We're Financial Moguls!!!

[Guest Jules]

Well, a full accounting would crash not only this server, but the whole fucking internets. Do yourself (and everyone else) a favor, pick up a book and read it every now and again, please. Your library card has grown stale and moldy - apparently.

what's wrong with you?

[miss jayne]

If the government wanted to save billions of dollars they would have outlawed short selling! This is the easiest thing they could have done to prevent this huge bailouts. Shorts artificially drove down prices on these giants where they couldn't raise capital anymore. Anyhoo my questions is $85 billion for this bailout?! Where does this money come from? Isn't this like half the cost of the Iraq war and magically we have the money to bail them out when we are not in the greatest economic shape right now? I understand the impact an AIG failure would have but where do we have all this money?

 

 

 

didn't we outlaw butterfly(?) trading after 1987? obama said it best last night when he talked about not keeping up with new banking/investment/trading regulations. No regulations when things are going well...bailout when wall street tanks. Why do I feel I am picking up after a too much purple jesus juice frat party?

[uncool2pillow]

Panic?

[remphish1]

Panic?

 

This is nuts! I hope airlines hedged some oil in the $90 a barrel range a few weeks ago or they will get burried again. The markets are so fishey these days I wouldn't even put my lunch money into the market!

[austrya]

So does that mean I should probably fill the tank up today while gas is only $3.89?

[John Smith]

Here's the big plan:

 

It's elegantly simple. The three key provisions: (1) The Treasury Secretary is authorized to buy up to $700 billion of any mortgage-related assets (so he can just transfer that amount to any corporations in exchange for their worthless or severely crippled "assets") [sec. 6]; (2) The ceiling on the national debt is raised to $11.3 trillion to accommodate this scheme [sec. 10]; and (3) best of all: "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" [sec. 8].

 

Put another way, this authorizes Hank Paulson to transfer $700 billion of taxpayer money to private industry in his sole discretion, and nobody has the right or ability to review or challenge any decision he makes.

 

Pretty sweet!!!

 

Pretty sweet for the bankers. Sadly once again the administration wants a blank check with no accountability. Have they worked out at what basis the buys will be made? Market basis or book? I have a feeling that the no-accountability is so they can buy the assets at book basis and stave off some of the losses that these firms are going to be facing. For instance if they hold mortgage backed bonds that cost them $1billion and the property supporting those mortgages is only worth $500mil. Do we buy at $1bil or $500mil? If it is not the lower price then the taxpayer is getting screwed in a huge way. If it is the lower price we are just getting screwed. Either way this mess is going to cost me

[cryptique]

So does that mean I should probably fill the tank up today while gas is only $3.89?

I did.

[austrya]

I probably should. I got away with only $20 last week but then again, the farthest we drove was about 5 miles.

[bjorn_skurj]

Well, now since the dollar is even further in the shitter, oil prices and the prices of all other imports will go up. Fuck this administration and fuck the oligarchy. What a bunch of assholes.

[Analogman]

Congress, Bush team agree on some bailout terms

 

By JULIE HIRSCHFELD DAVIS, Associated Press Writer 1 minute ago

 

WASHINGTON - Scrambling for a quick accord on the $700 billion bailout, the Bush administration and leading lawmakers have agreed to include mortgage aid and strong congressional oversight along with unprecedented help for failing financial institutions, a key lawmaker said Monday.

 

Unimpressed, investors sent stocks plummeting anew, pushed oil up $16 a barrel and propelled gold prices ever higher as they searched for a safe place to park their money.

 

President Bush prodded Congress to pass the administration's rescue plan quickly, declaring, "The whole world is watching." And there did seem to be movement in talks between the White House and Capitol Hill.

 

Rep. Barney Frank, D-Mass., chairman of the House Financial Services Committee, said "a great deal of progress has already been made." And a government official with knowledge of the talks said the administration had agreed to create a plan to help prevent foreclosures on mortgages it acquires as part of the bailout

[viatroy]

huh. If Wall Street doesn't like it, they must be doing something right.

[Analogman]

Treasury chief Paulson on verge of historic new powers

 

By Peter Grier Tue Sep 23, 4:00 AM ET

 

Washington - In recent weeks Henry Paulson Jr. has become one of the most famous and, perhaps, consequential US Treasury secretaries since Alexander Hamilton assumed the office on Sept. 11, 1789.

 

Secretary Paulson is not the sole architect of the Bush administration's bailout strategy for the US economy, of course. By all accounts he is part of a troika of top policymakers with Federal Reserve Chairman Ben Bernanke and New York Fed Chief Timothy Geithner.

 

But as the public face and dealmaker of the plan, Paulson is the one most in the spotlight. Moreover, bailout legislation submitted to Congress by the White House over the weekend would transform Paulson's office into that of temporary overseer of America's entire financial system.

 

This may not be the role that former Goldman Sachs head Paulson envisioned when he signed on as President Bush's third Treasury chief.

 

"But he has to do this. He has no choice," says Peter Morici, a business professor at the University of Maryland and the former chief economist at the US International Trade Commission.

 

The proposed expanded powers for the Treasury secretary are one aspect of the Bush bailout plan that has drawn criticism from Democratic members of Congress.

 

Under the proposal, the United States Treasury would have the power to buy virtually any financial instrument from any institution, as a means to relieve it of bad assets and pump credit back into the economy. New Treasury staff would help manage this program, although the administration foresees contracting with private firms to manage its new asset holdings.

 

Oversight of Treasury sought

For the most part lawmakers aren't grumbling about Paulson himself.

 

"We've got the right man" to deal with the problem now, said Sen. Christopher Dodd (D) of Connecticut, chairman of the Senate Banking Committee, in a broadcast interview on Monday.

 

What lawmakers do want is more oversight of the program than the White House has outlined so far. Many are troubled by wording in the proposal that appears to bar any review of Treasury's bailout actions by the courts or other administrative agencies.

 

Rep. Barney Frank (D) of Massachusetts, chairman of the House Financial Services Committee, said Monday that he would propose an oversight board that would report to Congress at least monthly.

 

Democratic lawmakers would also like the bailout legislation to include more help for troubled homeowners and restrictions on pay for executives of companies that sell their firms' bad debt to the government.

 

"The private sector got us into this mess. The government has to get us out of it. We want to do it carefully," said Representative Frank in a broadcast interview.

 

In the postwar era, many Treasury secretaries were financial experts before assuming the job. The Bush administration broke that mold somewhat by looking to industry for its first two Treasury chiefs, Paul O'Neill and John Snow.

 

Mr. O'Neill's feuds with the administration over his opposition to tax cuts may have made the White House view Treasury with suspicion, says former Treasury economist Bruce Bartlett. "The result was that the Treasury job got downgraded," he says.

 

The primary role of the Treasury is financing the operations of the US government, and that is helped if the department head understands the key role confidence and capital flows play in financial markets, says Mr. Bartlett.

 

"Maybe if we had had a Treasury secretary with some clout [prior to Paulson's arrival] ... we might have avoided some of these problems," he says.

 

If nothing else, the current crisis may ensure that future presidents recruit their secretaries of the Treasury from Wall Street, or what remains of it, says Professor Morici. After all, notable Treasury chiefs of the recent past include Robert Rubin, another former Goldman Sachs executive, who served during the Clinton administration.

 

A regularity to banking troubles

Today's problems are impressive mostly for their scale, according to Morici. Both the Great Depression and the savings and loan crisis of the 1980s required direct government intervention in private markets to prop up US finance.

 

"The fact of the matter is that about once a generation banks get us in trouble and we have to bring in a posse to straighten them out," says Morici.

 

White House-Congress negotiations over bailout details were moving quickly at time of writing. But it remained an open question whether lawmakers will move as fast as the White House wants. "It's important that we act quickly, but it's more important that we act responsibly," said Senator Dodd on Monday.

 

A draft bill from Dodd would add to the administration's plan help for homeowners and limits on executive compensation. It would also call for the government to get a stake in companies helped by the unprecedented rescue.

 

An emergency board of two appointees from the House and two from the Senate would watch over the Treasury's bailout operations, under Dodd's plan. The whole program would last only a year, as opposed to the two years proposed by the administration.

 

First votes on the bailout could come as early as Sept. 24. Mr. Bush on Monday urged lawmakers to move as fast as possible. "The whole world is watching" the plan's progress, he said in a statement.

 

 

[Good Old Neon]

With the exception of Jules, the other free market, anti-socialized-anything members of this board seem to be conspicuously absent from this thread.

[Sir Stewart]

[Good Old Neon]

Has anyone offered a coherent picture of what the

[JUDE]

With the exception of Jules, the other free market, anti-socialized-anything members of this board seem to be conspicuously absent from this thread.

 

 

And your point is?

 

I'd rather not see any sort of bailout, of course the FDIC (with it's current reserves) is far from being able to cover all of the deposits in one of these banks, much less when multiple banks go under. Sort af a damned if you do, damned if you don't scenario in my book.

[Good Old Neon]

And your point is?

 

I'd rather not see any sort of bailout, of course the FDIC (with it's current reserves) is far from being able to cover all of the deposits in one of these banks, much less when multiple banks go under. Sort af a damned if you do, damned if you don't scenario in my book.

 

Just an observation.

[bjorn_skurj]

Has anyone offered a coherent picture of what the "financial calamities" of not bailing the banks out might look like? I've read a lot of hand-wringing articles, but I've yet to get a sense of what, exactly, is at stake here. I cannot help but view this news through the mushroom cloud colored lens of previous, dire, end of the world pronouncements uttered by members of this administration.

 

Assuming one exists, can someone link me an article, please?

I think the concept is that without something like this, credit would dry up to an extent that it would seriously degrade the economy's ability to keep us all fed and happy.

[Good Old Neon]

I think the concept is that without something like this, credit would dry up to an extent that it would seriously degrade the economy's ability to keep us all fed and happy.

 

And that is different from the current predicament how?

[bjorn_skurj]

And that is different from the current predicament how?

I dunno. They say it would be worse, much worse. Like Road Warrior universe worse.

[Good Old Neon]

I dunno. They say it would be worse, much worse. Like Road Warrior universe worse.

 

That.

Would.

Be.

Awesome.

 

But seriously though, that

[Guest Jules]

With the exception of Jules, the other free market, anti-socialized-anything members of this board seem to be conspicuously absent from this thread.

Don't label me!

[bjorn_skurj]

That.

Would.

Be.

Awesome.

 

But seriously though, that's my point

[uncool2pillow]

I'd rather not see any sort of bailout, of course the FDIC (with it's current reserves) is far from being able to cover all of the deposits in one of these banks, much less when multiple banks go under. Sort af a damned if you do, damned if you don't scenario in my book.

That's kind of where I am on this thing. In general, I'm a free marketer, but I'm not naive enough to believe in a pure free market. My sense is that CEOs in all businesses have become so obsessed w/ the quarterly, monthly, or weekly profit reports that no one is ever thinking long term. Because of this politicians in DC may have to step in to dome some handholding, but I'm not sure they're any better suited.

 

I know I haven't been this worried about the world economic situation in my life, except for maybe about 2 weeks in the middle of September, 2001.

[Edie]

Right now the markets feel somewhat placated (note that I said "feel". Markets are emotional). Yes the NYSE was down 175 or so today, but it's still within 1 or 2% of the start of last week. So for right this second (and the market feels like second to second at this point), time should be taken to get this right.