Rolling US Economy Into The Shitbin Thread

Ok, I'm becoming convinced that national action is wise. This NY Times article explains the credit problems pretty clearly.

And this (behind firewall) hits closer to home for me:

"Wachovia bank has frozen the accounts of nearly 1,000 colleges, leaving institutions unable to access billions of dollars they depend on for salaries, campus construction, and debt payments.

The freeze, which affects most institutions that invest their endowment income and other assets through Commonfund, has some colleges worried that they won’t be able to make payroll this period, said Verne O. Sedlacek, president and chief executive of Commonfund, which manages investments for nonprofit institutions. Many colleges use the organization's short-term investment fund for operating expenses, “almost as a checking account,” he said.

Unless the credit markets thaw, enabling a new trustee to sell more of the short-term securities in the fund, colleges won’t be able to access all their money until at least 2010...."

Anyone seen this video? I've gotten several copies emailed to me today.

Tom Vu called it over a decade ago.

Tom Vu calledhit it over a decade ago.

Ed and Kondratieff are way off base here - are you guys paying any attention to what's going on in terms of interbank and municipal credit?

No one (except for maybe a few out of work real estate agents) is looking to roll back to 2005, and 700bn wouldn't be nearly enough if they were. This move is intended to improve circulation before we rupture an artery. Nothing more (except for a bunch of new tax credits to help the House Republicans save face and get in line).

Derailing the corporate-sponsored Capitol train to 'fuck you':

The Illinois senator and his pretend-opponents in the other business party just had their colluding asses kicked by the most motley, disorganized crew imaginable: the American public, who bombarded their legislators with threats of retaliation in November if they bowed to Wall Street's extortionist demands.

Never has Republican-Democratic co-subservience to finance capital been on such naked display. But then, "We the People" have never before been witness to the terminal unraveling of late-stage global finance capital. When the New York Times features no less than three articles declaring the nation's investment bankers ready for burial, as did last Sunday's paper, it is time for the Democrats, especially, to find another paymaster.

http://www.counterpunch.org/ford10012008.html

http://www.charlierose.com/shows/2008/9/30/1/a-conversation-with-senator-judd-gregg

^worth watching. he's got Warren Buffett in prime time tonight.

http://www.charlierose.com/shows/2008/9/30/3/a-discussion-about-the-economy-with-mort-zuckerman-andrew-ross-sorkin

^actually, this is the more interesting part of the show

what if we took that first $250 billion and simply divided it up amongst taxpayers?

Vegas would love that plan.

what if we took that first $1m and gave it to me :)

lol at zoom-in on *damning* WIKIPEDIA ARTICLE

http://www.techcrunch.com/wp-content/uploads/2008/09/septembermadnessb.jpg

lololol

I love how the only two things anyone can seem to think to do with taxpayers' money is: bail out Wall Street, or write personal checks. Oh or go to war. And by love I mean hate.

Senate passes revised bailout 74-25. McCain and Obama both voted for it, so there ya go.

Yes. It would be nice if taxpayer money would be used for you know ... good stuff, that helps us. While it's easy to argue the free flow of credit is essential to the economy, it's not easy to argue why we have to subsidize the idiocihogiheoih oh man, there's just no point. We'll never win.

I mean man, Barney Fruitcake Frank and all those guys, they're in on the scam, too. It goes ... all the way to the top! You know it went all the way somewhere, but the top's a little surprising.

New Tax earmarks in Bailout bill
- Film and Television Productions (Sec. 502)
- 6 page package of earmarks for litigants in the 1989 Exxon Valdez incident, Alaska (Sec. 504)

And you thought the money was just going to Wall Street!

they tacked on 100bn of stuff according to BBC. They had em over a pork barrel alright.

I was under the impression that actually the bailout stuff got tacked on to an existing unrelated bill rather than vice versa. But I could be mistaken.

er actually nevermind I think the story I read wasn't pertaining to those earmarks

“The bailout legislation that the Senate is sending back to the House is a fraternal twin to the one I voted against on Monday — meet the new bill, same as the old bill,” said Representative Joe Barton, Republican of Texas.

http://www.nytimes.com/2008/10/02/business/02bailout.html?partner=rssnyt&emc=rss

Only a third of the Senate's members are up for re-election on November 4, compared with all representatives in the house, so there may be fewer qualms about voting for the measure, which is unpopular among voters.

http://www.theaustralian.news.com.au/story/0,25197,24432015-2703,00.html

Is there a Bob Barr thread? I don't see one...

Not specifically, I think.

NY Times story about all the power players going nutzoid on Sep. 17-18

Here's more about that emergency meeting a couple of weeks back:

Mr. Paulson and Mr. Bernanke trooped up to Capitol Hill for a somber session with Congressional leaders. “That meeting was one of the most astounding experiences I’ve had in my 34 years in politics,” Senator Schumer recalled.

As the members of Congress and their aides listened, the two laid out their plan. They would begin offering federal insurance to money market funds immediately, in order to stop the run on money funds.

In addition, the S.E.C. would institute a ban on short-selling of financial stocks. Although Treasury officials concede that the move was mostly symbolic — investors can still buy put options that have the same effect as shorting stocks — they did it mainly “to scare the hell out of everybody,” as one official put it.

After Mr. Bernanke made his remark about the possibility that there might not be an economy on Monday without this plan, you could hear a pin drop.

“I gulped,” Mr. Schumer said.

Congressional leaders were nearly unanimous in saying that it needed to be done for the good of the country. Representative John A. Boehner of Ohio — the Republican House leader who a week later would lead the revolt against the plan — said it was time to put politics aside and move quickly, according to several participants. (An aide to Mr. Boehner denied that he voiced support for the plan, only that he made a plea for cooperation.)

Hearing that Mr. Bernanke and Mr. Paulson wanted legislation passed in a matter of days, the Senate majority leader, Harry Reid, expressed astonishment. “This is the United States Senate,” he said. “We can’t do it in that time frame.” His Republican counterpart, Senator Mitch McConnell, replied, “This time we can.”

Well, kinda.

lol polls:

#
78% of Americans want a bailout but most want significant changes ...
Nearly eight out of 10 Americans 78% say Congress should approve an historic bailout of the nation's financial markets, but most want lawmakers to ...
www.usatoday.com/money/economy/2008-09-25-poll-results_N.htm - 49k - Cached - Similar pages

L.A. Times/Bloomberg poll: Only 31% favor bailout | L.A. Land ...
Sep 23, 2008 ... The rapidly changing landscape of the Los Angeles real estate market.
latimesblogs.latimes.com/laland/2008/09/la-timesbloombe.html - 105k - Cached - Similar pages

LewRockwell.com Blog: Just 7% Favor Fed Bailout for Financial Firms
Just 7% Favor Fed Bailout for Financial Firms. Posted by James Ostrowski at September 22, 2008 07:57 AM. Just 7% Favor Fed Bailout for Financial Firms ...
www.lewrockwell.com/blog/lewrw/archives/022992.html - 6k - Cached - Similar pages

enjoying krugman's schadenfreude over this: http://powerlineblog.com/archives/011291.php

more on raising the FDIC limit

http://www.nytimes.com/2008/10/01/business/01ideas.html?scp=1&sq=small%20banks&st=cse

Wachovia bank has frozen the accounts of nearly 1,000 colleges, leaving institutions unable to access billions of dollars they depend on for salaries, campus construction, and debt payments.

i am, how you say, close to someone whose paycheck is dependent on one of these places. it's no joke. things are getting worked out, but there were some freak-out moments earlier in the week. like, imagine someone comes up to you and says, "um...all your money? yeah, someone just stuck it in a safe with a big lock on it, and only they know the combination. oh, did you need to buy groceries next week? well, we'll see if we can work something out."

(and in above scenario, imagine "all your money" is tens of millions of dollars, and "groceries" is hundreds of people's paychecks.)

Ed and Kondratieff are way off base here - are you guys paying any attention to what's going on in terms of interbank and municipal credit?

And what I am saying is cut the banks out of this, use the $700bn as a line of credit to enterprises, states, counties, municipalities. Unblock the economy not the banking system. The banking system can follow later when we have time to put in proper regulation possibly including flogging for the CEO's of over leveraged firms. We can let the turmoil continue in the banking sector and concentrate on priming the rest of the economy. Hell, a lot of that money will start trickling back into banks, hows that for some trickle down economics.

Barney Fruitcake Frank

wow, funny

I know you guys all read Big Picture anyway, but Ritholz has posted the best systematic rebuttal of the wingnut theories blaming the credit crisis on CRA or the GSE's that I've yet seen:

Making the rounds amongst a certain subset of wingnuts on CNBC, at IBD and other selfconfoozled folks has been the meme that the entire housing and credit crisis traces to the the Community Reinvestment Act (CRA) of 1977. An alternative zombie myth is the credit crisis is due to Fannie Mae and Freddie Mac. A 1999 article from the New York Times about the GSE's role in subprime mortgages has been circulating as if its the rosetta stone of the credit crisis.

These memes have become a rallying cry -- cognitive dissonance writ large -- of those folks who have been pushing for greater and greater deregulation, and are now attempting to disown the results of their handiwork.

I feel compelled to set the record straight about this pseudo-intellectual detritus...

http://bigpicture.typepad.com/comments/2008/10/misunderstandin.html

silent run on Wachovia

San Francisco-based Wells, a major West Coast retail bank, was the front runner but decided to pass because officials were worried about a piece of Wachovia's commercial loan portfolio, one of the sources said.

So not pretending that Wells Fargo is faultless or going to escape this, but when I read decisions like this I have a little more confidence in them in general.

http://www.kottke.org/plus/misc/images/here-be-dragons.jpg

Arrr

two fox news anchors are absolutely destroying some GOP senator they're interviewing about the bailout

tag team match two on one

Which senator?

Genuis lessons.

"A major insurance company -- one with a name that everyone knows that's on the verge of going bankrupt. That's what this is all about," Reid said prior to the Senate's approval of the $700 billion bailout bill.

And then, predictably, to avoid, I guess, accusations of being a retard:

"Senator Reid is not personally aware of any particular company being on the verge of bankruptcy. He has no special knowledge about [a bankruptcy] nor has he talked to any insurance company officials," said Jim Manley, spokesman for Sen. Reid, in an email to CNNMoney.com."

"fruitcake" reminds me of
http://tbn0.google.com/images?q=tbn:n1RDGehUbfxY5M:http://bp3.blogger.com/_1SBqFueoJQo/R4QIeuWDrDI/AAAAAAAAAMo/G3LeOsanCPA/s320/Stanley%2BRoper.jpg
Does anybody srsly say "fruitcake" anymore?

joe six-pack

Presumably there is something similar (to the Bradford & Bingley nationalization) there for HBOS should it become impossible for Lloyds TSB to proceed with its rescue. And equally they must be alert to some of the difficulties faced in other parts of the financial system which it would be unhelpful to name publicly.

http://www.thisislondon.co.uk/standard-business/article-23562887-details/Piece+by+piece+is+best+for+now/article.do

http://biz.yahoo.com/ap/081003/wells_fargo_wachovia.html

Huh. Well, okay then!

http://online.wsj.com/article/SB122303190029501925.html

Great. The bank in charge of my mortgage just bought the bank with my checking and savings accounts.

haha me too!!!