Wasn't the bailout supposed to take care of this? WASHINGTON (AP) — The Federal Reserve announced Tuesday a radical plan to buy massive amounts of short-term debts in a dramatic effort to break through a credit clog that is imperiling the economy. The Federal Reserve, invoking Depression-era power under ''unusual and exigent circumstances,'' will buy ''commercial paper,'' a short-term financing mechanism that many … Read More
Dow Plunges Below 10,000
But you probably know that already. And as for that $700 billion bailout? Money well spent….
Recovery Plan Bill Passes House
I guess that’s what… good? Oh, okay. Good.
The Rescue Plan Has Many Alternatives
I wish I were smart enough to understand them all. I like this one though — the Wright plan: …to let any American with a mortgage swap it out for a government one at 7% for up to 50 years (to get the monthly payment down to where the borrower can handle it). The Treasury will pay off the existing … Read More
Here It Is: My Long-Awaited And Tremendously Under-Informed Opinion (At Least Of Late) About The Financial Crisis
Important people are telling us to be afraid… very afraid… of what will happen if we don’t "fix" this "thing". I’m not talking about politicians. I have the general impression that they are, at best, only slightly less clueless than me about the crisis, as well as the bailout rescue plan bailout supposedly designed to stem the crisis. I’m talking … Read More
Closer To Home
(1) Oil prices plunged today, which is good, because we’ll see lower gas prices. Too bad we won’t have much around here. (2) Wachovia, my bank, got bought today by Citicorp. I’m assured that my money is safe. Riiiiight.
God I Hate House Republicans
I really do. UPDATE: Yeah, some Dems are to blame, too. But then again, the Democrat side said they would deliver half their caucus, and they over-delivered. The Republicans needed to do the same, and they failed miserably. UPDATE #2: Should the Democrats, who are in majority, just demogogue this situation and write a progressive bill and not wait for … Read More
Walk-All-Over-Ya Struggling
I think I’ll make a run on my bank. UPDATE: And then there’s this… I’ve received phone calls in the last hour from two economists I respect, one of them Larry Lindsey, the other in a position where he’d prefer not to be named. Both have government experience, neither is alarmist by nature, and they say this: The huge European … Read More
The Problem With The House GOP Proposal
As I understand it, the GOP proposal is that instead of getting an equity share in the companies that have bad debt, we simply insure those bad debts. The distressed company holding a troubled mortgage-based asset gets a taxpayer-funded insurance policy for the full value of the asset in exchange for a small premium payment. Of course, this is exactly … Read More
McCain Torpedoes The Bailout Deal
So both parties have been working hard for 7 days to come into an agreement, and then McCain enters – fancying himself deus ex machina – and poisoned the well. It’s political theatre, right where we don’t need or want it. So is it deal or no deal?
Dems And Reps Reach A Deal “In Principle”
Full text of agreement: 1. Taxpayer Protection a. Requires Treasury Secretary to set standards to prevent excessive or inappropriate executive compensation for participating companies b. To minimize risk to the American taxpayer, requires that any transaction include equity sharing c. Requires most profits to be used to reduce the national debt 2. Oversight and Transparency a. Treasury Secretary is prohibited … Read More
The Mortgage Crisis Explained
Best explanation ever from a blog Good Math, Bad Path. I’m reprinting it in its entirety. The title of the post is Economic Disasters and Stupid Evil People: With the insanity that’s been going on in the financial world lately, a bunch of people have asked me to post a followup to my earlier posts on the whole mortgage disaster, … Read More
Bailout History
A chart (adjusted for inflation) The details. While I’m at it, I think Markos is right. These are the things we should be looking at: What we need to determine the extent of this "crisis": Transparency. Release the presentation Paulson gave to congressional leaders that supposedly has them all spooked. Give us the data and information, and let outside economists … Read More
They Knew This Was Coming?
Buried in a Roll Call article today: [White House Deputy Press Secretary Tony] Fratto insisted that the [$700 billion mortgage bailout] plan was not slapped together and had been drawn up as a contingency over previous months and weeks by administration officials. He acknowledged lawmakers were getting only days to peruse it, but he said this should be enough. This … Read More
The Worst Is Yet To Come
Scary thoughts from Billmon: So think of it this way: What happened last week was a giant run on the bank, with people lining up to get their money back — like that scene in It’s a Wonderful Life, except in cyberspace, not Bedford Falls, and with Ben Bernanke and Hank Paulson, not Jimmy Stewart, standing in the electronic doorway … Read More