Never speak ill of your betters..

It seems to me that election day would be a decent time for finger pointing.

When? Never.

Or -- when the little guy are big campaign donor.

Easy answer - when Democrats are in the WH and Congress. Just wait and see...

-- r

Wouldn't that be like asking Moqtada Al-Sadr why his policies favor Shiites over Sunnis?

Kevin wrote: "But I can't help but wonder: when will it be time?"

Kevin, you are just too cute about these things.

In the USA today, and for at least a the past generation, we have government of, by and for America's Ultra-Rich Ruling Class, Inc.

Government has become nothing but one more tool by which a tiny, ultra-rich, ultra-powerful, increasingly hereditary minority protect their wealth and power and become ever more wealthy and ever more powerful, at the expense of and to the detriment of everyone else.

Rather than posing ironic rhetorical questions, why not ask yourself when will it be time for you to address that reality straightforwardly, instead of being ironic, sarcastic or otherwise cute about it?

Or is it too "shrill" to point out that while "centrist" Democrats and "sensible liberals" refuse to get their hands dirty practicing class politics, that the ultra-rich corporate ruling class is practicing literal class warfare, and winning?

Or is it too "shrill" to point out that while "centrist" Democrats and "sensible liberals" refuse to get their hands dirty practicing class politics, that the ultra-rich corporate ruling class is practicing literal class warfare, and winning?
Posted by: SecularAnimist

And so it goes.

"The comfort of the rich depends upon an abundant supply of the poor." - Voltaire

At $2/share, this is not a bailout. This is an orderly liquidation. The Fed didn't do this for Bear Stearns shareholders. They're basically screwed. The Fed did this so the whole financial system doesn't come to a crashing halt, which would completely screw everyone, from Wall Street to the Main Street and every side street your metaphors can imagine.

Exactly which bank was saved? Bear Sterns no longer exists. Bear Sterns was known for having a particularly high ownership among employees. A good chunk of their personal wealth was tied up in Bear Sterns stock--stock which lost something like 98% of its value from last summer to the forced sale this morning. And a lot of them won't find jobs at Morgan Chase.
Look, I hate rich people as much as anybody (well, "rich people" being defined as people having more stuff than me, of course), but this really is more about keeping the credit markets from seizing up then helping rich people.

A bit of a rhetorical question.

Short term... they (govt + central banks) are trying to prop up the economic system and prevent a massive implosion.

The economic failure of the homeowners and small investors is like a slow-burning fire in comparison... a huge and very long-lasting fire, but not as immediate.

That's one answer. The other (long term) reason is that that individual homeowners don't make large campaign donations.

What remains of the working class will ultimately take it in the shorts one way or another.

What, Me Worry?

Relax. Paulson worked over the weekend in order to reassure the president that "our financial institutions are strong and that our capital markets are functioning efficiently and effectively. In the long run, our economy is going to be fine."

If the various financiers and Robber Barons have their way, Kevin, it never *will* be time.

It's time and past time for the discussion to change it's frame. This is simply another in a long, long series of data points that proves that the Republican party is The Party of Business, and has been for a long time. "The business of America is business," even when those businesses are destroying the environment, the economy, the people, or whatever it is they happen to be destroying lately.

This should all be obvious, but somehow we've let the framing get away from us. The Republican party does not believe in government intervention--except when business needs it. The Republican party does not believe in regulation--except for individual behavior, not business behavior. The Republican party believes in "small" or "limited" government--except when it is beneficial to business otherwise (e.g., the drug companies).

This is not class warfare, or an argument that Democrats are "better," but merely an observation. Yes, Republicans are hypocritical if you believe their blather that they are "conservatives." But if you look at their behavior through the lens of their being the party of business, they are incredibly consistent.

So no, Kevin; it will never be time to point fingers, because that wouldn't be in the interests of business.

There's entirely too much focus ('Nothing up my sleeve.') on the firesale price JPM Chase is getting for Bear Sterns, ex the liabilities of same,(and the $30B that the Fed has put at risk on crap like CDS in this amazingly unsound deal) and not enough attention being paid to the REAL bailout which is the new Fed lending facility open to all these non-bank players such as Lehman (cue hounds baying in the background) and the hedge funds.

From this morning's department of irony:

"I see our country going off a cliff, and I feel bad about it."
Carl Icahn

Look, I hate rich people as much as anybody (well, "rich people" being defined as people having more stuff than me, of course), but this really is more about keeping the credit markets from seizing up then helping rich people.

A-ha!

It only took a handful of comments to get to the crux of the matter--liberals hate the wealthy! What a shock! Next thing you know, we'll be reading about how the sky is blue.

Listen up and listen good--these people at BS need help. They need a bailout, they need benefits and they need relocation assistance. They deserve the help of a government that values the creation of wealth. They do not deserve to lose their homes--the government should step in and put a cease and desist order on any bank that tries to forclose on a BS employee.

You cannot abandon the entrepreneur class to the anarchy that is oblivion.

I agree with Todd - that doesn't negate the central tenets of Kevin's argument however. And the good news is, lots of guys who owned BSC stock, many of whom were employed there, lost fortunes. Some small, some not so small.

Well, homeowners have one option to them that the banks don't: walk away. If the house value is underwater vs. the loan balance, its a reasonable thing to do. Which is what is creating the mess.

The fat cats took a big hit with the Bear Stearns liquidation. And the executives at Bear that made the mess held the stock. Not that it will make them poor, mind you.

Of course, there's always somebody who profits: Friday's short-sellers of BS are one case.

There's a move afoot to have FNMA start buying up mortgages at a reduced price. This might end up helping homeowners, too. Really, when stuff settles down, there will have been inflation, and a period of low interest rates, which will afford them the opportunity to refinance.

But it's going to be ugly for a while.

It's their world--we just live in it. Try not to damage anything belong to real people, as you play your role of spear-carring extra in the great movie of life . . .

Nouriel Roubini on the real bailout action:

(emphasis added - cfs)

'The response of the Fed to this run has been radical and in the form of the extension of the lender of last resort support to non bank financial institutions. Specifically, the new $200 bn term facility allows primary dealers – many of which are non banks – to swap their toxic mortgage backed securities for US Treasuries; second, the Fed provided emergency support to Bear Stearns and following the purchase of Bear Stearns by JPMorgan, is now providing a $30 bn plus support to JPMorgan to help the rescue of Bear Stearns; finally, now the Fed is allowing primary dealers to access the Fed discount window at the same terms as banks.

This is the most radical change and expansions of Fed powers and functions since the Great Depression: essentially the Fed now can lend unlimited amounts to non bank highly leveraged institutions that it does not regulate. The Fed is treating this run on the shadow financial system as a liquidity run but the Fed has no idea of whether such institutions are insolvent. As JPMorgan paid only about $200 million for Bear Stearns – and only after the Fed promised a $30 billion loan – this was a clear case where this non bank financial institution was insolvent.'

A Generalized Run on the Shadow Financial System
http://www.rgemonitor.com/blog/roubini/249924

Some friends of mine bought a house in early 2005 that's fixing to reset again big time in May. They got a letter yesterday from the mortgage company freezing their interest rates until 2013. They are greatly relieved because the reset was going to break their budget and they would probably default. Things must be getting pretty scary out there for the banks to *unilaterally* start making deals like that. Or perhaps they've had enough experience trying to get rid of foreclosed properties recently that it is cheaper to cut the borrowers a temporary deal.

when the rubber hits the road and push comes to shove and the chickens come home to roost, everyone is not only is suddenly a Keynesian, but, good havens, a Socialist.

Why don't we just call them by their proper name? Poulson and Bush: the Socialists.

You need to be asking the next president (presumably Barack Obama) that question. Is he the next FDR who will take on the big financial interests and make changes? Or is he the next (every other Dem president) who will make nice and let bygones be bygones?

Can someone please explain how to help the average homeowner?

Person X and Y are identical until they both decide to buy a house. X gets a teaser rate of 5% that will reset to 8%. Y decides to get a mortgage at 6%. Now 4 years later, X can't afford to pay 8% and gets forclosed. Should we help X? How? X already benefited by a rate that was 1% lower than Y. Should Y get helped? How?

How about me? I got a floating rate note at 3.5% a couple of years ago. Recently, it was 7.75%. Frankly, I would rather pay 3.5%. Should I get helped since my rate more than doubled? Does it make any difference that I have 50% equity in my house. (I used to have 70% equity.) My rate is going to go down to 5% next week.

Can anyone figure out how to help the little guy?

How about you give every american a $300 to $1,200 tax cut?

Honestly, I don't have a clue how to help the people who really need the help.

You cannot abandon the entrepreneur class to the anarchy that is oblivion. ab-Norman Rogers at 1:04 PM

…A throwback to a bygone era, Bear Stearns still operated as a cigar-chomping, suspender-wearing culture where taking risks was rewarded. It was a firm that was never considered truly white-shoe, an outsider that defied its mainstream rivals.
When the Federal Reserve helped plan a bailout in 1998 of Long Term Capital Management, the hedge fund, Bear Stearns proudly refused to join the effort. Until recent weeks, Alan Greenberg, Bear Stearns’s chairman for more than 20 years and a championship bridge player, still regaled its partners over lengthy lunches about gambling with the firm’s money in its wood-paneled dining room….

If any firm deserved to go under…well, so do a lot of others. They pride themselves cowboy capitalists, let 'em eat dung.

Conservatives and Bush get blamed for the government having put liberal ideas into action! People with terrible credit ratings….G. W. Orwell at 1:25 PM

At what point does the money the Fed is printing get reduced to 'not worth the paper it's printed on'?

Are we there yet?

My English relatives have gone from laughing at my greenbacks to some level approaching pity.

Remember at the core of conservative agenda, something that explains most of their "policy" proposals, is the great risk-shift. Shifting risk from business to the individual saves on costly safety measures, costly benefits, and costly pay- all of which are . Shifting risk to the individual from government means the same rich people can pay less in taxes. Money that would be used to improve the lives of the many.

This is not just cynical class war for more loot. The essence of movement conservatism is the moral war for the right kind of society. The rich have more because they are virtuous and good. They are the survivors in the natural struggle of life. The have-nots, like the poor people of New Orleans, get what they deserve. If they were more hard working, more sober, and less weak they too would be one of the haves.

In conservative ideology there is no contradiction in having the government shield the rich from risk while exposing the poor to market logic. It is not heartless to leave the poor to their misery while protecting the rich; it is the morally right thing to do- and better for the country.

The idea of treating mortgages like other debt in bankruptcy has been out there for a while, why not give it a try. It penalizes people, it weeds out speculators and it helps homeowners

Well speaking just for myself I am quite happy to have the fed step in and help the financial companies at this moment in time.

I, like a lot of us progressives, lower and middle and upper class folks, have a large chunk of my retirement tied up in my 401K, which by nature, is 100% stock.

Watching the DOW drop the last few weeks has at least improved my blood calcium levels as a result of all the Tums consumed. While a drop in the stock market is expected. I sincerely do not want it to go close to zero. Nor do I want to see most banks fail.

So suck it up folks. This time the fed is coming to the rescue of most americans.

optical weenie: at 2:42PM

I, like a lot of us progressives, lower and middle and upper class folks, have a large chunk of my retirement tied up in my 401K, which by nature, is 100% stock.

I have not heard of any company requiring that your 401k be 100% in stock. My companiy's default position is 100% in short term bonds.

If you are not comfortable being 100% in stocks then you should talk to your HR department and see what options are open to you.

Todd_NYC: At $2/share, this is not a bailout. This is an orderly liquidation.

Yeah, right, and by an astounding coincidence the Fed is loaning JPM $30B to buy BS. Hey, where can I get a deal like that?

Try Dean Baker: The NYT Hides the Bailout of Bear Stearns From Readers. See also numerous other posts on his blog where he talks about this.

Yes, the Fed has to keep the financial system afloat, or we're all screwed. But that's no reason to let irresponsible speculators (BS) keep even a penny, or even to give sweetheart deals to better run outfits like JPM.

AFAIK JP Morgan has been pretty good about avoiding this pitfall (the exact opposite of Bear Stearns). Buying up irresponsible competitors for pennies on the dollar is a legitimate business practice. In this case though the Fed is making certain "guarantees", which is just socialism for the rich.

Kevin Drum >"...when will it be time?"

The 12th of Never ?

Global financial warfare is what it is, the barbarians at the gate vs those inside the Industrial Capitalist castle. This is simply one skirmish in a much larger event.

"Lack of awareness of the basic unity of organism and environment is a serious and dangerous hallucination." - Alan Watts

We have a peculiar form of socialism in this country where it applies only to wealthy parasites.

There's always money for their wars, their bank failures, their Savings and Loan debacles, but never for universal medical care, Social Security, education...

bellumregio >"Remember at the core of conservative agenda...it is the morally right thing to do- and better for the country."

Stripped of fancy verbage you are saying it is all about The Divine Right of The Rich. Those of us that have been paying attention all along totally agree.

Note how that worked out for the last group to claim similar "divine rights".

"If you don't deal with reality, reality will deal with you" - C.J. Campbell

"Conservatives and Bush get blamed for the government having put liberal ideas into action!"

Dear heart, you really should up your meds again, since your post was fact-free and, in fact, made absolutely no sense. What is happening in the market today is wholly unrelated to anything even remotely resembling "liberal ideas".

Can we get some smarter monkeys, please?

Occam's Razor suggests that this is just an updated version of "What's good for General Motors is what's good for America."

Ummm, seems to me that both parties to a contract have an obligation to fulfill the terms. Isn't it a case of mortgagees defaulting causing shit to flow upwards?

Actually, the Bear Stearns shareholders and bondholders are pretty much getting wiped out. JPMorgan, in your metaphor, picked the company up at a foreclosure sale. Sure, it would have been better if we could magically claw back the outrageous salaries Bear Stearns people made, but maybe it would also be better to claw back some of the idiot binge spending of people who re-fied their house 17 times with cash out.

The issue of the "bailout" speaks to the bad stuff in the BS portfolio. And, yeah, maybe that should be allowed to go worthless if it's really bad, and not just a credit crunch. However, it won't be BS people on the other side of those transactions. And it's far too early to say other miscreants won't pay soon, too.

"Short term... they (govt + central banks) are trying to prop up the economic system and prevent a massive implosion.

The economic failure of the homeowners and small investors is like a slow-burning fire in comparison... a huge and very long-lasting fire, but not as immediate.

That's one answer. The other (long term) reason is that that individual homeowners don't make large campaign donations.

What remains of the working class will ultimately take it in the shorts one way or another.
Posted by: Buford on March 17, 2008
------------

Tent cities springing up! The slow smoldering fire seems to be burning quicker.

http://www.youtube.com/watch?v=CnnOOo6tRs8

orwell: Glad to see that Democrat congress and senate helping things out by doing - nothing.

Republicans Block Consideration of Housing Relief Package in Senate
By Paul Kane
Washington Post Staff Writer
Friday, February 29, 2008; Page A03

so much for those "up or down" votes....