Rolling US Economy Into The Shitbin Thread

On which day of the week?

I was referring to his criticisms of the Paulson plan. I think Paulson has become way too powerful. It's kind of the Cheney phenomenon all over again. You have an assertive, experienced cabinet member and a hands-off, low-information President - it's a bad combination. Cheney and Rumsfeld gave us the Iraq boondoggle and now Paulson is trying to get one of his own - at a similar price tag - before the curtain finally falls on the Bush tragicomedy

Personally I was pulling for the govt. to sell off AIG's various subsidiaries and retool its staff to administer.... the national health insurance system

But then I remembered the USA can't even introduce dollar coins successfully

What I'd like to hear from Congressional Democrats and Obama in the next few weeks is that this mess, along with the Iraq war and Katrina, is evidence that the choices voters make actually have consequences. That the debates over economic philosophy, the role of the government, and foreign affairs aren't just academic discussions. The Republicans are bad news for America not because of some tribal dislike or blood feud, but because their ideas demonstrably lead to disaster.

dollar coins do suk tho

dollar coins rule
they are especially ideal in a society where tipping happens

genuine out loud lolz

It looks like Paulson is set to pull the same trick with this bailout plan as he did with the Fannie-Freddie takeover. Just by floating the idea of that plan, he pretty much guaranteed it would have to happen. With Fannie-Freddie, he asked for the now notorious "bazooka" - the option to take over the struggling companies - with assurances that he probably wouldn't need to use it. But the mere possibility that the government would step in and take over those firms caused the private markets to freeze them out - no one wanted to inject capital in an institution that might imminently be taken over, thereby wiping them out. So his so-called option made its own implementation inevitable.

A similar effect could be happening now. By talking up the prospect of the government buying up these distressed mortgage assets, Paulson is effectively freezing the private market in these assets. There were private buyers for these assets and transactions were being done, at prices deemed fair by the market. But who would sell now, with the imminent prospect of government stepping in as an eager, cash-happy buyer? So the natural market process once again is being frozen by the icy hand of interventionist government, causing further destabilization and requiring more government intervention, and we only have Paulson to thank.

I say we let the banks fail and give everyone in the country a check for $2293.

― Adam Bruneau, Monday, September 22, 2008 12:32 PM (37 minutes ago) Bookmark

That's based on a 2008 census number. The number of actual taxpayers in 2007, according to the IRS, was less than half that. So make those checks out for $4500...

So people can pay for four months worth of health insurance.. awesome

In the early 20th century, New York City had a plan to build a superhighway through the heart of downtown, cutting right through the Cast-Iron District, now known as Soho. It kept getting postponed, but it always seemed on the verge of being resurrected. So property owners kept putting off their plans. So what happened in most of the rest of New York - that historic buildings got demolished to make way for new - didn't happen in Soho, because landlords didn't want to make gigantic investments just to see their property taken by imimenent domain. Perhaps one day the investment banking system will be like Soho: beautiful, old structures that house short-lived graphic design firms.

lol

over the weekend the general view of the bailout amongst journalists economists politicians and regular folks alike seems to have shifted from OMG WE MUST DO SOMETHING to HEY WAHT U TRYIN A DO

so i think theres a good shot at changing this thing - remains to be seen whether thatll be meaningful or cosmetic

From an anonymous Democratic member of Congress:

I also find myself drawn to provisions that would serve no useful purpose except to insult the industry, like requiring the CEOs, CFOs and the chair of the board of any entity that sells mortgage related securities to the Treasury Department to certify that they have completed an approved course in credit counseling. That is now required of consumers filing bankruptcy to make sure they feel properly humiliated for being head over heels in debt, although most lost control of their finances because of a serious illness in the family.

I can totally get behind petty shit like this.

Just by floating the idea of that plan, he pretty much guaranteed it would have to happen.

eh, I think he was getting a lot of panicked phone calls from people who know what the stakes are on our economy and our various creditors around the world.

Something was going to happen, there was and will have to be a government intervention or the economic shock wave will be global and massive. Nobody wants that kind of instability.

The only question is what the government will do, not will it do anything.

I think it might be a decent argument to make that a problem of this level probably isn't going to ever get momentum or get solved by committee. Somebody was going to have to take a bold first step. It's just a little, well, unfortunate that it's a Goldman guy salvaging Goldman.

Something was going to happen, there was and will have to be a government intervention or the economic shock wave will be global and massive. Nobody wants that kind of instability.

There has been tons of government intervention already, and there have been huge economic shock waves. There remains lots of instability. The question is, is the idea of giving Paulson a $700B+ check to use as he sees fit a good idea?

is it a good idea to give *anybody* that sort of rolling credit limit and say "use it as you see fit; we won't ask any questions"?

Exactly. No one person should be given that sort of authority.

http://i34.tinypic.com/2wodl6p.jpg

OMG WARE TO PUT $$$!!! OIL???

http://i33.tinypic.com/w7ea9l.jpg

Henry Paulson on Face The Nation yesterday:

"Is this going to fix the situation or is this a band-aid?"
"Well Bob... what we're doing now is not going to make the turbulence disappear overnight, this is going to take a while to work through this situation, but this is a very strong step... this is about doing what's right...."

Given Paulson's record, I propose we make arrangements to change our name to the United States of China.

Given Paulson's record, I propose we hang him.

I know I know threatening etc etc. I'm just APPALLED by the NERVE of these PEOPLE

Are you asking other foreign governments to help as well?
"We are urging others to do so. A number have expressed the willingness to do so. This is a global financial system."
Can you tell us which ones?
"Not at this time. But what we are doing, again, we're taking care of our situation. And I'm not saying anyone has committed to do this yet, but we have started that dialogue. And again, in terms of the United States of America, it is a distinction without a difference in terms of what's best for our citizens as to whether it happens to be owned by a foreign ownership or a U.S. ownership."

So actually you're going to bail out our shitty banks for us. Thanks, btw.

he's gotta bail out the foreign banks because he and his family are about to become persona non grata on these shores

hey our banks funded incredibly stupid investments in po duck clap board houses in las vegas too, give us your hard earned paper.

i am now sending u $5

FINALLY A RATIONAL VIEWPOINT

http://mediamatters.org/items/200809190021

wtf? seriously wtf?

what i cant believe is dems who dont refuse to answer the question on those terms. they should be like "wtf stfu u dum racist hick"

from 2006

NEW YORK — Record earnings on Wall Street are yielding windfall bonuses for its top executives.

Compensation experts predict a lucrative bonus season this year, as surging merger and underwriting activity, growing fixed income markets and a rebound in stock trading activity fuel unprecedented profit and pay.

This week traders, bankers and other executives at Goldman, Lehman and Morgan Stanley were told the size of their bonuses for the fiscal year ended Nov. 25. Bonuses make up the bulk of Wall Street compensation, and can be more than 10 times the base salary for top producers.

CEOs also saw big pay hikes amid strong growth in profit and share-price gains that outperformed the broader U.S stock market.

Goldman Sachs Group Inc. (GS), which posted its second straight year of record profit Thursday, paid Chief Executive Henry "Hank" Paulson about $38 million in salary, restricted stock and options. The third-largest investment bank by market value saw its shares rise 22 percent this year.
Related

According to a Securities and Exchange Commission filing, Goldman on Tuesday gave Paulson 224,777 restricted stock shares worth about $30 million when priced last month. Of these shares, 89,910 vested immediately and were withheld by the firm to cover Paulson's tax obligations while the remaining 134,867 shares vest in November 2008.

Paulson, who is 59, was also granted stock options on 220,392 shares valued by the firm at about $7.3 million, with 40 percent vesting immediately. Paulson, who received a salary of $600,000 and no cash bonus this year, now holds 3.89 million shares.

Overall, Paulson's compensation rose more than 21 percent from last year.

"The compensation considers the outstanding financial performance of the firm and Hank's leadership, the share price performance and the competitive environment," spokesman Lucas van Praag said.

Earlier this week Lehman Brothers Holdings Inc. (LEH) whose stock soared 48 percent this year, said it paid chairman and chief executive officer Richard Fuld $14.9 million of restricted stock and options on 350,000 shares. Lehman, which didn't disclose the other portions of Fuld's pay package, received $10.4 million in restricted stock last year.

Morgan Stanley the largest securities firm by market value, said it paid chairman and CEO John Mack a bonus of $11.5 million for five months on the job. Acting President Zoe Cruz, a key lieutenant to both Mack and former CEO Philip Purcell, got a stock bonus of almost $14 million.

Directors at Morgan Stanley had offered Mack a $28 million bonus, citing his leadership, but said Mack requested a pro rata share of the bonus. The remainder of the bonus would be returned to the bonus pool for other executives.

The banking, brokerage and credit card company also this week raised the stock portion of bonuses for management committee members to 65 percent of total pay from 55 percent.

Shares of Morgan Stanley have risen just 3 percent this year amid a tumultuous management shake-up that led to dozens of executive departures. The firm next Tuesday is expected to report 1 percent earnings growth, as credit card losses and soaring compensation costs offset a 23 percent rise in revenue.

Last Year's Big Five Wall Street Bonuses
September 22, 2008 7:12 AM

As the Bush Administration asks for close to a trillion dollars to prevent a worldwide financial cataclysm, here are some numbers you might find interesting -- courtesy of the ABC News Research Center and ABC News' Barbara Paulson.

In 2007, Wall Street's five biggest firms-- Bear Stearns, Goldman Sachs, Lehman Brothers, Merrill Lynch, and Morgan Stanley - paid a record $39 billion in bonuses to themselves.

That's $10 billion more than the $29 billion loan taxpayers are making to J.P. Morgan to save Bear Stearns.

Those 2007 bonuses were paid even though the shareholders in those firms last year collectively lost about $74 billion in stock declines --their worst year since 2002.

If split equally among the approximately 186,000 workers at the former Big Five Houses, that bonus money means an average of $201,500 per person -- more than four times the $48,201 median household income in the U.S. last year.
http://blogs.abcnews.com/politicalpunch/2008/09/last-years-big.html

http://yglesias.thinkprogress.org/wp-content/uploads/2008/09/paulsonpp_5_1.png

Goldman Sachs Group Inc. (GS), which posted its second straight year of record profit Thursday, paid Chief Executive Henry "Hank" Paulson about $38 million in salary, restricted stock and options.

where are the riots?

it's all the democrats' fault, though

http://www.bloomberg.com/apps/news?pid=newsarchive&sid=aSKSoiNbnQY0

says mccain economic advisor

Now that the collapse has occurred, the roadblock built by Senate Democrats in 2005 is unforgivable. Many who opposed the bill doubtlessly did so for honorable reasons. Fannie and Freddie provided mounds of materials defending their practices. Perhaps some found their propaganda convincing.

But we now know that many of the senators who protected Fannie and Freddie, including Barack Obama, Hillary Clinton and Christopher Dodd, have received mind-boggling levels of financial support from them over the years.

Throughout his political career, Obama has gotten more than $125,000 in campaign contributions from employees and political action committees of Fannie Mae and Freddie Mac, second only to Dodd, the Senate Banking Committee chairman, who received more than $165,000.

Clinton, the 12th-ranked recipient of Fannie and Freddie PAC and employee contributions, has received more than $75,000 from the two enterprises and their employees. The private profit found its way back to the senators who killed the fix.

There has been a lot of talk about who is to blame for this crisis. A look back at the story of 2005 makes the answer pretty clear.

Oh, and there is one little footnote to the story that's worth keeping in mind while Democrats point fingers between now and Nov. 4: Senator John McCain was one of the three cosponsors of S.190, the bill that would have averted this mess.

This is no time for politics of the playground

By Clive Crook

Published: September 21 2008 17:58 | Last updated: September 21 2008 17:58

Every four years, despite ample evidence to the contrary, the US celebrates the myth of presidential omnipotence – of the office, at least, if not its occupant. The country is looking for the one man or woman who can do the biggest job in the world, take the 3am phone calls and use those awesome powers to set to rights all that is wrong, from the war on terror to indiscipline in schools, from economic inequality to the state of the roads. It is a cherished illusion. In 2008, the worst financial crisis since the 1930s has shattered it before the new president is even in the job.

The technocrats are in charge – Hank Paulson at the Treasury and Ben Bernanke at the Federal Reserve – and even they are making it up as they go along. President George W. Bush appeared briefly last week, noting that the country was worried about the current financial difficulties and saying, as though this were important information, that he shared those concerns. Wisely, he did not affect to take command of the situation (you thought the collapse of Lehman was a blow to confidence).

Over the weekend, Congress became deeply involved, because the Fed-Treasury plan to take bad assets off the balance sheets of banks and non-bank financial institutions will require congressional action. Even as the issue thus became intensely political, the president was off to the side – and will stay there, even if wheeled in to chair some meetings. What is true of the president is more true of the presidential candidates.

The rescue of Bear Stearns in March should have woken the authorities up to the possible need for a more systematic approach to the subprime meltdown, and it should have persuaded Barack Obama and John McCain to get a grip on the elements of financial regulation so that they could express a view on that matter. But every one acted as though the crisis would blow over, at least until after the election. That is why the Fed and the Treasury are having to put together a complicated and expensive regime for the resolution of bad assets – in the space of hours and under extreme duress. It is why Mr Obama and Mr McCain are obliged to play politics rather than having anything helpful to say.

So much for the idea that Mr Obama’s experience resides in “being tested on the campaign trail”. A fat lot of use that was when the financial system approached meltdown last week. Mr McCain did no better, fronting his trademark decisiveness – decisively adopting one position then decisively reversing himself the day after. What about rallying round in a crisis? Before the situation worsened last week, both campaigns had already taken on a stridently negative tone. The financial emergency only reinforced this, giving no impetus whatever to the pragmatic, post-partisan consensus-seeking that both men once espoused and that the situation so urgently demands. They left that to Congress.

For Mr Obama, what has happened is not so much a result of specific regulatory failures (of which there have been plenty) but a wholesale failure of the enemy ideology. Here is his recommendation on how to move forward, almost in full: “You can fire the whole trickle-down, on-your-own, look-the-other-way crowd.”

Mr McCain, likewise playing to stereotype, sounded loud populist notes about greed on Wall Street and (again) the need for change in Washington. Both men continue to accuse the other of lies, distortions and gratuitous insults. This now constitutes the bulk of each campaign’s television advertising. Welcome to the new politics.

Given the timing, Mr Obama and Mr McCain were bound to seem irrelevant to the task of stabilising the financial system, even though important principles are at stake in that effort. But whichever of them wins in November, the fallout from this emergency will probably cloud the next administration’s first two years in office. It would be good to see some dawning of this reality in remaining weeks before the election.

First and foremost, there should be an acknowledgement that the outlook for fiscal policy is transformed. Contrary to reports, the planned arrangements for relief from bad assets will in most respects not resemble the Resolution Trust Corporation of the late 1980s and early 1990s. The RTC absorbed hundreds of distressed savings-and-loan companies wholesale. It did not have to pick and choose the assets it would acquire, and those assets were infinitely simpler than the tangled instruments today’s banks and non-banks will seek to shed. But the parallel is apt in one way. The history of the RTC tells you something about the likely cost, and the fiscal politics, of this venture.

The final cost to taxpayers will be enormous – hundreds of billions of dollars – and keeping this new entity funded will be a preoccupation of the next administration. The RTC is now regarded as a success in its way. Yet it was detested on Capitol Hill and keeping it funded was a constant struggle: actual outlays of cash were required and Congress has its own ideas about where public money should go. The tens of billions required to keep the RTC running are an order of magnitude smaller than the likely needs of its successor.

As though nothing has happened, the campaigns are fighting over who is proposing the bigger tax cuts and who will more generously support investment in energy efficiency, better schools, smarter hospitals, new bridges or whatever. Those promises were dubious to begin with and are now worthless. The next administration will spend most of its time finding taxes to increase and spending programmes to cut, or risk presiding over the bankruptcy of the government itself. Something to talk about, after the election.

Goldman Sachs Group Inc. (GS), which posted its second straight year of record profit Thursday, paid Chief Executive Henry "Hank" Paulson about $38 million in salary, restricted stock and options.

where are the riots?

They can be started here.

http://maps.google.com/maps?f=q&hl=en&q=30+Hudson+St,+Jersey+City,+New+Jersey+07302,+United+States&sll=37.0625,-95.677068&sspn=45.197878,77.255859&ie=UTF8&cd=1&geocode=FRg7bQIdcFGW-w&z=16&iwloc=addr

http://www.time.com/time/nation/article/0,8599,1843168,00.html?cnn=yes

I enjoyed this ^^^

This weekend my dad, triumphantly, adduced the piece of legislation that McCain advanced in 2005, as proof of McCain's prescience. Anyone know its name so I can read it my damn self?

http://www.govtrack.us/congress/bill.xpd?bill=s109-190&tab=speeches

http://thomas.loc.gov/home/multicongress/multicongress.html

http://thomas.loc.gov/cgi-bin/bdquery/z?d109:SN00190:@@@P

I thought the subprime problem was the mortagages that didn't go through Freddie/Fannie, though?

LOL:

http://markets.on.nytimes.com/cgi-bin/upload.dll/file.png?z0408210az7a0351dc6ca3481fb4801eb18d8692cf

In seriousness, I think oil is probably a dumb place to put money unless you plan to sell again in the short term. Even the mild, early stage recession we were in, combined with higher prices, took a big enough bite out of demand to deflate the last bubble pretty quickly, and demand is probably going to fall even more now.

I thought the subprime problem was the mortagages that didn't go through Freddie/Fannie, though?

1. No.

2. There IS NO subprime spoon. Subprime is a high-risk/high-profit lending category and served as the canary in the coalmine. That's all. People were borrowing with exotic instruments all up and down the credit scale. Some were sophisticated; some were naive; all of them expected real estate values to keep rising, and all of their investments became worthless when the music stopped.

From today's Evening Standard:

Our authorities did nothing; the Americans, led by Treasury Secretary Hank Paulson came up with an answer. Throughout the credit crunch, Paulson has played a blinder. ... That is leadership from the front... (In England) there's nobody with the character and aura to climb above all that and to take charge.

http://www.thisislondon.co.uk/standard-business/article-23558554-details/Hank+puts+us+to+shame+in+handling+the+crisis/article.do

Got two paragraphs into that. stopped here and killed self.

Of course, they were US organisations and it was only natural that their futures should be determined on their home patch. But that's not how it's been played in London in the past few years, where we've come to regard the London end as just as important, if not more so, than New York.