Krugman - Not Much With NEXIS

Krugman doesn't disagree with people, he demonizes them, so this has been the week from him to paint Paulson and Bernanke as Satan and the Anti-Christ (Relax, libs - Dick Cheney comes back soon.)

However, Krugman's fits of frenzy often result in some comical over-reaches.  I like this tantrum about Bernanke's theory of the current problem and solution:

So now the whole rationale for the plan is “price discovery”: we’re going to throw lots of taxpayer funds into the pot because that will let us find the true values of troubled assets, which are higher than the fire sale prices out there, and so balance sheet will improve, confidence will return, etc, etc..

So I just did a Nexis search trying to find out when Paulson and Bernanke started talking about price discovery, which we’re now told are at the core of the plan’s logic. And the answer is …

Yesterday.

I can’t find any use of the term, or even a hint of the argument, until yesterday’s Senate hearings.

Uh huh.  I think this passes as a "hint" as to Bernanke's thinking, from last May 13:

Recent research by Allen and Gale (2007) confirms that, in principle at least, "fire sales" forced by sharp increases in investors' liquidity preference can drive asset prices below their fundamental value, at significant cost to the financial system and the economy. Their work underscores the basic logic in Bagehot's prescription for crisis management: A central bank may be able to eliminate, or at least attenuate, adverse outcomes by making cash loans secured by borrowers' illiquid but sound assets. Thus, borrowers can avoid selling securities into an illiquid market, and the potential for economic damage--arising, for example, from the unavailability of credit for productive purposes or the inefficient liquidation of long-term investments--is substantially reduced.

So, Bernanke thinks there is sound theory supporting the notion that panic prices can be a flawed indicator of fair value and that a central bank can solve or prevent a financial crisis by declining to panic and recognizing the fair value.  He was speaking in the context of secured loans when he made these remarks, but it surely counts as a "hint" of his thinking about asset purchases.

Now, I don't know if it makes sense to say there has been a multi-year "panic" about mortgage backed securities during a multi-year housing slump - it may be that these low prices are perfectly justified.  But the notion that Bernanke only started talking this way this week is silly.

Comments

[McCain Is Toast]

The man lacks the temperament to perform the duties of the office.

[Charlie (Colorado)]

The man lacks the temperament to perform the duties of the office.

I don't think there's much of a temperament requirement for being an NYT columnist.

[Jane]

I don't think Krugman has an office, at least of that sort. Care to try again?

[Jane]

Charlie beat me - as usual.

[Paul Zrimsek]

Many of us have been saying so all along, but I doubt that anyone the NYT hires to replace him is going to be any better.

[McCain Is Toast]

Let McCain live out his days in the Senate if the good people of Arizona want him back.

That a presidential candidate in his 70's can lower himself to engage in such juvenile antics boggles the mind. Can anyone honestly imagine Reagan pulling such a pathetic, cynical stunt?

Never. We've all held our noses and supported your candidacy, John, but it's over, and you have nothing to blame but your own cowardly instincts.

[RichatUF]

Seems that we got a new batch of astroturfers.

[Annoying Old Guy]

I must disagree with Charlie and the first responder. There does, in fact, seem to be a temperament required and Krugman easily meets that requirement.

[hrtshpdbox]

"We've all held our noses and supported your candidacy, John"

Exactly how long have people named "McCain Is Toast" been supporting his candidacy?

[Put]

Junk mortgages?

Junk taxes?

Junk loans?

Junk assets?

Junk loss?

Junk Foreign aid loans, bonds aren't currency. Junk GDP is how the 'loans' are written off in England and Canada. The free aid money is the trade adjustment vs. the GDP. So, oil and gold may remain high as long as the junk is there and it may always be there because of the junk GDP, which is not oil, cars(energy products) and gold, which is the GDP payment of England, not junk commodities like oil and cars.

Land Rover sucks.

[Steve Diamond]

Absolutely spot on TM. And folks please see my latest post on this - we have been down this road before and it can work, although the right may not like the broader political implications.

I think one problem here is in the packaging of the proposal. Ben and Hank let the "framing" get away from them. Once the "B" word - bail out - got out there they were in trouble.

The right metaphor is "Market Maker" - they are setting up an exchange and the first thing an exchange needs is inventory. This is Ebay with a market maker at the center of it willing to make a market at a fair price, even prepared to take a loss now and again to provide liquidity.

No private sector player has the resources to survive any interim short squeeze in such an environment other than the state.

[Paul Zrimsek]

Heh. These suspiciously doctrinaire apostates have been coming out of the woodwork ever since Obama won the Lifelong Republican nomination.

[clarice]

Exactly, Steve--calling it a Bail out is a huge mistake.

[matt]

agreed. I would rather think of it as the opportunity to acquire valuable assets at less than market prices. There's no reason at all the Fed needs to play fair, since that doesn't work on Wall Street.

If managed wisely, the Fed could turn a profit on these assets. One thought, to use some of the housing as a tool of some sort. These properties have to be maintained to retain their value, and the feds are not very good at that sort of thing. They are gonna need the mother of all asset and property managers.

Not being an expert, I'm not sure if there is a direct link between the securities and the underlying real estate, but it would seem logical there is.

[cathyf]

If I might be allowed to coin a term, the AIG deal looked to me to be an "extrajudicial bankruptcy". I like that a lot better than "bailout" and I think it's more accurate, too.

[srp]

Reposting from the Barney Frank thread below:

There may be a tad of groupthink occurring here. A huge list of prominent economists of varying political orientation is opposed to the Paulson plan (and have signed a petition against it). Less dirigiste alternatives such as loosening capital requirements for new loans by banks or requiring a sector-wide holiday on dividends have also been proposed, but have not been debated or discussed by the do-something-right-now crowd.

I understand the logic behind the Paulson proposal, but it does exacerbate moral hazard and slow the recognition of any insolvencies in the financial sector. I am also concerned that the mere prospect of this plan is deterring private transactions (at low prices) for the shaky assets. According to the NYT (buried in a huge article in their business section last week) private rescuers of AIG were deterred from injecting equity into the company because of the threat of government takeover and concomitant loss of investment. The mere suggestion of these kinds of federal interventions paralyzes private transactions--the illness is partly iatrogenic.

Ben Bernanke made his bones showing how financial contagion in the banking sector caused much of the carnage in the Great Depression. He is determined not to let the same thing happen on his watch, which is laudable. But it is not 1929 now. We have avoided the monetary contraction of that time and a more judicious process for reconnecting borrowers and lenders is possible.

[perm]

We can do this. There are other programs that should get it to 100s of billions over five years. Just write off the loan when your done. it can be called 'Housing Development Fund.'

http://thomas.loc.gov/cgi-bin/cpquery/T?&report=sr464&dbname=110&

[srp]

When people like Greg Mankiw and Allan Meltzer are saying that the proposed intervention is an inferior solution (see Mankiw's blog) it might be a good idea to pay attention. The rush to judgment is a mistake.

Meltzer's alternative is to just have the government lend money to the entities in question, with no dividends allowed until the loans are repaid. He claims that this worked very well in Chile when they had a much more severe crisis of a similar type.

[ben]

"Never. We've all held our noses and supported your candidacy, John, but it's over, and you have nothing to blame but your own cowardly instincts."

Yes, all the trolls that supported McCain are upset with him now and switching to Obama.

[comprehensive list]

We can do this. The houses will be sold and mortgages paid.

'Regardless of which state you are in, government auctions are will be there. The government auctions are for cars, trucks and SUV’s. If you become a member, you will gain access to all the pre-owned, seized and repossessed cars all over the US and even boats and motorcycles are included. You will even gain access to the different auctions that are being held all over the US. Not just that, you will also learn the ins and outs off auctions and turn you into a really confident buyer. On top of that, you will get a comprehensive list of ALL federal government property sales programs and auctions.

Sooner or later, you will turn out to be a government auctions expert! Think about the thousands of dollars that you can save if you join this auction. For just a small fee of $39.50, you can be a bonafide member! Try it out and you will never regret it! Click here to be a member!'

http://capweb.net/

[Topsecretk9]

Cryptic is right. Read cryptic's link

http://thomas.loc.gov/cgi-bin/cpquery/T?&report=sr464&dbname=110&

[Sara (Pal2Pal)]

Draft proposal of Financial Rescue Plan…or how to give one man free rein with $700 bil for two years

[Topsecretk9]

Barney Frank is on Greta's show and has the balls to say it was the Bush administrations lack of will to regulate...watch Barney being a bullshit politician artist way back when saying any need to regulate a GOVERNMENT ENTERPRISE WAS AN EXAGGERATION

[Elliott]

Quoth the One:

"This is the exact time when the American people need to hear from the person who in 40 days will be responsible for this mess."

As my father said, "They did. He just gave a speech tonight."

File under: Had Palin said this...

[MayBee]

heh heh heh, Elliot.
Do you think he imagines he gets the keys to the White House on Nov 5?

[Rick Ballard]

Here's a good WSJ piece outlining the upside potential on the deal. The author ran a hedge fund so his ability to count isn't in question (unlike, say, Krugman or Mankiw - two sides to one debased coin).

I'm not sure that Kessler's premise that the return will be achieved by priming the pump on the economy is correct but I do know that if $700B is actually going to buy $2T notional to be held to maturity, then the deal will net a profit on it (based upon a Treasury cost of funds in line with the current 10 year rate).

There's no way that this is actually a bailout.

When I see evidence of an economist's ability to count I'll start paying attention to what a group of them "think".

[bubarooni]

bailout shmailout!

haven't you seen the important news?

palin is one one of those wacky AND dangerous quasi christians that believes in witches!

or something like that. i do know that obamarman said she's got some kind of 'pastor problem'.

hmmmm.... or was it that she is a witch?

whatever it was, it's important.

[Chuck Lyons]

In a presidency where the conspiracy theory loons think that Bush was behind 9/11 because he didn't run screaming from an elementary school when told of the attacks, we should not be surprised that the same loons think Obama is taking the high road by not being in Washington during 'the most serious financial crisis since the Great Depression'.
However, its difficult for the average American to understand the financial implications of the current situation when words like 'financial contagion' and mortgage-backed derivatives are bantered about.
What we really need is Ross Perot with some charts to explain the whole process. At least then we may be able to understand why Congress, Bernanke and Paulson should get 700 BILLION dollars to play with. (let's not forget Congress is a willing party in this windfall)

[Jane]

Good Morning everyone! I wonder what time Obama's plane will land in Washington, and if the President will send a car for him or meet him at the airport.

The Messiah really needs to be taken down an peg or two. Where is reverend Wright when you need him?

[clarice]

He's damning Amerikka, Jane. Good morning to you and to JOM!!

[Extraneus]

You're right, we can probably look forward to a debarking ceremony of some sort, huh?

[Neo]

Let's ask the most unanswered question in the financial mess ..

If at the end of operations of this Resolution Trust Corp. there is a profit .. what becomes of it ?

[Charlie (Colorado)]

palin is one one of those wacky AND dangerous quasi christians that believes in witches!

#85 arrives in the major media on schedule.

(Bub, got a link for me?)

[Charlie (Colorado)]

From that WSJ article.

But these are small-time deals. My analysis suggests that Treasury Secretary Henry Paulson (a former investment banker, no less, not a trader) may pull off the mother of all trades, which could net a trillion dollars and maybe as much as $2.2 trillion -- yes, with a "t" -- for the United States Treasury.

[Jane]

I keep thinking about Glenda who we haven't heard from since her brief re-appearance after Ike. Is anyone in touch with her?

Hey Charlie, that's what I was trying to tell you about!

[whosonfirst]

I despise the NYT. Pinch Sulzberger is the epitome of everything people hate about liberals. I long for the day when the Sulzbergers get together and tell Pinch that, although they like him, money talks and he's gotta go.

I don't like Paul Krugman, or Barney Frank, or Christopher Dodd. But they happen to be on the right side of this issue (if there even is a right side. It may be that this thing is too far along and we're screwed no matter what we do) The villains here are Bernanke and Paulson. They have shown themselves to be incompetent and yet they have the cast iron gall to come asking for an enormous, undefined amount of money. It's not 700 billion, that's just the foot in the door.

Because Bernanke and Paulson are part of a Republican administration you support them, and defend them ,and cheer for them. This is not a damn football game. This matters. Our way of life may be at stake here.

I noticed that both yesterday and today you turn these threads into your usual insipid political discussion, which doesn't matter. In all likelihood, Obama will be the next president. Will that be a good thing? Probably not. If McCain were elected would that be a good thing? Probably not. But that is the choice we are being given.

This financial and economic situation, on the other hand, matters very much to all of us. Try giving serious thought to it instead of making snarky comments that don't matter.

[bad]

Chaco

Stop beating Jane!!

[lurker9876]

OT: Have you seen the video about Palin's minister using "witch hunt" to push a Kenya woman out of a town? Olberman ran the video last night. It also showed Palin with raised arms in rapture and her minister holding his hands on her shoulders.

What's the story on this one?

[Charlie (Colorado)]

OT: Have you seen the video about Palin's minister using "witch hunt" to push a Kenya woman out of a town? Olberman ran the video last night. It also showed Palin with raised arms in rapture and her minister holding his hands on her shoulders.

That would be #85 arriving on schedule.

[Sara (Pal2Pal)]

Schieffer: Paulson Asked for McCain to Come In to Save Bailout

[M. Simon]

I notice we have a commenter who took five paragraphs to make a snarky comment that doesn't matter.

Read the fookin style book dude.

[boris]

Charlie, if trivial pursuit were still a popular game you could come out with a set of cards based on Sarah Palin facts and rumors.

[JM Hanes]

whosonfirst:

"Try giving serious thought to it instead of making snarky comments that don't matter."

Check the archives. This crowd did their serious thinking in about eleventy seven threads before you showed up. Sorry you misssed the party, but really, why on earth would expect serious discussion on a Paul Krugman thread?

[bubarooni]

chaco:
saw it on olby's show last night and msnbc.com followed up on que this morning to give us all a good scare too.
http://www.msnbc.msn.com/id/26880901/

m.simon:
i'll try to find one and stay mum until i've soaked up the lesson. i could use one with a few pointers on class too as i possess very little of either trait.

[bgates]

OT - have you seen the video about Obama's 20-year pastor and spiritual advisor who performed his marriage ceremony and baptized his children damning America or the tape of him blaming greedy white people for ruining the world? Olbermann is a piece of crap. Obama donated tens of thousands of dollars to this black nationalist church.

Sorry to go OT.

[clarice]

Just imagine, Rick, if we make that kind of return maybe we won't have to privitize social security--we can periodically just "bail out" Wall Street and put the profit in the SSA accounts.

[bad]

Jim Geraghty highlights this from a WAPO piece:

But Democratic leaders, who said they hope to approve the bailout plan by the end of the week, were having their own trouble rallying the rank and file. House Democrats summoned to a lunchtime meeting to discuss the proposal yesterday received a glossary of financial terms, such as "credit default swap" and "illiquid assets."

House Dems should read JOM.

[narciso]

First of all, Bernanke & Paulson, were confirmed almost unanimously; the last by a Democratic majority Senate. Second, Dodd, &
Barney Frank were certainly wrong on the biggest part of this; which is Fannie and
Freddie absorbing so much mad paper. One might say it was because of a philosophical view of lowered lending standards; or be more crass and point out their direct contributions from F&F, Countrywide, & B of America. Krugman was wrong, mostly about the reasons for the crisis. Most recently, just last week, he was wrong about the magnitude of the problem. Obama's been mostly AWOL on the issue; his only noticeable effort was on a bill that would
made it harder to enforce lending standards in lower SES neighborhoods. McCain, was "Hector at the Gates" three & five years on the issue; while the media was focused on the Libby witchhunt, undermining
the war on terror, and as I recall, promoting a certain Tourette's prone Maple
State governor as a viable presidential candidate; and his understudy the Boston Brahmin, who came to note, by verbal slandering a generation of veterans, and later through his aides; circulating a vicious urban legend; about America's drug problem.

[Sara (Pal2Pal)]

Looks like the market opened up between 95 and 100 pts.

[Captain Hate]

House Dems should read JOM.

Why? They wouldn't understand anything except what the trolls write.

[bad]

LOL Captain

[Captain Hate]

the right may not like the broader political implications.

SD,

For lack of a better description, I'm "the right" and the only thing I may not like is that Barney Frank and his gaggle of thieves may add some garbage in that will screw the whole deal. This problem was created by the Feds interfering with banks' standards in approving loans and it should be fixed by the feds unscrewing it. Other than that they should keep their mitts off the operation of the market and, if the feds make any money due to the current bad loans' properties increasing in value (and that's not going to be the case in all situations) that's fine with me.

[Needy , but not TRULY needy]

"Barney Frank is on Greta's show and has the balls to say it was the Bush administrations lack of will to regulate."

In 1980 Ronald Reagan said 'Government isn't the solution to the problem, it IS the problem."

Now Government IS the solution to the unbridled deregulation promulgated, inspired,
and whored by the Republican Philosophy most aptly described as 'laissez faire', or
let business do whatever the fuck they want.

Well what they want NOW is 'help' from the Federal Government to pull their bona fides out of the fire of disrepute, while they claim it's for the good of all.

Interesting Welfare Reform proposal.

[bad]

Kevin Williamson at Mediablog finds this little tidbit at WAPO:

In his personal life, [NBC News Chief White House Correspondent David] Gregory also rubs shoulders with newsmakers. At a baby shower for his wife before their son Max, now 3, was born, Michael Chertoff, then an assistant attorney general, disappeared into another room with a Justice Department colleague while Gregory tried to figure out what was going on. It turned out they were finalizing a plea agreement with John Walker Lindh, the American captured while fighting for the Taliban. [Gregory's wife Beth] Wilkinson last month became general counsel of Fannie Mae, and the couple now have 8-month-old twins as well.

"She knows everyone in government, and she tells me nothing," Gregory grumbles.

What did Beth Wilkinson know and when did she know it?

[Ranger]

Interesting times indeed... ABC did an http://blogs.abcnews.com/politicalradar/2008/09/bill-clinton-do.html>interview with Buba this morning and the quotes they posted make him almost sound like he is part of the McCain campaign:

"You can put it off a few days the problem is it's hard to reschedule those things," Clinton said, "I presume he did that in good faith since I know he wanted -- I remember he asked for more debates to go all around the country and so I don't think we ought to overly parse that."

[steveaz]

OT, but...

The way Obama's supporters are reacting to McCain's decision to postpone his first debate with O! suggests that Mac has hit a nerve with his move.

Me thinks that the Dem's dost protest too much!

[glasater]

With all the hue and cry about not enough regulation of the housing market, I would submit there were too many complex regulations so that no one understood the rules.
It's like when I went to a very stuctured high school--we students figured out all kinds of ways to get around those rules. And that's what I feel the "smart kids on Wall Street" did to create those esoteric financial intstruments to get loans to people who really couldn't pay for them.

The regulations as Paulson explains have to be updated for the times we live in now but that's a case best addressed after we get this plan nailed down.

[Captain Hate]

Now Government IS the solution to the unbridled deregulation promulgated, inspired,
and whored by the Republican Philosophy most aptly described as 'laissez faire', or
let business do whatever the fuck they want.

Go tell Axelrod that your astroturding mission failed badly and that everybody laughed at you. Go back to Kos and waste Soro's money some other way.

[Sara (Pal2Pal)]

Market now up by 219 pts. I guess it is liking what the President had to say last night.

[M. Simon]

bubarooni,

Guilty conscience eh?

It wasn't meant for you. :-)

[Sara (Pal2Pal)]

And Chaco should be happy, market over 11,000 again. 11,053 as I type this.

[GMax]

Quoting Rick above:

There's no way that this is actually a bailout.

When Warren Buffett say if he could borrow at Treasury rates, he would do the 700 B deal in a heartbeat and it will make the govt money, you should think and listen intently.

When Bill Gross the Head of PIMCO, the largest collection bond funds in the world says this deal with net the Government about 11% spread over the Treasury cost of funds, that is another time to be listening.

There might be 75B a year of earnings for the Govt and multiple years of it. I dont see the Congress not figuring that out in short order and wanting to spend it like sailors just into port. I guess that is stimulus for the economy but I would wish the Govt to keep their hands off and pay down some debt or put it in to plug the hole in Social Security.

[JM Hanes]

I love the idea that the President called Obama and told him to get his ass to Washington! Makes his posturing look a little silly, no? The man who would be king meets the genuine article. I don't know exactly what the Prez has in mind, but for the moment, I'm having fun imagining Obama arriving at the White House for a face to face with the President and John McCain in the Oval Office -- no advisors, no teleprompter, and no clue. Weasel wording may not work out so well when you're not in charge of the triangulating.

Then I picture a press conference immediately afterwards, with the real President at the podium. Will Obama wimp out, or will he have to appear with Bush? A photo op shaking Bush's hand would be priceless. Sometimes being the tall guy is not an image making advantage.

Last but not least, I imagine Obama trying to take credit for the deal that's worked out, or complaining about it, when it was obvious that he want to keep campaigning and cramming for a debate instead. Can't he do two things at once? With a helpful assist from the President, I'm not sure McCain's move is loking all that bad; if Camp Obama wants to imply that McCain is trying to wiggle out of the debate, Camp McCain can just remind follks that they could have been doing Townhall meetings all summer.

[Neo]

Intrade Betting is Suspicious

What's a little weird, however, is that this rouge trader is not only selling Obama contracts and buying McCain contracts .... they also seem to be buying Hillary Clinton contracts

This is the exact mirror image of the Obama trading -- in fact, the trades seem to be occurring at exactly the same times. So someone is betting on some sort of disqualifying event happening to Obama.

[Sara (Pal2Pal)]

Ranger: re: Bubba, two things, first I think he is one of the few men alive who have actually been in the White House and knows the stakes and knows how dangerous politicizing this crisis is. Second, I've been saying since Hillary withdrew that he talks like a men giving cursory support to Obama in public but behind the curtain of the voting booth will vote for the man he believes in the more qualified and that is McCain.

[clarice]

Axelrod's pulling out his remaining har--Clinton just defended McCain's action in cancelling the debate and going back to D.C. Said it was the right thing to do. The debate can wait. Heh

He also suggested maybe they should add a couple of economics questions to the foreign policy debate--Heh Heh as if empty suit sould get up to snuff on two big things at the same time even with the teleprompted transplanted between his ears.

[glasater]

...When people like Greg Mankiw and Allan Meltzer are saying that the proposed intervention is an inferior solution

Well at least Mankiw is willing to entertain other thoughts as witnessed by this recent blog entry:

A smart friend, who knows more about this topic than I do, emails me his response to the critics: Academic economists don't like the Treasury plan, but nearly all of the Wall Street economists are for it. You don't have to be all that cynical to say that the Wall Street economists are talking their book. But I'd like to think that there is at least in part a sense in which they are more attuned to the reality of the situation in credit markets -- that last week we were a day or two away from a breakdown of the financial system.

link

[bad]

Has anyone found footage or a quote of Obama criticizing Bush for not being somewhere while a big event was happening? His statement that presidents can do two thing at one would look pretty silly next to a previous dis of President Bush in a similar situation.

[JM Hanes]

GMax:

"There might be 75B a year of earnings for the Govt and multiple years of it."

Assuming that's the case, I suddenly find myself thinking about the Obama presser where he essentially said he might have to scale back on his grander plans in light of all the money the Feds would be losing.

I'm not exactly sure how the McCain could parlay that statement into a talking point, but the fact that Obama had no idea the government would be making money, not losing not losing it, seems to call his economic bona fides into question, doesn't it?

[bubarooni]

m.simon:

whew!

indeed i do. i do a lot of coding and my ciphering kinda reflects it. i'm constantly admonished in meetings by my liberl arts trained peers.

while i'm an inveterate JOM'er i find myself outta my league in posting 'smart stuff' and normally am reduced to snarkiness. it's kinda like when i walk into a museum and see a nice painting. i like to be surrounded by it but could never add anything to the display. i'm reduced to grunting 'cool!'.

i think the campbell brown piece on mccain camps 'sexist' treatment of palin the other has just pushed me over the edge. i'm pretty sure it was msm attempt at self-inoculation against bias charges so they could start the next round of palin bashing. anyway, when i saw the witch doctor stories starting to appear...

[GMax]

The wisdom of McCain going to Washington was and is twofold. He is now the nominal leader of the Party and will bring the bulk of Republicans inline on this and as you can already see, the Democrats who wanted to drag this out and hang a bunch of nonsense on the bill are all of a sudden focused on "We have a deal." They want to try to deny McCain the credit, but he has already earned it. Paulson asked McCain to return, and Bill Clinton says its the right thing to do.

So he gets both Republicans to do the right thing, and Democrats to do the right thing, for opposite reasons of course. But he still gets the credit, Wild Bill just ensured that.

Now the kicker is Obama has to put down the collection plate and come to WH for a session. So he looks like a follower and a small, self centered person. Its all good.

[Gnome from Nome]

While his staff has to choke-hold McCain from making boxcars at the crap table, his gambling compulsion has other outlets;

like the Bailout.

He's a risk taker, for sure. He shoots from the hip and don' take no prisoners when it comes to his knee-jerk, testosterone Maverickisms.

'Cause he's McCain, the rootin' tootin cowboy who'll take the point and ride that
ICBM like Slim Pickens while he takes us all down with him.

Sheesh. It's just like the movie.....

[DebinNC]

Sara's link saying Paulson begged McCain to come to DC and get Reps on board makes Frank and Reid look even more idiotic ... if that's possible. Sue Myrick, my rep, is among the Rep fiscal hawks on record as being sceptical about the plan. Her office just told me she's waiting to see the final plan to make a decision. I hope the "deal making" going on includes the voices of a few like Myrick.

[GMax]

JMH

Dont get too far out there, I am not sure McCain gets it either. And I think Paulson is not selling it that way because he wont be around to administer it and the govt can and does screw up a free lunch all the time.

[Extraneus]

Heh Heh as if empty suit sould get up to snuff on two big things at the same time even with the teleprompted transplanted between his ears.

Yes, and he's going to waste a whole day he could have otherwise spent with his tutors, which may have been part of McCain's plan when he requested that Bush call the meeting. Meaning O will probably end up agreeing to postpone the debate, once again showing a flat-footed reaction to new news that has to be walked back afterwards. All completely fair game when it comes to honestly evaluating his readiness, too, which is what independents are trying to do these days, and I imagine McCain will be pointing out the contrasts when he restarts his campaign right after the deal is done.

[steveaz]

Glasater,
"With all the hue and cry about not enough regulation of the housing market, I would submit..."

Lost in the 'hue and cry" is two other huge governmental intrusions in the housing market: building restrictions, and encroachments on the amount of developable land by an ever-expanding parks system.

California is Exhibit A here. If Sacramento would stop pulling real estate off the market and quit larding-up building codes (both are done mostly at the behest of the "environmental" lobby), then the state would have a housing surplus, not a shortage. Ditto Illinois, New York, Ohio, you name it.

Seems that, instead of corrupting the lending market in order to put inner city families in homes they can't afford, the Dems could have simply told the Enviro's to take a hike and the resultant building surplus would make homes more affordable, in REAL terms.

(Of course, this would push populations into the outlying rural areas, staunching the Left's desired urbanization plans, and impacting the power of their big-city machines.)

I'd like to see some of the blame for the crisis put on the Enviro's. Does anyone think that the watchdog media will shine a light on their contribution to the "Housing Crisis?"

[Gnome from Nome]

Why do old men have to prove they can still get it up?

[GMax]

But how about this JMH, riffing on Obama stump speech " This is not a bailout, its an investment by the govt to unclog the credit market. If done correctly, it will almost assuredly make money for the taxpayers. How often have you seen that happen. Obama just does not get it. He thinks the 700 billion is a cost not an investment.

[MayBee]

There is no doubt in my mind that Bill Clinton would rather see John McCain be President. For many reasons, but primarily because Clinton truly thinks Obama is not capable of doing the job well.

[Gnome from Nome]

"If Sacramento would stop pulling real estate off the market and quit larding-up building codes"

Interesting that you bring up Sacramento where the Governor of Cauliflowerornia and the Legislature operate.

See any parallels in the gridlock there to those in DC? DC, you ain't seen nothin' yet.

[bgates]

Why do old men have to prove
Boy, progressives sure do hate old people.

[Rick Ballard]

glasater,

Find an economist who was smart enough to note in public that selling CDS in an unregulated market is precisely the same as allowing fire insurance on your house to be sold to a grinning idiot with a five gallon can of gas in one hand and a book of matches in the other. I'll listen to that economist - and I'll spit when I hear the names of all the other 'famous' thinkers who reached a 'consensus' on what to do about a problem which they caused (in good part) by their promulgation of 'solutions' to problems which have the invariable perversity of human nature as their cause.

[clarice]

Don't you think the image we end the week on is Obama poncing about on the campaign trail while wiser heads--McCain and Bush--yank him back to do some work? I do.

[Neo]

What a scam ..

The federal government creates Fannie Mae and Freddie Mac who procede to produce securities of questionable value (but they are assumed to be backed by the federal government). Then when the securities are determined to be of questionable value, the federal government sets up a program to buy them back, on the cheap, while possibly making up to $1 trillion by reselling them when their value is cleared up.

Then the feds have the nerve to complain about CEO compensation.

There must be a sucker born everyday.

[bad]

I thought the troll was saying McCain had more testosterone than Obama.

[Ranger]

I think the next key decision point is Friday morning. Obama has to decide if he is going to stay in DC until the vote is taken, or jet off and come back to vote on Sunday or Monday. If he leaves, then McCain should be front and center on this all weekend, making it clear that he is leading the Rs and Obama is not leading the Ds. I really don't see how Obama can leave and risk being absent from the press conference that announces the final deal before the debate and voting starts... but then he does need a lot of cash to feed his campaign.

[Charlie (Colorado)]

why on earth would expect serious discussion on a Paul Krugman thread?

[JM Hanes]

GMax:

Well, I did say I wasn't sure how McCain could play it, but I admit I'm having fun letting my imagination run away with me this morning. I'm much more sensible in the wee hours. :-)

I don't think Obama knows any more about economics than McCain does, though, professorial airs notwithstanding. It's all pretty ironic, when the newest best thing in community organzing is leveraging philanthropic "investments' into public financing at both state and federal levels.

[Jwilkes]

"DC, you ain't seen nothin' yet."

Actually, the DEM plan for the bailout seems the one that is going through.........

"Rep. Barney Frank, D-Mass., who has led negotiations with Treasury Secretary Henry Paulson on the package, said that given the progress of the talks, the White House meeting was a distraction."

"Some partisan sticking points remain.

Democrats are pushing to allow bankruptcy judges to rewrite mortgages to ease the burden on consumers who are facing foreclosure — a nonstarter for Republicans.

Democrats acknowledge privately that the provision will almost certainly be dropped in the interest of a bipartisan deal. Obama told reporters it's "probably something that we shouldn't try to do in this piece of legislation."

Democrats also want any potential proceeds the government reaps from the bailout to go to a fund designed to pay for housing for poor families. Many Republicans oppose the very existence of the fund, which they say is a backdoor means of funneling money to liberal political groups.

Democratic demands that Congress be given greater authority over the bailout and that the government be required to help homeowners renegotiate their mortgages so they have lower monthly payments already have been accepted in principle."

http://news.yahoo.com/s/ap/20080925/ap_on_bi_ge/financial_meltdown

[Rick Ballard]

"I thought the troll was saying McCain had more testosterone than Obama."

Well, sure. Michelle keeps Barry's in her purse.

[glasater]

Steveaz--I believe once Palin is in office she will finesse the enviros having dealt with that faction in AK.

..Obama just does not get it. He thinks the 700 billion is a cost not an investment.

Zero thinks raising capital gains is the "fair" thing to do--not understanding at all that lowering cap gains plus corporate taxes bring more money into the government coffers.

Perhaps that how the debate should be framed--this is a 700 bil investment plan.

[Ranger]

Rep. Barney Frank, D-Mass., who has led negotiations with Treasury Secretary Henry Paulson on the package, said that given the progress of the talks, the White House meeting was a distraction.

In other words, 'Paulson was desperate and was giving us anything he wanted, so calling in McCain is going to force us to strip out a lot of stuff we could have had.'

I am sure the Ds were very unhappy about it, but I don't think they really realize that it would have failed without it.

[Charlie (Colorado)]

WTF?

Anyway

why on earth would expect serious discussion on a Paul Krugman thread?

ROFL.

[GMax]

None of that nonsense will be in the bill, and the Democrats already know it. If they dont zip this up and fast, McCain will start getting more and more credit, so they can not afford to drag their feet on this one. Its power they seek and Mac is a very real threat to that power, so dont expect any principles to get in their way here. Like they ever do...

[The Wicket Picket]

.Katie Couric interviews Sarah Palin about reforming the finance industry as.......

REGULATORMAN !!!!!!!!!!!!!!!!!

COURIC: You've said, quote, "John McCain will reform the way Wall Street does business." Other than supporting stricter regulations of Fannie Mae and Freddie Mac two years ago, can you give us any more example of his leading the charge for more oversight?

PALIN: I think that the example that you just cited, with his warnings two years ago about Fannie and Freddie — that, that's paramount. That's more than a heck of a lot of other senators and representatives did for us.

COURIC: But he's been in Congress for 26 years. He's been chairman of the powerful Commerce Committee. And he has almost always sided with less regulation, not more.

PALIN: He's also known as the maverick though. Taking shots from his own party, and certainly taking shots from the other party. Trying to get people to understand what he's been talking about — the need to reform government.

COURIC: I'm just going to ask you one more time, not to belabor the point. Specific examples in his 26 years of pushing for more regulation?

PALIN: I'll try to find you some and I'll bring them to you.

[Charlie (Colorado)]

Actually, the DEM plan for the bailout seems the one that is going through.........

Don't be an ass. They're going to vote for the whole $700 billion, they're going to have "oversight" with no teeth, and the very thing you quote says they're not going to get the foreclosure relief they're looking for.

It's Paulson's plan.

[JM Hanes]

What MayBee said. As usual!

Clarice: Three lines to my half a page. As usual!

[Tacobender]

KDrum says........................

CYNICISM WATCH....A couple of hours ago I suggested that maybe John McCain would try to postpone the first debate to October 2nd because that would then eliminate the vice presidential debate. (So sad....) I thought I was just being hackishly cynical when I said that, but no: according to CNN, that's exactly what McCain is proposing. The VP debate would then be "rescheduled." (Perhaps to November 5th, joked Dana Milbank.)

My lesson for the day: No matter how hackishly cynical you think you are, you're no match for the hackish cynicism of the McCain campaign.

[glasater]

COURIC: I'm just going to ask you one more time, not to belabor the point. Specific examples in his 26 years of pushing for more regulation?

PALIN: I'll try to find you some and I'll bring them to you.

Well she sure didn't want to bring up McCain-Feingold:-)

[Ranger]

Hmmmm... via Instapundit:

SUN-TIMES: Obama state earmark being probed. "A $100,000 state grant for a botanic garden in Englewood that then-state Sen. Barack Obama awarded in 2001 to a group headed by a onetime campaign volunteer is now under investigation by the Illinois attorney general amid new questions, prompted by Chicago Sun-Times reports, about whether the money might have been misspent. The garden was never built. And now state records obtained by the Sun-Times show $65,000 of the grant money went to the wife of Kenny B. Smith, the Obama 2000 congressional campaign volunteer who heads the Chicago Better Housing Association, which was in charge of the project for the blighted South Side neighborhood."

posted at 10:59 AM by Glenn Reynolds

How many former associates have to be under investigation before the MSM starts paying attention?