Tuesday, September 30, 2008
"Bankruptcy does not mean the company disappears; it is just owned by someone new (as has occurred with several airlines). Bankruptcy punishes those who took excessive risks while preserving those aspects of a businesses that remain profitable.
In contrast, a bailout transfers enormous wealth from taxpayers to those who knowingly engaged in risky subprime lending. Thus, the bailout encourages companies to take large, imprudent risks and count on getting bailed out by government. This "moral hazard" generates enormous distortions in an economy's allocation of its financial resources."Commentary: Bankruptcy, not bailout, is the right answer - CNN.com
Monday, September 29, 2008
Yeah, we can't have nukes in Iran cause they can hit Israel...
Bush is powerless to do anything because we're in a severe financial crisis caused by our attempt to keep nukes out of Iraq.
Can this get any more stupid?
Please notice step 1 is the Federal Reserve's intervention in the market's interest rate mechanism, causing mispriced credit.
This is one of the many bailouts that didn't need a vote from Congress.
"The next president will have to deal with yet another crippling legacy of George W. Bush: the economy. A Nobel laureate, Joseph E. Stiglitz, sees a generation-long struggle to recoup."The Economic Consequences of Mr. Bush: Politics & Power: vanityfair.com
His culprits are a tax code that has become hideously biased in favor of the rich; a
national debt increased 70 percent; a record $850 billion trade
deficit; record oil prices; weak dollar...just like Ron Paul has been saying for years.
Sunday, September 28, 2008
planned $700 billion bail-out that comes courtesy of the American
tax-payer if the US Congress gives the financial rescue package the
go-ahead this weekend."
The Sunday Herald - Scotland's award-winning independent newspaper
Let's bailout the whole world! Then, maybe, they'll like us again!
"Here is a historic geopolitical shift, in which the balance of power in the world is being altered irrevocably. The era of American global leadership, reaching back to the Second World War, is over.
You can see it in the way America's dominion has slipped away in its own backyard, with Venezuelan President Hugo Chávez taunting and ridiculing the superpower with impunity. Yet the setback of America's standing at the global level is even more striking... In a change as far-reaching in its implications as the fall of the Soviet Union, an entire model of government and the economy has collapsed.
Ever since the end of the Cold War, successive American administrations have lectured other countries on the necessity of sound finance. Indonesia, Thailand, Argentina and several African states endured severe cuts in spending and deep recessions as the price of aid from the International Monetary Fund, which enforced the American orthodoxy. China in particular was
hectored relentlessly on the weakness of its banking system. But China's success has been based on its consistent contempt for Western advice and it is not Chinese banks that are currently going bust. How symbolic yesterday that Chinese astronauts take a spacewalk while the
US Treasury Secretary is on his knees.
Despite incessantly urging other countries to adopt its way of doing business, America has always had one economic policy for itself and another for the rest of the world. Throughout the years in which the US was punishing countries that departed from fiscal prudence, it was borrowing on a colossal scale to finance tax cuts and fund its over-stretched military commitments. Now, with federal finances critically dependent on continuing large inflows of foreign capital, it will be the countries that spurned the American model of capitalism that will shape America's economic future."John Gray: A shattering moment in America's fall from power | Comment is free | The Observer
This writer assumes that the failures are due to lack of government intervention. This is wrong. The Fed is the ultimate in intervention. It affects every aspect of our economy. I post this because he DOES get right the hypocrisy of the U.S.'s say one thing, and do another economic foreign policy.
US House of Representatives approves Nasa buying Russian spacecraft | World news | guardian.co.uk
Saturday, September 27, 2008
"The more voters learn about the proposed $700-billion taxpayer-backed Wall Street rescue plan, the less they like it. Most voters remain largely unworried about their own money, too.
Just 24% of U.S. voters now favor the plan first proposed by Treasury Secretary Henry Paulson a week ago and the subject of very public negotiations on Capitol Hill ever since, according to a
Rasmussen Reports national telephone survey taken Friday night. Fifty percent (50%) oppose it, and 25% are undecided."
Friday, September 26, 2008
"9. Foreign Banks Can Cash in Too
Or perhaps the fact that U.S. tax-payers look like they might also end up bailing out foreign banks will end up being a fly in the ointment.
Now, the U.S. bailout looks as if it is going global, too, a move that could raise its cost and intensifyscrutiny by Congress and critics.
Foreign banks, which were initially excluded from the plan, lobbied successfully over the weekend to be able to sell the toxic U.S. mortgage debt owned by their American units to the Treasury, getting the same treatment as U.S. banks.
On Sunday, Treasury Secretary Henry Paulson indicated in a series of appearances on TV talk shows that an original proposal introduced Saturday had been widened. "It's a distinction without a difference whether it's a foreign or a U.S. one," he said in an interview with Fox News.
He's right, in a way. There are no U.S. or foreign mega-banks -- just multinational financial
institutions with headquarters at home or somewhere abroad. If one accepts the logic of the plan at all, it might as well extend to multinationals with foreign-sounding names. The rabbit hole is only so deep, and we're already way down it."
We're going to bail out Middle Eastern sheiks who invested in Citigroup! Cool! This gets better by the second!
hundreds of millions of dollars in the financial crisis, are seeking
federal help for Medicaid and other programs, as economic woes work
their way through the system."
Local Officials Press for a Piece of the Rescue Plan - WSJ.com
Sanders: Larry, I’m sure after all of the ranting and raving you have done against government intervention and the virtues of free market I know without saying that you are opposed to the bail out.
Kudlow: No, I’m in favor of it.
Sanders: Oh, you’ve become a Socialist overnight Larry, what happened?….I think your version of socialism is to bail out the rich. My concern is about the middle class and working families who are now asked to bail out the disaster caused by the incredibly greedy people on Wall Street who have fought for this deregulation which is now taking us over the cliff.
Thursday, September 25, 2008
Bush: Economy strong enough to handle turmoil - BostonHerald.com
Wednesday, September 24, 2008
September 18, that he has watched with "sadness" the collapse of Wall
Street firms that made economic policy recommendations in emerging
markets "as if they were the super intelligent and we were the poor
"Important banks, very important banks, that spent their lives giving
advice about Brazil and what we should or shouldn't do are now broke,"
news agency EFE quoted Lula da Silva as saying in a speech in southern
Brazil - Brazzil Mag - Brazilian President Makes Fun of Wall Street's Super Brains
"Bernanke's remarks, an unusual departure from his prepared
testimony, come as lawmakers and the Bush administration
negotiate a rescue plan aimed at easing the worst financial
crisis since the Great Depression. The Fed chief said paying
prices higher than the bad assets would fetch in the open market
would help ``unfreeze'' credit markets and aid the economy. "
He wants us to pay MORE than what they're worth. This is his solution.
Saturday, September 20, 2008
Thursday for declining to prosecute the managers of an oil- and
gas-royalty program that's been tainted by allegations of illicit sex,
drug use and taking favors worth thousands of dollars."
McClatchy Washington Bureau | 09/18/2008 | Official: Why weren't managers charged in oil-sex scandal?
Tuesday, September 16, 2008
"This past week, the government announced that it would take Freddie Mac and Fannie Mae, the mortgage giants, under conservatorship, which is a nice way of saying that they will be nationalized.
We don't use the word nationalize any more. We can try an experiment and read the new term conservatorship" back into history. In fact, we might say that Stalin and Lenin put Russia's industries under a kind of conservatorship. Or we might say that Mao pushed a kind of land conservatorship, or that Hitler's policy was one of national conservatorship. Marx's little book could be re-titled: The Conservatorship Manifesto.
You see, the government keeps having to make up new names for these things because the old policies, which were not that different in content, failed so miserably. The old terms become discredited and new terms become necessary, in an effort to fool the public.
It's as if a restaurant served a shrimp dish that gave all the customers food poisoning, and so each night it decides to serve the same shrimp but name the dish something new: crangon cocktail, prawn pasta,
scampi salad, or what have you. But no matter what they call it, it is still poison.
The Social Imperative of Sound Money by Llewellyn H. Rockwell, Jr.
When you're sitting around pondering, "Who is winning the war?", keep this in mind.
decision to seize Fannie Mae and Freddie Mac may choke off the
biggest source of funding for financial companies suffering from
the collapse of the subprime mortgage market. "
"Paulson's ``decision has been devastating to the market,''
said Marilyn Cohen, President of Envision Capital Management in
Los Angeles, which oversees $200 million in fixed-income assets.
``We all thought they would never help exacerbate the banking
crisis and that's exactly what they did.'' "
Gov't interventions don't help. They make it worse and distort the market's natural correction mechanisms.
Monday, September 15, 2008
Saturday, September 13, 2008
No, I didn't make this up."
Today's M/I Report
Friday, September 12, 2008
million per mile in order to protect America from busboys, gardeners
and fast food clerks. But it sure makes the nativists, xenophobes and
bigots feel good. Of course more than bigots benefit from the Wall. Add
in the morons who think this Wall is somehow making them safe. It won’t
help the economy -- quite the contrary, it is very harmful to the
economy. But the emotional comfort that bigots and morons get from it
has to be worth something. Unfortunately, like most government schemes
the people who think they are benefiting have managed to pass the bulk
of the cost off on other people. Let’s face it -- the Minutemen types
and their closet supporters are major Welfare Queens. To give
themselves comfort they are ripping off the taxpayers to the sum of
between $2 million and $4 million per mile."
Classically Liberal: Anti-immigration panic costs $2-$4 million per mile.
What's going on here? Is Freedom of the Press dying?
"You see, taxpayers, you must allow the government to issue permits to allow drilling and mining. We know how to properly allocate these very valuable licenses efficiently and equitably. If you let the free market decide this, it will do things poorly and unethically."
blanche to mount counter-terrorist operations inside Pakistani
territory raised fears last night that escalating conflict was
spreading from Afghanistan to Pakistan and could ignite a region-wide
George Bush's secret order to send special forces into Pakistan | World news | The Guardian
Sunday, September 7, 2008
commandos only months prior to Georgia’s army assault in South Ossetia
FT.com / World - US military trained Georgian commandos
The US government had accepted responsibility for the attack but did not
offer any apology for the same and instead announced to launch more
such attacks against the militants across the border, if so required in
Pakistan cuts supply lines to Nato forces
Remember, the Global War on Terror is making us safer.
install missile interceptors on Polish land—the Russkies balk and claim
Poland is now a legit target for Russky missiles. What’s this?
Diplomacy through intimidation? Just because we do it, does that mean
they should? Monkey see, monkey does? Russkovia is full of monkeys with
nuclear warhead missiles!"
» 10 Reasons Why We Need a New (Cold?) War
""This is our land. We are afraid to send our sons out the door for
fear the American troops will pick them up," says Mohammed, who was
chosen by the others to represent them. "Daily we have headaches from
the troops. We are fed up. Our government is weak and corrupt and the
American Soldiers have learned nothing."
A strong sense of frustration echoed through dozens of interviews by
The Associated Press with Afghan villagers, police, government
officials, tribal elders and Taliban who left and rejoined the
religious movement. The interviews ranged from the capital, Kabul, to
the rural regions near the border with Pakistan."
Afghans Fed Up With Government, US - Military.com
U.S.-backed Georgia, Kremlin-watchers in Moscow are worried that Russia
and America are closer to direct confrontation than at any point since
the end of the Cold War."
McClatchy Washington Bureau | 09/05/2008 | Kremlin-watchers warn of direct U.S.-Russia clash
"Then, last week, advisers from Morgan Stanley
hired by the Treasury Department to scrutinize the companies came to a
troubling conclusion: Freddie Mac’s capital position was worse than
initially imagined, according to people briefed on those findings. The
company had made decisions that, while not necessarily in violation of
accounting rules, had the effect of overstating the companies’s capital
resources and financial stability.
Indeed, one person briefed on
the company’s finances said Freddie Mac had made accounting decisions
that pushed losses into the future and postponed a capital shortfall
until the fourth quarter of this year, which would not need to be
disclosed until early 2009. Fannie Mae has used similar methods, but to
a lesser degree, according to other people who have been briefed."
"These two gigantic hedge funds intentionally
manipulated their accounting to show a capital position that was
stronger than reality, by pushing forward losses instead of recognizing
them as they occurred.
While not illegal, it had the effect of lying to the markets, which put both firms at risk of all-on collapse.
Now the government proposes to bail them out at your expense and risk the collapse of the government's funding,
instead of indicting the executives of these firms and placing them
into rundown, forcing the losses to be taken by the people who profited
from the gains during the "salad years.""
The Market Ticker
Aren't you glad we have a "free market capitalist" system, while those bad, evil Commies manipulate their economy? Well, OK, so the U.S. government intervenes here and there, but it's for the best. Why is it for the best, you ask? Well, that's because I assume the government is omniscient and incorruptible, and therefore smarter than the market.
Saturday, September 6, 2008
this is not a conflict of Russia’s choosing. There are no winners from
this conflict. Hours before the Georgian invasion, Russia had been
working to secure a United Nations Security Council statement calling
for a renunciation of force by both Georgia and South Ossetians. The
statement that could have averted bloodshed was blocked by western
FT.com / Comment & analysis / Comment - Why Russia’s response to Georgia was right
Republican National Convention, the party has created a "black-hat"
squad to track the Paulites and other potential troublemakers to make
sure they don't cause a scene on the convention floor.
Identified by their black baseball caps emblazoned with a white
star, squad members keep an eye on delegates they fear might cause a
scene. The squad is empowered by the convention managers to take
delegates' credentials and kick them off the convention floor -- a step
one convention official said would be unprecedented."
Aren't you proud of your party?
Monday, September 1, 2008
Russia's government declares its superiority over the West, claims America is on weak ground militarily and morally due to Iraq
but officials in Moscow believe those countries lack the leverage,
strength or unity to intervene, analysts say."
Russia sees Georgia outcome as proof of its dominance - Los Angeles Times
One of the reasons the supporters of this war used to justify staying, was that if we didn't, we'd look weak to our enemies. Well, they were wrong. We look weak by staying, and we look weak to Russia and China, actual countries with missiles, not just some guys in caves. What the Neo-Cons and their supporters don't realize is that the use of our guns don't make us look strong, it's how and when we use them. If you don't behave morally, it doesn't matter how big your show of strength.
once the Bush administration's favorite Iraqi politician, and
implicated him in bombings that killed Americans and Iraqis, Chalabi
and Iraqi government officials said Thursday."
McClatchy Washington Bureau | 08/29/2008 | Chalabi aide arrested on suspicion of Baghdad bombings
So, should the U.S. bomb itself for aiding the "terrorists?"