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POPSU.S.Treasury's Kashkari to Lead Bank Bailout Office (Update1) ``We need to think through what's the best for securities, for loans, to help strengthen the balance sheet of the institutions.'' Anthony Ryan, the Treasury's acting undersecretary for domestic finance, said in an interview today on CNBC. ``We are focusing on the broader issues, the mortgage- related assets.'' Senate confirmation is required to fill the position for which Kashkari will be nominated. The Treasury hasn't specified the length of Kashkari's tenure, or whether the White House would nominate him officially. The Bush administration remains in office until January. Ben Dover, "Dewey Screwem and Howe" via tom mcguire
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POPSMarkets Fall: Government Throws Away More Money
You don't have to be a lawyer to know if someone is lying -- But when a lawyer catches a witness in a lie it is often the beginning of the end. What caught my eye in this clip is: the government (USA) "will begin paying interest on the reserves that banks leave on deposit." Humm....we print the money...we give the money to the banks at super low interest rates...now the banks can give us back the money and charge us interest!? The next big part of the plan is to buy unsecured loans for threatened banks that may go out of business. Humm...Note: Other countries are buying assets or Number One Preferred Stock...meaning they get paid first if these banks fail. Also, rather than seeking to "inspire confidence," some suggest it would be better to dole out the cash for every new loan the banks make...which is what we want them to actually do. Other lies: "optional," warrents; & "mark to market," valuations. While our house burns, these alleged "firefighters," are steali
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POPSThe Real Culprits - Part One And in so doing, he helped create the market for the risky subprime loans that he and Democrats now decry as not only greedy but "predatory." Yes, the market was fueled by greed and overleveraging in the secondary market for subprimes, vis-a-vis mortgaged-backed securities traded on Wall Street. But the seed was planted in the '90s by Clinton and his social engineers. They were the political catalyst behind this slow-motion financial train wreck. And it was the Clinton administration that mismanaged the quasi-governmental agencies that over the decades have come to manage the real estate market in America.
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POPSBigPicture=Acorn+Fannie+SubPrimeGoneMad 1993,Congress gave Fannie and Freddie the go-ahead to finance it all by buying loans from banks, then repackaging and securitizing them for resale on the open market. "We have to use every means at our disposal to end discrimination and to end it as quickly as possible," Clinton's comptroller of the currency, Eugene Ludwig, told the Senate Banking Committee in 1993. Wall Street eagerly sold the new mortgage-backed securities. Not only were they pooled investments, mixing good and bad, but they were backed with the implicit guarantee of government.
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POPSBash the Bailout: Government is Not the Answer
......banking crisis, they make things worse. This is a long paper, but see p. 4 in particular. 10. One of the oldest forms of government intervention in the financial markets has been deposit insurance. Yet globally it destabilizes capitalism, impedes innovation and makes a bad regulatory regime worse. British economist Andrew Lilico explains how. 11. Harvard economist Jeffrey Miron puts it bluntly: “The fact that government bears such a huge responsibility for the current mess means any response should eliminate the conditions that created this situation in the first place.” 12. Government has been becoming more intrusive when it comes to lending over the years. John Berlau looks at how they want to fingerprint anyone originating a home loan. The bailout bill is now law, but it does little or nothing to solve the problems government created. As long as they persist, the financial markets will be at serious risk. In the end, we may need to bailout the bailout.
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POPSCitizen Journalism And Steve Jobbs It is simply silly to decry "citizen journalism" because one "citizen journalist" got the story wrong, intentionally or otherwise. Actually, the term "citizen journalism" is silly. It is a way for big media to differentiate themselves from the "citizens". People say things on the street. People say things in their home, at work, on the train, and in email, Twitter and on their blogs. This is all information. The fact that it continues to be necessary to think about what you hear and run it through filters is no different for any information source. I certainly would never take a CNN, or Fox or MSNBC news story as gospel. Would you?
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POPSSimpsons Episode Features Rigged Voting Machine Well you know something is terribly wrong when we support the axes of EVIL with our American Oil dollars then support the Communist or rather letting the Communists support US.. And to think the American people are caring, loving people who let the greedy folks run our country to the ground while we happily played games, watched t.v., watched three sports stadiums be built, and worried about t.v. personalities and all for what ?? The t.v. personalities, sports stars are rich and live the life we don't have yet we pour our over taxed, hard earned dollars to them anyway.. ha ha so who's still laughing?? ha haaa
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POPSEnvironmental Activists Are Trying To Exploit Wall Street Bailout Bill .......energy or natural resource development projects that the Greens oppose. Once the U.S. Government owns the securities (and, thereby, the property) an omnipotent Paulson could essentially take the land out of circulation by "preserving" it as public land. He could even claim — through the economic device of "contingent valuation" — that the acquired land has more value as pristine public land than as, say, an energy or logging project. Contingent valuation uses opinion surveys to value intangible assets for which there is no market, such as scenic views and crystal-clear air. Respondents are asked hypothetical questions like, "How much would you pay to preserve a seashore view from oil drilling?" or "How much is it worth to keep a forest pristine and un-logged?" Though the whole process is pretend — the respondents know they won't actually spend any of their own money for this preservation — the government uses the method to establish monetary values of preserved la
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POPSWall Street Fat Cats Aren't at Fault This Time That’s because Raines was transforming Fannie Mae from a boring but stable financial institution dedicated to making homes more affordable into a risky venture that abused its special status as a “Government Sponsored Enterprise” (GSE) for Raines’ personal profit. Fannie bought the bad loans and bundled them together with good ones. Wall Street was glad to buy up these mortgage securities because Fannie Mae was deemed a government-insured behemoth “too big to fail.” And others followed Fannie’s lead.
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POPSBarney Frank and Chuck Schumer’s Role In Fannie Mae's Failure In Congress, they made sure there was no additional oversight, no additional limit on executive behavior and compensation, and no further restraint on the growth of the companies’ mortgage-backed-securities portfolios, among other changes. (All of these needed reforms, by the way, have been championed for years by Sen. John Sununu.) They wanted more loans to people who might not qualify for traditional bank financing. And, as The Wall Street Journal has pointed out, Frank “pressured regulators to ease up on their capital requirements — which now means taxpayers will have to make up that capital shortfall.” Barney Frank is the very symbol of Washington’s deliberate refusal to prevent the collapse — the predicted collapse — of Fannie Mae and Freddie Mac. Rules were relaxed and money was loaned and predictably low income families defaulted on loans that they never had any business getting in the first place and now you and I have to pay for it.
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POPS The Bailout: Will The Center Hold? The bill takes a hybrid approach, and in the case of assets bought at auction, the most severe penalties kick in only when Treasury has bought more than $300 million in assets. At that juncture, a 20 percent surtax would be imposed on rich severance packages, and in the case of highly paid executives, the company would lose its deduction for salaries above $500,000. The second compromise dealt with a Republican proposal that the government intervene in the markets, not by buying up bad assets but by providing a federally backed insurance program that might make the same mortgage-related securities more salable. House GOP leaders had warned Saturday evening that they would need to take any deal to their rank-and-file members before committing to back it. In a sign that negotiations were growing serious earlier in the evening, a Pelosi aide collected BlackBerrys from the staffers meeting in her office so that no details would leak out.
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POPSFive alternative bailout plans Not advocating anything here except questioning the President/Wall Street idea that the bailout plan we've heard is the only possibility. See link for details on each.
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POPS$7.5 million Signing Bonus --- $11.6 million Golden Parachute .........AFTER A TOTAL OF 17 DAYS AS CEO @ WaMu......... Oh, say it ain’t so, he will miss out on that big bonus. Documents show WaMu was going to pay their new boss $8 million to simply not screw up and get fired — all negotiated as the Seattle-based banking giant’s loses climbed to an estimated $20 billion. Wow, I would love a job where I could get paid 8 million to just not screw up enough to get fired. Seriously, I guess I need to find a bank that is failing…
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POPSMcCain's Playing at "Leadership?" John Mcain is either (a) playing politics and setting himself up to be a hero by screwing around with the US financial system or (b) just a poor leader unable to rein in his own party and provide positive input.
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POPSJPMorgan Buys WaMu Deposits; Regulators Seize Thrift David Bonderman's TPG Inc., which led a $7 billion capital infusion for WaMu earlier this year, lost most of its initial $2 billion investment. TPG, based in Forth Worth, Texas, said in a statement yesterday it was ``dissatisfied with the loss'' and that the WaMu investment was a ``small part of assets.'' New York-based JPMorgan, which separately announced plans to raise $8 billion by selling common stock, had its outlook lowered to negative by Moody's Investors Service. Moody's left its Aa2 rating on JPMorgan unchanged. JPMorgan won't acquire WaMu's liabilities, including claims by shareholders and subordinated and senior debt holders, the FDIC said. JPMorgan paid $10 a share for Bear Stearns in March as the New York-based securities firm teetered on the brink of bankruptcy. ``Having worked with Kerry Killinger for 10 years, I still absolutely cannot fathom where or why he went wrong, and what caused him to lead the company into taking the kinds of risks that they did.''
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POPSThrowing Good Money After Bad is Pointless What's happening ... they start a war against Weapons of Mass Destruction but fine none ... Instead their friends make money on 'contracts' ... while 'billions' are lost unaccounte for ... big bosses dish out huge pays and bonuses ... and turn around and declare 'bankrupt' banks and brains !
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POPSHistory Is Repeating, When Will the Masses Wake Up? "At the present time, behind the scenes there is a night-and-day movement of collateral. A visiting Englishman leaving the United States a few weeks ago said things would look better here after "they cleaned up the mess at Washington." Cleaning up the mess consists of fooling the people and making them pay a second time for the bad foreign investments of the Federal Reserve Board and the Federal Reserve Banks. It consists of moving that heavy load of dubious and worthless foreign paper — the bills of wig makers, brewers, distillers, narcotic drug vendors, munition makers, illegal finance drafts, and worthless foreign securities — out of the banks, and putting it on the back of American labor. That is what the Reconstruction Finance Corporation is doing now. They talk about loans to banks and railroads." ...
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POPSFBI Investigating Companies At Heart Of Meltdown Last week, the Federal Reserve provided an emergency $85 billion loan to AIG, which teetered on the brink of bankruptcy. Lehman Brothers was forced to file for bankruptcy after attempts to engineer a private rescue fell apart. All the companies were laid low from bad bets on complex mortgage-related securities. Treasury Secretary Henry Paulson and Federal Reserve Chairman Ben Bernanke made the joint decision last week that the only way to stop the carnage was to deal with the root cause of all the troubles, billions of dollars of bad mortgage debt sitting on the books of major financial companies. This debt has triggered the worst credit crisis in decades, causing credit markets to essentially freeze up despite the fact that the Fed joined with major central banks around the world to pump billions of dollars of reserves into the financial system. IndyMac Bancorp Inc. and the former Countrywide Financial Corp., are also under. scrutiny.
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POPSHow Fannie and Freddie Lost Their Groove If that bill had become law, then the world today would be different. In 2005, 2006 and 2007, a blizzard of terrible mortgage paper fluttered out of the Fannie and Freddie clouds, burying many of our oldest and most venerable institutions. But the bill didn't become law, for a simple reason: Democrats opposed it. Republicans, tied by Democratic opposition, couldn't even get the Senate to vote on the matter. That such a reckless political stand could have been taken by the Democrats was obscene even then. Wallison wrote at the time: ``It is a classic case of socializing the risk while privatizing the profit. The Democrats and the few Republicans who oppose portfolio limitations could not possibly do so if their constituents understood what they were doing.' Congressman Richard Baker (R-La.) has been concerned about the risks created by Fannie and Freddie since 2000, when he first introduced legislation to augment the powers of their regulator...
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POPSThe Banking Bailout and Those Bells and Whistles It seemed like everyone was on the same page--it lasted for about 24 hours. But the funds are not uncontroversial and have been criticized as a method by which politicians can cater to special interests. The funds were set to receive funding from Fannie Mae (nyse: FNM ) and Freddie Mac (nyse: FRE ) in this summer's Housing Bill. The uncertainty over the funds is tied directly to the uncertainty with Fannie Mae and Freddie Mac, which need new legislation from the next Congress. The Treasury program to buy equity and securities from Fannie and Freddie only lasts through 2009. Under the new proposal, however, the funds will be addressed now. Together they receive one-fifth of the profits from the Treasury's purchasing program. Of that fifth, 65% go to the Housing Trust Fund and 35% to the Capital Magnet Fund. The remainder of the profits would stay with the Treasury. Not exactly the clean and simple passage that everyone was talking about on Sunday morning.
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POPSOil Posts Biggest Gain as Traders Caught in End-Month Squeeze Oil has risen 33 percent since Sept. 16 as lawmakers pledged fast consideration of the Treasury's plan to buy devalued mortgage-related securities. We are back to the cycle that pushed prices to records earlier this year.'' Gasoline for October delivery increased 10.41 cents, or 4 percent, to settle at $2.7038 a gallon in New York. Heating oil rose 14.52 cents, or 5 percent, to settle at $3.043, the biggest single-session gain since June 6. Regular gasoline, averaged nationwide, declined 1.8 cents to $3.739 a gallon, AAA, the nation's largest motorist organization, said today on its Web site. Pump prices reached a record $4.114 a gallon on July 17. Crude oil prices are ``too high'' because the global economic slowdown may spread and cut consumption, the International Energy Agency's deputy executive director said. ``Gold, silver, oil, copper, just about any hard asset, is looking good at this point,'' said Michael Fitzpatrick, VP at MF Global Ltd. in New York.
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POPSWall Street Fascism How shallow it was; how shallow it remains. The question is, How many times can the government race its emergency bailout vehicle toward the cliff without dragging the entire economy irretrievably into the abyss of outright socialism or full-fledged, Mussolini-style economic fascism?
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POPSOverview Of The Upcoming Bail-Out Of The Financial Industry The purpose of the bailout, then, isn't to recapitalize the banks, it's to put a firm value on the toxic sludge once and for all. Maybe it's a dime on the dollar, maybe it's 50 cents on the dollar. Whatever. When that's done, some banks will turn out to be insolvent, and perhaps they'll be allowed to fail. Others will turn out to be in bad shape but still solvent, and they'll continue doing business. Treasury’s Financial-Bailout Proposal to Congress The legislative proposal from Treasury Department for authority to buy mortgage-related assets http://blogs.wsj.com/economics/2008/09/20/treasurys-financial-bailout-proposal-to-congress/ Shock Forced Paulson's Hand A Black Wednesday on Credit Markets; 'Heaven Help Us All' http://online.wsj.com/article_email/SB122186563104158747-lMyQjAxMDI4MjIxMDgyNjA1Wj.html
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