Andy McCain's bank:

http://www.reuters.com/article/pressRelease/idUS51176+26-Jul-2008+BW20080726

EPIC FAIL

But isn't it better that shareholders are not bailed out?

Dunno, just asking.

Don't recall hearing jack shit about the banking crisis at the RNC...

Deregulation, like karma, is a bitch.

tomj: yes, I think so. To be clear, my 'yikes' was not about the terms of the bailout, or even about our taking Fannie and Freddie over (which I actually favor, I think), but about the fact that I don't think this would be happening if things weren't continuing to go south.

Do the CEOs and other execs get severance packages?

What about the people who got screwed? You know, the ones who are homeless and in foreclosure. Would be nicer if the money went to bail them out.

Palin Is “Racist, Sexist, Vindictive, And Mean�

http://www.laprogressive.com/2008/09/05/alaskans-speak-in-a-frightened-whisper-palin-is-%25e2%2580%259cracist-sexist-vindictive-and-mean%25e2%2580%259d/

“So Sambo beat the bitch!�

This is how Republican Vice Presidential nominee Sarah Palin described Barack Obama’s win over Hillary Clinton to political colleagues in a restaurant a few days after Obama locked up the Democratic Party presidential nomination.

According to Lucille, the waitress serving her table at the time and who asked that her last name not be used, Gov. Palin was eating lunch with five or six people when the subject of the Democrat’s primary battle came up. The governor, seemingly not caring that people at nearby tables would likely hear her, uttered the slur and then laughed loudly as her meal mates joined in appreciatively.

...“The GOP is kind of like organized crime up here,� an insurance agent in Anchorage who knows the Palin family, explained. “It’s corrupt and arrogant. They’re all rich because they do private sweetheart deals with the oil companies, and they can destroy anyone. And they will, if they have to.�

“Once Palin became mayor,� he continued, “She became part of that inner circle.�

I had no idea Alaska was full of racists.

So in one week, the DOW Jones drops, unemployment rises, and Fannie & Freddie are being taken over by the Feds at a loss for shareholders ...

Yikes, indeed.

Socialism in action!

So does the stock market rally in a vain effort to look deviant in the face of adversity or does it drop like a stone on Monday.

This is a 'yikes' situation. Ever since Congress approved a potential bailout a few weeks ago I've been expecting this but I figured Bush would keep the pressure on regulators to hold off until after November. The fact that they are going now means even the Bush people think the situation is too bad to delay action even to get McCain elected.

That's bad.

"So in one week, the DOW Jones drops, unemployment rises, and Fannie & Freddie are being taken over by the Feds at a loss for shareholders ..."

It's morning in America.

Just in time for someone who came to DC with Ronnie to get Ronnie's old job.

Thread Hijack wrote:
I had no idea Alaska was full of racists.

It's the Great White North, eh?

Back on topic:
It's gonna cost taxpayers billions of dollars? Good thing we got all that tax relief. We're gonna need more. Hey, where did all the money go? Maybe all the people that got it should give it back. Or we could just eat the rich.

I recommend Barry Rithotlz at the Big Picture for future reading. He has suggested a haircut of 100%/25%/10% for shares/preferred/bonds. The Republican Party is just scarily incompetent and I would love for Greenspan and Gramm to be in leg irons. Read his current Pimco posting.

tomj: But isn't it better that shareholders are not bailed out?

Yes. But that still leaves the people who made bundles in the process by transferring their risk to the public, whether as shareholders, or as underwriters.

I'd really like to see a plan that claws back some of those gains from the people who benefited in order to pay for the bailout, and not simply write this off as debt to be paid by John Q. Taxpayer.

Sold a mortgage to Fannie or Freddie in the last few years? You owe. Got a comp bonus in the last few years (yeah, I'm looking at you Mr. Syron)? You owe. Sold stock at a gain from Fannie or Freddie in the last few years? You owe.

Maybe more trouble than it's worth, and a whole mess o' paperwork, but at some point we need to draw a line in the sand, with a clear signal to those who think they can take the gains and transfer risks/losses to John Q. Taxpayer without demanding payback.

That's the Republican way: Privatize the gains, socialize the losses. All their talk of "free market" economics is just blowing smoke up our collective asses.

This is why we need McCain more than ever.

No one else running even remembers the battles over the Second Bank of The United States, or the collapse of Crédit Mobilier and the Panic of '73...

Again the bushcon looters get their money and the taxpayers get to pay for it.Again!
This just happens to be a visible theft because of the media interest in people losing their homes.
Most of the stealing has been hidden by the distractions.
Every aspect, every sewage drinker of the bushcon looting always makes sure they get their money.
By the way: gov bailout = tax payers pay
Tax payer pays for buchcon theft, again!
Don't forget these guys hero is kenron lay, the expert in draining funds from all available sources.

You don't suppose there is a reason this got delayed to the Friday evening document dump? Was there some big event this week?

I believe all the news out of the RNC should have been printed in the 'Lifestyle' section of the newspaper.

This is a treble dose of catastrophe. A couple dozen more and we'll be talking real catastrophe. Seriously, though, while foolish elderly people support Republicans as the lose any semblance of a worry-free retirement, it looks as though Bushco may have finally completely drained the treasury's ability to withstand any more shock. Imagine if a Rove-spun Republican party were to win? They have so alienated intelligent voters and progressives that they would have no chance at governing. We are losing the second civil war. This one pits ourselves against common sense. Starvation to follow. . .

But isn't it better that shareholders are not bailed out?

The shareholders are being bailed out.

Under the plan, the federal government would place the firms in a legal state known as conservatorship, the sources said. The value of the company's common stock would be diluted but not wiped out while the holdings of other securities, including company debt and preferred shares, would be protected by the government.

You don't suppose there is a reason this got delayed to the Friday evening document dump? Was there some big event this week?

The document dump is used to hide things. This was timed so that there was some time for FHFA to get bodies in, do the details, write the press releases, and still have the news digested, etc. before the markets open in Asia for Monday -- our Sunday.

Big news whose market effects cannot be reliably foretold, and whose timing is discretionary, always break on Friday, after the markets close -- for once it's prudential, and not conspiratorial.

It's all in your heads. Whiners.

Expect to hear a lot more about the Keating Five over the next week, my friends. A lot more.

With Hanna and Ike set to cause billions of dollars of damage, maybe the US taxpayers won't flinch at the largest bailout in US History this weekend.

Think about it. The MSM will be focused on weather folks standing on treacherous shores as the wind and rain rages all around them. Meanwhile, the FM2 bailout will try and whisper across the public's radar over the course of the weekend.

I mean... we did start the week with a Category 2 Hurricane shutting down the RNC for a day.

While the damage from Hanna and Ike will be widespread, the stench from the rotting corpses of Fannie and Freddie will stick with US for years to come.

Thanks guys.

The pwnership society.

This is not good at all. Economy going great, eh, Bush?

At this point anything less than dragging most of the Executives and the Board to jail is less than great, but probably won't due to the complex nature of the crimes and the political connections.

But its not a recession. its not , its not, its not (it must be Clintons fault)

And who exactly is going to bail out the U.S. Government? I watched the Republican Convention this past week and it seemed like a welcoming visitors from another planet. We are in the worst economic fix since the Great Depression, and but for the "good" will of China and Saudi Arabia we would be going through an Argentinian style default and economic depression. And maybe that is the plan, as the elite may think the South American model (very wealthy elite, a small, insecure center, and the mass of the population impoverished) more suitable for them maintaining their position in society.

I don't see how McCain survives after this devastating economic news, I really don't. This is worse than the S&L crisis, where he was also involved.

Yikes. Not yet. Keep it for the coming election results and the subsequent resurrection of Herbert Hoover to fix our economic woes. Trickle down from the economic school of Sarah Barracuda.

Here's a scary paragraph written by Henry Liu on July 7, 2008 in the Asia Times:

"Each agency now has a $2.25 billion credit line with the Treasury, set nearly 40 years ago by Congress at a time when Fannie had only about $15 billion in outstanding debt. It now has total debt of about $800 billion, while Freddie has about $740 billion. Today the two companies also hold or guarantee loans with face value of more than $5 trillion, about half the nation's mortgages. Market analysts estimate that the market value of this liability may be less than 50% unless the housing market recovers. In other words, the GSEs face a $3.5 trillion exposure to default if they cannot raise new funds in the credit market.

Debt Capitalism Self-Destructs

Did you all catch the phrase "face a $3.5 TRILLION exposure to DEFAULT." That's lots of tens of billions.

I highly recommend this article as a good economics history read and an understandable explanation of the causes of F&F's problems today. It's written in plain English for those of you who share my economics illiteracy. Liu doesn't hesitate to point fingers at those responsible for this disaster.

Yet one more example that the laissez faire capitalism advocated by John McCain and his ilk doesn't work and ultimately ends in collapse and failure.

Government regulation of markets are the only sustainable way for a large, complex interconnected society like ours to be organized. Anyone who says different, simply doesn't know what they are talking about. You don't hear about massive, systemic collapses like this in Sweden, do you?

We're going to need a primer on the implications of, and likely political fallout from, the F&F bailout, and I doubt that many political bloggers are equipped to deliver it. Better spend the weekend making the acquaintance of econ-financial writers and bloggers (favoring the minimally wonky ones).

Here's Mort Zuckerman, who has been on the case for months: "A collapse of Fannie and Freddie is unthinkable because it would provoke a systemic risk to the financial world. Too many firms across America, and the world, are holders of their securities. And since F&F are these days virtually the only consistent buyers and securitizers of U.S. home mortgages, a decline in their lending could bring housing finance to a virtual standstill."

http://www.usnews.com/articles/opinion/mzuckerman/2008/07/25/fannie-mae-and-freddie-mac-too-fat-to-fail.html

Nothing yet (as of Saturday noon EST) from Paul Krugman or Bob Reich.

I'm guessing that everything we've heard from Obama and McCain on what they'll do about the economy and taxes is now moot.

Yes, allbetsareoff. I have the strong suspicion that the powers that be (Fed, Treasury) aren't telling the US public the half of it. As I posted above, together Fannie and Freddie's current debt is approximately $1.5 trillion. If you add on the mortgages they're holding or securing, many of which could be subprime loans, the potential default could reach $3.5 trillion if half of those mortgage loans/guarantees fail. The size of this problem is way bigger than anyone in the know is letting on. Tens of billions my foot!

Damn! First there was Bush I and Bush II. Then there was Desert Storm I (Kuwait) and then Desert Storm II (Iraq). Now we're going to have Great Depression I (1929-1941) and Great Depression II (2008-20??)!
Republicans - the graft that keeps on giving!

And, no, that last line is NOT a typo.

To my elected representative,

Please STOP the lunacy that is the proposed $700 billion bailout of the financial industry. Make no mistake, this is not a bailout of the citizens you were elected to represent. This is a bailout of the corporations from whom you've accepted money and other support, using money you are taking from the citizens you were elected to represent...and from their children...and from their children.

The citizens you were elected to represent are substantially protected from major changes in the financial industry via FDIC, SIPC, and excess SIPC insurance on their bank and brokerage accounts. Only those citizens who freely chose to invest in financial companies will suffer investment losses, just as those did who freely chose to invest in technology companies before the dot com bust. That's the way it should be.

The financial companies in trouble are the ones who freely chose to make bad decisions about what they invested in, and about how they managed risk and cash flows. They deserve to fail so that a new generation of financial companies which are better managed can flourish, making it much less likely that the current situation will ever repeat. The financial companies in trouble do not deserve to be gifted, or even "loaned," taxpayer money so that they can continue their past mistakes. If they are able to avoid failing by changing quickly into a next-generation financial company WITHOUT a taxpayer-funded bailout, then they have proven they deserve to survive. Whether new or re-born, we need better managed next-generation financial companies in our economy.

You are free to use the arguments made here to publicly justify your vote against the proposed $700 billion bailout.

I am asking you to vote AGAINST the proposed $700 billion bailout, in any form. I will record which of my representatives vote FOR the bailout, and will vote AGAINST them and their parties in the November election. I am also urging my friends, colleagues, and community to do the same.

Warm regards,
David

An open letter from America Is Our Creation! at http://AmericaIs.OurCreation.info .

To my U.S. Government representative:

Please DECLARE VICTORY with your Save America Plan for the American economy! Please STOP the lunacy that is the proposed $700 billion Paulnankebush Bailout of Global Financial Investors and Employees!

You have a choice.

You had the foresight to insure the stability of the U.S. financial system, and to insure the safety of deposit and investment accounts in banks, savings and loans, credit unions, and brokerages up to reasonable levels by establishing the FDIC (Federal Deposit Insurance Corporation), NCUA (National Credit Union Administration), and SIPC (Securities Investor Protection Corporation). You gave the FDIC and NCUA the power to use the full faith and credit of the U.S. Government to do this for banks, savings and loans, and credit unions.

You also have allowed the Federal Reserve to grease the wheels of the credit markets by accepting high risk debt as collateral for short term loans.

Please declare victory via your Save America Plan and focus your efforts on enabling the FDIC, NCUA, SIPC, and Federal Reserve to do what they do even better, instead of focusing your efforts on the duplicative, excessive, and THIEVING Paulnankebush (Paulson/Bernanke/Bush) Global Financial Investors and Employees Bailout.

Your Save America Plan is a much better solution than the proposed Paulnankebush Bailout of Global Financial Investors and Employees because:
* Your Save America Plan injects cash into the financial system through multiple vehicles, reestablishing the flow of credit.
* Your Save America Plan insures the market value of deposit and investment accounts up to reasonable levels.
* Your Save America Plan takes MUCH less money from American taxpayers than the thieving Paulnankebush Bailout of Global Financial Investors and Employees.
* Your Save America Plan keeps inflation manageable. You would create runaway inflation if you support the excessive Paulnankebush Bailout of Global Financial Investors and Employees, making Americans poorer on Day 1 as the prices skyrocket for gas, food, and all goods and services that are imported, have any imported component, or use oil and gas in their creation or distribution.
* Your Save America Plan GUARANTEES repayment of deposit account insurance claims to American taxpayers whereas the thieving Paulnankebush Bailout of Global Financial Investors and Employees does not. Financial institutions will repay FDIC/NCUA insurance claims through increased risk-based insurance premiums, whereas your support for the Paulnankebush Bailout of Global Financial Investors and Employees would be a gamble on a new U.S. government agency buying low and selling high. If (more likely when) when you lose that gamble, you will force the American taxpayers to foot the cost of the Paulnankebush Bailout of Global Financial Investors and Employees forever.
* Your Save America Plan moves deposit and investment accounts to financial institutions whose management teams are so STRONG that they didn't cause themselves to fail by taking too much risk. We desperately need these kinds of better managed next-generation financial companies in the American economy. If you support the Paulnankebush Bailout of Global Financial Investors and Employees, you will leave deposit and investment accounts in financial institutions whose management teams are so WEAK that they caused themselves to fail by taking too much risk.
* Your Save America Plan prices and disposes of the toxic wastes that are the bad loans/debt and their derivatives. The FDIC/NCUA/SIPC have been successfully selling bad loans/debt and their derivatives for years, whereas you would entrust a new and inexperienced (at least in working together) team to do this with the Paulnankebush Bailout of Global Financial Investors and Employees.
* Your Save America Plan enables housing prices to fall to sustainable levels. Homeowners in trouble can sign their house over to the mortgage holder, rent for a while, and then buy a new home when housing prices fall to sustainable levels. Yes, they lost their current gamble on owning a home that they FREELY CHOSE to buy and often refinance at inflated prices via mortgage and home equity loans/lines, but they are much more likely to be in a winning gamble when they buy a new home at a much lower price. Your support for the Paulnankebush Bailout of Global Financial Investors and Employees would just make homeowners wait longer for housing prices to fall to the same sustainable level, at which point they could buy a new home.
* Your Save America Plan puts the losses where they belong...with the people, funds, and companies -- U.S. and FOREIGN -- that FREELY CHOSE to invest in, and/or work for, financial companies. The same thing happened with the dot com bust and other burst bubbles where nobody bailed out the investors and employees. This is the way it should be. The investors and employees made the gamble in anticipation of making huge profits and/or enormous wages; they deserve to take the profit when the gamble succeeds�and the loss when the gamble fails. On the contrary, the losers in the Paulnankebush Bailout of Global Financial Investors and Employees are the American taxpayers who you -- acting as THIEVES -- would force to transfer their wealth to the people, funds, and companies -- U.S. and foreign -- that FREELY CHOSE to invest in, and/or work for, financial companies.
* Your Save America plan keeps the responsibility and accountability where it has a successful track record, with the FDIC, NCUA, SIPC, and Federal Reserve. Your support for the Paulnankebush Bailout of Global Financial Investors and Employees would place the blame on your shoulders, and unchecked power in the hands of a Treasury with strong ties to Wall Street and much less experience resolving such a crisis.

Instead of focusing your efforts on the thieving Paulnankebush Bailout of Global Financial Investors and Employees, please focus your efforts on improving your Save America Plan by taking these actions:
* Nationalize the SIPC so that like the FDIC and NCUA it's backed by the full faith and credit of the U.S. Government, with financial companies paying risk-based premiums so that it too has a net cost of $0 to American taxpayers over medium term time horizons.
* Nationalize and make permanent the one year money market insurance plan so that like the FDIC and NCUA it's backed by the full faith and credit of the U.S. Government, with financial companies paying risk-based premiums so that it too has a net cost of $0 to American taxpayers over medium term time horizons. Make it a responsibility of FDIC or NCUA, rather than creating a new government agency.
* Establish controls over the Federal Reserve so that it does not sneak the Paulnankebush Bailout of Global Financial Investors and Employees past the rest of the U.S. Government by making short term loans that are too large relative to the low value of the high risk debt it accepts as collateral.
* Ensure the FDIC, NCUA, SIPC, money market insurance plan, and Federal Reserve are able to obtain the temporary peak resources they need to handle the crisis.
* Encourage financial companies to cut their dividends to preserve capital, and raise the interest rates they offer to attract capital.
* To reduce panic, educate -- through a single unified campaign -- deposit and investment account holders about their FDIC, NCUA, SIPC, and money market insurance rights.
* To increase Americans' wealth, educate homeowners who are in trouble to 1) renegotiate their mortgages and home equity loans/lines and 2) if the mortgage holders are unwilling to renegotiate, to sign their house over to the mortgage holder, rent for a while, and then buy a new home when housing prices fall to sustainable levels.
* To increase Americans' wealth, educate investors in poorly managed financial companies to sell their holdings, take their losses, and reinvest what they have left...diversified across some combination of deposit accounts, money market funds, bonds, stocks, real estate, small businesses, etc.

You have an historic CHOICE now.
* You can SUPPORT and strengthen the Save America Plan you've already created. You'll go down in history as one of the WISE people who had the foresight mitigate a crisis nearing the scope of the Great Depression WITHOUT stealing from the American taxpayers to give to the people, funds, and companies -- U.S. and foreign -- that freely chose to invest in, and/or work for, financial companies.
* You can UNDERMINE the Save America Plan you've already created and instead support the Paulnankebush Bailout of Global Financial Investors and Employees. You'll go down in history as a THIEF made the crisis worse by stealing from the American taxpayers -- who can ill afford it -- to give to the people, funds, and companies -- U.S. and foreign -- that freely chose to invest in, and/or work for, financial companies. You'll also go down in history as one of the people who made the crisis worse by crippling American taxpayers financially at the very moment the American economy could least afford it.

I understand that I will suffer pain from this crisis, just like almost everyone else living in the U.S. It's inevitable. I freely chose to own a home via a mortgage. I freely chose to invest some money in financial companies. I freely chose to be part of the American economy. I am accountable for my decisions and their consequences.

However, I am NOT accountable for the decisions and consequences made by investors and employees of financial companies, who made their own free choices. They are!

Now, you have a choice. I will hold you accountable for your choice and its consequences. If you support the thieving Paulnankebush Bailout of Global Financial Investors and Employees, I will vote against you and your party in the November election and I will similarly work to have you fired if you are an appointed, rather than elected, official.

I am urging my family, friends, colleagues, and fellow citizens across the nation to do the same.

It's your choice.

Stop the Great Bailout!

Given the now likely passage of the Great Bailout, I'm mad as hell and I'm not going to take this anymore!

This is our last chance.

Visit http://ImMad.net to stop the passage of the Great Bailout right now!

Then spread the word to as many people as you can right away.