patrick.net

Malcolm Says:
I’m going to frame the letter I got from Boxer some time ago saying there weren’t any plans for bailouts.

Malcolm, buddy, can you please upload or scan that letter someplace from where I can print it? I will write "LIAR" using a scarlet permanent-marker across that letter, and include it in the correspondence that I am sending to the senators who voted for this bill.

I am writing to them to explain exactly why I am now supporting their opponent and how much $ my friends and I are sending to their opponent's next election campaign. This letter will be a great "exhibit A"

OO Says:
F*ck the foreign lenders, they don’t have enough aircraft carriers to come after us anyway. You might as well do this now before they build up their military muscle. Debase the USD, go to a new currency standard, wipe out all out existing debt obligations.

That makes sense ... if you are actually looking to protect American interests. The powers that be are patently not doing this - they are only interested in preventing losses to the banks (a.k.a. "the financial system").

Oh look, stock market down close to 3% already this morning. Must be because we took to long to vote in that bill.

I can't wait to hear the spin after it drops 5% on the day.

well written article by a consulting company on the bailout...

http://www.growthink.com/content/no-bailout-4-reasons

Fuzzy, here is the spin: "The market is disappointed that it has to wait until Friday for the final vote".

On a more serious note, it never ceases to amaze me how headline writers and financial pundits have absolutely no problem coming up with an all-but-certain one-liner justification for why the market went down or up on any given day.

I think most of the time they have no clue what is going on. If they did, they should tell me what the market will do *tomorrow*.

TOB: You must read P. J.!

Hey, my email has been attacked! A zillion invalid emails were sent out with p@patrick.net as the return address. This means my mailbox gets flooded with rejection emails, and mail from p@patrick.net also gets placed on spam lists, and therefore blocked.

The timing of this makes me paranoid that someone really doesn't want me to be able to get email for the next few days...

Patrick

ECB not lowering rates was a big mistake. Hello deeper recession in Europe!
And. . . let the in-fighting begin. Is anyone suprised the banks of Europe are now fighting over how to bail their system out?

Advice for the world's governements: Nullify ALL CDS as illegal contracts.

Re-capitalize your banks through governement infusions.

Don't think the US can back-stop this. We can't. The problem is wayyyy to big.

Paulson and Congress. Let's talk now on the appropriate scope of this.

Bernanke, you may be a student of the US Depression. But what if the trigger for the depression: bad loans on mis-priced RE captial, massive leverage, and a new ingerediant - portfolio insurance, is true not just in the US, but EVERYWHERE.
So much for your helicopter idea.
Globalize your thinking Ben. This isn't the 1929 Depression. This is the 2009 GLOBAL DEPRESSION!!!

Patrick : I would suggest you to create a new temporary email id in the mean while and post it on your blog so that users can reach you.

we went at a peak time of 8:00 and we were 2 of a total of 6 people in the theater. Also, this isn’t a dumpy theater that no one goes to, it is a Regal stadium theater.

I noticed that empty seat trend when I saw Iron Man. The cause may be housing related. Think of all the guys who HELOC'd a big flat panel TV and justified the expense to the wife as "we'll save on movie tickets."

Duke wrote:Bernanke, you may be a student of the US Depression. But what if the trigger for the depression: bad loans on mis-priced RE captial, massive leverage, and a new ingerediant - portfolio insurance, is true not just in the US, but EVERYWHERE.
So much for your helicopter idea.
Globalize your thinking Ben. This isn’t the 1929 Depression. This is the 2009 GLOBAL DEPRESSION!!!

Maybe we will be saved by parts of the world which didn't embrace US style laissez-faire-debt-based-capitalism yet.

I can’t wait to hear the spin after it drops 5% on the day.

ABC news had an interview with one of the Reps who voted nay on the House bill. The rep was saying that before the vote, his constituents were overwhelmingly against a bailout. After the vote down and the 700 point Dow drop, he said he is getting about 50-50 split on for/against bailout. He said he heard from many folks who claimed "$30k loss in thier 401k," etc.

I wonder if he will speak of those who say "The Senate passed the bailout bill and I lost $30k in my 401k."

The only corellation is that each time their is a vote on the bailout, the market crashes. Doesn't matter whether it passes or not. Therefore, lets not bring the bailout up for any more votes.

Here's the guy who managed RTC1 admitting we won't make money.

Making Money on RTC2

Also, we have to thank Rick Santelli from CNBC for being the only person who has been arguing for Tax Payers.

Wow nice link on RTC2.

Try this:

http://www.nytimes.com/2008/10/02/business/02crisis.html?_r=2&em=&adxnnl=1&pagewanted=1&adxnnlx=1222970661-P4VJuvmL6ibzKprii+U4HA

Finally. Finally as reporting gets better I simply cannot watch it now as it casues too much anxiety.

I find myself getting pretty cavalier about the 700b.

Can someone find out what the US and Global run-up in RE value was over the last 8 years. Somethng like $6T in US alone? If we lose all of that $6t and magnify it by the leverage applied to that 6T. Now do that for the world. EEEEGADS!

It was pretty sickening to see the idiots in Congress these past few days. It's even more sickening to realize that they are the representatives, and hence a reflection of, the American people. Perhaps they should change the moniker for the US to Land of the "It's ALWAYS somebody else's Fault".

Everybody here is sure furious that the "guilty asshole banks" are now needing to get bailed out by the "guiltless innocent Taxpayer". Really? The banks are certainly no saints, but they just happen to be sitting on the wrong chair when the music stopped. Just follow the money, and see if your grubby little hands were not in some way accountable too.

For every bad loan made, every poor bastard who bought a house at a high price, someone was at the other end of the trade. Could have been a lucky guy who just happened to be able to sell his house at the right time, or it could have been a speculator. They benefited from this bubble. Who are they? TAXPAYER.
And the people who felt rich, and took out a big HELOC, had a great time in Europe, drank lots and lots of Napa wine, and bought big screen TVs and Hummers? They had a good ol' time these past few years. Who are they? American TAXPAYER.
How many people worked in the construction business, building houses, fixing up kitchens (people gotta have Granite Countertops)? They made out for many years. Who are they? French? No. American Taxpayers.

People got big tax cuts from Bush. Goddamn hypocritical Republicans. Did they get concerned that this country was consumed by greed, and one day they might have to pay, and turned down their tax cut? Nooooooo. Who are they? American TAXPAYER.

You worked at Best Buy? Home Depot? Caribbean Cruise lines? Name an industry. Got bonuses? Plenty of time-and -a half? Didn't save too much of that? Didn't occur to you that one day, this is all coming home to roost? Who are these people? American TAXPAYER.

There is PLENTY of blame to go around, so let's not pick on Paulson and put his picture on a pitchfork. People with pitchforks are never good guys, mostly dumbasses who get excited and just want to tear down stuff. Ever seen Frankenstein the movie? So you identify with one of those "townspeople"?

kona_three, errr, I mean Marina Subprime...

In fact, my grubby little hands were not involved. But I'll bet yours were.

And since you believe so strongly in the bailout, you can pony up my $5K for me in addition to yours. Just go feed it into an ATM machine... they'll take care of the rest.

Wow, this is going to be spectacular. People are getting fear-mongered into supporting the bailout based on the drop in stocks on Monday.

It's going to be bittersweet when stocks drop another 10-20% over the next couple months, and they all realize they were tricked.

Everyone send another round of emails to your reps...

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

Fuzzy,
Yup. 20% by year end. From 10,500 today to ~8400.

But, wow, there are so many varables. Hard to play te game when the rules are changed. Big market rallies on days before shortshave to cover the positions on stocks that are no longer allowed to be shorted. I can dream up a lof of regulation from today until the end of the year. The SEC will make it up a they go and Congress won't say a word.

kona_three : Your argument that tax payers were involved during this greed and money making orgy somehow makes banks, investment banks and NAR innocent is baseless. Of course when there is boom going on , all the things that you mentioned happen. We are not here to blame greed in people. We are blaming people who wrongfully changed/influenced the rules of the game to thier own benefit. That is criminal. the common man ( tax payer) was not greedy/stupid but not corrupt.banks, NAR and few elected officials were not only greedy but "CORRUPT".
i hope you see the difference. you can prosecute people based on corruption but not for bieng greedy. Corruption kills a system not greed.

incorrect :the common man ( tax payer) was not greedy/stupid but not corrupt

correct: the common man ( tax payer) was greedy/stupid but not corrupt

Corruption requires power. The common man is not corrupt only because he is powerless.

kona_three , this is for you:

In 1933, in the wake of the 1929 stock market crash and during a nationwide commercial bank failure and the Great Depression, two members of Congress put their names on what is known today as the Glass-Steagall Act (GSA). This act separated investment and commercial banking activities. At the time, "improper banking activity", or what was considered overzealous commercial bank involvement in stock market investment, was deemed the main culprit of the financial crash.

Congress finally repealed Glass-Steagall in 1999, rewarding financial companies for more than 20 years and "$300 million worth of lobbying efforts".

wanna guess who spent all the money lobbying ?? do you smell corruption here when somebody repeals an act which was a learning from the last biggest depression.

Peter P says : Corruption requires power. The common man is not corrupt only because he is powerless

Power corrupts and the only antidote to corruption is Jail time.

FuzzyMath:
Yup. Pretty damn typical. "It wasn't my fault. Somebody else should pay my $5K"
I rest my case.
Although, people who live in a commune in the Sierras might have a case, but still, you probably got some benefit because you got better prices for the eggs and vegetables you peddled at the farmer's market. It won't be all fun and games from now though. You'll probably need to get another shotgun for your eldest, and lay out some bucks for more barbed wire. People like you tend to get more paranoid as the economy gets more scary.

SP,
Email me at ReliableSunPower@aol.com and I will email you a copy of the letter from Boxer later today.

Power corrupts and the only antidote to corruption is Jail time.

That is most absolutely wrong. Corruption and prison have co-existed for centuries.

I had a lot of garlic for lunch, and the rejected mail keeps on coming.

But it's OK. I've got most of them going into my junk mail folder. I can read the real mail fine.

I had a lot of garlic for lunch

What did you eat?

I though evil and good co-existed for centuries too :-)

I though evil and good co-existed for centuries too

I never said good was an antidote to evil. ;)

snmr,

Hey, nobody said the banks were blameless. Or that Congress was blameless. They suck. It's just that I think the "American Taxpayer" is not blameless, and shouldn't be moaning and whining like they are now. They partook in every damn scheme that the banks cooked up - bought houses that they couldn't afford with no money down, embraced the HELOC, refinanced like crazy to take equity out, let the savings rate go negative, etc, etc. Oh, by the way, they elected this Congress. Their hands are clean?
Let's just say that the supposed $3k per person penalty now is payback for those who went nuts, and a tax for those who didn't, just for the privilege of living in this country. You can all go to Mexico, you know, they probably don't patrol their side of the border all that well.

I am fine with the $3K penalty if we ALL have to pay now in cash. Everybody in the country. Same $3K.

Commended for your perusal:

http://tinyurl.com/5xghpq

WHO could have possibly known this was going to happen? WHO recklessly pushed it anyway? WHO, I ask?

Oh, yeah. Those guys. Strange how it always works out that way.

Who's they? What the hell is an Aluminum Falcon?

"I am fine with the $3K penalty if we ALL have to pay now in cash. Everybody in the country. Same $3K."

They should also give you the banker's name that you are paying, so you know exactly who you're making the check to.

Bill passes tomorrow, money due on Monday. Let's go downtrodden homeowners! Pony up the cash! Woohoo!

Kona_three,

I think you're totally mixed up. You're confusing everyday people with people who gamed the system. You're saying everyday people who were honest, worked hard, paid their taxes, saved, invested, vacationed and partied with their own money somehow are part of these crooked scheme of things, but they aren't.

Pshawn

Let's discuss some more pertinent issues than laying blame, on the eve of the Titanic heading down, we should be foremost concerned with self preservation.

Are there any instances in the economic history that the currency of a country in unprecedented crisis peculiarly survived a systematic collapse and became very strong? What is the likelihood of the USD remaining intact and strong (even outperforming gold) while the financial system collapses? I cannot think of an example, but if there are any, please point it out.

Let's say the bill gets stuck again on Friday, what will happen? If it passes, we know the financial system will get its lubrication in time, but how much time can we buy? Up till election?

Inflation is still running high, oil is STILL higher than 12 months ago, so the ripple effect of oil has yet to be reflected. Therefore, the very negative real return on T-bill is unsustainable. What will happen when the T-bill bubble burst?

In a word, where do you park your money for self preservation?

Now I agree with the suspicion that kona_three is one of the permabull specuvestors. FaceReality, TOS, MP - who cares.

Yes, now his solution is we leave USA because we don't like the way Paulson is looting the country.

What the idiot fails to understand is - those evil taxpayers who tried profiting from the bubble are either happy or sad based on how their gamble pay off. BUT - none of them is asking for a tax payer handout, at least directly.

These bankers are demanding that we pay them else we all will face Armageddon.

The taxpayers either got rewarded or punished for their actions. In old fashioned free market capitalistic way. (I am simplifying here, because we know there was a lot fraud going on and very few fraud cases are being prosecuted.)

But the payback time for bondholders and holders of toxic MBS is now. And they suddenly don't like capitalism. They liked the rules as long as they were getting bonuses. They liked deregulation as long as their 40:1 leverage was working in their favor. But now that want Govt to intervene. And they don't want oversight, they want premium for their sh1t, they won't give equity and they want it yesterday - OR ELSE ...

It's so completely idiotic to apply the same yardstick to the taxpayers (specuvestor or not) and these Paulson gang members. Such style of thinking and persistent objections to logical reasoning is typical of a housing perma-bull. Get lost dude.

OO,

Dollar will remain strong compared to other currencies like Euro, GBP. They are soon going to find how worse they are compared to us.

But dollar will decline against gold and oil - in the longer term. Short term, hedgies are getting hit by a mid-night call from Mr. Margin. Weird things can happen in such periods of extreme volatility. Also global slowdown will reduce demand for oil in the short term.

Currency debasement is not an overnight phenomenon. It takes a while for the theme to play out.