patrick.net

It just occurred to me what was the intent of the original Paulson plan: He wanted to make permanent the temporary loans that the FRB has been making, at face value, against suspect collateral.

I asked this question a couple of days ago and I am going to ask again.

WTF is the wording of .....outstanding $700B at any one time. That sounds like a banking revolving credit line.

Why didn't he word it as a total of $700B, period? What are the loopholes that bankers can take advantage of with outstanding balance at any one time? If we are committed to letting him print to a total of $700B at any one time, does it really mean that we are printing $700B ONLY?

From the New York Times:
"Around the country, Republican and Democratic voters are rising up in outright opposition to the White House plan or, at the very least, to express concern that it is being pushed through Congress in haste.

Lawmakers, in turn, are agonizing over what to do."

Really? Agonizing, huh?

I thought that as a _representative_ of the _people_, this would make it absolutely a no-brainer. They are in Congress as a proxy for their constituents, so if the majority of their people are against the bill, should they not vote NO with confidence?

Why this conflict? :-)

TOB,

So Denninger is claiming that Bernanke is purposely recalling the Fed loans to make things look worse than they are? That is one possible explanation.

A slightly less sinister explanation is along the same lines as what I said above: That they are calling back or voluntarily getting repaid on the e Fed loans in preparation of making them "permanent" (buying the assets) using "new money" allocated by Congress through the imminent bailout bill.

Perhaps it is no coincidence that the number is $700B. It is not too far above the fed's currently outstanding balances on the various lending facilities.

Plus of course the rescue plan is an interest free loan, with the taxpayer taking the risk.

If this is the case, it means that the whole rescue plan is just a reset of the terms on the temporary lending. There is no imminent crisis, rather Wall St is using the threat of impending doom to negotiate a sweet deal for themselves. They are holding an axe over orr collective taxpayer head, although the temporary lending is in fact sufficient. Now they just want higher profits.

Hey I have an idea. Why don't they pass a bill that makes the Treasury buy houses off anyone who wants to sell them for 20% more than the current market price?

Cumon. If we don't do it the world will end.

actually, might as well make that 20% more than whatever the house was bought at. Don't want anybody losing money here.

Great idea Patrick.

Here is why this is sooooo good:

1) We can all do this without taking off work to protest or flying to Washington to sock someone in the eye.

2) We take back the power.

3) There is nothing they can do about it. Are they going to ding all of our credit ratings and not give anyone loans anymore? NO, they will die in that environment.

Yes, it turns out we DO have power.

Instead of a crowd of bleating sheep begging Congress=banksters not to eat them, we can simply cut them off.

The Dems are pussies, once the bail-out was proposed. They immediately started thinking about adding provisions, they don't even think maybe we shouldn't pass this thing at all (even when their constituents are against it).

cb, neither did the Republicans that hated the plan.

The best protest...change your tax withholdings to exempt. This money will not come entirely from SWF. Every country is going to do the exact same thing to save their own as***.

Senator:
Why can’t we pay these banks the actual value of these toxic assets so maybe the tax payer may be able to recoup some of this money?

Paulson:
Can’t do that. We need to pay way more than these assets are actually worth. If we don’t, banks may choose to not participate.

Senator:
Can we put in a clause that reduces CEO pay of failed companies and multimillion dollar golden parachutes for CEOs of failed companies?

Paulson:
Can’t do that. In order for this to work we need them to want to participate. If they do not get those multi-million dollar bonuses they may choose to not participate.

American wage slave:
If this is such an emergency how can Wall Street still be in a position to “choose” and hold out for a sweetheart deal? This stinks!

This is really terrible. The rule of fear is trumpeting logic.

Even if something needs to be done - why this plan ? Instead of simply adding provisions - why are we not discussing alternatives ? Why is the congress is in such a hurry ?

Paulson scared the sh1t out of these congressman. No one wants to be blamed for the imminent depression. Every puppet is declaring - "We need to act fast and act decisively". Wow. What a circus.

There is no outrage. Nothing to the scale needed. There are no marches, no demonstration. Seems like American people have resigned to fate. The fate of getting raped by the PTB whenever the the PTB gets an erect1on.

EBguy,

What is the current balance outstanding for the various Fed credit facilities? How much did it change the last few days?

Ok.. "Don't fight them.. Just join them"!!!!

They are determined to "help people stay in their homes" I guess this means foreclosure forbearance and loan modification. Obviously this is not fair at all and can drive a prudent person nuts. My money is on the prudent person slowing slipping into imprudent ways. The prudent people still paying their loans which were obtained in the last 5 years in addition to putting 5 to 20 percent down and yet still underwater what will they do?

I think these people should stop paying their mortgages and qualify for the forbearance because they will be able to squeeze a good year of living for free in the house. The downside is simply a 3 year credit hit but who cares. Right?

Can someone walk me through this scenario in theory? For example in Southern California with a purchase money loan.

I called my Rep, and emailed him.

The public is clearly pissed about this one. If it gets through it is quite simply the final failure of our democratic system.

They're already on a knife edge regarding monetary policy and financial structure. If they stay on this path, they are going to lose all support from the public.

Triplec, you are absolutely right. The people who have continued to pay their mortgage even though their asset has been declining are about to jump ship.

Why the hell wouldn't they?
We've only just begun on the defaults.

And who in their right mind would BUY a house right now? You have to watch 5 seconds of tv these days to figure out that's a terrible idea.

So after things drop another 20%, and the foreclosures exponentially rise,
Then what? The FED asks us for $7 trillion instead of $700 billion?

What is the current balance outstanding for the various Fed credit facilities? How much did it change the last few days?
The TSLF increased by around $11 Billion to ~$197Billion total. Bid to ask on yesterdays $37.5Billion TSLF auction was 1.63.
TAF has not increased in ages and is holding steady at $150Billion. Will be interesting to see what the H.4.1 numbers look like later today.

Amen Bap. My blood is fucking boiling over this one.

Thanks, EBguy,

I found the "slosh report" that tallies the OMO at the Fed,

http://www.gmtfo.com/reporeader/OMOps.aspx

If you have time, can you explain how this related to the numbers you are getting from the Fed website spreadsheets? I admit being lazy here, but as everyone else I am a bit stressed about the goings on.

>>I’m voting for Chaves and Putin. and then moving to Oz. F this place.

Haha, Bap, I knew you would come around ;) How about Obama?

They might as well put Ahmedinijad and Chavez on the ticket. Those guys couldn't do much more harm than the criminals we currently have running the place.

Keep calling, faxing and emailing everyone. It is clearly rattling the cages, and at worst it is buying us time.

If this passes, it is a clear signal to me that the terms of my tax-deferred accounts won't mean a thing when it comes down to it: just manufacture a convincing enough, large enough crisis, and seizure can be justified on the flimsiest grounds. That tells me all I need to know to take the immediate penalty and tax hits, and pull the plug on every dollar-denominated investment I have, as well as start moving my business offshore. I don't even trust Paulson and his crew to not monkey around with foreign exchange rates so I won't even bother with ADRs and the like. At that point, it is either completely booked and traded in a non-dollar currency, or I'm not interested in the investment. I'll even settle for adding to my physically possessed precious metals in the absence of other options. The egregiousness of the violations won't happen right away, but I'm sure as hell not going to stick around without a bolt hole outside of the country.

The rules of the game are you need to call/fax/email each representative, each day. They look at the figures day-by-day, and as long as you are not part of some organized spam, each day's contact is legit in their eyes.

Figure out what you will do if this passes, because chances are it will.

apostasy or OO,

what is the best way to buy physical gold? I want physical delivery of it to me. I'm not talking about an amazing amount of it.

Are there dealers you would suggest? Should I try to find one locally?

At least some street protests are happening.

http://biz.yahoo.com/cnnm/080925/092508_bailout_protests.html

Is anyone aware of street protests in Bay Area ? I would definitely join.

Fuzzymath,

for small amount buy locally, find a coin dealer that has been in business for many years. Find the largest one.

Buy gold ONLY with cash when you are doing so locally, leave no paper trail, no address, no contact information.

Looks like the bailout deal is in some trouble.

http://biz.yahoo.com/ap/080925/financial_meltdown.html

AP
Bailout deal breaks down; Bernanke back to Capitol
Thursday September 25, 7:49 pm ET
By Jennifer Loven and Julie Hirschfeld Davis, Associated Press Writers
Bailout deal breaks apart; Bernanke, Paulson head to Capitol for late-night negotiations

WASHINGTON (AP) -- Urgent efforts to lash together a $700 billion rescue plan for the national economy broke apart Thursday night, hours after key lawmakers had declared they had reached a deal.

Treasury Secretary Henry Paulson and Federal Reserve Chairman Ben Bernanke sped to Capitol Hill to try to revive or rework the proposal that the administration says must be quickly approved by Congress to stave off economic disaster.

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Congressional leaders were to meet with the economic chiefs into the night.

THIS IS A BREAKING NEWS UPDATE. Check back soon for further information. AP's earlier story is below.

Another shotgun wedding.

JPM is buying WaMu branches. WaMu stock is down over 50% to 75 cents after hours.

Breaking News....

WaMu is about to be bought by JP Morgan. I hope this thing falls apart before Congress can screw things up more.

http://www.kndo.com/Global/story.asp?S=9076540&nav=menu484_2_8

WaMu bites the dust!

All we have to do is buy only what we need; not what we think we need. If we did this for a very short time, the real economy would be forced to come through and jack up gummymans plans. Would that work?

Whoooo Hooooo!!!!!

Whoooo Hooooo - ME TOO!!!!!

I hated those ads; Good ridden s.

Couldn't even make it to Friday - wow!

Again I suggest the shortened work week. Start on Wed. so that Friday comes in 3 days and you have 4 days to work on bailouts over the long weekend.

It might be a good idea to Invest in Fiddles!!!

*Not investment Advice*

I take it back. It's not 75c it's 45c. Cheaper than bubble gum. I would still rather have bubblegum.

Dear *ME*:

Thank you for expressing your concerns with the problems in the financial sector and proposals to address them.

A lot of Ohioans, including me, are angry at the thought of bailing out people who made a lot of money making bad business decisions that created problems in neighborhoods across Ohio.
I agree that we need to avoid rewarding excessive risk taking. These institutions made unwise decisions, and taxpayers should not be expected to simply cover their losses.

Treasury Secretary Paulson this weekend sent a proposal to Congress that would give him almost unfettered authority to spend $700 billion purchasing troubled assets from financial institutions. On Tuesday, my colleagues on the Banking Committee and I held a hearing at which Secretary Paulson, Federal Reserve Chairman Bernanke, and others testified.

They made a strong case for the need to act quickly to prevent further damage to our economy. The turmoil in the credit markets has the potential to do great damage to a lot of innocent bystanders. I am afraid that if we do not act, the economic instability could affect thousands of American jobs and the savings of countless middle class families.

But Secretary Paulson’s proposal is not the right answer. No Secretary should be given a $700 billion blank check. Taxpayers must be given an opportunity to recover their money, and assurances their tax dollars will not fund lavish pay and golden parachutes. We need strong rules to guard against abuse, and to ensure all types of institutions and regions are helped.

In the days ahead, we need to focus on containing the damage to middle class families and local businesses as much as possible. In the months ahead, we need to take a hard look at how financial markets are regulated so we never find ourselves in this situation again.

Thank you again for contacting me. I will certainly keep your views in mind as the Senate debates ways to help restore strength to our economy.
Sincerely,
Sherrod Brown

Look at this shit! I just got this from one of my reps in response to a letter I wrote last night.

I am Ok with the Bailout as long as these two conditions are met :

1) All the profits made by selling homes in the past 8 years are taxed at 50%. Put those numbers are tax liabilities which can be paid in next 10 years.

2) for 2000 - 2008 , Yearly salary above 40K (Average salary) per year at all institutions recieving bailout will be taxed at 50% and put as tax liability which can be paid in next 10 years.

This is an attempt to cancel out profits made from US tax payer with losses to US tax payer.