patrick.net

The leaders rejoiced and exclaimed that one universal currency required more than a central bank - it required one world government.

World government? Dream on. :)

Don't worry. We will have WW3 before that happens.

On a lighter note-

Whatever happened to the good ole days?

http://www.youtube.com/watch?v=gvaY4AMd-js

Oh it was Dream on or Dream weaver?

http://www.youtube.com/watch?v=y5WrD-fAzx4

EBGuy,

sure, they are tapping into the Treasury. But who, WHO are buying these T-bills? As far as the July report can tell, foreigners are fleeing T-bills. The retail Americans don't have that much patriotic dollars left.

I say the 770 pt crash is rather staged.

Look at Nikkei and Hong Kong, the drop is significantly smaller.

I agree with Krugman. I think the nationalization of the banks is exactly the way to go. None of this equity warrant nonsense. Let it fail. Take it over. Make 'em all federal employees until they are spun out.

One of the articles I loved about BoA taking on Meril was the CEO stating he will not bay Wall Street wages, he is paying banker maret rate. There is a man who knows who has the power.

When will Congress wake up and reaise who has the power? Banks need us to buy their garbage more than we need to bail them out. We can always get them in BK anyway. Time to peddle another plan.

Bayrenter1 - yea. I think McNearney knows he is a 1 termer. His party fed him to the wolves and he is gone. Remember, Pombo was voted out for his close ties with Abramoff. Well, I would rather vote fo Abramoff himself after that terrible partisan vote! The 11th distric was HUGELY anti-bailout.

Duke.

I think public (i.e. government) purchases of senior, preferred, voting, convertible stock does not necessarily count as nationalization, unless the public ends up holding a majority of the voting power. But that may be a fine distinction, I can agree.

I will support a plan that requires any rescue to take the form of senior, preferred, voting, convertible stock. But as always, the valuation of the companies and their debt is key, and the law must nail down a tight system for evaluating the price the public should pay for their share.

justme,

Deal.

Wow - that was easy. Why is this so hard in Congress?

Paul Says:

> On a lighter note-
> Whatever happened to the good ole days?

Rember when we had a large number of posters telling us we were crazy and real estate would never drop in value?

Case Shiller out.
SFO at 156.88.
Down 1.85% for July.
Down 24.81% YOY.
Down 28.16% from Peak.

I am now chosing a rate of 1.5%, and I show an equilbirum to normal BA prices in Nov. 2009 if there is no market overshoot.

This means we have 35% to go.

Even with a bailout, I think we WILL overshoot though. Either because the recession will be bad, or because the 'cure' of a bad bailout will be worse.

Also, part of my model presumes the BA appreciates at 4.25% per year - or about 1% faster than inflation. Sadly, we are not seeing tha kind of wage increases. So, if my model fails, it is too optimistic.

Please recall that at its peak, SF was 108% of normal.

Here's a link to a messageform that will send your thoughts about the bailout bill to all of your representatives, including Bush and Paulson.

http://congressorg.capwiz.com/congressorg/issues/alert/?alertid=11987806

I think a bailout will eventually happen, no matter what. Maybe in some modified form, but politicians want attention and it would be very hard for them not to be seen doing "something". Even if that something turns out to be counterproductive.

I have faith that our politicians will take this recession and turn it into something worse.

Still, it was heartening to see them do the right thing, if only momentarily.

If you wanted to know the whole simple story of how we got into this mess, here it is.

http://www.youtube.com/watch?v=NU6fuFrdCJY

Please pass this around if you liked it.

"i would prefer a bailout rather than a depression."
So would we all. But that is a false dichotomy. Don't lend money to a compulsive gambler, don't through good money after bad.

Hey, use the Justme/Duke plan.
We recapitlaized the banks, preserved equity and debt, and actually put money to work that will fund the current need for credit.

Still, it was heartening to see them do the right thing, if only momentarily.

Or perhaps there were merely confused by the Mercury retrograde.

http://www.dailypaul.com/node/65539

Excellent speech by Thaddeus McCotter.

"There are no necessary evils in government. The Treasury to you, gentlemen, is closed."

So there are non-clowns other than Ron Paul. I stand corrected.

Guys, just an observation but the currency isn't collapsing. It is getting stronger. Money is starting to be worth something again. I look at this as a good thing. Look at gold and oil. Oil is falling consistently now, and gold jumped again due to the panic but is now back on a decline in balance with the gain of the dollar. I know people starting to buy houses literally with cash around the country. It is a new day, but we've got to think differently now than our parents did.

If we expect them not to rob us, we need to put something more permanent in place, and this means having a leader.

TOB, I agree. GWB has absolutely disappointed us.

Guys, just an observation but the currency isn’t collapsing. It is getting stronger. Money is starting to be worth something again.

Yes. I was chatting with a friend yesterday... dollar-euro parity is not impossible in the next few years.

This is because Europe sucks more.

Not investment advice.

Would LOVE to see more discussion on the video posted above. I came here to post it.

Can anyone provide insight into it's veracity?

tinyurl.com/3f5wzw

FormerAptBroker Says:
September 30th, 2008 at 6:42 am
Paul Says:
> On a lighter note-
> Whatever happened to the good ole days?
"Rember when we had a large number of posters telling us we were crazy and real estate would never drop in value?"

Yesterday I was in a room with some very scared 'former?' millionaires. I smiled internally as one said "Who could have seen this was coming?"

Who could have seen this was coming?

Yes... ;)

Who could have ignored the writings on the wall?

Malcolm,

Of course the dollar is stronger. We just saved $700 billion :)

The only thing we have to beware of is falling into a deflationary spiral... but Ben won't let that happen. They'll print money to balance it out.

The important thing about continuing to vote down the bill is the message behind it... that we will protect our currency.

This has been posted many times here, but I think it is important that we remember:

"If the American people ever allow private banks to control the issuance of their currency, first by inflation and then by deflation, the banks and corporations that will grow up around them will deprive the people of all their property until their children will wake up homeless on the continent their fathers conquered."

-- Thomas Jefferson

TOB
What is that Bernanke quote? Where? When? Context?

How is this analysis:
1. Market is too crazy to be into. Deleveraging means we are ALL just waiting for the other show to drop. The death sprials of the hedgies and badly managed banks make the ride too hard for investors.
2. Bonds look bad as they may pop. If no rescue, we move into the phase of more than just equity stake holders getting wiped out, we move into debt-holders getting wiped out.
3. Treasuries look bad as massive holders of Treasuries may be dumping them to solve their own need for cash. Why buy a 0% T-Bill when you can get China's 5% bill below par?
4. Cash looks good as it is a realtive safe haven until we figure out which way all of this is going to break. I mean, inflation losses stink, but it seems to be a smaller loss than anything else.
5. In theory, gold should have been good but the momnertum plays by the big boys makes those waters to dangerous to swim in.

So - the dollar is strong as it is seemingly the safest store of value in these uncertain times. And with everyone wanting them, we are rallying the dollar.

Once the BailieMae bill is passed, dollar will fall then move back to reflecting ecnomic fundamentals. Which may be bad for Europe.

I would like to say to Milton and Anna: Regarding the Great Depression. You're right, we did it. We're very sorry. But thanks to you, we won't do it again."

Who else thinks this full quote, in which Bernanke is talking to Milton Friedman in 2002 about the role of the central bank in the great depression, is differnet than TOBs quote - wihch seemed to imply Ben is now sad about what he personly just did.

Invoking The Great Depression would be a fear tactic. There is NOTHING the Fed can do NOW that can stop an unwanted economic event.

They COULD HAVE lowered the severity of the coming recession by turning off the excess liquidity cool-aid spigot a lot earlier.

My favorite quote from yesterday:
Rep. Paul Braun, R-Georgia, voted against it.
Before his vote, he called the bill "a huge cow patty with a piece of marshmallow stuck in the middle, and I'm not going to eat that cow patty."

EB
Quite similar to Surfer X's 'shit sandwich'--though he was actually referring to the traunches.

Duke Says:

> Once the BailieMae bill is passed...

I like "No Banker Left Behhind" more than "BailieMae" to describe the bailout bill...

More evidence that the market is fixed.

On what basis did DOW rally 500 pts? Somebody is not doing a good job in keeping DOW half dead to scare the sh*t of retiring or retired voters.

I can understand the -770 part, I am still perplexted by the +485 part. Obviously our economy is doing very well, since we rallied almost 500 pts on nothing.

OO,

Why do you expect the market to be rational ? As much as panic selling, there is panic buying. Traders are always fearful of loosing money by missing out on cashing on a trend. Economic fundamentals do not dictate day-to-day gyrations.

Who knows OO. Could be traders optimism about the bill passing on a revote. In which case, we'll drop the 5% again if it doesn't pass. Buy on rumor, sell on news. Even if it had passed yesterday, I bet we would have dropped the 9% over the course of the week anyways.

All the arguments I'm hearing for the bailout are retarded. In their attempts to convince people it's NOT a bailout, they have made it completely obvious that it IS a bailout.

I think the Trinity (Bush, BB, Paulson) are not doing a good job marketing this bailout, due mostly to their arrogance.

Paulson came out as the most abrasive and arrogant personality in finance (probably an overstatement, Fuld is worse), asking for financial dictatorship out of the blue while drumming up the dire consequence of financial Armageddon, which people on this blog know will be coming. That was right after telling the American public for months that everything was doing just fine. Don't you need a transitional episode here?

What they should have done is to let the market crash even harder, and let a few pension funds go belly up, bailing out the rest with NO retroactive extension of protection for those that have failed, that will present a far more convincing danger to the public. Then the Trinity can come up with the same terms, at that point the American public will be far more receptive. I am sure they (minus Bush) are smart enough to think of this, but the fact that Paulson doesn't even want to bother with such maneuvers means that he is simply too confident of himself.

Paulson grossly miscalculated. After being in Goldman Sachs for years, I presume he know all the negotiating techniques. He is no dummy.

This time he tried the Bush model - create panic and gather support. It worked for Iraq war. But since he is not a seasoned politician, he had no idea about how to gauge public response. He flunked big time on this.

He wanted to create panic to get the bailout pass quickly so he gets to choose which of his cronies get the money. But the bailout did not pass, and panic actually increased by his action.

Everyone who is coming out on TV supporting the bailout (from both sides) is talking about "retirement savings and ability to send kids to college". They are desperately trying to spread fear and succeeding to some extent.

So the theory is, if there are no student loans, no one will be able to go to college ? Prices will still keep going up, even when there is no one to pay ? Idiots. And these people are going to save capitalism ?

One of the reasons deflation is so scary is - hardly anyone understands it.

My favorite argument is the following...

1. The banks are fundamentally sound
2. They have assets that are stuck that they can't sell
3. It would be silly to let them fail just because they can't sell their assets for what they're "really" worth.
4. Therefore, we should save them by buying that asset.

Through the same logical sequence, I could argue the following...
1. I am financially sound
2. I have an asset (a house) that I can't sell for a "fair" market value (more than I bought it for)
3. It would be silly to let my go bankrupt just because I can't sell my house for more than I bought it for.
4. Therefore, the government should save me by buying my house.

Substitute house for any other asset you can imagine and the argument still works! Brilliant!

3. I would

while I am sure the bailout vs 2.0 or 2.01 etc will pass (and we know we do need a bailout, just that the distribution of reward and risk is too skewed), I am more impressed by the sheer arrogance of our overlords.

I know that they own America and we are just little guys trying to be left alone under the system, it seems like the overlords will stop at nothing to grab the last cent from the new-age American serfs.

There are already reports of organized push to the retirees telling them that if the bailout doesn't pass, they will not receive their SS checks. This will only get worse when more boomers head into retirement without sufficient funding, the government can tell them to vote for anything if the threat is "your SS check will be bounced!".