Congratulations Taxpayers, you now own an insurance company

[Gnam]

bye bye WaMu. (http://www.bloomberg.com/apps/news?pid=20601087&sid=aWxliUXHsOoA&refer=home)

http://img220.imageshack.us/img220/7972/q2gb4.jpg



Forget it Dude, Let's go bowling.

http://img510.imageshack.us/img510/2816/imagetophj6.jpg



Here's the real question...How does this affect the motorsport sector of the economy?

[Ankf00]

honestly, i'm just going to rack up every last CC and CC offer I have, buy a *****oad of toys, rent a boat, and just ****ing head to costa rica.


screw you guys, i'm going home [/cartman]

[SurfaceUnits]

"More than any other time in history, mankind faces a crossroads. One path leads to despair and utter hopelessness. The other, to total extinction. Let us pray we have the wisdom to choose correctly." -- Woody Allen

[SurfaceUnits]

your politicos are adding pork to the Wall St. billionaire bailout bill but nothing of substance has changed

[Stu]

your politicos are adding pork to the Wall St. billionaire bailout bill but nothing of substance has changed

aren't they raising the income amount for the AMT?

thats one benefit right?

[dando]

aren't they raising the income amount for the AMT?

thats one benefit right?

A year late for me. :irked: :saywhat:

-Kevin

[dando]

http://www.politico.com/news/stories/1008/14161.html


With each permutation, the bill has steadily grown in size. Treasury’s initial plan was about three pages long. The House version, which failed, stretched to 110. The Senate substitute now runs over 450 pages. And tucked away in the tax provisions is a landmark health care provision demanding that insurance companies provide coverage for mental health treatment—such as hospitalization—on parity with physical illnesses

http://apnews.myway.com/article/20081001/D93HV16O0.html



As revised by the Senate, the package would extend several tax breaks popular with businesses. It would keep the alternative minimum tax from hitting 20 million middle-income Americans, and provide $8 billion in tax relief for those hit by natural disasters in the Midwest, Texas and Louisiana.

The bill would not point to offsetting spending cuts to pay for the AMT and disaster provisions, but it would have revenue offsets for part of the energy and extension measures. The failure to offset many of the tax cuts angered the House's band of "Blue Dog" Democrats.

The increase in the deposit insurance cap was a bid to reassure individuals and businesses with accounts in banks and similar institutions.

The Senate specializes in high-stakes legislating-by-enticement, and the long list of sweeteners it added was designed to attract votes from various constituencies.

Tax cuts new and old are favorites for most House Republicans, the main target of intense lobbying to gain support for the measure. Help for rural schools was aimed mainly at lawmakers in the West, while disaster aid was a top priority for lawmakers from across the Midwest and South.

Another addition, to extend the deductibility of state and local taxes for people in states without income taxes, helps Florida and Texas, among others.

And there were plenty of obscure tax breaks to go around, like one for certain wooden arrows used by children, and another benefiting litigants in the 1989 Exxon Valdez oil spill.

:irked: :saywhat: :shakehead

-Kevin

[cameraman]

And tucked away in the tax provisions is a landmark health care provision demanding that insurance companies provide coverage for mental health treatment—such as hospitalization—on parity with physical illnesses

Double-edged sword right there. It is a desperately needed thing. There are far too many untreated crazy people out there. Too bad it will also greatly jack up our premiums:irked:

[KLang]

sweeteners :yuck::irked:

[oddlycalm]

Right, because tax cuts and more spending are just the ticket when we are up to our eyes in debt. :irked:

oc

[SurfaceUnits]

if you expect these clowns to fix this mess you also expect TOney GOrge to fix open wheel racing

[extramundane]

There are far too many untreated crazy people out there.

I can think of 535 of them right off the top of my head. :irked:

[Ankf00]

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

[chop456]

^ Awesome. :D

In other news, we just passed $10,000,000,000,000.

http://www.brillig.com/debt_clock/

[Insomniac]

My goodness. Only these guys could make things worse. Everyone needs to get in a little bit of random crap to vote Yes.

[Insomniac]

^ Awesome. :D

In other news, we just passed $10,000,000,000,000.

http://www.brillig.com/debt_clock/

I tried to find one, but no luck finding a picture of the debt clock in times square. I wonder if it reset or stopped at $9,999,999,999,999.

[SurfaceUnits]

does the automobile industry get to take on the winner of September madness

[oddlycalm]

does the automobile industry get to take on the winner of September madness

Dude, nice crack but they fight in totally different classes. :laugh:

It took Detroit 40yrs of concerted effort to tank the domestic auto biz. They did well in overseas markets and are still technically solvent. Wall Street managed to create a global crisis that disappeared several $ trillion in just over 11yrs and put the financial future of many millions of people, if not billions, on the line. Insert appropriate sports analogy here. :gomer:

oc

[dando]

Buffet urges bailout:

http://money.cnn.com/2008/10/02/news/newsmakers/buffett.fortune/index.htm?cnn=yes


"If we don't get it solved next week," added Buffett, "I may go back to delivering papers."

:(

-Kevin

[oddlycalm]

Buffet urges bailout And put several $ billion into GE and Goldman Sachs for sweet preferred stock deals. :thumbup:

Buffet was on Charlie Rose last night and his comments were interesting as always.[/I]http://www.charlierose.com/shows/2008/10/1/1/an-exclusive-conversation-with-warren-buffett

oc

[Indy]

"If we don't get it solved next week," added Buffett, "I may go back to delivering papers."

And he thinks this will convince me to support the bailout?

[cameraman]

And he thinks this will convince me to support the bailout?
Do you have any idea what Buffett invests in? If he goes broke so do you and you will get there first.

[SurfaceUnits]

Do you have any idea what Buffett invests in? If he goes broke so do you and you will get there first.
Bufett apparently needs Indy's tax dollars to stay solvent. hmmm

[Napoleon]

Better yet the bailout bill contains a provision that gives a tax break just to racetrack owners like Tony George, ISC, and Wheeler.

[Insomniac]

Buffet urges bailout:

http://money.cnn.com/2008/10/02/news/newsmakers/buffett.fortune/index.htm?cnn=yes



:(

-Kevin

I don't get it. He gets great terms on his investment, but doesn't think the government should get the same terms? The only way the gov't makes the $700B back is selling off terrible assets which have an artificially high price right now and they exercise warrants on stock. Buffet gets preferred stock with better voting rights, warrants on stock and doesn't buy any bad assets.

[Insomniac]

I still can't decide on the best direction, but I do feel this new bill is worse than the one that was voted down. How is spending even more and bringing in even less anywhere close to a good solution? Given that, it'll probably pass at noon today.

[tllips]

I still can't decide on the best direction, but I do feel this new bill is worse than the one that was voted down. How is spending even more and bringing in even less anywhere close to a good solution? Given that, it'll probably pass at noon today.

If it contains the right Pork, it doesn't matter how much it is or how well it fixes the main problem. :rolleyes:

[dando]

I don't get it. He gets great terms on his investment, but doesn't think the government should get the same terms? The only way the gov't makes the $700B back is selling off terrible assets which have an artificially high price right now and they exercise warrants on stock. Buffet gets preferred stock with better voting rights, warrants on stock and doesn't buy any bad assets.

Me thinks Buffet's got more cred than the Fed these daze. :irked: :saywhat: :(

-Kevin

[dando]

I still can't decide on the best direction, but I do feel this new bill is worse than the one that was voted down. How is spending even more and bringing in even less anywhere close to a good solution? Given that, it'll probably pass at noon today.

Some of the crap pork I saw on the nightly news last night was despicable. Tax cred for run produced in Puerto Rico and St. Thomas? :saywhat: :mad: God damn leeches in Washington....any wonder how we got into this mess? :flame:

-Kevin

[KLang]

The pork had already passed, :irked:, they just added the bailout onto the existing bill to make it more palitable. :yuck:

[Insomniac]

If it contains the right Pork, it doesn't matter how much it is or how well it fixes the main problem. :rolleyes:

I enjoyed all the outrage yesterday. This is how it always works. No one passes a bill specifically for all these add-ons, it's tacked onto other stuff. I was surprised, but shouldn't have been, that they tacked them onto such a public piece of legislation.

[Insomniac]

Me thinks Buffet's got more cred than the Fed these daze. :irked: :saywhat: :(

-Kevin

He does, but why does he support what the Fed wants to do? With his own money, he's doing something much different. Shouldn't the government do the same? The goal is to get the credit markets going, right? Couldn't that $700B be used differently? Like loaning directly to the people who can't get a loan because Wall St. has a mess? Sure, it would take longer to set up, but it could be made available to all corporations instead of buying up bad assets. Then the financial companies can decide if they want to fix the mess they are in to begin loaning or not. So for example, Goldman-Sachs (who Buffet now has a sweet stake in) can decide to give up preferred stock for cash to loan to say GM, or GM can come and get it directly by giving up their own preferred stock. If GS wants to be the middle man again, they clean up their own mess.

What stinks to me about what Buffet is saying is it is essentially do as I say, not as I do.

[Insomniac]

Some of the crap pork I saw on the nightly news last night was despicable. Tax cred for run produced in Puerto Rico and St. Thomas? :saywhat: :mad: God damn leeches in Washington....any wonder how we got into this mess? :flame:

-Kevin

It's not even just the pork/earmarks, but all the other stuff they tack on not even related to the purpose of the bill that would never pass on their own merits. In civics class, we learned about this stuff, but it was painted more as a quid-pro-quo. I vote for your bill and you vote for mine. But the reality is, it gets tacked on to other stuff and you either vote that down until it gets removed or you're screwed. They are all shameless. Very few stand up, and even fewer have a constituency who get it and wouldn't fall for the campaign ploys that would make them pay for voting against.

[cameraman]

He does, but why does he support what the Fed wants to do? With his own money, he's doing something much different. Shouldn't the government do the same? The goal is to get the credit markets going, right? Couldn't that $700B be used differently? Like loaning directly to the people who can't get a loan because Wall St. has a mess? Sure, it would take longer to set up, but it could be made available to all corporations instead of buying up bad assets. Then the financial companies can decide if they want to fix the mess they are in to begin loaning or not. So for example, Goldman-Sachs (who Buffet now has a sweet stake in) can decide to give up preferred stock for cash to loan to say GM, or GM can come and get it directly by giving up their own preferred stock. If GS wants to be the middle man again, they clean up their own mess.

What stinks to me about what Buffet is saying is it is essentially do as I say, not as I do.

Dude Buffett is investing his money, it has nothing to do with fixing the credit crisis. Why on earth would he want to buy toxic derivatives with his own money?

You want the government to act as a bank writing loans to business??????

[dando]

Bill passed 263-171.

-Kevin

[oddlycalm]

He does, but why does he support what the Fed wants to do?
Because if the Feds buy the assets at the current market price while the market is depressed the assets will be worth considerably more later. He thinks the treasury can make a nice profit doing it. He admired the AIG deal quite a bit and thinks it will turn a very substantial profit.

oc

[cameraman]

Because if the Feds buy the assets at the current market price while the market is depressed the assets will be worth considerably more later. He thinks the treasury can make a nice profit doing it.
But not so much that he is putting any of his own money on that table.
Not that I don't fully agree with him...

[Insomniac]

Dude Buffett is investing his money, it has nothing to do with fixing the credit crisis. Why on earth would he want to buy toxic derivatives with his own money?

You want the government to act as a bank writing loans to business??????

I understand that. I'm just saying that people (congressmen) are looking to him for advice. And his advice is to buy bad assets, which I can see a purpose in, but then to get little in return, that's poor advice. I wanted the government to actually use its leverage to get a "sweetheart" deal for the taxpayers. We are saving them, we should be getting a lot more from them in exchange. Buffet got a lot for infusing them with cash only. We're infusing them with cash by buying something no one would buy and are getting less.

[Insomniac]

Because if the Feds buy the assets at the current market price while the market is depressed the assets will be worth considerably more later. He thinks the treasury can make a nice profit doing it. He admired the AIG deal quite a bit and thinks it will turn a very substantial profit.

oc

These assets have no buyers. You're telling me they're worth more than what the Fed is going to pay? The current market price is anything but the current market price. I agree the AIG deal was a great deal. 80% ownership. They won't be getting that with this $700B though.

[SurfaceUnits]

patiently waiting on the next raid on the treasury. Incompetence AMplified

Get your resume ready so you can be a part of Washington's newest bureaucracy,
1000's of warm bodies are needed to spend your tax dollars

[oddlycalm]

These assets have no buyers. You're telling me they're worth more than what the Fed is going to pay? The current market price is anything but the current market price.
I'm not telling you anything. I was posting what Warren Buffet said in the interview. It was his opinion that they would turn out to be worth quite a lot more than current market price.
Warren Buffet interview (]http://www.charlierose.com/shows/200...warren-buffett)

oc

[SurfaceUnits]

Why the bailout may not be enough
Cleaning up banks' balance sheets is a start, but the government may need to do more.

After much ado, the government appears ready to toss a lifeline to Wall Street. But with policymakers frantically battling to keep the economy out of a deep slump, it won't be the only one needed.

The House of Representatives is expected to approve a $700 billion rescue package Friday. The so-called Troubled Asset Relief Program would allow Treasury Secretary Henry Paulson to buy bad mortgage assets, in hopes of getting bank loans flowing through the economy again.

But using TARP to slim the bloated balance sheets of U.S. financial institutions may not be enough to restore the investor confidence that began ebbing last year - confidence that's necessary if banks are going to be able to raise the capital they need to stand behind their loans, and engage in the borrowing they need to keep their operations running on a daily basis.

The key is to vanquish the fear that has left banks hoarding cash - and potentially strangling growth by withholding the credit consumers and businesses need. That means recapitalizing troubled banks via purchases of preferred stock, and guaranteeing the senior debt of financial companies.

"Nationalization works because it creates confidence," said John Hempton, an investor and financial analyst based in Australia. Investors around the globe lost faith in American finance when it became clear that Wall Street had spent the boom years earlier this decade peddling bad debt, Hempton says.

BTW, the FDIC increase to 250K will cost you 5 trillion dollars because the FDIC only has 60 billion on hand

[Sean Malone]

Why the bailout may not be enough
Que Sera Sera :shakehead

[Insomniac]

BTW, the FDIC increase to 250K will cost you 5 trillion dollars because the FDIC only has 60 billion on hand

That is if every bank fails. Raising the FDIC insurance will make banks even more safe. People will feel safer leaving more cash in banks, which means more cash on hand. It would be nice if they raised rates, but that's not a good macroeconomic strategy.

[SurfaceUnits]

there's nothing in the bill that says what the banks have to do with their windfall profit; if the CEO deserves a big bonus for getting your tax dollars, oh well.

[cameraman]

What windfall profit? Anything the government buys will be sold at a loss just not as big a loss if the government wasn't buying.

[SurfaceUnits]

What windfall profit? the banks, dude. they get to turn in worthless paper in exchange for billions

[FTG]

It was his opinion that they would turn out to be worth quite a lot more than current market price.
Warren Buffet interview (]http://www.charlierose.com/shows/200...warren-buffett)

oc

the assumption, however, the taxpayer will pocket those profits is ludicrous. The government will end up owning millions of homes nobody wants. When people start wanting the homes again, the government will sell off little chunks of the most profitable homes to their buddies for a fraction of what they're worth. Capitalism for the rich in good times; socialism for the rich in bad times.

[SurfaceUnits]

Bailout type Cost to taxpayers (Source: Reuters)
Financial bailout package approved this week up to or more than $700 billion
Bear Stearns financing $29 billion
Fannie Mae and Freddie Mac nationalization $200 billion
AIG loan and nationalization $85 billion
Federal Housing Administration housing rescue bill $300 billion
Mortgage community grants $4 billion
JPMorgan Chase repayments $87 billion
Loans to banks via Fed's Term Auction Facility $200 billion+
Loans from Depression-era Exchange Stabilization Fund $50 billion
Purchases of mortgage securities by Fannie Mae and Freddie Mac $144 billion
POSSIBLE TOTAL $1.8 trillion+
NUMBER OF HOUSEHOLDS PER U.S. CENSUS 105,480,101
POSSIBLE COST PER HOUSEHOLD $17,064+

[SurfaceUnits]

IRS undercover operations: Privacy invasion?
The bailout bill also gives the Internal Revenue Service new authority to conduct undercover operations. It would immunize the IRS from a passel of federal laws, including permitting IRS agents to run businesses for an extended sting operation, to open their own personal bank accounts with U.S. tax dollars, and so on. (Think IRS agents posing as accountants or tax preparers and saying, "I'm not sure if that deduction is entirely legal, but it'll save you $1,000. Want to take it?") That section had expired as of January 1, 2008, and would now be renewed.

Starting with the so-called Anti-Drug Abuse Act in 1988, the IRS has possessed this authority temporarily, with occasional multiple-year lapses. A 1999 internal report said the IRS had 126 "trained undercover agents" working in field offices at the time. This is the first time that such undercover authority would be made permanent.

Sens. Max Baucus (D) and Chuck Grassley (R) have been pushing to make it permanent for a while, claiming (PDF) in April that: "Undercover operations are an integral part of IRS efforts to detect and prove noncompliance. The temporary status of this provision creates uncertainty, as the IRS plans its undercover efforts from year to year."

There's another section of the bailout bill worth noting. It lets the IRS give information from individual tax returns to any federal law enforcement agency investigating suspected "terrorist" activity, which can, in turn, share it with local and state police. Intelligence agencies such as the CIA and the National Security Agency can also receive that information.

The information that can be shared includes "a taxpayer's identity, the nature, source, or amount of his income, payments, receipts, deductions, exemptions, credits, assets, liabilities, net worth, tax liability, tax withheld, deficiencies, overassessments, or tax payments, whether the taxpayer's return was, is being, or will be examined or subject to other investigation or processing, or any other data received by, recorded by, prepared by, furnished to, or collected by the Secretary with respect to a return."

That provision had already existed in federal law and automatically expired on January 1, 2008.

What's a little odd is that there's been little to no discussion of the IRS sections of the bailout bill, even though they raise privacy concerns. Treasury Secretary Henry Paulson said this week: "I will continue to work with congressional leaders to find a way forward to pass a comprehensive plan to stabilize our financial system and protect the American people by limiting the prospects of further deterioration in our economy." He never mentioned the necessity of additional IRS undercover operations.

[Insomniac]

the banks, dude. they get to turn in worthless paper in exchange for billions

I'm not sure how you define profits, but I doubt they paid less than what they'll be selling that for. You are right that they don't have to use that capital to invest, and could pay executives and other employees bonuses using loopholes, but that was a risk the whole time. Shareholders may not be so forgiving this time. They didn't mind when the stock price was soaring. Different story now.

[SurfaceUnits]

the law authorizes the Treasury Department to create a so-called Troubled Assets Relief Program, or TARP, as well as a separate insurance fund.

The TARP program permits the Treasury to purchase mortgage-backed bonds or any other "troubled assets" from financial institutions. The idea is that because banks have become so hesitant to lend to each other, this law will help unstick the gears of the modern financial economy.

Some loopholes exist. It's possible for a bank to buy $100 billion of bad debt--perhaps in the form of subprime mortgages that are becoming quickly worthless-- declare bankruptcy, and sell it to the Treasury Department for $120 billion, or $200 billion. In other words, although the Treasury Department is supposed to look out for the best interests of taxpayers, there's no law forbidding such profits in the case of firms involved in bankruptcy, receivership, or mergers.

The Treasury Department is authorized to "guarantee" home mortgages, essentially becoming a kind of co-signer, to reduce the number of foreclosures. If the home owner stops paying his or her mortgage, taxpayers would be on the hook. The Treasury Department can also eliminate a "reasonable" amount of a home owner's mortgage debt, under section 109 of the new law, which would likely delay the process of house prices falling.

[SurfaceUnits]

In response to grassroots pressure from Americans upset about Wall Street executives cashing in, Section 111 is titled "Executive Compensation and Corporate Governance."

It does not include, however, any statutory dollar limit on how high executive salaries of TARP bailout recipients can be. Instead, it lets Treasury Secretary Henry Paulson, the former CEO of Goldman Sachs, come up with "appropriate standards." In addition, only the top five executives will have their golden parachutes limited; all the rest will remain untouched, even if their second-tier salaries and bonuses happen to be in the millions or tens of millions of dollars.

Bear Stearns CEO James Cayne made $61.3 million from selling his shares a day after the JP Morgan bailout. Daniel Mudd, CEO of Fannie Mae, was replaced last month; he made $11.6 million in 2007. Richard Syron was chairman and CEO of Freddie Mac from 2003 until last month. He made $19.8 million last year. Martin Sullivan was ousted as president and CEO of AIG this summer, and was paid a $47 million severance package.

While salaries of failed executives will have no statutory limit, TARP-participating companies will lose a tax deduction if they pay their top executives more than $500,000 a year. The $500,000 limit only kicks in if the company offloads over $300 million in assets through TARP.

[SurfaceUnits]

Section 115 of the law says that the administration can, after notifying Congress and waiting 15 days, purchase and hold $700 billion of assets "at any one time." (It can buy and hold $350 billion without waiting.)

This, too, is a potential loophole. It permits the Treasury Department to buy up, say, $700 billion in 2008, sell those assets off gradually over the next year at a (probable) loss, and repeat the same process in 2009. Losses to taxpayers, in other words, could exceed $700 billion. Although the Treasury Department is instructed to try to avoid losses, the text of the law does not forbid that scenario.

If the TARP ends up costing taxpayers money, the president may ask Congress to consider enacting a law to recoup "from the financial industry an amount equal to the shortfall," presumably through higher taxes. But Congress is under no obligation to do anything; a mechanism to cover the shortfall does not exist in this law.

Even though FDIC coverage will be boosted from $100,000 to $250,000 per account through December 2009, premiums to banks may not take "into account" the higher account coverage. In other words, premiums can't increase for that reason.

[SurfaceUnits]

• This may be just the beginning of bailouts. California Gov. Arnold Schwarzenegger said Thursday that the state may need a $7 billion loan from the U.S. Treasury, according to a report in the Los Angeles Times. That's because the state has spent more than it takes in through tax revenue, with an annual budget deficit of $14 billion or more, even though its individual income tax rate is arguably the highest in the nation.


• Rep. Ron Paul of Texas, who correctly predicted in 2003 that taxpayers would be "forced to bail out investors," said in a speech on the House floor that the legislation would "only further harm the economy" and was actually worse than the previous version. In a CNN interview, the former Republican presidential candidate said his colleagues are refusing to deal with the underlying problems and spending more tax dollars even though "this country's bankrupt."

[Insomniac]

They'll be letting firms manage the assets, so that's probably $3.5B in fees this year.

On the flip side on how quickly they can sell the assets, it could protect taxpayers from even worse losses. I don't think it would've been prudent to shackle them once they purchase the assets. It's far more important to have people involved chiefly concerned with the investor's investment instead of how it can benefit others.

[Ratattack]

I don't post too much around here lately, but this might sum everything up in plain old english..

Speaking in the Tongues of Brokers

By JOE BAGEANT

Any number of cultural historians have noted the American belief that success is a sign of God’s favor. And over the past couple of decades he has had a downright love fest with the already-rich. So much so that the richest 400 Americans now have more money stashed away that the combined bottom 150 million Americans. Some $1.6 trillion bucks.

This was accomplished by selling off or shipping out ever available asset, from jobs to seaports, smashing usury and anti-monopoly laws, raiding the public coffers and manipulating the medium of exchange and blackmailing the peasantry regarding common needs such as heath care and energy to keep their asses warm … to name a few. The ultimate coup was to convince the entire nation that the well being of the rich, meaning the well being of Wall Street, was indeed the common man’s well being.

All went well for a while. People went into credit card hock up to their noses in order to provide 26% credit card interest to Wall Street, etc. And when that became untenable, flimsy mortgages were cranked out by the millions ensuring that every American who could hold a cray on could sign to purchase a home. To facilitate this all sorts of shaky ‘mortgage instruments’ were created – balloon, (sign here Jeeter, you’re gonna flip it in a year and make a hundred K on this house trailer) interest only, and finally negative balance mortgages where you only paid part of the interest and the rest was rolled back into the principal balance. And joy of joys you could refinance a couple of times while the inflated value of these houses was on the way up. Life was good for everybody. The bill was never gonna come due because, god in his wisdom, had deemed that capitalism would defy the second law of thermodynamics and expand forever. So every time a bank made a mortgage loan of say, $400,000, even though the debtor had never even made a payment yet, the loan was declared a bank asset and another $400,000 was loaned against it. Meanwhile, the Federal Reserve Bank yelled whoopee and printed another $800,000 in currency. Of course at some point the country had to run out of customers, so the loans got easier and easier. No matter that debt is not wealth. Wink and call it that and most folks won’t even look up from their new big screen high resolution digital TVs.

Problem was that all the jobs to pay for this stuff were stampeding off toward places in China with names containing a lot Xs, Zs and praying for a vowel. It was becoming clear that the entire economy was running on fumes. In fact less than fumes. It was running on the odor of paper. Mountains of the stuff. Bundles of mortgages and very strange securities and derivatives of unknown origin and value. Paper that stated its own worth and signed by some mystic hand no one could quite identify though the blurry signatures looked to read Greenspan, Paulson and Bernake.

But there was a rub. Things reached the point where there simply was not anything left to defraud the public out of, nothing left to steal from the nation’s productive capability, no matter how much paper Jeeter and Maggie signed for that trailer house, no matter how secure Brian and Jennifer out there in Arlington Virginia and Davis California thought they were. So the only thing left to do was steal from future generations of Americans and accept an I.O.U. which the government would happily sign on behalf of the people and enforce. By the wildest coincidence, under the Bush administration this I.O.U. happened to tally up to about $700 billion.

Seeing the oncoming train of financial disaster, the financiers just about wet their pants, and screamed “We want it all now! And if we don’t get it the “economy” will lock its brakes and crash. Remember, we control the medium of exchange. Nobody gets a paycheck if we don’t. Remember that it’s lines of credit from us that backs every working man’s and woman’s paycheck in the country. So pay the hell up”

Folks, they’ve got us all by the nuts and nipples. McCain knows that. Obama knows that. In the end, regardless of the so-called dissenters in the House and the Senate, we will pay up. It s election season and the dissent is for show. So it looks like we will get some “concession.” For example, we will get shares in these “toxic assets” that are stinking up the joint. The rich need to dump them and dump them fast. In another magnanimous concession, the Federal Deposit Insurance Corporation will ra ise the insurance on “our savings” to $250,000 (how many readers have 250 K in the bank?). But it will be redeemable in even more inflated currency amid an inflationary environment. And, in case you didn’t know, the FDIC has up to ten years to pay up on that insurance. So don’t get any ideas about running off to Mexico, to which by the way, we are a net debtor nation.

We will pay. We will pay because the European banks holding all that bad paper we wrote demand that we make good on it so even more of their banks will not fail. We will pay because the Chinese, the japs and everyone else will cut off the loan tap with which we pay the interest (not the principal) on our exploding super nova of national debt. We will pay because God loves the rich. We will pay because we will not be offered any other choice. We will pay because George Bush worked hard for all those Ds in school and became20the first MBA president. We will pay because our media has internalized the capitalist system so thoroughly they can only talk in Wall Speak. We will pay because the only language we have to describe our world is that of our oppressors because we have been taught to think in Wall Speak. We will pay because we hitched our wagon to last stage capitalism and even though the wagon has now two wheels over the cliff and roars forward, we don’t know where the brake handle is located. And because we don’t know any better or understand any possible resistance to the system because we have been kept like worms in a jar and fed horse ****.

And as we all know, worms do not rise up in revolt.

That takes a backbone. :irked:

[SurfaceUnits]

They'll be letting firms manage the assets, so that's probably $3.5B in fees this year.

On the flip side on how quickly they can sell the assets, it could protect taxpayers from even worse losses. I don't think it would've been prudent to shackle them once they purchase the assets. It's far more important to have people involved chiefly concerned with the investor's investment instead of how it can benefit others.

More Monopoly Money ...
by Larry Edelson 10-02-08
Answer: There will not be any profits. Period.


What's the $700 billion really going to cost us?

No one knows for sure. But I'm going to take some guesses here.

First, if you buy the line that the Treasury is aiming to make money on the bailout, on behalf of the taxpayers — you and me — think again.

Since real estate prices were the trigger behind the losses, it's safe to assume that if the Treasury is going to make us any money on this deal then the assets underlying all the losses to begin with will need to somehow rise in value for us to make a profit.

That means property prices are going to have to regain all they've lost, and then some, for there to be a profit on that $700-billion investment.

I repeat: Property prices are going to have to regain all the value they've lost, and then some, for the Treasury to show us a profit on this $700-billion investment.

That's simply not going to happen. Not in my lifetime. Property prices might bottom out and start moving back up. But property values are not going to exceed their previous peak in my lifetime or likely yours.

Oh, and keep in mind, it's not really $700 billion. You have to add in the $592 billion the Fed and the Treasury already pumped into the economy prior to this bailout package. So the total so far is $1.29 trillion.

Second, there's the interest expense on all the IOUs that will have to be issued.

Let's take the total so far, the $1.29 trillion. Apply a conservative 5% interest rate the government is going to have to pay to borrow the money.

That's another $64 billion per year in interest expense costs. Compounded over 5 years, that's over $350 billion. 10 years, $807 billion.

Where's that money going to come from?

And if we're to profit from the bailout, that just means real estate prices not only have to get back to their previous peak, they have to exceed that peak by the amount of the interest expense that has to be paid to show a profit.

More proof we're not going to profit.

Third, raising taxes isn't going to help, either. There's no way the economy can handle higher tax burdens right now. And even if it could ...

Recouping part of the $1.29 trillion (ignoring the interest expense cost) through taxes is not a profit for the taxpayer. It's a burden. A cost.

So I ask you again, where's the profit potential for the U.S. taxpayer?

Answer: There will not be any profits. Period.

So the real cost of this bailout will be at least $1.29 trillion. And if real estate prices don't stabilize soon, the cost could easily mushroom to $1.5 trillion. Or $2 trillion. Perhaps even more. Not counting the interest expense!

And again, how's it going to be paid for?


The one and only answer: By a substantial devaluation of the U.S. dollar. By inflating it away. By eventually raising asset prices fictitiously through inflation, through more smoke and mirrors, via an eventual massive dollar devaluation.

In fact, there's precedent for it: The Great Depression only ended after Roosevelt devalued the U.S. dollar in January 1934 by raising its exchange rate with gold from $20.67 to $35.00. That was a de facto 69% devaluation of the dollar.

The same thing is going to have to happen this time around. Only you won't see any President, or anyone in Congress or the Fed actually coming out and saying the dollar needs to be devalued.

They won't have to. The markets will do it themselves. Notwithstanding an occasional knee-jerk rally in the buck, the dollar is toast. No ifs, ands, or buts about it.

[Indy]

Notwithstanding an occasional knee-jerk rally in the buck, the dollar is toast. No ifs, ands, or buts about it.

No doubt about it. I have heard no one on television say this. We will all pay for this through our taxes, all right, but the greatest taxation by far will be through inflation. Deliberate inflation is wealth confiscation.

To prosper now you will have to understand and act on this:

fixed income = very bad,

fixed interest debt = very good.

Add to this the realization that by "saving" dollars you may as well be burning your wealth. You have to invest in real assets which will provide a hedge against inflation.

[Sean Malone]

I don't post too much around here lately, but this might sum everything up in plain old english..

Speaking in the Tongues of Brokers

By JOE BAGEANT

Any number of cultural historians have noted the American belief that success is a sign of God’s favor. And over the past couple of decades he has had a downright love fest with the already-rich. So much so that the richest 400 Americans now have more money stashed away that the combined bottom 150 million Americans. Some $1.6 trillion bucks.

This was accomplished by selling off or shipping out ever available asset, from jobs to seaports, smashing usury and anti-monopoly laws, raiding the public coffers and manipulating the medium of exchange and blackmailing the peasantry regarding common needs such as heath care and energy to keep their asses warm … to name a few. The ultimate coup was to convince the entire nation that the well being of the rich, meaning the well being of Wall Street, was indeed the common man’s well being.

All went well for a while. People went into credit card hock up to their noses in order to provide 26% credit card interest to Wall Street, etc. And when that became untenable, flimsy mortgages were cranked out by the millions ensuring that every American who could hold a cray on could sign to purchase a home. To facilitate this all sorts of shaky ‘mortgage instruments’ were created – balloon, (sign here Jeeter, you’re gonna flip it in a year and make a hundred K on this house trailer) interest only, and finally negative balance mortgages where you only paid part of the interest and the rest was rolled back into the principal balance. And joy of joys you could refinance a couple of times while the inflated value of these houses was on the way up. Life was good for everybody. The bill was never gonna come due because, god in his wisdom, had deemed that capitalism would defy the second law of thermodynamics and expand forever. So every time a bank made a mortgage loan of say, $400,000, even though the debtor had never even made a payment yet, the loan was declared a bank asset and another $400,000 was loaned against it. Meanwhile, the Federal Reserve Bank yelled whoopee and printed another $800,000 in currency. Of course at some point the country had to run out of customers, so the loans got easier and easier. No matter that debt is not wealth. Wink and call it that and most folks won’t even look up from their new big screen high resolution digital TVs.

Problem was that all the jobs to pay for this stuff were stampeding off toward places in China with names containing a lot Xs, Zs and praying for a vowel. It was becoming clear that the entire economy was running on fumes. In fact less than fumes. It was running on the odor of paper. Mountains of the stuff. Bundles of mortgages and very strange securities and derivatives of unknown origin and value. Paper that stated its own worth and signed by some mystic hand no one could quite identify though the blurry signatures looked to read Greenspan, Paulson and Bernake.

But there was a rub. Things reached the point where there simply was not anything left to defraud the public out of, nothing left to steal from the nation’s productive capability, no matter how much paper Jeeter and Maggie signed for that trailer house, no matter how secure Brian and Jennifer out there in Arlington Virginia and Davis California thought they were. So the only thing left to do was steal from future generations of Americans and accept an I.O.U. which the government would happily sign on behalf of the people and enforce. By the wildest coincidence, under the Bush administration this I.O.U. happened to tally up to about $700 billion.

Seeing the oncoming train of financial disaster, the financiers just about wet their pants, and screamed “We want it all now! And if we don’t get it the “economy” will lock its brakes and crash. Remember, we control the medium of exchange. Nobody gets a paycheck if we don’t. Remember that it’s lines of credit from us that backs every working man’s and woman’s paycheck in the country. So pay the hell up”

Folks, they’ve got us all by the nuts and nipples. McCain knows that. Obama knows that. In the end, regardless of the so-called dissenters in the House and the Senate, we will pay up. It s election season and the dissent is for show. So it looks like we will get some “concession.” For example, we will get shares in these “toxic assets” that are stinking up the joint. The rich need to dump them and dump them fast. In another magnanimous concession, the Federal Deposit Insurance Corporation will ra ise the insurance on “our savings” to $250,000 (how many readers have 250 K in the bank?). But it will be redeemable in even more inflated currency amid an inflationary environment. And, in case you didn’t know, the FDIC has up to ten years to pay up on that insurance. So don’t get any ideas about running off to Mexico, to which by the way, we are a net debtor nation.

We will pay. We will pay because the European banks holding all that bad paper we wrote demand that we make good on it so even more of their banks will not fail. We will pay because the Chinese, the japs and everyone else will cut off the loan tap with which we pay the interest (not the principal) on our exploding super nova of national debt. We will pay because God loves the rich. We will pay because we will not be offered any other choice. We will pay because George Bush worked hard for all those Ds in school and became20the first MBA president. We will pay because our media has internalized the capitalist system so thoroughly they can only talk in Wall Speak. We will pay because the only language we have to describe our world is that of our oppressors because we have been taught to think in Wall Speak. We will pay because we hitched our wagon to last stage capitalism and even though the wagon has now two wheels over the cliff and roars forward, we don’t know where the brake handle is located. And because we don’t know any better or understand any possible resistance to the system because we have been kept like worms in a jar and fed horse ****.

And as we all know, worms do not rise up in revolt.

That takes a backbone. :irked:
:yuck:

[SurfaceUnits]

BREAKING NEWS
Federal Reserve doubles to $300B the amount it will loan to financial institutions in need of short-term capital. More soon.


Cramer advises to pull out of market all money you will need for the next five years

[nrc]

Cramer advises to pull out of market all money you will need for the next five years

Anyone who doesn't already have money that they're going to need in five years out of the market is probably going to have to change their plans.

[Insomniac]

SU: I know you didn't write this, so please don't think I'm responding to you personally.


More Monopoly Money ...
by Larry Edelson 10-02-08
Answer: There will not be any profits. Period.


What's the $700 billion really going to cost us?

No one knows for sure.

This guy definitely doesn't.


But I'm going to take some guesses here.

A lot of guesses.


First, if you buy the line that the Treasury is aiming to make money on the bailout, on behalf of the taxpayers — you and me — think again.

Since real estate prices were the trigger behind the losses, it's safe to assume that if the Treasury is going to make us any money on this deal then the assets underlying all the losses to begin with will need to somehow rise in value for us to make a profit.

That means property prices are going to have to regain all they've lost, and then some, for there to be a profit on that $700-billion investment.

I repeat: Property prices are going to have to regain all the value they've lost, and then some, for the Treasury to show us a profit on this $700-billion investment.

That's simply not going to happen. Not in my lifetime. Property prices might bottom out and start moving back up. But property values are not going to exceed their previous peak in my lifetime or likely yours.

This assumes they are buying all mortgages at 1. face value and 2. that they will all be defaulted on leaving the government with assets worth far less than face value. I'm sure the packages they are buying will have a higher % of likely to default loans, but they aren't all 100%, and these assets will not be sold at face value. If they were still worth that, we wouldn't have a need to buy them.


Oh, and keep in mind, it's not really $700 billion. You have to add in the $592 billion the Fed and the Treasury already pumped into the economy prior to this bailout package. So the total so far is $1.29 trillion.

Second, there's the interest expense on all the IOUs that will have to be issued.

Let's take the total so far, the $1.29 trillion. Apply a conservative 5% interest rate the government is going to have to pay to borrow the money.

That's another $64 billion per year in interest expense costs. Compounded over 5 years, that's over $350 billion. 10 years, $807 billion.

Where's that money going to come from?

He's adding apples to oranges. The Fed wasn't handing out interest free loans. Very favorable? Yes. Interest free. No.


And if we're to profit from the bailout, that just means real estate prices not only have to get back to their previous peak, they have to exceed that peak by the amount of the interest expense that has to be paid to show a profit.

More proof we're not going to profit.

This isn't true. The assets can be sold off well before prices return to those levels. People need to believe they will be buying good assets.


Third, raising taxes isn't going to help, either. There's no way the economy can handle higher tax burdens right now. And even if it could ...

Recouping part of the $1.29 trillion (ignoring the interest expense cost) through taxes is not a profit for the taxpayer. It's a burden. A cost.

Who would even suggest that loaning money, and taxing the lender would result in a net profit (besides this guy). Money going out plus money going out != profit. Thanks for telling me that won't work!


So I ask you again, where's the profit potential for the U.S. taxpayer?

Answer: There will not be any profits. Period.

So the real cost of this bailout will be at least $1.29 trillion. And if real estate prices don't stabilize soon, the cost could easily mushroom to $1.5 trillion. Or $2 trillion. Perhaps even more. Not counting the interest expense!

Here is where the potential profit lies.
1. Reselling of assets purchased.
2. Stock warrants exercised on companies who sold bad assets.
3. AIG ownership.
4. Interest on loans.
5. Nationalization of Freddie and Fannie.

Basically, after the real estate market stabilizes and returns to normal (modest home valuation growth) and the investment banks are in better financial condition. The government hopefully can wait it out.


And again, how's it going to be paid for?


The one and only answer: By a substantial devaluation of the U.S. dollar. By inflating it away. By eventually raising asset prices fictitiously through inflation, through more smoke and mirrors, via an eventual massive dollar devaluation.

In fact, there's precedent for it: The Great Depression only ended after Roosevelt devalued the U.S. dollar in January 1934 by raising its exchange rate with gold from $20.67 to $35.00. That was a de facto 69% devaluation of the dollar.

The same thing is going to have to happen this time around. Only you won't see any President, or anyone in Congress or the Fed actually coming out and saying the dollar needs to be devalued.

They won't have to. The markets will do it themselves. Notwithstanding an occasional knee-jerk rally in the buck, the dollar is toast. No ifs, ands, or buts about it.

Does this guy know the dollar is no longer on the gold standard? (or any currency that I know of) Short of printing money and handing it out to people, the Fed can't devalue the dollar if they wanted to.

[dando]

http://www.telegraph.co.uk/finance/comment/ambroseevans_pritchard/3141428/Germany-takes-hot-seat-as-Europe-falls-into-the-abyss.html

:eek:

The house of cards has begun to collapse. :(

-Kevin

[Methanolandbrats]

To sum up, we're all pretty much screwed.

[Insomniac]

Dow below 10k, that's a psychological floor. I wonder how low it will go now?

[FTG]

Short of printing money and handing it out to people

What do you think spending $700 billion you don't have is?

[Methanolandbrats]

Dow below 10k, that's a psychological floor. I wonder how low it will go now?
All this ******** began at about 8400.

[SurfaceUnits]

Dow below 10k, that's a psychological floor. I wonder how low it will go now?

do you know what abandoned government owned housing looks like after a year or two? think HUD times 1000

[FTG]

This assumes they are buying all mortgages at 1. face value

Paulson is allowed to pay face value if he wants to. He has refused to rule out that option. In fact, he stated that if his buddies on Wall Street "need the capital" paying face value might be best for the "economy."

60 minutes had a real nice summary on the crisis. Wall Street profited by selling mortgages to people who couldn't afford them. Then they profited by selling insurance in case the mortgage payments were defaulted on.

They didn't keep any reserve to pay claims. Insurance regulations state that you can't sell insurance if you don't keep reserve to pay the claims. The free-market capitalists running the government thought "if Wall Street doesn't want to call it insurance, and they don't want to keep reserve let's not regulate them."

It's funny people who complain about media bias so frequently aren't willing to admit their bias against regulations caused them to overlook a disaster waiting to happen.

Like I said, you got what you voted for and there is a pretty good chance you're going to vote for another guy who doesn't believe in financial regulations.

[SurfaceUnits]

It's funny people who complain about media bias so frequently aren't willing to admit their bias against regulations caused them to overlook a disaster waiting to happen.

Like I said, you got what you voted for and there is a pretty good chance you're going to vote for another guy who doesn't believe in financial regulations.so should we vote for the guy who has former freddie mac and fannie mae directors on his election staff?

[KLang]

Please don't force another thread closure. :rolleyes:

[SurfaceUnits]

Who gets picked to over see the transfer of wealth to Wall St.? Well a former Wall Streeter of course

Official: Kashkari tapped to head bailout
35-year-old Treasury official - and former Goldman Sachs investment banker - to oversee $700 billion rescue package.

WASHINGTON (AP) -- An official says the administration has decided to pick a key Treasury Department official to be the interim head of its $700 billion rescue effort for financial institutions.

The official said Monday that Neel Kashkari, Treasury's assistant secretary for international affairs, will soon be announced as the interim head of Treasury's new Office of Financial Stability. The official asked not to be identified by name because the selection has not been announced publicly.

The 35-year-old Kashkari is a former Goldman Sachs (GS, Fortune 500) banker, the investment giant once headed by Treasury Secretary Henry Paulson. The new office was created by the emergency legislation enacted Friday to fund the largest government bailout in history.

[FTG]

so should we vote for the guy who has former freddie mac and fannie mae directors on his election staff?

Somewhere between 45 to 51% of the country won't. I'm just saying when you get what you voted for, don't complain. And that's enough partisan talk.

[Insomniac]

What do you think spending $700 billion you don't have is?

Are they printing $700B? No. They're borrowing it. That is not printing money, it's coming from somewhere, not thin air.

[Insomniac]

do you know what abandoned government owned housing looks like after a year or two? think HUD times 1000

I'm sure it doesn't look too good given they lack the resources to take care of it. Doesn't the bill let them renegotiate the terms? (I hope only the terms, not the principle.) With the fed rate so low, hopefully they can get people to stay in their homes and keep paying.

[SurfaceUnits]

Somewhere between 45 to 51% of the country won't. I'm just saying when you get what you voted for, don't complain. And that's enough partisan talk. you have to be in a party to be partisan, I think my write in vote puts me above the fray, looking down, like a vulture

[SurfaceUnits]

didn't they implement an automatic stop trade at one point if the DOW lost 500 points

[oddlycalm]

Please don't force another thread closure. :rolleyes:
Amen. Trying to make financial deregulation a partisan issue is a total red herring. Both parties pursued deregulation with lust. Both parties took plenty of money from Wall Street to do their bidding and presidents of both parties signed the legislation into law. Congressional oversight committees chaired by both parties have done nothing to head off the looming disaster. The few public voices seriously sounding the alarm on this on either side of the political divide were roundly ignored.

Divisive partisan politics is exactly the method used to get people to take their eye off the ball.

oc

[dando]

didn't they implement an automatic stop trade at one point if the DOW lost 500 points

They implement curbs, but now the Dow is down almost 800 points. Jeebus. :eek:

EDIT: as I typed that, 805 was briefly reached. :eek: :cry:

-Kevin

[STD]

Divisive partisan politics is exactly the method used to get people to take their eye off the ball.
oc

Puppets on strings dancing to that same old song, once again.

[Michaelhatesfans]

Divisive partisan politics is exactly the method used to get people to take their eye off the ball.


What are you trying to do? Put talk radio out of business?

[FTG]

Divisive partisan politics is exactly the method used to get people to take their eye off the ball.


Exactly my point. Economists know what happens when you allow people to borrow money they can't pay back. They also know what happens when people who can't pay claims issue insurance. This is illegal in Canada, Europe, Japan, Korea, China, Thailand etc. Only one government allowed it.

[SurfaceUnits]

some of youse sound like D and iglooboy backslapping each other, post for post

[dando]

Amen. Trying to make financial deregulation a partisan issue is a total red herring. Both parties pursued deregulation with lust. Both parties took plenty of money from Wall Street to do their bidding and presidents of both parties signed the legislation into law. Congressional oversight committees chaired by both parties have done nothing to head off the looming disaster. The few public voices seriously sounding the alarm on this on either side of the political divide were roundly ignored.

Divisive partisan politics is exactly the method used to get people to take their eye off the ball.

oc

Pigs @ the trough. :shakehead

-Kevin

[Insomniac]

Amen. Trying to make financial deregulation a partisan issue is a total red herring. Both parties pursued deregulation with lust. Both parties took plenty of money from Wall Street to do their bidding and presidents of both parties signed the legislation into law. Congressional oversight committees chaired by both parties have done nothing to head off the looming disaster. The few public voices seriously sounding the alarm on this on either side of the political divide were roundly ignored.

Divisive partisan politics is exactly the method used to get people to take their eye off the ball.

oc

Not to mention the global economy is following along. So this massive deregulation mess isn't just here.

[Insomniac]

Exactly my point. Economists know what happens when you allow people to borrow money they can't pay back. They also know what happens when people who can't pay claims issue insurance. This is illegal in Canada, Europe, Japan, Korea, China, Thailand etc. Only one government allowed it.

Completely untrue. AIG's London group wrote so many CDS that they didn't have nearly enough cash on hand. CDS are being swapped on a global market.

[cameraman]

What are you trying to do? Put talk radio out of business?

As noble a goal as ever has existed.

[SurfaceUnits]

Paulson has your best interests in mind:

Its 2011. You're asking yourself: What happened? Why a new bubble, bigger meltdown so fast? Paulson thought the bailout would work. Congress did too. You're looking back.

1. Opening scene: Paulson and Goldman Sachs, 1974-2006

Harvard M.B.A., 1970. Then a staffer at the Pentagon and with Nixon. Joins Goldman in 1974. CEO in 1999. Paid $38 million in 2005. Federal ethics laws let him sell $484 million in Goldman stock tax-free when he left. Net worth, about $700 million.

2. U.S. Treasury Secretary, 2006-2008

Goldman was a big derivatives player under Paulson. His decisions at Treasury reflect 24 years as a Wall Street insider. He was protecting his old Wall Street buddies when he and the Fed chairman insisted in mid-2007 the subprime-credit meltdown was "contained."

3. Paulson suddenly flip-flops and hits panic button, Sept. '08

After years of denial, two weeks ago Paulson flip-flops. Using a classic Reaganomics "disaster capitalism" gimmick, he pushed the panic button, asked Congress for a $700 billion blank-check bailout bonanza for Wall Street. Nothing for Main Street. A one-sided Ponzi scheme, imperial powers, complete with Iraq War-type threats of "economic mushroom clouds." Conservatives were screaming "nationalization! socialism!"

4. Paulson's panic triggers 'feeding frenzy' for lobbyists, 2008

While baffled Republicans wondered why Hank pushed the panic button, his panic set off a scene rivaling "Jaws." Washington is run by 42,000 lobbyists. They smelled blood in this $700,000,000,000 ocean. Add my bank! Foreign banks! Hedge funds! Money markets! S&Ls! Auto loans! Bankruptcy relief! Sharks on a feeding frenzy.

5. Flashback: Paulson warned the president, but failed us, 2008

Yes, he saw this crisis coming years ago. Bloomberg Markets reports that back in August 2006 Paulson spoke to the White House staff at Camp David: "Paulson held up over-the-counter derivatives as an example of financial innovation that could, under certain circumstances, blow up in Wall Street's face and affect the whole economy." Yet he withheld this information from America, didn't tell us till his recent panicky flip-flop.

6. Paulson's conflicts of interest favor his old buddies, 2008

Paulson owes a lot to Goldman; 24 years almost made him a billionaire. An analyst told Bloomberg News that Goldman and Morgan Stanley may be the two "biggest beneficiaries" of the Bailout Bonanza: They've already "written down the value of their holdings." So they have much junk to dump on taxpayers, thanks to Paulson their, "inside man." And he wanted no oversight. With several former Goldman staffers working with him at Treasury now, you wonder: Did they give their old buddies early hints of the bailout?

7. Uncle Warren also gets priority before taxpayers, 2008

Main Street may be overlooked, but not old friends like Warren Buffett. Earlier as Goldman's CEO derivatives made Paulson one of the chief architects of today's "Economic Pearl Harbor," as Warren Buffett calls it (a strange comment since back in 2002 Buffett warned derivatives were "weapons of mass destruction"). Flash forward: Buffett offers Goldman $5 billion, spinning it as a show of confidence in the bailout. But in a Portfolio piece, "Salvation or Swindle?" we learn: "Saint Warren is buying $5 billion worth of Goldman's perpetual preferred stock. This stock pays a 10% dividend and is callable at any time at a 10% premium." Imagine, $500 million after taxes annually. Plus "Saint Warren also receives warrants with the right to buy $5 billion of Goldman's common shares at $115 per share over the next five years. That is 8% below Tuesday's closing price. ... This has nothing to do with saving the financial system."

8. Paulson's triumphant return to a 'New Wall Street,' 2008

Here's another sneaky script subplot from The Huffington Post: First Goldman pays Paulson megabucks, then "lends" him to Bush, a virtual Trojan Horse. Now Paulson's preparing the way for his grand march back into private life by throwing billions of taxpayer dollars to his old buddies. So Goldman gets billions, and taxpayers get a pile of illiquid junk. Scam? Yes, and a classic case of moral hazard: Freed of risky liabilities, Wall Street dances off into the sunset, laughing at the stupidity of the American taxpayer. If Paulson did return to Goldman, his future bonuses would likely more than double his net worth. In short, his 30 months in government will undoubtedly make him a billionaire while costing taxpayers a trillion in new debt as a result of his inaction and incompetence.

9. New president, same old lobbyists, same old greed, 2009

Some things never, never change, no matter who's president. America is run by 42,000 lobbyists, not our 537 elected officials. And Wall Street's the biggest political campaign donor. For example, USA Today reports that since 1989 Christopher Dodd, chairman of the Senate Banking, received $43 million. Barney Frank, chairman of the House Financial Services Committee, got $7.8 million. No wonder they voted for Paulson's Bonanza.

[nrc]

Paulson has your best interests in mind:

Links are your friend.

[SurfaceUnits]

if you have a CitiBank account, login and check under Headlines-Top Stories

What if: Hank Paulson doesn't return to Wall Street and Goldman Sachs? Builds a global banking empire? Competes head-on with Goldman, Morgan, and other domestic and foreign banks? What if the money comes from offshore, from Asia and the Gulf? He's a red-hot brand! Expect a mega-IPO in 2009.

10. Paulson resigns, creates own bank-holding company, 2009

No, he's not going to stay. He's already the de facto president, an uncrowned king, the messiah of global finance. He raised hundreds of billions to "save" America and the world from collapse. So forget Goldman. What then? He's a former president of the Nature Conservancy, a $5 billion global environmental charity. Bloomberg reports he's already working on a "$10 billion international fund under the auspices of the World Bank that would help emerging-market countries avoid investments in heavily polluting infrastructure." He's even lined up "$6 billion in informal commitments [and] Congress is considering the administration's request to kick in $2 billion." Get it? Not only is he bailing out his old buddies. Not only is he preparing for his return to private wealth. But he's also finagling more taxpayer money for his pet cause. All while being paid to work for U.S. taxpayers. Next, a new Paulson Global Bank Holding Corp.? An IPO? You bet, in 2009. But not retail, probably a private placement with $25 billion minimums.

11. Warning: Same old cycle: Bailout-Bubble-Bust, 2009-2011

"Wall Street's dead?" No way! The Street's alive, will survive and thrive. Paulson's Bonanza sets up the greatest "moral hazard" in world history. Our bad boys got away with a scam. Taxpayers are stuck with their toxic waste. Once freed, Wall Street comes roaring back with a new bull next year. The financial sector lost almost half its stock value since last summer's peak, $1 trillion. Our greedy financial geniuses must quickly invent new tricks to satisfy shareholders who lost billions and are now demanding higher earnings and stock prices. Banks must start blowing a newer, bigger, more lethal bubble.

12. Hot new aggressive competition among banks, 2009-2010

Yes! Paulson and his competition, J.P. Morgan Chase, Bank of America, Barclays, Wells Fargo, Citibank and Goldman, are revving up to Nascar speeds: Heavy trading, high leverage, risky derivatives to meet demanding quarterly expectations. Investors have short attention spans, want a new bull. The Fed, Treasury and SEC will look the other way, creating de facto deregulations to get the markets back on track. Who loses? Homeowners and taxpayers. But also small depositors in the bank-holding companies: Expect more excessive fees and commissions as all banks siphon off more to raise new cash for their same old high-risk gambling bets.

13. Armageddon: Bubble pops, global economic meltdown, 2011

Russia, China, Iran, Venezuela and others are already praying for America's demise. Now staunch allies like Germany join the chorus: The German finance minister blames the current crisis on Wall Street's "insane drive for higher and higher profits ... Wall Street will never be what it was ... The global financial system will become more multipolar." To protect itself before and after the 2011 collapse, Paulson's new global banking empire will likely be headquartered in multiple locations in Asia, Europe and the Gulf. But the moral hazard created by Paulson's 2008 bailout will eventually backfire. We relieved Wall Street of the consequences of its costly, stupid blunders. But we also released them to chase a new raging bull in 2009 ... and blow a bigger more lethal credit bubble that'll bring down the global economy before the end of the next presidential term.

[Sean Malone]

I love fiction. :gomer:

[SurfaceUnits]

I love fiction. :gomer:

we wish. I wonder where the market found half a trillion dollars to bring it back from it low

[dando]

we wish. I wonder where the market found half a trillion dollars to bring it back from it low

In economic terms it's called the velocity of money...just follow the $$$ (as you posted previously). Tech boom, housing boom, tech bust, housing bust...plus all sorts of financial wackiness in b/w. :irked:

Boom/Bust for Dummies short bus version. :gomer:

-Kevin

[Methanolandbrats]

In economic terms it's called the velocity of money...just follow the $$$ (as you posted previously). Tech boom, housing boom, tech bust, housing bust...plus all sorts of financial wackiness in b/w. :irked:

Boom/Bust for Dummies short bus version. :gomer:

-Kevin I've got a bad feeling the money is gonna chase commodities to the moon in the next cycle. Say hello to really expensive food and energy.

[nrc]

if you have a CitiBank account, login and check under Headlines-Top Stories

Let me put it more succinctly. Don't cut and paste articles. Post a link.

http://www.marketwatch.com/news/story/paulson-now-matinee-idol-we/story.aspx?guid=%7B3C64D415-39D2-4A35-9486-06F050D45FD7%7D

[SurfaceUnits]

Let me put it more succinctly. Don't cut and paste articles. Post a link.

http://www.marketwatch.com/news/story/paulson-now-matinee-idol-we/story.aspx?guid=%7B3C64D415-39D2-4A35-9486-06F050D45FD7%7D

not everybody has a CitiBank account

[nrc]

not everybody has a CitiBank account

First, if it's only accessible for those with a Citibank account it shouldn't be pasted here. Second, the link I posted contains the same content with no need for a Citibank account.

[SurfaceUnits]

well obviously it wasn't

[SurfaceUnits]

Well it appears that Paulson got the blank check he was wanting:


Federal Reserve unveils a plan to buy up short-term corporate debt to unfreeze credit markets.
http://money.cnn.com/2008/10/07/news/economy/fed_commercial_paper/index.htm?postversion=2008100709

Nobody in DC is going to question any decision he makes on how he spends the tax dollars