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Calling Paulson's Bluff


Business  (tags: Bailout, Bailout Cost, Democrats, Economic Crisis, Economy, Financial Crisis, Hank Paulson, Henry Paulson, Henry Paulson Plan, Housing Bailout Bill, Lehman Brothers, Bush, McCain, Republicans, Neocons, PNAC, Wall Street Crisis, Business News )

Blue
- 3802 days ago - huffingtonpost.com
Paulson spent the past two weeks playing a game of chicken with firms like Lehman Brothers and AIG. Now he is playing even higher-stakes chicken with Congress and the economy.



   

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Comments

Blue Bunting (855)
Sunday September 21, 2008, 10:38 pm
Something's wrong

I keep trying to envision what I would do if I were God and could just, y'know, fix things. I mean, without changing all physical law or anything. Just redistribute a lot of wealth and say, 'What part of 'Thou shalt not steal' didn't you understand?" (Maybe I'd add a few words to remind people that it wasn't the abortionists and queers and uppity women who got Jesus so pissed off that he turned over tables in the temple, it was usurers.) And I'm still at a loss.

But I'd certainly take away all that money from all those people who have been getting rich by bleeding the rest of us dry. There shouldn't be any billionaires, dammit. There shouldn't be people sitting pretty whose "work" consists mainly of going for drinks or golf with other people who wear watches worth more than the average full-time worker's annual salary.

I'd physically move some people around, of course. I'd remove a lot of pot dealers and hookers from jails, for one thing, and replace them with a number of political operatives and "businessmen" whose names you already know, along with quite a few you never heard of, who are the architects of what we have seen. (I think their former residences would also make nice homes for all those people they kidnapped from New Orleans and put in toxic trailers - don't you?) And then I'd move all their money back to the ordinary humans whose misfortunes they engineered to make themselves rich (that'd be pretty much everyone else). In that event, you'd be amazed at how many "too big to fail" institutions could fail without it bothering the rest of us.

Of course, that isn't going to happen. A few words from around the blogosphere, starting with my own commenters:

Charles:

Yeah, a $700B slush fund could really do wonders for Republicans' prospects this November.

It is breathtaking in its arrogance: proposing to transfer the power of the purse from Congress to the Executive. If we had real courts and a Congress with historical memory, I would think it had no chance of enactment. I've written to my delegation.

earthhandstaplesthat:

I just read the sexy Three Page Trillion Dollar Slush Fund Proposal. It's so hot it doesn't even have a code name. Whew. It's one big slush fund. Who doesn't like war-sized slush funds? It's clearly a National Security issue so it's naturally a Star Wars size black budget op. That's the way they roll.

Paulson's proposal is not reasonable policy, given the size of the sums/people/agencies involved and the fox in hen house issues. No. But I don't mind that's it's just three pages. (And you don't need three pages just to outline a MIB-sized slush fund.) The Dems should propose a two page bill that provides $699 billion in relief directly to families. Smaller, cheaper, better, and just two pages.

David Bell:

If they want the taxpayer to bail out the financial industry, perhaps the executives should STFU when their tax bill is increased.

And that doesn't have to involve crazy 90% tax rates.

The way some of these financial institutions have been carrying on, shouldn't RICO apply?

Why, yes, David, if it should apply to anyone, it should certainly apply to the biggest gang of thieves and vandals in history.

CMike:

With all deference to the good professor, I think Krugman should be asking not "why [is this] supposed to work" but rather, what is it that Hank Paulson and Ben Bernanke are actually trying to accomplish. My answer to that question would be that our easy money Fed Chairman and our Goldman Sachs minted Treasury Secretary are trying to stampede the Congress into putting the budgetary authority for the United States government on a course to be taken over by the International Monetary Fund in the near future.

The IMF, those are the folks who are always about belt tightening when it comes to wasteful social programs; social programs like Social Security, Medicare, and Medicaid. We are on the verge of the ultimate triumph for "The Shock Doctrine: The Rise [now the Apex] of Disaster Capitalism."

$29 billion at risk to underwrite the JPMorgan Chase takeover of Bear Stearns, $75 billion for AIG, now another $700 billion for playahs to be named later; we'd better leave all this high finance to the experts for a few more rounds. There is opportunity in crisis and don't our modern day titans of capitalism know it.

It won't be the fault of Florida or Ohio voting machines. It looks like a Democratic House and a Democratic Senate are going to pass this baby lickety-split. (With only sixty votes in the Senate required for absurdity to pass, no reason for any of us to think there will be any hold up there.)

Ouch.

Phoenix woman suggests some things to do today, including reading " Robert Reich explaining why there's no reason any taxpayer money should be spent on this - especially money offered up
without any oversight," and, of course, calling your Congresscritter. (It's not that I expect to be able to talk sense to people who are actually thinking seriously of giving Bush and Paulson what they want, it's just that I've always felt a moral obligation to try. I know a decade or so on the internet may have made you wonder if it's possible to change people's minds, but my experience is that, yes, you can. Not always. Not even most of the time. But it does happen.)

Mike Whitney looks at our full-spectrum breakdown and sees people Grasping at Straws:

The problems cannot be resolved by shifting the debts of the banks onto the taxpayer. That's an illusion. By adding another $1 or $2 trillion dollars to the National Debt, Paulson is just ensuring that interest rates will go up, real estate will crash, unemployment will soar, and foreign central banks will abandon the dollar. In truth, there is no fix for a deleveraging market anymore than there is a fix for gravity. The belief that massive debts and insolvency can be erased by increasing liquidity just shows a fundamental misunderstanding of economics. That's why Henry Paulson is the worst possible person to be orchestrating the so called rescue project. Paulson comes from a business culture which rewards deception, personal acquisitiveness, and extreme risk-taking. Paulson is to finance capitalism what Rumsfeld is to military strategy. His leadership, and the congress' pathetic abdication of responsibility, assures disaster. Besides, why should the taxpayers be happy that the stocks of Morgan Stanley, Washington Mutual and Goldman Sachs surged on the news that there would be a government bailout yesterday? These banks are essentially bankrupt and their business models are broken. Keeping insolvent banks on life support is not a rescue plan; it's insanity.

Gods, is he right about Paulson, who has said that not rewarding the thieves by letting them keep all the money is a poison pill to any plan - a curious approach, you might think.

A poison pill? The executives who drove their banks into insolvency won't let the government save their banks if it means they have to give up multi-million dollar golden parachutes? After they've been paying themselves millions a year for the sheer incompetence necessary to bankrupt their companies? Did we step through the mirror and I didn't notice?

I can only read this as Paulson saying that Republicans will stop any bill that reigns in executive compensation in exchange for a bailout. I cannot think of words sufficient to describe my contempt at the greed, selfishness and sheer hubris being displayed by Paulson, Republicans and the bankers who believe they can dictate that not only should Congress hand over 700 billion dollars, but it should do so with no meaningful conditions.

Don't leave out those Democrats who are responding to this with anything other than outrage and derision.

Or, as Arthur Silber put it:

There Is No Fix

That's the truth that almost no one will face about the economic unraveling: There is no fix. This is the fundamental reason I say that, with regard to their publicly proclaimed aims, no one knows what they're doing. They can't know what they're doing -- because, while everyone insists they are trying to "fix it," there is nothing to be done. And yet, everyone in Washington is desperately trying to "fix it" -- that is, they are attempting to avoid the inevitable consequences of an economy that has significantly and for a long time gone completely off the tracks. Many actions by many players must lead to certain results now. To rebuild on a solid foundation, the results must play out -- and they will play out, no matter what stop-gap measures are adopted -- and then and only then, a new structure can be erected.

Larisa Alexandrovna says, "Welcome to the final stages of the coup...."
Uh huh. I've been wishing all morning I could find that link to Teresa
Nielsen Hayden's 2000 Usenet post in rec.arts.sf.fandom explaining
exactly what she saw when Republican Congressional aides went to Miami
to stage a riot to prevent votes from being counted. This was an
astonishingly brazen act performed without ski masks by people who were
obviously part of a machine that did not expect ever to have to give up
power. It's ramifications were larger than even we imagined. Yes, we
knew we were looking at a heist, and it was obviously not just another
stolen election, but I don't think anyone realized it would, or could,
go this far.

Mr. Sideshow, without even reading any of that stuff, just mused from the kitchen while making his lunch:

One final, monstrous smash-and-grab raid on the treasury before they leave office.

Yes, I think so. They're not worried about the country.

Much more here and here and here. The only good news is that people are actually talking about this instead of about some missing white woman or whatever has taken Nancy Grace's fancy this week.

Like I say, you really should make the effort, if only to say you tried. Meanwhile, keep an eye on Eschaton, where Duncan (and others) will continue to help you connect the dots.

 

JOSSIE ROSS (62)
Monday September 22, 2008, 10:04 am
THANKS.....
 

Past Member (0)
Monday September 22, 2008, 10:17 am
this is great blue, thank you!! As a people of "democracy" it is up to us to get educated and make our votes count for all concerned. not just our own personal gain. don't image yourself "christ like" before actually realizing what he actually stood for. read the book for yourself. a bible in one hand and the devil's pitch fork in the other is an ignorant hypocrite. some even call it the sheep of the anti-messiah.
 

Past Member (0)
Monday September 22, 2008, 10:39 am
this is great blue, thank you!! As a people of "democracy" it is up to us to get educated and make our votes count for all concerned. not just our own personal gain. don't image yourself "christ like" before actually realizing what he actually stood for. read the book for yourself. a bible in one hand and the devil's pitch fork in the other is an ignorant hypocrite. some even call it the sheep of the anti-messiah.
 

Blue Bunting (855)
Monday September 22, 2008, 2:11 pm
The Democrats in Congress must hold out for everything they want. This is basic negotiation. So what if Secretary Paulson wants the cash upfront with "the reforms need to come later."

Here's what this Democrat wants:

1. No more $ for the Iraq War.

2. Expand Medicare and/or Medicaid to include all members of the population.

3. Codify the "Fairness Doctrine" of the FCC removed by R. Reagan. Return the public airwaves to a marketplace of ideas.

4. Triple the amount of money available for students under the Pell grant program.

All of the New Deal, or none of the New Deal.


There MUST BE NO bailout without considering the following facts:

1. Paulson was Goldman Sachs-CEO, before he became US-Secretary of the Treasury.

2. Goldman Sachs is the only invesment-bank, which not only SURVIVED last week's bloodshed, but THRIVED on it. (Question: What did GS know, to thrive, while others faltered - something, that other Investment Banks apparently didn't know - and HOW did they get to know this?)

3. Paulson now suggests that the USA shall unconditionally buy toxic debt from the remaining Banks and Investment Banks - aka Goldman Sachs.

4. Goldman Sachs will shed all her toxic debt and sell it unconditionall to the taxpayer, only keeping the good, profitable debt in her portfolio.

5. After January 20th, Paulson will very likely return to the board of directors at Goldman Sachs. But even if he didn't return, He had $632,000,000 in Goldman Sachs stock when he left.
http://www.forbes.com/lists/2006/12/VY36.html

1 + 2 + 3 + 4 + 5 = Everybody at Goldman Sachs is laughing their sleeves up, celebrating their unprecedented bravery and recklessness in looting America

A pattern. Anyone?

---

So let me get this straight, Mr. President and Mr. Secretary. We taxpayers have to give $700 billion dollars to Wall Street right away, no questions asked, so they can lend our money back to us with interest? Insulting.
 

Blue Bunting (855)
Monday September 22, 2008, 3:53 pm
Has anyone seen any mention of the infamous Section 8 of the Paulson Bailout Plan mentioned in any major media outlet?

Here's the textjust as a reminder:


Decisions by the Secretary pursuant to the authority of this Act are non-reviewable and committed to agency discretion, and may not be reviewed by any court of law or any administrative agency.

It is critical that this gain traction this week. Write every outlet you can think of to cover this massive power grab. And if you see any mention of it, please note it in the comment thread.

Well, at least Jack Balkin is paying attention. It's a must read.

Write you your House Representative, here. Write to your Senator here.

Update: Ian notes that Obama seems to have drawn a line in the sand: NO DEAL! Although I must note, after reading Obama's remarks, I don't see anything about Section 8 or legal oversight in them AT ALL. And that is disturbing. Here are the key points:

First, there must be no blank check when American taxpayers are on the hook for this much money.

Second, taxpayers shouldn't be spending a dime to reward CEOs on Wall Street.

Third, taxpayers should be protected and should be able to recoup this investment.

Fourth, this plan has to help homeowners stay in their homes.

Notice anything missing?

Update 2: Lambert points out that McClatchy is on the case.
 

Marion Y (322)
Monday September 22, 2008, 6:07 pm
I'm leaning toward thinking Congress is complicit with the Fed and Bush to push this through. Oh, there's a lot of resistance from the dems and many repubs, but I wouldn't hold my breath that they will look out for us.

An excellent article that says why.

Thank you, Blue. I appreciate all your efforts to keep us informed.
 

Hans L (958)
Tuesday September 23, 2008, 5:35 am
Marion indeed excellent!

Financial-market wise guys, who had been seized with fear, are suddenly drunk with hope. They are rallying explosively because they think they have successfully stampeded Washington into accepting the Wall Street Journal solution to the crisis: dump it all on the taxpayers. That is the meaning of the massive bailout Treasury Secretary Henry Paulson has shopped around Congress. It would relieve the major banks and investment firms of their mountainous rotten assets and make the public swallow their losses--many hundreds of billions, maybe much more. What's not to like if you are a financial titan threatened with extinction?

If Wall Street gets away with this, it will represent an historic swindle of the American public--all sugar for the villains, lasting pain and damage for the victims. My advice to Washington politicians: Stop, take a deep breath and examine what you are being told to do by so-called "responsible opinion." If this deal succeeds, I predict it will become a transforming event in American politics--exposing the deep deformities in our democracy and launching a tidal wave of righteous anger and popular rebellion. As I have been saying for several months, this crisis has the potential to bring down one or both political parties, take your choice.

Christopher Whalen of Institutional Risk Analytics, a brave conservative critic, put it plainly: "The joyous reception from Congressional Democrats to Paulson's latest massive bailout proposal smells an awful lot like yet another corporatist lovefest between Washington's one-party government and the Sell Side investment banks."

A kindred critic, Josh Rosner of Graham Fisher in New York, defined the sponsors of this stampede to action: "Let us be clear, it is not citizen groups, private investors, equity investors or institutional investors broadly who are calling for this government purchase fund. It is almost exclusively being lobbied for by precisely those institutions that believed they were 'smarter than the rest of us,' institutions who need to get those assets off their balance sheet at an inflated value lest they be at risk of large losses or worse."

Let me be clear. The scandal is not that government is acting. The scandal is that government is not acting forcefully enough--using its ultimate emergency powers to take full control of the financial system and impose order on banks, firms and markets. Stop the music, so to speak, instead of allowing individual financiers and traders to take opportunistic moves to save themselves at the expense of the system. The step-by-step rescues that the Federal Reserve and Treasury have executed to date have failed utterly to reverse the flight of investors and banks worldwide from lending or buying in doubtful times. There is no obvious reason to assume this bailout proposal will change their minds, though it will certainly feel good to the financial houses that get to dump their bad paper on the government.

A serious intervention in which Washington takes charge would, first, require a new central authority to supervise the financial institutions and compel them to support the government's actions to stabilize the system. Government can apply killer leverage to the financial players: accept our objectives and follow our instructions or you are left on your own--cut off from government lending spigots and ineligible for any direct assistance. If they decline to cooperate, the money guys are stuck with their own mess. If they resist the government's orders to keep lending to the real economy of producers and consumers, banks and brokers will be effectively isolated, therefore doomed.

Only with these conditions, and some others, should the federal government be willing to take ownership--temporarily--of the rotten financial assets that are dragging down funds, banks and brokerages. Paulson and the Federal Reserve are trying to replay the bailout approach used in the 1980s for the savings and loan crisis, but this situation is utterly different. The failed S&Ls held real assets--property, houses, shopping centers--that could be readily resold by the Resolution Trust Corporation at bargain prices. This crisis involves ethereal financial instruments of unknowable value--not just the notorious mortgage securities but various derivative contracts and other esoteric deals that may be virtually worthless.

Despite what the pols in Washington think, the RTC bailout was also a Wall Street scandal. Many of the financial firms that had financed the S&L industry's reckless lending got to buy back the same properties for pennies from the RTC--profiting on the upside, then again on the downside. Guess who picked up the tab? I suspect Wall Street is envisioning a similar bonanza--the chance to harvest new profit from their own fraud and criminal irresponsibility.

If government acts responsibly, it will impose some other conditions on any broad rescue for the bankers. First, take due bills from any financial firms that get to hand off their spoiled assets, that is, a hard contract that repays government from any future profits once the crisis is over. Second, when the politicians get around to reforming financial regulations and dismantling the gimmicks and "too big to fail" institutions, Wall Street firms must be prohibited from exercising their usual manipulations of the political system. Call off their lobbyists, bar them from the bribery disguised as campaign contributions. Any contact or conversations between the assisted bankers and financial houses with government agencies or elected politicians must be promptly reported to the public, just as regulated industries are required to do when they call on government regulars.

More important, if the taxpayers are compelled to refinance the villains in this drama, then Americans at large are entitled to equivalent treatment in their crisis. That means the suspension of home foreclosures and personal bankruptcies for debt-soaked families during the duration of this crisis. The debtors will not escape injury and loss--their situation is too dire--but they deserve equal protection from government, the chance to work out things gradually over some years on reasonable terms.

The government, meanwhile, may have to create another emergency agency, something like the New Deal, that lends directly to the real economy--businesses, solvent banks, buyers and sellers in consumer markets. We don't know how much damage has been done to economic growth or how long the cold spell will last, but I don't trust the bankers in the meantime to provide investment capital and credit. If necessary, Washington has to fill that role, too.

Finally, the crisis is global, obviously, and requires concerted global action. Robert A. Johnson, a veteran of global finance now working with the Campaign for America's Future, suggests that our global trading partners may recognize the need for self-interested cooperation and can negotiate temporary--maybe permanent--reforms to balance the trading system and keep it functioning, while leading nations work to put the global financial system back in business.

The agenda is staggering. The United States is ill equipped to deal with it smartly, not to mention wisely. We have a brain-dead lame duck in the White House. The two presidential candidates are trapped by events, trying to say something relevant without getting blamed for the disaster. The people should make themselves heard in Washington, even if only to share their outrage.
 

Past Member (0)
Tuesday September 23, 2008, 9:42 am
Noted and thanks Blue I love your idea :)

So here we are the serfs giving over our last dollar and our children and grandchildrens to the powerful and rich institutions and although its all very unconstitutional they will get away with it !
Doesn't it make you just a little mad to know that these people have used the average American to support their lifestyle while we take whatever scraps they hand us from their trowns?

I think this divided country better wise up and join tofgether in protest against these people who have owned us for far too long.
They have divided us and made us weak so we can't accomplish anything in our own best interest .
Both parties have pitted us against each other although I have to say the Republican's have done a far better job convincing their supporters that they are Conservatives and stand for smaller government while the Democrats are the tax and spend party .Nobody who supports the Republican's seems to question their theory when with both Bush's in office we have had trillions of dollars in debt.They don't seem to notice this !
Bush Jr who has always flopped in business all his life has all but distroyed this country and never should have been president because he wasn't fit .Now here we are again in an election year and the same people who voted for Bush are willing to close their eyes and make the same mistake again by voting for McCain whose also unfit to lead and his VP is a joke when it comes to knowledge and experience !
What we should be doing is standing together and fighting this government that has been taken over by Big business.
As long as we are divided we will never get anything done in our best interest.
 

Marion Y (322)
Tuesday September 23, 2008, 10:02 am
"Paulson and the Federal Reserve are trying to replay the bailout approach used in the 1980s for the savings and loan crisis, but this situation is utterly different. The failed S&Ls held real assets--property, houses, shopping centers--that could be readily resold by the Resolution Trust Corporation at bargain prices. This crisis involves ethereal financial instruments of unknowable value--not just the notorious mortgage securities but various derivative contracts and other esoteric deals that may be virtually worthless. "

Hans, I fully agree with your astute comments. Your quote above shows the real risk for taxpayers offers little guarantee. One senator today said he's almost sure this deal will backfire on taxpayers.

On a positive note, many of the safeguards and considerations you mentioned are being forcefully addressed by senators in this hearing. They recognize The Feds and Bush want to hastily rush this through without full discussion of the ramifications of this deal. A primary concern of the senators is that outraged Americans aren't taking this one lying down and we want a say in this deal. I think our letters and calls are getting through to these politicians.

The world is watching. I hope we do something right for a change in the closing of this last 8 years of disasters. We will all lose, it's just a matter of to what degree.
 

Marion Y (322)
Tuesday September 23, 2008, 10:25 am
Blue, You've done some good research on this.

Yes, one of the senators mentioned that this is final, not subject to review, so we've got to get it right and will not be rushed into a decision.

Paulson's proposal is vague and a scam. Paulson argued that he knew Congress would hash out the details of the plan. Yeah, right.

Good article by Balkan. As one commenter said "The current administration is nothing but a crime syndicate. If they really want to help the nation, let them resign the office they have disgraced right now."

Again, Section 8 is being strongly addressed, as well as help for homeowners, protection for taxpayers and not giving golden handshakes to CEOs out of this. The senators seem gravely serious, but they could be just giving us another one of their shows. Well, Americans are not being entertained by this in the least, and I hope they know we are watching every move they make.

The scary thing is that Paulson, Bernanke and others continue to say they don't even know if this deal will work. Keep writing those letters and making calls...
 

Estella Ameigh (22)
Tuesday September 23, 2008, 10:33 am
Get congress to lock the vault before the thieves take what is left. The working poor, middle class, and retired folks simply can not afford any more screw-ups that bad management has caused. No more should be placed on the backs of generations to come. Stop the insanity and bad judgement now!
 

Past Member (0)
Tuesday September 23, 2008, 10:51 am
Okay people .I have sent out my letters to my Congressman and my Senators saying No to this Bail out and stating why .I hope you will all do the same .We can't just complain about our government we have to be willing to do something if we ever want to see any change.If enough of us write them and tell them No deal then maybe they might listen under fear they won't get our support on election day.

I am pleased to know Obama said No deal even if he didn't add anything on section 8. that could have just been an oversite ,at least I am hoping it was and that he will look at that closely before making a vote.
 

Past Member (0)
Tuesday September 23, 2008, 10:59 am
I would like to add one last thing here .
If Paulson and Bernanke say their not sure this bail out will work I really don't think we should say yes under any conditions.How could we ever benefit if the deal doesn't work ? All we would be left with is debt and higher taxes along with the collapse of our economy and a depression.I would much rather stand my chances with a depression than make my children and grandchildren pay for this for years to come.
 

Marion Y (322)
Tuesday September 23, 2008, 11:58 am
Good point, Linda. You mentioned Obama. He's addressing the bailout now in great length.

His main points:

1 - He was harsh with CEOs who said they will not go along with the bailout if they are not given what they want. Obama said it is selfish of them to demand a handout and expect taxpayers to pay for it. Obama said it will not go well for these CEOs if they keep up with their demands. (don't quote me as I'm going from memory and didn't get it all)

2 - Paulson cannot act alone on this issue. A committee and oversight neutral to Wall Street needs to take over.

3 - Taxpayers must be treated as owners in this. We cannot provide corporate welfare to these companies. Taxpayers must have equity in this, and profits must go to taxpayers. After recovery has been made, additional payments to go to taxpayers.

4 - Help must go to families struggling with foreclosure and declining home values.

5 - There must be the same sense of urgency for our economy and Americans who are struggling, as there has been for Wall Street.

----

What a contrast in leadership! Bush is behind Paulson to hurry this bailout through. Obama said we must put Americans first and will think this through.
 

Past Member (0)
Tuesday September 23, 2008, 1:23 pm
He was harsh with CEOs who said they will not go along with the bailout if they are not given what they want. Obama said it is selfish of them to demand a handout and expect taxpayers to pay for it. Obama said it will not go well for these CEOs if they keep up with their demands. (don't quote me as I'm going from memory and didn't get it all) Forget whatever politicians say...they lie no doubt that OBAMA will say yes to everything! The CEO will receive your money OMG you are being screwed and have no idea that this will hurt not only you but all US generations to come.....

THIS WILL NOT WORK WHO WILL BUY BUBBLES????NO ASSETS HERE NOTHING JUST WORTHLESS BAD DEBTS AND FAKE BUSINESS TRANSACTIONS!
 

Blue Bunting (855)
Tuesday September 23, 2008, 11:23 pm
Insofar as the economic crisis is concerned let us all be reminded that the fundamental flaw in all the "solutions" offered is that those solutions are offered to "fix" a problem that cannot be fixed. To understand this basic point, you require only three sentences from Mike Whitney's analysis. Here they are:

This cycle [in the market] will persist until the bad debts are accounted for and written off or until the exhausted dollar-system collapses altogether.

And:

In truth, there is no fix for a deleveraging market any more than there is a fix for gravity. The belief that massive debts and insolvency can be erased by increasing liquidity just shows a fundamental misunderstanding of economics.

This is the truth that almost no one will accept.

Will Dmeocrats NEVER recognize when they're being "set up" by the RepubliCON crook$ AND LIAR$?


"I wonder how many times you have to be hit on the head before you find out who's hitting you? It's about time that the people of America realized what the Republicans have been doing to them," - Harry Truman.
 

Marion Y (322)
Wednesday September 24, 2008, 1:07 pm
Blue...I'm afraid you're right. So if we cannot fix the problem, we should let Wall Street suffer and ride this out, and the rest of us deal with the ensuing collapse. Suffer now, or suffer even more later. I say get it over with.

The entire US system must be torn down - the illegal Federal Reserve, the corrupt congress and government, and a public hanging for Bush and his posse.
 

Blue Bunting (855)
Wednesday September 24, 2008, 6:26 pm
Why did Paul$on'$ firm: Goldman $ach$ survive???

The Long and Short of It at Goldman Sachs

Goldman Sachs sold hundreds of Billions in subprime/CDO's and shorted them at the same time.


A new analysis by Goldman Sachs Group, Inc. finds that “Wall Street banks, brokerages and hedge funds may report $460 billion in credit losses from the collapse of the subprime mortgage market, or almost four times the amount already disclosed.”

The degradation of accounting The folly of fair value accounting, which helped to drive up executive bonuses based on illusory values, is increasingly exposed by the US financial crisis. Goldman Sachs now has "assets" for which no market exists valued at twice the firm's capital. That route leads to insolvency.

 

Blue Bunting (855)
Wednesday September 24, 2008, 7:01 pm
There is no doubt in my mind, where Paulson´s loyalties lie. He is
pushing for the plan as Bush was pushing for the Iraq war. By using
politics of fear the ultimate scare tactics they always use. And in my mind there is no doubt about his loyalties either. He needs a job come January and where would that be for a banker?
The price tag for his plans? Much, much more than $700 Billion.
 

Blue Bunting (855)
Wednesday September 24, 2008, 10:55 pm
Timing ...

naked capitalism: On the dishonest sale of the bailout plan

Yes ... the Bu$hie$ were sitting on this plan; waiting for the right opportunity ... 41 days before ELECTION DAY.
 
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