after, but exactly. Ok, so the kid was just weird! But I digress... Don't I always? :-)

Biba looks has an uncanny resemblance to my mom and aunt and their female cousins. I always find her encouragement wonderful. She has this great mix of difficult classic recipes (gnocchi, polenta) mixed in with ridiculously easy stuff which is just eyes-rolling-back-in-your-head wonderful. And she has great stories ("The first time I made these pumpkin gnocchi I kept adding flour and more flour because they seemed too wet, and when I cooked them I almost broke a tooth!" "This recipe is easier than calling out for pizza, and I fed my whole family of four for less than $9.")

matt

hmmmm...garam masala? Will try that next time.

I don't agree that McCain should avoid working both sides of the aisle. I think it necessary, actually. Overseas, the US is taking a massive moral hit because of the greed factor and huge losses on what were supposed to be BBB or better securities. Now the emperor has no clothes if you will. As Patrick, Charlie, and Jim point out, our world today runs on credit. No banks, no liquidity, no economy worth much. Like I said, the potential for massive upheaval and violence exists.Try telling 20 or 30 million people who have worked hard and played by the rules that their life savings just went poof. That is one of the risks and will continue if we don't work on balancing budgets and keeping the dollar relatively strong.

The up side is that if the treasury does get the bundled mortgages at a relatively good discount, then a lot of good things can happen if the portfolio is properly managed.

Unless our leadership works together for the good of the country, Republican and Democrat, the likelihood of failure is significantly higher than that of success. They can't afford to be tossing hand grenades at each other any more.

DougS

A long time lurker with something to add about inflationary action of Fed. The demand for cash balances just went up with this scare both with the general public as well as institutions. This is deflationary! Unless FED buys bonds we will go into a sustained deflationary period. The Fed must increase the money supply just to maintain the current level of income. They can always take offsetting actions in the future (decrease money supply) by sellng bonds out of their holdings. The trick is to increase the money supply sufficiently to offset this increased demand for cash balances.

Rocco

Here's a recipe from the wife of my second favorite minuteman, Captain Isaac Davis from the Acton company. Captain Davis was the first officer killed in the Revolutionary War at the old North Bridge at Concord fight.

Many believe it was the brave men from Acton who saved the day on April 19, 1775. The story goes that after the Acton Minutemen marched 7 miles to Concord (at a brisk pace to a tune called "The White Cockade" by a young fifer, Luther Blanchard), the Acton Minutemen joined two companies from Concord. Captain Davis joined a small group or war council where they tried to figure out what to do. When the two Concord companies were asked if they'd take the bridge, they replied "we'd rather not." When that question was posed to Captain Davis, his reply was, "I haven't a man that's afraid to go" and marched his company in front of the two Concord companies taking the bridge and squaring off against the British. When all hell broke loose, a British ball pierced his heart and witness accounts say he was dead before he hit the causeway. Also killed that day in Concord was Abner Hosmer. Fifer Luther Blanchard was wounded dying later from his wound. Captain Isaac Davis is my personal hero because if he didn't have the courage that the others lacked, I wonder what this country would be today? Anyway...this has nothing to do with recipes but since it is apple picking time here in Mass, I thought you'd enjoy his wife's recipe.

Hannah Davis Baked Apple Crunch

And for those interested in this period, this is a fascinating account of the events of that day.

Captain Isaac Davis: The First Officer Killed in the Revolutionary War

Rev. George F. Clark

sylvia

"Would you mind if I used your questions (citing you, of course) in the article I'm writing?"

No problem. Just glad someone took the time to attempt to answer my questions. I am going to read your answers more carefully and try to digest it over the next few minutes.

sylvia

"Looks right now like less than 9 percent of all loans"

Hmmm. I don't know if that's a big or low number. On one hand, that's a lot of loans to default all at once. I find that number hard to believe. I would like to see more detail on exactly what these loans were, and to who. I doubt it was mostly to low income people. Probably more like the developers who pop up the subdivisions and strip malls everywhere. On the other hand, even if it is 9%, a 10% loss in profit is not that rare for many companies. Companies swing 10% all the time - retail for instance. These companies must have cut it right to the bone in planning. That is criminal in my opinion for Freddie and Fannie. Especially when it didn't take a genius to see this problem building for years now.

cathyf

To second what DougS said... Back in 1928 the fed decided that banks were overleveraged, and investors were overleveraged, and so the solution to all that Roaring Twenties irrational exuberance was to increase bank reserve requirements. Well, the fundamental nature of money is that it ain't money til ya spend it, so these reserve requirements were the equivalent of taking in money and burning it. They cut the money supply by 1/3 in a few months.

People aren't really educated about the Great Depression. They hear stories of hyperinflation in Germany, and don't realize that the main characteristic of the Depression in the US was that there was tremendous deflation.

M. Simon

Jim Ryan,

I used your bit about Zen and follow the leader in a post. LUN - scroll down.

M. Simon

Other people that listen to RUSH should add something to this but I think if McCain comes up with another "gang of" consensus he will loose the conservative vote and the election.

If Conservatives stand on "principle" at a time like this we will get a communist, terrorist appeaser for President.

Do I like any of this? No. Was I speaking out against ACORN and phony mortgages before I learned a thing or two this year? No. My mind was on Iraq etc.

So I'm going to have to suck it up and HOPE McCain works to clean up the mess as President. I know ∅ will make things worse.

So how ever much McCain disappoints you don't get stuck on stupid.

MayBee

Amen, M Simon.

Charlie (Colorado)

On the other hand, even if it is 9%, a 10% loss in profit is not that rare for many companies. Companies swing 10% all the time - retail for instance. These companies must have cut it right to the bone in planning.

It's not the loss in profit that's a killer, Sylvia: it's that when someone exercises one of the CDSs, the person who had the CDS has to give a zillion dollars in cash and is left holding a security no one wants to buy.

Pofarmer

Mainly, like us, he thinks the crooks that broke the system should not be rewarded with leadership in fixing it. It will be a disaster in the making if we let the crooks act like innocent bystanders.

He's right there. In a fair world, Barney Franks and Chris Dodd would already be out on their ear and out of an negotiations for a fix. But, I suspect they'll scate. Rush is also right on another point. If they could find a Republican to blame it on, they already would have. Right now all they can do is Blame Bush for not watching them closely enough???

TCO

If McCain wanted to be inside the OODA loop, he would have come out STRONG ANTI_BAILOUT. Would have demonized Bush (who is pushing an anti free market stance) instead of supporting a party-mate and allowing the Democrats to actually have the rightward position on this. And the position that resonates with the public. Instead, he has looked like a flopping old man, with no principles on free market economics.

TCO

He has gone down on tradesports and in the polls, since the bailouts started. He's doing the wrong thing, BOTH for the country and for himself politically.

Pofarmer

It's not the loss in profit that's a killer, Sylvia: it's that when someone exercises one of the CDSs, the person who had the CDS has to give a zillion dollars in cash and is left holding a security no one wants to buy.

These guys might be really, really, smart. But this setup was really, really stupid.

DGS

Rocco,

This is interesting. When we moved back to Mass, we looked at buying the Issac Davis house on Hayward Road. We decided not to do so because there are lots of restrictions on historical houses.

sylvia

"it's that when someone exercises one of the CDSs, the person who had the CDS has to give a zillion dollars in cash and is left holding a security no one wants to buy."

Not sure I still get this 'CDS' concept. You say a lot of people cashed in their CDS's at once. I'm not exactly sure why they were all cashed at once almost but I'm picturing it's kind of like a stock that gets a lot of bad press and becomes a hot potato. So even if the CDS's were cashed in, the banks were left with the properties. So the properties went down in value too, because no one wanted to buy them. Still - to whom do the banks owe to at this time and what's the emergency? They are still getting in the payments from all the people who are still paying, hopefully with a small profit from that, they own the bad houses and don't owe on that - so what's the rush? So they might not have enough money as they did before to lend, but is that really such a bad thing since we were over-extended before anyway?

Perhaps you are saying that the banks do not have enough cash on hand at this time to give to the CDS owners, and that is the problem? Who are these CDS owners, and why should it matter if they get all their cash now? Why can't they wait to get paid off, after all they were part of the problem too.

sophy

I do not know how to use the Cheap metin2 yang ; my friend tells me how to use.

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