Powered by TypePad

« Interesting, But | Main | Jim Lindgren Is Excellent »

September 27, 2008

Comments

MayBee

Perhaps it is the jerks ready to embrace a depression that are going to get me the government they deserve.

Like the people that sat out 2006 to teach Republicans a lesson. I didn't, but now I have to share a government with them.

Charlie (Colorado)

Simon, you don't teach freedom from attachment by stealing what people have.

MayBee

Remember, the Maoists were ready to kill the educated people like Doctors and Dentists because the peasants were up in arms and ready to change the system.

It isn't always a good idea to be ready to give up everything to teach society a lesson.

DebinNC

LA Times: Sen. Judd Gregg of New Hampshire, the Senate Republicans' lead negotiator, said that the parties have moved "down the road a long way toward reaching agreement." When negotiators gather this afternoon, he said, "we're going to stay there until we get this done."

I wonder if Senate Reps have pushed recalcitrant House Reps aside in negotiations?

Charlie (Colorado)

LA Times: Sen. Judd Gregg of New Hampshire, the Senate Republicans' lead negotiator, said...

That was from 1PM today; things are moving faster than that.

Pagar

Would someone please explain why we keep talking about House Republicans? They are not in the majority. None of their votes are needed. Why aren't we discussing House Democrats not voting?

glenda waggoner

By the way, what does GW have to lose by coming out and naming names-or send Darth Vader out to explain Acorn to the brainwashed democratic voters? Why would doing business as usual, really crab-feeding bottom dwelling Pelosi-gain votes and not lose them? And do the narcissist media comprehend they'll have 0 creds with even their herds of simpleton thinkers? Send those videos of the dem in 2004 praising FMac/Mae and FRaines to every little/big tv/radio outlet. I know Rush will probably soundbite it. Are we ready to march, yet? I have a very loud voice and my 86 yr old Dad says I'm very bossy. I CAN make a scene if needed.
Thank you, Simon, Charlie and Clarice for links/ papers-getting the word out! All of you-Jane,JMH,Sara-thank you.
Why does "politics as usual" have to win instead of We the People?

Verner

Here's a commercial--BaraK Obama's idea of helping the middle class is to give hundreds of millions of dollars to ACORN.

JM Hanes

M.Simon:

"And freedom from attachment is the only way out of suffering"

All very neat and tidy, but I'm pretty attached to my kids. I've learned to cope with the fear, but suffering just comes with the job. Joy too.

bgates

By the way, what does GW have to lose by coming out and naming names
His eight year streak of abdicating the responsibility of explaining his position to the public.

Barney Frank

Every Democrat will be saying "The Bush Bail-Out" and then the papers will be calling it "The Bush Bail-Out"

If the Repubs were adept at PR they would accept this terminology with pride. If it passes and works Bush and the Repubs get credit for it. If the Dems block its passage then the 'Bush bail out', which would have saved us, was thwarted by the evil Dems. The only way it hurts is if it passes and we still have a catastrophe in which case we won't give a fig who owns it because we'll be too busy scraping together our last pencils to sell.

M. Simon

JMH,

The rules are simple. It is just not easy. Like war.

The big thing is to live without fear. All the rest can be adjusted.

Barney Frank

His eight year streak of abdicating the responsibility of explaining his position to the public.

Brilliant, bgates.

jc

"Perhaps it is the jerks ready to embrace a depression that are going to get me the government they deserve.

Like the people that sat out 2006 to teach Republicans a lesson. I didn't, but now I have to share a government with them."

Oh please. My willingness to stand up for what is right is not the problem here. I was on your side of this issue until the last 2 days.

I am not trying to join a suicide pact or cause a Depression. However, I am not willing to let a bunch of GS fatcats convince me that we can't make it without them to the point where I become willing to sell out my country.

From your comment I must conclude that selling out to GS/ACORN/Dodd/Frank is the government you deserve.

I see no reason to be saddled with that.

Charlie (Colorado)

Would someone please explain why we keep talking about House Republicans? They are not in the majority. None of their votes are needed. Why aren't we discussing House Democrats not voting?

Because it's their turn in the barrel.

Charlie (Colorado)

I see no reason to be saddled with that.

I have no desire to be reduced to penury for your notion of purity.

Verner

You know, maybe what we need is a million pissed off Americans march on Washington.

How would they like a bunch of middle aged women smashing the plate glass windows at Ben And Jerry's and burning stacks of O magazine and their 401k statements to Lee Greenwood's "Proud to be an American" !

I volunteer to be on the front line.

Hey, let's get it to Rush and Hannity.

M. Simon

Charlie,

I'm not the one doing the stealing. I'm against it.

To be content with your lot in life (while working to improve it) is to be a rich man. I am rich beyond measure because I am content.

I have lived without a single dollar in my pocket for years. Being poor doesn't bother me. I will start over and work my way up again. Or it will kill me. No matter.

As soon as you have desires the bastards have you over a barrel.

Jane

Well at least we chased away "baked alaska".

Carry on.

M. Simon

What will happen if the system goes down? The bad debts will get liquidated. The treasury will supply money. The economy will move again.

In fact the sound banks already have an excess of liquidity.

M. Simon

Verner et. al.,

I live in Illinois in Rockford. Pick me up on the way. I can sleep sitting up.

jc

"I have no desire to be reduced to penury for your notion of purity."

Then make your case. We are being sold a liquidity crisis and a solution to that crisis. I posted a link to John Allison's letter to congress on this thread. Where and how is he wrong? Note that his point #11 could be resolved very simply and would abate most of the immediate pressure of this mess. Without the emergency, the other issues could be resolved much more intelligently and without the requirement to sell out to thugs.

There is usually more than one way to productively solve any problem. However, it practically impossible to solve a problem one does not actually understand.

M. Simon

jc,

I'm with you. I pledge my life, my fortune, and my sacred honor. Pretty much you will have to make do with my life and my honor because my fortune doesn't exist.

Sara (Pal2Pal)

This is supposed to be an ad for Obama, I think. You???

DebinNC

Oh, Verner ....LOL!!

Captain Hate

I live in Illinois in Rockford. Pick me up on the way. I can sleep sitting up.

Then stop by Cleveland Heights for me.

M. Simon

John Allison letter

M. Simon

Sara,

If it turns out that way I will be very happy too!

sbw

Headline: Throw the bums out!

House Democrats could pass any bill on the financial recovery that they want. Instead they gamble.

The bill they want to pass is the one they don't dare pass without House Republicans as cover. The bill they want is decorated with fat windfalls for their own. Although their language claims to help "main street" it funnels money instead to grass root community organizers shown in congressional hearings and court testimony to be partisan and corrupt.

Standing at the brink of depression, Democrats gave the country a choice. If the House Republicans don't join them they will let the economy collapse. If House Republicans agree, they betray their base and commit political suicide at the polls next month. If they don't, the Democrats use a compliant press to blame the Republicans.

This kind of extortion is unacceptable. Democrats can pass any financial recovery bill they want. Instead, leaders Nancy Pelosi and Barney Frank play election politics, abetted by Senator Harry Reid, Chris Dodd, and Chuck Schumer, their party's chief campaign strategist.

The people in charge are acting like there is no crisis. They act like it is a political game and an opportunity for graft.

Throw the bums out. Congress cooked the rules in the mid 1990s to milk Fannie Mae for cheap loans to curry votes. Congress funded ACORN that herded poor prospects into home mortgages. Videos of Democrats in committee hearings show Barney Frank, Maxine Waters and others resisting changes that might have avoided Fannie Mae's collapse. Congress populated Fannie Mae with "friends" like Franklin Raines and Jim Johnson as administrators. Until they collapsed, bankers like Countrywide Bank who benefited from Fannie Mae feathered Congressional beds with donations and easy loans.

Congress needs to trim the 100 page of trash back to the simple bill that will clear the credit lock-up immediately and that has the prospect to return the temporarily borrowed billions of dollars to the U. S. Treasury.

Call your favorite national journalists and insist they stop regurgitating sound bytes and report what Pelosi, Frank, Dodd, and Schumer have done to cause this mess and hold us hostage at the brink.

Verner

You know Sue, Couric made them take the ad about sexism downbecause she objected to her footage being used.

But NBC doesn't seem to care! Go figure!

Pofarmer

How many times has the fed now "injected liquidity" in this market. It just might be time to cut bait.

None, actually. We're still waiting.

I'm talking about in the last 15 months or so. Around the time of the Bear Stearns meldtdown our fed and foreign Fed's injected tons of money into the markets.

Pofarmer, if you don't think a depression or really major recession will hurt you, you're a fool, even if you think it will hurt other people more.

If you really think hurting other people as much as it will hurt them is acceptable, you're not actually someone you want to know personally.

Here's the deal dude. Some things are out of my control, Totally, have nothing to do with me. If some guys in big investment banks who thought they were so goddamned smart theymade hundreds of millions and 7 figure BONUSES, then the whole shitpile collapses, why to fuck am I supposed to bail their sorry asses out????? The system needs cleaned out, they need to lose everything. Unfortunately the traders and CEO's have squirelled away HUNDREDS OF MILLIONS IF NOT BILLIONS of $. Some of it Freddie Mac and Fannie Mae gaurantee, no doubt, some of it from investors, etc, etc.

Look, small business and small and medium sized banks are in a strong position right now. I'm not ready to call this the end of the world.

What we have going on here is corporate brinkmanship. These fuckers took on mortgage debt, then they screwed around and sold each other "insurance" but that wasn't good enough, they had to trade the damn stuff, and it grew, and it multiplied, and when the first MBS went "Poof" the whole shitpile collapsed. Take away the CDS obligations, you solve the problem. I bet the system would work fine with the MBS values on the books sans the crap CDS "obligations." Just shitcan the damn things. You bought a load of MBS's??? You own em. I don't want to see these bastards propped up. I don't want to see the economy fail, either. However, I look at the balance sheets, and, shit, it ain't that bad. There are hundreds of billions of $ of good assets on those books. Most of these firms have a good net worth, sans enough capital to work with. These high rollers are just pissing on each other seeing which ones will go under first, and the rest are mewing for a govt bailout for a problem THEY CAUSED AND PARTICIPATED IN. The only thing I can't take full satisfaction in is that the fuckers that ultimately caused this probably won't see any jail time and probably won't lose even a penny of their own money. These guys NEED to go down. I think all the depression talk is brinksmanship nonesense. Could it come to that???? Probably. But, if it was that bad, pissing away 3/4 of a TRILLION $ wasn't going to fix it anyway. You can only kick the can so far.

Look I don't want bad things for anybody. I've lived with practically nothing. I've worked 30 hrs a week during the semester and 60 hrs a week all summer running heavy equipment to put myself through school. I can work on computers. I can work spreadsheets and do financial statements. I can weld, I can run heavy equipment. I can do my own mechanic work and grow my own food if I really have to. Do I want to see my balance sheet shrink? Do I want to see my business stagnate or fail?? Well, no, but you know what??? My costs are up something on the order of 300% in 3 years. That's no shit, either. I can't stand this inflation either. This fed and these fuckheads on wallstreet have caused these conditions. I damned if I do, damned if I don't. You folks at the consumer level got no idea how costs have skyrocketed out here in the productions sector. Something has GOT to give. I see this bailout as inflationary. These guys get the bad debt off their books it will be back to business as usual. You don't want a depression, I don't want hyperinflation. Pick your pill.

Sara (Pal2Pal)

jc: Charlie has been making his case in a gazillion different threads on this subject going back days.

I was against a bailout, Charlie convinced me of the necessity, so then I was okay sort of if it is necessary, now I'm I know it is necessary, but I don't want the ACORN B.S. and I'm mad as hell at the way the House Republicans are being treated.

My own Congressman, whose statement I posted in the Lindgren thread and linked in this one, is dead set against any bailout at all. He has a let them fail attitude. He is one of the House Republicans. I'm not happy. His attitude strikes me as one who will not legitimately negotiate to some kind of compromise that will make the necessity happen. I'm mad because it puts me in the position of having to try to influence him to get with the program and get a deal, which I don't really like in the first place, but have been convinced is a necessity. I don't like to be boxed in that way.

M. Simon

"Lord of Light" by Zelazny is the best book on militant Buddhism I have ever read.

jc

Charlie (Colorado),

M. Simon says he has nothing to lose. Not me. I have scrimped, saved and invested for a lifetime and I am right in the middle of this mess. Everything I ever passed up for a better future is frustrating me right now. Up until 2 days ago I was arguing against people who did not care what I was going to lose in this crisis. I care what is happening to you because it is happening to me, too.

But, an old friend of mine with significant expertise developed over 25 years in commercial/investment banking gave me some food for thought and a more open mind about this situation.

Even so, it took the ACORN thing to make me stop leaning towards your position.

Porchlight

I live in Illinois in Rockford.

Great town. Home of Cheap Trick.

boris

Lord of Light was an SF favorite. "That's when the fit hit the shan."

Pofarmer

Very nicely put sbw.

Barney Frank

What will happen if the system goes down? The bad debts will get liquidated. The treasury will supply money. The economy will move again.

That's what Andrew Mellon thought would happen in 1930-32. Didn't quite work out the way he planned. It largely led to the leviathin state we now have.

I hope the 'let's have a depression so we can be content with nothing' plank isn't going to be inserted into the Republican platform any time soon. Could be a tough sell to most voters, especially the ones who like to eat three squares a day.

Porchlight

Very good, sbw. Will you be running that in your paper?

sbw

Porch, we'll see what Monday brings.

DebinNC

Sounds to me like a deal is coming soon, and the 100 House Republican rebellion has been quelled by Dems and Senate Republicans.

M. Simon

Barney,

I'm not against a bail out. I'm not against saving the system. What I am against is giving it to the thugs.

BTW the Great Depression was caused by a liquidity crisis. Read Milton Friedman on the subject. I think it is in "Free to Choose". Mellon didn't have a clue.

How do you get a dead system going again? Forgo taxes on wealth generation and only collect personal income taxes.

How do you inject liquidity in a dormant system? The government buys back T-Bills.

Sara (Pal2Pal)

Uh oh, look what happened when this guy tried to link to the video you've all been talking about.

ABC News is stifling user comments that point out democrats' role in financial crisis

Dave

Too many people are looking to Factcheck for truth and/or facts about the candidates. It's important that we all realize that they are biased and NOT to be trusted.

FACTCHECK IS FUNDED BY ANNENBERG!!

jc

Sara (Pal2Pal)

Give your congressman a break. Look at the tactics the other side is willing to employ before you tie the hands of the guy negotiating for you. He needs a stiff negotiating position to get a reasonable deal.

I was for the bailout a couple days ago. My thinking was that the people who make the mess should be responsible for cleaning it up. Clearly, government made the mess.

I say that having lived through the RTC process in the late 1980's. For a few days I actually convinced myself that our government had learned from the RTC experience and maybe they were going to be more responsive to people's needs this time. I no longer think so. The ACORN thing has removed all of my hope on that issue.

Based on what I learned from the RTC era, those folks who think this bailout will be a quick, painless thing don't really get it. Bailout or not, this will take a while and a lot of people are going to get hurt. I don't want that to happen to anybody either, but imagining the bailout will be painless is something that does not agree with my experience.

Pofarmer

To: Washington, D.C.
From: Wall Street
Re: Credit Crisis
Dear D.C.,
WOW, WE'VE MADE QUITE A MESS OF THINGS here on Wall Street: Fannie and Freddie in conservatorship, investment banks in the tank, AIG nationalized. Thanks for sending us your new trillion-dollar bailout.
We on Wall Street feel somewhat compelled to take at least some responsibility. We used excessive leverage, failed to maintain adequate capital, engaged in reckless speculation, created new complex derivatives. We focused on short-term profits at the expense of sustainability. We not only undermined our own firms, we destabilized the financial sector and roiled the global economy, to boot. And we got huge bonuses.
But here's a news flash for you, D.C.: We could not have done it without you. We may be drunks, but you were our enablers: Your legislative, executive, and administrative decisions made possible all that we did. Our recklessness would not have reached its soaring heights but for your governmental incompetence

Pofarmer

Carl Icahn writes this morning:

With the shocking collapse of multiple banks and financial institutions in recent months and staggering losses to shareholders, Congress clearly needs to forge a bailout package to stall the economy from further downward spiral.
In my view, the primary factor that got us into this mess is the egregious mismanagement and short-sightedness of boards and CEOs of these institutions, who took inordinate and leveraged risks with stockholders money, not simply external factors like the housing market slump.
Business cycles happen. Obviously, responsible managements should have planned for this possibility and not blindly invested in subprime mortgages and other toxic instruments.

Unfortunately this has been a disaster for shareholders, many of which are pension funds for working people. These shareholders are paying for the mistakes, while managements are leaving with huge bonuses, such as the $2.5 billion package for Lehman executives after the bank collapsed.
I have long maintained that there are too many laws in this country that protect inept managements and don’t give stockholders enough power to throw out these managers. The banking industry is a prime example.
The bailout is one answer. But perhaps the most important solution is to bring private money into these institutions. We need to have management accountability to induce private money to come into the financial industry.
The U.S. Federal Reserve recently relaxed bank ownership rules to allow an investor to buy up to 15 percent voting stake in a financial institution, up from 9.9 percent. In certain circumstances, an investor could have up to two seats on a bank’s board.
These are baby steps in the right direction, but they won’t do enough to attract enough private money that the industry desperately needs during this crisis.
Private equity and hedge funds control hundreds of billions of dollars and many, including Carlyle Group and JC Flowers, have stated that are interested in investing more heavily in the financial services industry.
But now that top buyout fund TPG likely lost $1.35 billion in its minority investment in the failed Washington Mutual, many will be understandably reluctant to pour money in unless laws are changed to allow for more control over their investment.
The financial services industry has historically been one of the most profitable investment sectors. If laws were changed to allow for more private investment and management changes, the sector can be nursed back to health, backstopped by government funds.
Democrats and Republicans alike were right to challenge Treasury Secretary Hank Paulson’s sweeping $700 billion plan to buy the toxic debt of financial institutions – mainly because it contained no provisions to make managements accountable for their mistakes.

Pofarmer

If private equity money were allowed to invest more heavily in financial institutions and manage them, they would be better able to value the illiquid assets that got them in trouble to begin with.
The Paulson plan will likely go through in some form, but legislators are right to demand provisions that would allow oversight and review of the Treasury’s action for this kind of taxpayer money.
Importantly, lawmakers should pass enhanced "clawback" provisions that allow for the recovery of CEO bonuses, as well as restrictions on executive compensation for firms that sell their assets to the government.
In my view, there is nothing more egregious than a CEO or other top executive getting multi-million dollar payouts after the company they were overseeing goes under.
This certainly applies to Stan O'Neal, who left Merrill Lynch as CEO last October with about $130 million in stock grants and options at a time when Merrill was deeply involved in the mortgage-backed securities market. The firm took billions of dollars in losses as a result, prompting its sale to Bank of America.
Before the U.S. taxpayer pays a dime to Merrill and Bank of America to buy its junk loans and derivatives, it should explore whether it can take back egregious compensation packages paid to current and former top executives.
That should also apply for any other bank participating in the program, including Citigroup’s former CEO Chuck Prince, Bear Stearns' Jimmy Cayne, Lehman’s current CEO Dick Fuld and all the others.
The hapless taxpayer should not be punished for the mistakes that drove these financial institutions off a cliff.
This clawback should also apply to Lehman, which set aside some $2.5 billion to pay bonuses to top executives of the firm, the bulk of which is being sold to Barclays. Again, they shouldn’t get these bonuses if taxpayers are forced to buy their toxic assets.
Similarly, the government must have the right to take substantial equity stakes in companies that participate in the loan buyout program and demand transparency on the part of the Fed so taxpayers can know what they hold, where the assets were purchased and for what price.
This kind of transparency is essential if the program is to achieve its objectives in reviving the debt market and not simply rewarding incompetent managements.

Dave


http://www.factcheck.org/about/

Pofarmer

Sorry for the mass postings. The following is actually the header for the preceding information. The guy is for real.

My perspective.

Caution: I do not render advice and am wrong about half the time. In fact, I’ve had months during my lifetime when I could do nothing right.

First, the international economy is in very tenuous condition.

There are solutions.

There are billions of dollars of private money ready to buy assets IF THE LIABILITIES ARE CLEANED.

The details of any solution passed by Congress will be critical.
$700 billion is an insufficient amount. The problem is bigger.
I am dead set against the Paulson Plan and will address later in this document.

As I mentioned yesterday, I cannot fathom any company, whether it be a Fortune 500 company or the corner drug store, where the treasurer races into see the boss shouting “We need $XXXX in the next 48 hours or we are screwed!” In a well-run company, that treasurer would be fired on the spot.

Amidst all this confusion are a presidential election and a congressional election AND EGOS.

The people of whom I am familiar who’ve survived a crisis or who operate highly successful businesses recognize it is essential to pull together a few folks with talent and with individual track records of making the right decisions and possess the ability to “get things done!”

Egos sometimes interfere with this strategy, as some folks feel it deflates their egos to bring other folks on board (particularly if they are more capable than you!).

There are some people who can pull all the strings, handle the press, attend meetings, fend off telephone calls and select priorities. This is a very short list.

Many, many years ago, I was chosen as an executive for a large corporation. Why? Because I had been a successful trader generating huge commission incomes and I had the ear of the Chairman about some problems I had identified.

When a person is whisked around town in a stretch limo with a driver attending to your every need; when you enter a hotel or restaurant all fawn over you; when you enter an

office building a fellow races ahead to catch the elevator for you; when you talk to staff they wonder about being candid because you control their careers. Suddenly, your ego builds and you think “I’m pretty important.” The truth is, if you cannot perform the job, you can be replaced with a wastebasket.

For me personally, it was a short term disaster. My clients suffered as I was not available 24/7. My income suffered as I was not on top of my market game. I don’t like meetings wherein nothing much is accomplished. My style is pretty direct, I offended people. Bottom line, I learned I was not a people person. I politely informed the chairman, thanks, but I simply cannot wear two hats. I resigned.

I can only imagine the confusion and turmoil today. Particularly the press. Some members of the press are plain stupid, but you must measure every word to avoid a mis-step or time-consuming controversy.

The other factor, as far as I am concerned, I’d prefer a couple of folks on my team who’d faced adversity before, or who’d failed at a few endeavors but learned some lessons. It is pretty difficult to become elected if you’ve had a few train wrecks.

In terms of the market place, when there is ‘blood running in the street,’ it is my instinct to buy. But, carefully. Additionally, volume in both equity markets and some commodities were high on the 18th, suggesting capitulation. This provides me with a “risk measuring point.”

I believe we will witness an advance in corn and soybean prices in the first quarter of 2009. Mostly because of acreage concerns. The concerns evidenced by the bears in the market are not new news. We yet have to survive the October crop report which I feel will be friendly towards the bean market and at the worst neutral for corn. Therefore, I approach both markets cautiously preferring to buy price dips.

But, I do not have the same confidence in this market as last year. Until the fog clears, I’m more comfortable thinking this might be a wide ranging trading market, this may change but we may well be in a market in the short run whereby demand will have to be proven. The conservative way to play it would be to buy ‘near the market price calls’ out in May or July & write calls of those same futures at prices quite a ways above the market.

Inflation is an obvious concern. However, I am not quite ready to jump on the immediate inflation ship; I do believe we face possible horrible inflation in the future.

Captain Hate

Sounds to me like a deal is coming soon,

I looked through that article and found nothing about ACORN; rather just a bunch of jerking off about "insurance". That gives me a sinking feeling in my stomach that I was hoping not to have.

Barney Frank

What I am against is giving it to the thugs.

Likewise. I personally will be surprised if the Dems try to stick ACORN in the final bill. I know they would love to do it, but I believe they are using it as leverage to get as many other concessions as they can. I believe they are quite frightened of letting this thing go bonkers. It is not certain just exactly who would get this albatross hung around their neck if nothing gets passed. Crises have a funny way of pinning blame somewhat randomly, sometimes even on the cockalorums who actually deserve it; Paging Dr Frank, Dr Dodd and Dr Pelosi.

JM Hanes

Bravo, sbw. I assume that's your next editorial. Clear, no-nonsense and persuasive, including an actual course of action that readers can undertake themselves -- a key piece that's easy to forget.

Topsecretk9

I'd begin tomorrow with leaks that we are alsmot there but for the Tinsel and then explain why the tinsel is a slap in the face to taxpayers-
Posted by: clarice | September 27, 2008 at 09:32 PM

Suddenly democrats care about leaks!
Imagine if the GOP had demanded this:

Staffers for the principal negotiators of the Wall Street bailout bill were asked to turn over their BlackBerries Saturday afternoon so as to prevent leaks, as members of Congress and the Bush administration rolled up their sleeves to try to hammer out a compromise bill.

Bbs_2The BlackBerries, with Post-It notes identifying their owners, vibrated away in a small trash can, and later were spread out on a table for later retrieval, as their owners tried to help their bosses resolve the legislative logjam in one of House Speaker Nancy Pelosi's offices on the second floor of the U.S. Capitol building.

and are the usual dirtbag dems who caused this party crashed...comforting isn't it?

House Republicans, who had not been meaningfully involved in the process until Thursday, when they announced they would not vote for the compromise bill first proposed by Treasury Secretary Henry Paulson, sent a high-ranking member of their leadership, Minority Whip Roy Blunt, R-Mo., who arrived to the negotiations carrying a tall cup of coffee.

House Speaker Nancy Pelosi, D-Calif., projected confidence before the meeting, saying, "It would be my hope that this could be resolved today, that we had a day for the American people and members of Congress to review the legislation on the Internet, that we could bring something to the floor possibly Sunday night or Monday morning."

House Ways and Means chairman Charlie Rangel, D-N.Y., currently the subject of an Ethics Committee investigation into whether he skirted taxes, made a surprise showing, joining Blunt, House Financial Services Committee chairman Barney Frank, D-Mass., Senate Banking Committee chairman Chris Dodd, D-Conn., and the ranking Republican on the Senate Budget Committee, Judd Gregg, R-N.H.

Republicans, who had wanted a five-person meeting with Blunt, Frank, Gregg, Dodd and Paulson, also saw the table fill with other Democrats inserting themselves into the process, including House Caucus chair Rahm Emanuel, D-Ill., Sen. Chuck Schumer, D-N.Y., Sen. Kent Conrad, D-N.D., Sen. Max Baucus, D-Mont., and Sen. Jack Reed, D-R.I.

Whip Roy Blunt, R-Mo
Judd Gregg, R-N.H.


Chris Dodd, D-Conn
Barney Frank, D-Mass.

Charlie Rangel, D-N.Y
Rahm Emanuel, D-Ill.,
Sen. Chuck Schumer, D-N.Y.,
Sen. Kent Conrad, D-N.D.,
Sen. Max Baucus, D-Mont.,
Sen. Jack Reed, D-R.I.

LUN

JM Hanes

Each to his own, M. Simon. I don't see it as a one size fits all proposition, but then that's just me.

Topsecretk9
The more voters learn about the proposed $700-billion taxpayer-backed Wall Street rescue plan, the less they like it. Most voters remain largely unworried about their own money, too.

Just 24% of U.S. voters now favor the plan first proposed by Treasury Secretary Henry Paulson a week ago and the subject of very public negotiations on Capitol Hill ever since, according to a Rasmussen Reports national telephone survey taken Friday night. Fifty percent (50%) oppose it, and 25% are undecided.

Six–out-of-10 voters (60%) remain worried that the federal government will do too much to bailout the ailing financial markets. Only 28% think the government will not do enough. ...

LUN

Rick Ballard

Pofarmer,

The Feds aren't on the hook for CDS paper. At least I don't think they are. Lots of hedge hogs are though. Just like lots of hedge hogs were on the other side as CDS buyers.

Charlie (Colorado)

JC, find a way to get me an email address, and I'll mail you the whole article I wrote. It's queued up for Pajamas Media, so it's not for general publication yet.

Ann

sbw,

You have always been a gentlemen at JOM, now I think you might be a hero if you publish that.

Just be aware, the next step is we mud wrestle for you and the ladies here are fierce when you get on that list. :)

M. Simon

JMH,

Be a '76er. Then they can only kill you. They can't defeat you. Can they break me? Yeah. But I will get up and fight again.

ACORN, CRA, and no drilling is the keys to the coup. I'd give up on the CRA temporarily if we get rid of ACORN and the no drilling provisions. We can save that fight for after JMac gets elected. If Zero gets in it won't matter.

M. Simon

Does any one have a link to the bit where McCain said he would stand with the Republicans?

RichatUF

The Feds aren't on the hook for CDS paper. At least I don't think they are. Lots of hedge hogs are though. Just like lots of hedge hogs were on the other side as CDS buyers.

In which they all got a nasty surprise when WaMu was turned into an aperitif JPMorganChase.

Also, I wouldn't be really all that surprised if the money from the CDS premiums has been driving the commodities bubble for the last year. Once those guys have the chair pulled out from them, demand for commodites contracts are going to drop too. Which is why I think the purchase is going to be counter-inflationary-funds and banks are going to move out oil and metals and back into bonds and equities.

Oh look at this-smiling faces, a deal has been reached?

Gmax

In fact the sound banks already have an excess of liquidity.

Well no that not exactly true. The Fed put out over $200B through the discount window this week.

Treasuries notes are pricing at near zero, folks are willing to take Treasuries for no yield for the comfort of having a govt backed piece of paper.

Let Fortis go down and then the shock of Wachovia failing due to liquidity ( not insolvency ) and you may have lots of institutions that can not satisfy the demand for withdrawals.

That is what a classic panic is, and given that much of the public seems to be blissfully unaware, when they do figure it out, the panic will be even more intense. This is not a video game, where you can just hit restart and go back to where we started.

Are you any good at apple shining?

RichatUF

M Simon-

ACORN, CRA, and no drilling is the keys to the coup.

Ace has it flagged up: the Dem's got the No Drilling tucked in until 2011-they really do hate us and love exporting US jobs and US capital out of the country (ah, a clue). I really don't get it. If these are seperate pieces, Bush could sign the bailout and veto the continuing resolution.

Rick Ballard

Here's a nice poison pill from the NYT. Paulson should not have been involved in the AIG deal whatsoever.

That article is going to change the tenor of the battle and may kill the plan altogether.

jc


Charlie (Colorado)

I just registered at Explorations. Will that give you the email?

Verner

Oh my stars! M. Simon, Did I just read that Pelosi decided to attach NO DRILL!

Christ almighty. The woman is smoking crack.

M. Simon

GMax,

In fact I am excellent at apple shining. In my youth I lived for a week in an abandoned apple orchard under a canvas tarp.

In any case it will not take all of us to make a revolution. About 1/3 will do. Those in fear or who have things they are attached to can avoid doing what has to be done. A couple of million in Washington should be enough.

Any way I blame all those "principled" Republicans who sat out 2006. I'm not going to sit this one out either.

RichatUF

Rick-

Noticed that they included that Goldman would have been on the hook for 20 billion if AIG imploded-which would have sucked for them as a bear raid put them under without the announcement of a plan. Not good, don't know what to say.

Also this bit-seems we've been on the right track all along. Even the geography is right.

In the case of A.I.G., the virus exploded from a freewheeling little 377-person unit in London, and flourished in a climate of opulent pay, lax oversight and blind faith in financial risk models. It nearly decimated one of the world’s most admired companies, a seemingly sturdy insurer with a trillion-dollar balance sheet, 116,000 employees and operations in 130 countries.

“It is beyond shocking that this small operation could blow up the holding company,” said Robert Arvanitis, chief executive of Risk Finance Advisors in Westport, Conn. “They found a quick way to make a fast buck on derivatives based on A.I.G.’s solid credit rating and strong balance sheet. But it all got out of control.”

It's like these guys that are buying and selling the CDS contracts are all pumped up on meth. Good grief a 377 person operation a few thousand miles away blowing up a nearly 100 year old company with 160 thousand employees. Wonder when that little outfit got spun up-before or after Gov. Spitzer, one of David Axelrod's clients, got through with them?

Bet the Fed starts hiding the body Monday.

RichatUF

damn: ...as a bear raid could have put them under...

Gmax

In my youth I lived for a week in an abandoned apple orchard under a canvas tarp.

What it was not enough and you are looking for an return extended engagement?

Barbara

If true, I would guess that Pelosi wants to insert a No Drill provision to limit or weaken the value of Palin on the Republican ticket. There doesn't seem to be any other logical reason for it. I hope the Republicans fight back on this.

Pofarmer

The Feds aren't on the hook for CDS paper. At least I don't think they are. Lots of hedge hogs are though. Just like lots of hedge hogs were on the other side as CDS buyers.

I understand that. What they need to do is unwind the CDS's, gone, bye bye. Maybe a gentlemans agreement between the banks and hedgies. Here's your premiums back and we'll for get this ever happened kind of thing.

Folks, there is no panic on the local level. There may be some panic around the larger institutions, but, by and large, no panic, there need be no panic.

Pofarmer

I wouldn't look much for logic where Pelosi is concerned. Assume she is a leftwing elitest bitch and continue from there.

Charlie (Colorado)

It should; let me look quickly. Also, I just wrote a coupe of long comments on the top thread.

Charlie (Colorado)

Okay, on its way. Love the yahoo nick.

Charlie (Colorado)

Folks, there is no panic on the local level. There may be some panic around the larger institutions, but, by and large, no panic, there need be no panic.

Pofarmer, as I just wrote on the other thread, when you see the panic at the local level, that will mean it's too late.

You're saying "I don't need to open my parachute, I haven't hit the ground yet."

Charlie (Colorado)

Rich, that happens all the time in this business. Hell, I can think of two times --- Barclay's Bank and a French bank the name of which escapes me --- that were put into backruptcy or receivership or insolvency by a single trader.

The traders, to be sure, were violating the trading rules,

RichatUF

seems I should have read on:

Ten years ago, a “watershed” moment changed the profile of the derivatives that Mr. Cassano traded, according to a transcript of comments he made at an industry event last year. Derivatives specialists from J. P. Morgan, a leading bank that had many dealings with Mr. Cassano’s unit, came calling with a novel idea.

Morgan proposed the following: A.I.G. should try writing insurance on packages of debt known as “collateralized debt obligations.” C.D.O.’s. were pools of loans sliced into tranches and sold to investors based on the credit quality of the underlying securities.

Ooops. That turned out well.

At the 2007 conference he noted that his company worked with a “global swath” of top-notch entities that included “banks and investment banks, pension funds, endowments, foundations, insurance companies, hedge funds, money managers, high-net-worth individuals, municipalities and sovereigns and supranationals.”

Seems like the NYT has an all-star cast to choose from.

Because it was not an insurance company, A.I.G. Financial Products did not have to report to state insurance regulators. But for the last four years, the London-based unit’s operations, whose trades were routed through Banque A.I.G., a French institution, were reviewed routinely by an American regulator, the Office of Thrift Supervision.

Even more interesting. Why would they want to route everything through France and what could OTS been reviewing?

RichatUF

a French bank...SocGen's "rouge trader"

perc

Washington Post is saying that a deal has been reached.

Charlie (Colorado)

a French bank...SocGen's "rouge trader"

Did you mean "rogue" or is that a pun?

Pofarmer

You're saying "I don't need to open my parachute, I haven't hit the ground yet."

Nah, what I'm saying is that the airplane seems fine, them other fella's can jump if they want to though.

Gmax

Yes Charlie you are right. When the bank can make the large and somewhat problematic credits repay, they go and pull the excess lines and credit lines of quality customers as well and unilaterally reduce credit card authorizations to current balance. Good people who have never caused a problem all of a sudden have no credit available. Then when folks need to borrow since an A/R balance is slow paying, and cant make payroll without it, they do not have it and payroll does not get paid.

Spiral from there to the grocer and the cable company and the mortgage company and there you go. Total loss of confidence.

When I saw the Fed borrowings I blanched and spent all day Friday getting everything I could behind firm FDIC guarantees or money market mutuals made up of Treasuries. It may not happen, but if it does, I wont have the problem some will.

$100,000 of FDIC insurance is awful low, it does make you have to go all over town to spread funds.

Charlie (Colorado)

Washington Post is saying that a deal has been reached.

Yeah. barney Frank didn't look happy and Pelosi wasn't out front to take credit. That gves me hope.

Verner

Has anybody ever thought that Pelosi, Ried, Frank, Dodd and Obama might actually WANT us to have a depression?

I'm dead serious.

What better way for them to achieve their goal of eliminating "inequality" in America. They can rebuild the country from the ashes on our backs.

Think about who we're dealing with. Look into their histories, and their relationships with the radical left.

They want to utterly eliminate any opposition. They want to destroy their main enemies--the middle class.

So they wreck the market, and start anew, with the government owning everything--and a new president Obama!

And don't tell me they haven't thought of it.

Sara (Pal2Pal)

http://justoneminute.typepad.com/main/2008/09/interesting-but.html#comment-132518703

Sara (Pal2Pal)

A Deal reached.

Pofarmer

Gmax, what happens if this is mostly contained to the top tier banks?

Captain Hate

Has anybody ever thought that Pelosi, Ried, Frank, Dodd and Obama might actually WANT us to have a depression?

It's been a long time since I haven't felt that way.

RichatUF

test

jc

Charlie,

The nick is from a pretty damn vulgar Drew Carey joke from a bunch of years ago.

M. Simon

Verner,

I keep saying it is a coup. People laugh.

GMax,

In my youth I lived for a week in an abandoned apple orchard under a canvas tarp.

What it was not enough and you are looking for an return extended engagement?

What ever it takes. My bones creak. I get up slow. Moving around hurts some. Whatever it takes.

I don't fear pain. I don't fear death. I'm a free man. If you don't want to be in the front lines let an old man take your place. I'm ready. Who ever else is ready - follow me. I'm not going to let the country I love go down without a fight.

"If ye love wealth better than liberty, the tranquility of servitude than the animating contest of freedom—go from us in peace. We ask not your counsels or arms. Crouch down and lick the hands which feed you. May your chains sit lightly upon you, and may posterity forget that ye were our countrymen!" - Samuel Adams

"Tyranny, like hell, is not easily conquered; yet we have this consolation with us, that the harder the conflict, the more glorious the triumph. What we obtain too cheap, we esteem too lightly; 'tis dearness only that gives everything its value. Heaven knows how to put a proper price upon its goods; and it would be strange indeed, if so celestial an article as Freedom should not be highly rated." Tom Paine

Gmax

Pofarmer then both of us would be happy I would think.

WaMu was instructive. Remember I helped close a lot of S & ls in the 80s. I never saw one closed that did not cost the insurer.

WaMu was no cost, the insurer actually is net up today, so the bondholders will likely get pennies on the dollar for their investment.

It was all liquidity. And Bernanke was talking doomsday a week ago.

And the borrowing window outflow was huge. What kind of assets do you think the FED got back with those kinds of lendings?

Charlie (Colorado)

Nah, what I'm saying is that the airplane seems fine, them other fella's can jump if they want to though.

Honeylamb, you're on the same harness as the rest of us.

Pofarmer, I can lead you to knowledge, I can't make you think. I was a Wall Street quant, I have particularly specialized in the kind of math that underlies this, and I'm usually the person saying "calm down." I can try to explain it to you again, if you want, but you've really gotten down to the point of refusing to see, and denial is not just a geography quiz.

So the hell with it, I'm going to bed.

Gmax

K LO at the corner:

Some details to work out, but I'm told there is a deal in the works, minus ACORN.

Charlie (Colorado)

Gmax, what happens if this is mostly contained to the top tier banks?

Gee, Pofarmer, what happens if gravity only applies about 500 foot altitude?

It does indicate what the problem here is, though. Do you know where your community and regional banks keep their money? And get commercial credit? And clear their checks? And process their Visa and MasterCard?

Might it be ... wait for it .. the top-tier banks?

And now I'm really going to bed.

Sara (Pal2Pal)

I can't believe none of you have a comment on the deal. I linked to the article above. I figured after the number of pixels used to discuss the problem someone would have something to say.

narciso

How does a bank like WaMu or Bear Stearns before, be liquidated and operations remain the same; even with a cash infusion from JP
Morgan Chase. Eventually doesn't JPM come down with the same bug as those they have
absorbed.

The death of Kirk Stephenson, of Brandon & Bringley, puts a human face, on this so far
theoretical discussion; I got it from a Times of London link on Drudge. It was Barings, the firm of the Egyptian viceroy
Lord Cromer, that went under due to Nick Leeson's and other's malfeasance. Barclay's
scarfing up institutions like Big Macs.

clarice

Well, DSara I read an article in the WaPo but it treally gave no details sufficient to form an opinion.

The comments to this entry are closed.

Wilson/Plame