September 2008 Archives

Oh Well...

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So, the financial bailout has failed. Thank god that we had John McCain right there in Washington builing bi-partisan consensus! Lord knows what might have happened without him there!

What will the failure of the bill to pass mean? Good question. It could mean that credit will freeze up, the Dow will fall and financial companies will have to admit that many of their assets are, in fact, completely worthless and write them down. This would be accompanied by a HUGE market adjustment downwards.

I suppose it's also possible that congress might stay in session and try to come up with another compromise before they go off to campaign (on what exactly I am not sure).

At this point I am not sure that I care which it is. The former is going to have to happen eventualy to really resolve this problem. Everything else is just gaming to put it off a little longer, or to shift where the hot potato is when it goes off. Maybe financial disaster is the best solution to resolving this quickly and finally.

Holy Crap

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Even though I was expecting it, it's still a little stunning to see it happen.

Update - Just to be clear...WaMu failing and getting bought for a song by JP Morgan doesn't mean "OH NOES!!1! The sky is falling and we must give a trillion dollars to Wall Street or die on Monday!". WaMu was a strictly regulated bank that was, in accordance with regulations, seized and sold off, with no loss by the depositors and no cost the taxpayers. The shareholders lost everything, but, well, that is how it works - make a bad investment, lose your shirt.

The trillion dollars is all about almost completely unregulated investment banks. While there are connections between the two problems, the orderly failure of WaMu versus the Wall Street disaster simply underlines the importance of prudent regulation. If you have that then you don't need Helicopter Hank to swoop in and air drop money to the top 0.1%

Also, while I am talking financial crisis, you hear a lot these days about how whatever bailout is passed it should include something saving the homeowners that are affected by all this. While this seems like it might be a good thing to do, it's important to remember that some of these homeowners were as stupid as Wall Street. Take a look at these idiots, for example. It's hard to be sad that they are underwater when they took out $450K of equity loans on a $189K house in four years, with only 9k down.

Obviously if anything is done about homeowners it needs to be selective and only affect those that were actually screwed, as opposed to those that screwed themselves.

Not Funny. Sad. Relevant

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Note the casual willingness to lie about even a small matter, like "running to the airport". I know people like that. They also lie about big things.

"202" Scammer

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From: Minister of the Treasury Paulson

Subject: REQUEST FOR URGENT CONFIDENTIAL BUSINESS RELATIONSHIP

Dear American:

I need to ask you to support an urgent secret business relationship with a transfer of funds of great magnitude.

I am Ministry of the Treasury of the Republic of America. My country has had crisis that has caused the need for large transfer of funds of 800 billion dollars US. If you would assist me in this transfer, it would be most profitable to you.

I am working with Mr. Phil Gram, lobbyist for UBS, who will be my replacement as Ministry of the Treasury in January. As a Senator, you may know him as the leader of the American banking deregulation movement in the 1990s. This transactin is 100% safe.

This is a matter of great urgency. We need a blank check. We need the funds as quickly as possible. We cannot directly transfer these funds in the names of our close friends because we are constantly under surveillance. My family lawyer advised me that I should look for a reliable and trustworthy person who will act as a next of kin so the funds can be transferred.

Please reply with all of your bank account, IRA and college fund account numbers and those of your children and grandchildren to wallstreetbailout@treasury.gov so that we may transfer your commission for this transaction. After I receive that information, I will respond with detailed information about safeguards that will be used to protect the funds.

Yours Faithfully
Minister of Treasury Paulson

h/t to Wil Wheaton

Increasingly Awesome!

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So, everybody is happy today and the markets are up because the Government has a plan to save everything! This is excellent news! Do you understand the plan though? Because, really, it's totally awesome.

We are going to create an government organization to buy up all the bad debt (they keep calling it "Toxic" for some reason, I don't know how that is supposed to reassure us). This is basically the same plan that was used to totally solve the S&L crisis, and which totally prevented the Great Depression! All without any cost to the taxpayer, so you already know it's a good plan*.

Once the American tax payer has bought the $800 BILLION in bad debt from all the poor banks that made terrible loans, we are planning to hold on to it for, and I quote, "four to six months". After this time everything will have calmed down and no one in the banking industry will be afraid of these TOXIC loans and then, according to this plan, all the private banks that sold off the bad debt will happily by it back from the government for AT LEAST as much as they sold it for. Heck, we might even make a profit! Just like we did the last two times we did this**. I am sure that there is no chance that the private banks, once free of their toxic debts will decide not to buy back the known toxic debt held by the government and, instead, come up with ways to generate new toxic debt. It is inconceivable that the Amerian taxpayer might end up stuck with over a trillion dollars of of bad debt and insurance obligations in addition to the trillion in bailouts we have already paid out this year. Inconceivable does mean what I think it does, right?

Funny, huh...four to six months is just about the right amount of time for the people that came up with this TOTALLY AWESOME plan to get the hell out of dodge and dump this disaster on whoever is President next. Maybe this really is a totally awesome plan.

* Statement regarding cost to American Taxpayers may be a total lie.
** Statement regarding profit to American Taxpayers may be a total lie.

My Friends! Strong!

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Morgan Stanley has collapsed back to pre-1994 prices!

Goldman on the other hand is only down 10% so far.

Who could have predicted that allowing investment banks to leverage themselves to the point where they basically live paycheck to paycheck like the rest of us would be a terrible idea?

I wish that the economy would just go ahead and collapse so I don't have to sit around thinking about it anymore, but it's like a car crash - I just can't stop watching it.

Hooray!

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Go Free-Market Capitalism!!!!!! Careful, your invisible hand is showing!

God forbid we should regulate these idiots and save ourselves the huge expense of bailing them out (currently we are at about $1 trillion this year). Can you imagine where we would be right now with a well regulated financial market and no war? $2 trillion ahead!

The mind boggles.

What many conservitives ignore is that when we talk about regulating financial markets what we are really talking about is not limiting their ability to do real business, it's limiting their ability to perform acts of accounting fraud. The radical financial instruments of the past 10 years had nothing to do with actually creating value, and everything to do with hiding losses and pumping up the value of truly worthless holdings.

Are You Ready?

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Hopefully you have access to a supply of apples to sell on the street, and several pairs of boots that can be used to make delicious soup. The next few years are not going to be pretty, no matter who ends up as president. Excellent analysis of what is going on here.

My Friends, Let Me Repeat...

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"Our economy, I think still -- the fundamentals of our economy are strong." - John McCain, 9/15/08

It would be funny, if he weren't batshit insane. He also still thinks it's a good idea to privatize Social Security and put it in the hands of the Wizards of Wall Street! What a maverick!

Let's Be Very Clear...

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"The fundamentals of our economy are strong" - John McCain, 8/20/08

Today I Learned

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That Sarah Palin, while Governer of the State of Alaska, raised taxes on oil producers and used that money to increase the stipend that citizens of Alaska get just for being citizans of Alaska.

Sounds like big "S" Socialism to me, or at least it would if I were a conservative pundit, and Palin was a Democrat. No doubt these additional costs were passed on to consumers across the country, so technically I am paying a little bit more for gas to ensure that people live in Alaska. Since I am a raving left wing socialist, bent on the destruction of America, I am okay with this - living in Alaska probably sucks.

Heck, I wouldn't live in Alaska even now that I know they will pay me to.

Move Along

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It is important to remember when evaluating political candidates that their families and the actions of those families should not be considered, especially if the candidate is running on a platform of family values. This makes perfect sense, unless you think about it.

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This page is an archive of entries from September 2008 listed from newest to oldest.

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