patrick.net

A lot of companies do end up hiring them as FTEs if they’re bright. This saves the companies lot of $$$ plus it ends up becoming a huge raise to the guy

A lot of the good engineers at our company (mostly Americans) quit and went on to get their MBA's since they had just missed the tech boom. Most of them got jobs at i-banks on Wall Street after graduation. I guess they got burned twice.

A breakthrough on the bailout is reached.

http://www.msnbc.msn.com/id/26884523/

Now the country can return to watching football, NASCAR, and don't forget the baseball pennant races.

The plan calls for the Treasury Department to buy deeply distressed mortgage-backed securities and other bad debts held by banks and other investors. The money should help troubled lenders make new loans and keep credit lines open. The government would later try to sell the discounted loan packages at the best possible price.

So bye, bye, Miss American Pie, drove my Chevy to the levy, but the levy was dry...

Dear FuzzyMath:

Thank you for your letter expressing concern about Congress' consideration of a plan to meet our Nation's credit crisis with financial help from the Federal Government. This is a difficult situation for which there are no perfect solutions, and I would like to share my thoughts and concerns about this issue with you.

On September 19, 2008, Secretary of the Treasury Henry M. Paulson, Jr. announced a legislative proposal to use $700 billion to purchase illiquid mortgage-related assets from ailing financial institutions. Secretary Paulson's three-page proposal was a non-starter, and without critical changes it has no chance of approval from Congress.

This proposal would have given a blank check to an economic czar who would have been empowered to spend it without administrative oversight, legal requirements, or legislative review. Decisions made by the Treasury Secretary would be non-reviewable by any court, agency, or Congress. The proposal also lacked a requirement for regular reports to Congress on the status of the program. This was simply untenable.

Since this announcement, my offices have received thousands of comments from Californians like you concerned about how this action will affect them. Yet, I believe prudent action must be taken. The bill should include the following principles: a phase-in of funding; oversight, accountability and transparency; a mechanism allowing the Secretary of the Treasury to modify mortgages to prevent additional foreclosures; and a precise cap on executive compensation.

The current credit crisis affects all Americans. If action is not taken to stem the crisis, Americans risk losing their homes, jobs, personal savings, life insurance and more. Banks will cease to lend to businesses and homeowners, and credit will be increasingly difficult to come by for average Americans. I strongly believe that the consequences of failing to act now would be greater than not acting at all.

Attached please find a statement I recently made on the floor of the Senate expressing my feelings on this issue. Please know that I will keep your thoughts in mind as this situation unfolds.

Once again, thank you for writing. If you have any additional questions or concerns, please do not hesitate to contact my Washington, D.C. office at (202) 224-3841. Best regards.

U.S. Senator Dianne Feinstein
Floor Statement on the Economic
Rescue Proposal
September 26, 2008

It's this line that I'm talking about...

"Since this announcement, my offices have received thousands of comments from Californians like you concerned about how this action will affect them. Yet, I believe prudent action must be taken."

They think they are smarter than all americans. They think we don't know that we're going to have economic problems.

They don't understand that americans actually DO want change. Not a skin color change, but a REAL FUCKING CHANGE.

They're shepherding us straight off a cliff.

Henry Paulson: Well, Well, Well....... Fuzzymath why are you being unamerican? You should be thankful that I am willing to take your money and stop the correction due to the excesses of three decades. I am doing you a favor by taking your money!

http://www.msnbc.msn.com/id/26884523/

Why are they all smiling? They just reached a deal on spending 700 billions of taxpayers money. It's like celebrating a touchdown when you are down 63 points. Pathetic bunch of losers.

Poor Lehman, I guess they were small enough to fail.

http://biz.yahoo.com/ap/080928/as_hong_kong_lehman_protest.html

keepitcleaneconomics@blogspot.com

Look at the only guy not smiling. I wonder what is making Barney so unhappy.

Remember that picture. It will be a cornerstone image 50 years from now when people look back at the destruction of America.

from Fuzzy's Dianne Fienstein letter:

If action is not taken......
credit will be increasingly difficult to come by for average Americans.

"Difficult" credit would be a good thing, you bought off idiot. True affordability returns when one need not compete with Joe Howmuchamonth for every big ticket item.

Then again, saving of any sort must be discouraged by the likes of social1sts like Dianne F. After all, a nation of savers who would be less dependent on government.

its funny that they think people are buying this bullshit.

"They" could not care less that no one buys this bullshit. Do you think they will get voted out? Do you really believe that the executive pay will be limited? Do you really think the gov will buy the assets at true market value, and not an inflated price?

The Congress republicans should have stopped this deal in its tracks. Bush should have never proposed it in the first place. Unfortunately, lobbyists speak louder than either ideology or voters.

TOB - They "hope" that someday the securities will "come back". I think they'd buy that crap at a much higher rate (like 40c to a dollar instead of 10c) so that'd end up spending more, buying less and never turn a dime of profit as they'd overpay upfront anyway. If the banks were looking to sell this shit for 10c, they'd have never done this to begin with. They'd fool the govt (again!) and sell this shit for 2x or 3x the mark to market. In other words, they got what they wanted - now GS can go back to 160 and leave us alone.

"Hope" is not an investment strategy - I wish the people smiling in the photo understand that.

Thank you coretexity for your response.

I have few more questions.

1) Is $85 billion from the govt enough to cover all of insurance obligatons of AIG? If not, what is going to happen?

2) What would prevent any other insurers, other than AIG, of mortgage backed securities form going bankrupt?

It's great they posted the wall street give away bill on the web. Here is what you get when you go to www.financialservices.house.gov/

"The page cannot be displayed
The page you are looking for is currently unavailable. The Web site might be experiencing technical difficulties, or you may need to adjust your browser settings. "

GREAT, TERRIFIC!!!

Paul - I cannot reach it either. In a way it is good because it means that a lot of people are interested in finding out the details instead of watching ESPN and playing XBox.

indianguy -

1) The $85B is not to cover the obligations, it is to provide liquidity so that AIG can meet the new reserve requirements which need more $$ because of LEH bankruptcy and overall downgrade of financial companies' bonds by Moodys/S&P. There is no freakin amount that can cover their obligations :)

2) They played at a huge leverage (1:30) so again, they'd go bankrupt now or later if the situation stays same or deteriorates. What can prevent the lights out is the mortgages that are bundled go up in value (to the 2006 levels) which seems impossbile to me. However, this 700B bailout and short sale ban seemed impossible to me too, but look what happened.

Here is the Bill in PDF form.

http://i.cdn.turner.com/cnn/2008/images/09/28/ayo08c04_xml.pdf

All you've got to do is get a margin account at Golden Sacks, and then leverage into GS stock.

Not investment advice.

http://i.cdn.turner.com/cnn/2008/images/09/28/ayo08c04_xml.pdf

This doesn't work either.

Wow, the discretion left to Paulson (aka. The Secretary of the Treasury) is staggering. There are holes in that document that you can sail a aircraft carrier and two battleships through.

Now I'm REALLY frightened.

For example (page 32 lines 10-22),

if (auction-based purchases) AND (the total is above $300M)

EVEN THEN

only entering into NEW golden parachute agreements is forbidden

AND

there is a 2-month window for making new golden parachutes anyway, because the secretary is not required to issue the order until 2 months after the transaction closes.

This is INSANE.

(I'm worried the indentation will not survive when I hit submit, but what else can I do).

CORRECTED:

For example (page 32 lines 10-22),

if (auction-based purchases) AND (the total is above $300M)

EVEN THEN

only entering into NEW golden parachute agreements is forbidden

AND

there is a 2-month window for making new golden parachutes anyway, because the secretary is not required to issue the order until 2 months after the law is enacted, and such law shall be effective upon issuance .

(I’m worried the indentation will not survive when I hit submit, but what else can I do).

Did you guys see the Ads by Google?

Learn To Be Rich

Gain Profits from Real Estate. Train in in San Francisco. Oct 14-16

They never learn.

justme, we all know that those executives will be spared. There is no question about that. The bailout is outrageous.

As I have said before, capitalism without failures is the worst form of socialism.

God help us.

Good article to read:

http://financialsense.com/stormwatch/geo/pastanalysis/2008/0926.html

It is the aversion to necessary depressions that caused the whole mess. Can we blame democratically-elected officials? Or should we blame democracy itself?

In any case, capitalism has not failed us. We have failed capitalism.

The whole point of recapitalizing the thieves at GS and MS is to enable them to buy assets on the cheap during the ensuing depression. This will be the new business model on Wall St.

The whole point of recapitalizing the thieves at GS and MS is to enable them to buy assets on the cheap during the ensuing depression.

As will cash rich foreigners.

If you are correct in your assessment, maybe those Americans who have savings can get in on the "cheap" asset buying as well.

Do remember though, that the gov is busting its butt to keep asset prices (stocks and houses) high. The recapitalization is intended to keep those prices high by enabling easy credit to continue. So it would be a betrayal of sorts for the "bailees" to hoard that money to buy assets, rather than use that money to enable loans.

Headset, the problem is that sovereign wealth funds (and Buffet) are purchasing preferred issues, meaning that the big money moves are way out of reach of us plebeians. And you've just got to know that there are a lot of insider moves here, because those guys have access to people and information way outside the public eye.

HeadSet,

Pelosi may think she is busting her butt to keep asset prices up, whereas in reality she may just be recapitalizing GS and MS so that they can participate in the for sale.

I'm not in favor of either one of the motivations.

for sale == fire sale

What the heck is going on?

Every link I find on the Internet to the draft bailout bill won't open with Adobe Reader. You get an error message about some kind of error.

Brand,

I did not mean to imply that middle class savers could compete with the big boys. Only that if we have a depression, savers may be able to pick up stocks and houses on the cheap with their ready cash. Stocks like Ford that may fall to $1 yet survive a depression (especially with a bailout) to pay a good return. Savers could also pick up depressed rental houses that could pay well after a recovery.

Justme,

We agree, you just said it better. I meant to infer that it is the gov who would be "betrayed" if the bailout funds were hoarded to buy firesale assets rather than enable loans.

The taxpayers were betrayed when the bailout bill was not killed.

Every link I find on the Internet to the draft bailout bill won’t open with Adobe Reader. You get an error message about some kind of error.

ME TOO!!

Media blackout anyone??

I can open the bill. The link I posted earlier is from cnn.com.

The bill did say that California assets are not elgible for the buy program because they caused 70% of this problem. Maybe only poeple in California can't read it because of the section throwing California under the bus ;)

http://www.nytimes.com/2008/09/21/business/21draftcnd.html

Text of Draft Proposal for Bailout Plan

Sec. 8. Review.

Decisions by the Secretary pursuant to the authority of this Act are non-reviewable and committed to agency discretion, and may not be reviewed by any court of law or any administrative agency.

They were gonna throw Phoenix under the bus, but then Congress decided that the Bay Area is far more special.

Fortunately, Hank Paulson will have the power to determine what constitutes the Real Bay Area; I believe the CAR will be assisting in that endeavor.

snmr, it seems that the new Section 119 (Judicial Review) significantly alters Hanky Panky's wish for unlimited power.