While they are peddling you this claim that the US will take distressed assets and make a profit, look over on the Instapopulist and see they are going to do reverse auctions AND who is in charge!
There is zero guarantee they are getting these assets at a greatly reduced price to turn a profit later so far.
I tried to warn people he is in bed with these hedge fund managers, he put Robert Rubins clone, Jason Furman as his chief economic adviser and Goolsbee? Talk about out of reality in terms of cause and effect on current policy, I'm sorry but the guy thinks our trade deficit is no big deal seemingly.
Of course check out Senator Bernie Sanders speech nailing to the cross former Senator Phil Gramm as the primary cause of this disaster. Remember Gramm, America is a bunch of Whiners? Until he said that, he was McCain economic adviser, nuf said there! Unless McCain has an epiphany to realize he is dead wrong on economic policy to actually strengthen the US, this is a true choice of worse and worser.
Now wait a second on these CDSes. If they had just let AIG, GSEs go directly into bankruptcy, can the 3rd party holders of CDSes start making calls on their asset because they are not part of that particular companies portfolio that just went into bankruptcy and liquidation?
If a bank sends the RFC derivatives at a distressed price, the bank realizes a loss and that loss reduces primary and secondary capital. Only the desperate will unload significant derivative paper. This is no free lunch unless accounting shenanigans are afoot.
Government, if it does what it advertizes, must take paper at significant discounts - losses. Rep. Frank and many analysts expect to get derivatives at steep discounts. With discounts they can make money on Gov side - offset by losses on the bank side.
Long term, best asset quality practices would make the derivatives true first mortgage bonds, traceable to the mortgages, not debentures or phony bonds - minimizing interest on the bonds and mortgages.
With the nationalization of much of U.S. finance we should ask what important difference there is between Bush and Hugo Chavez who nationalized the Bank of Venezuala? The answer is that only one of them speaks good Spanish.
Basically, when Congress created the program in 1989, it allocated $50 billion dollars. The Resolution Trust Corporation came back to Congress needing more money several times. Over 6 years, they eventually got $110 billion. Table 3 of the GAO report (from 1996) says the total cost was $160.1 Billion. Of that $160.1 Billion, only $28B was from the private sector. The rest was from the Taxpayer!
One of the bs talking points is that they 'made money on this'. I think someone is spinning the fact that the RTC did not use all their money and had $17B left over. Somehow that gets spun into a profit.
... the MOAB (Mother of All Bailouts) currently in front of Congress.
And it is not clear at all to me that even the MOAB is going to succeed. In fact, I hate to say this, but I suspect it won't. It just throws entire generations' worth of savings down the rathole.
I just read the proposed regulation that Atrios pointed to, and he's right, this is a $700 billion blank check for the Bush administration and the financial elites. Glenn Greenwald notes the pacing of the discourse is identical to the run up to war. The political system is engaged in a massive transfer of wealth to corrupt actors with no debate (except in the foreign press and in the blogs) with no details made public. Furthermore, the Democratic leadership is entirely complicit in what is happening.
The chart was made long before these massive bailouts started.
As for the Bailout of the Bailouts, I think the $700 Billion number will be about as accurate as the Bush Administration estimates for how much the Iraq War was going to cost us.
In the end the Federal Reserve is going to have to start monetizing debt from money printed out of thin air. I truly believe that.
I have a question, on the change of the US defaulting on it's federal debt, that graph I see, when is the date of that assessment?
We're not even seeing the new deficit numbers or costs of this bailout being reported accurately.
You have $700B, I see $800B for this new plan and the previous tally ranges from $500B to $900B.
This is the ultimate question to me and one I have been asking for a week now. Are they going to bankrupt the United States and how do we alert people to this possibility if it is one?
My house, savings, 401K ??? Pension? Social Security? Lots of people are invested and not rich. They have lived conservatively and saved over long periods of time. Not everybody in the markets is rich. May they all rot in hell including the 59 million stupid effing American s that voted for Bush and gave him a second term. He can't get the hell out fast enough.
Another sucker n chump one was the new jobs would be in high tech and all one has to do is study hard, go to school and work hard.
Then....they worked like the dickens to offshore outsource as many of those jobs as possible.
Great post, hear, hear!
Everything I have read to date, they are refusing to force consequences on these people are correct the reasons as to why we got here.
Both sides, Democrats and Republicans.
They cannot even report the numbers right. As far as I know the total bail out to date is the previous $900B plus this new $800B, numbers which change hourly.
This is exactly what I've been talking about. I wish the Democrats would voice such an obvious rebuttal to that "tax and spend" propoganda spewed by so many political campaigns.
Also, Blueneck made a good point about the bridge collapse in Minneapolis. I think the Obama campaign will bring that up though. I saw Joe Biden mention large scale infrastructure improvments in a recent interview, allluding the Minnesota tragedy.
from a historical standpoint it's hard to object to the government's mass bailouts since similar debt-producing methods were put into action to save the U.S. from the Depression; maybe we've been headed for socialism this entire time...
I think there are now a lot of buzz words flying around that are affecting main street (that's us) where people don't know what they are talking about because it's all obscure trading rules.
Uptick rule was a regulatory rule that stopped the short sellers from increasing downward pressure on a stock when it was in free fall. The rule has been around forever, but removed in 2007.
There are a lot of questions today on why this rule was not put back into place since it worked quite well since the 1930's and instead this sudden outright ban.
Investopedia has some same definitions to decode this nomenclature unique to traders.
in the Instapopulist the plan? This is ridiculous. It's like they are trying to remove risk out of the system and there is no way they could do in depth analysis on any of this in such a short period of time.
This is just unbelievable. And it's a perfect weapon because most people don't understand numbers. They only understand guns.
That virtually guarantees that the bailout will be far larger than $700 Billion.
vs. whatever the hell Chavez is doing down there.
While they are peddling you this claim that the US will take distressed assets and make a profit, look over on the Instapopulist and see they are going to do reverse auctions AND who is in charge!
There is zero guarantee they are getting these assets at a greatly reduced price to turn a profit later so far.
I tried to warn people he is in bed with these hedge fund managers, he put Robert Rubins clone, Jason Furman as his chief economic adviser and Goolsbee? Talk about out of reality in terms of cause and effect on current policy, I'm sorry but the guy thinks our trade deficit is no big deal seemingly.
Of course check out Senator Bernie Sanders speech nailing to the cross former Senator Phil Gramm as the primary cause of this disaster. Remember Gramm, America is a bunch of Whiners? Until he said that, he was McCain economic adviser, nuf said there! Unless McCain has an epiphany to realize he is dead wrong on economic policy to actually strengthen the US, this is a true choice of worse and worser.
Now wait a second on these CDSes. If they had just let AIG, GSEs go directly into bankruptcy, can the 3rd party holders of CDSes start making calls on their asset because they are not part of that particular companies portfolio that just went into bankruptcy and liquidation?
Anyone know?
If a bank sends the RFC derivatives at a distressed price, the bank realizes a loss and that loss reduces primary and secondary capital. Only the desperate will unload significant derivative paper. This is no free lunch unless accounting shenanigans are afoot.
Government, if it does what it advertizes, must take paper at significant discounts - losses. Rep. Frank and many analysts expect to get derivatives at steep discounts. With discounts they can make money on Gov side - offset by losses on the bank side.
Long term, best asset quality practices would make the derivatives true first mortgage bonds, traceable to the mortgages, not debentures or phony bonds - minimizing interest on the bonds and mortgages.
With the nationalization of much of U.S. finance we should ask what important difference there is between Bush and Hugo Chavez who nationalized the Bank of Venezuala? The answer is that only one of them speaks good Spanish.
Basically, when Congress created the program in 1989, it allocated $50 billion dollars. The Resolution Trust Corporation came back to Congress needing more money several times. Over 6 years, they eventually got $110 billion. Table 3 of the GAO report (from 1996) says the total cost was $160.1 Billion. Of that $160.1 Billion, only $28B was from the private sector. The rest was from the Taxpayer!
(http://www.gao.gov/archive/1996/ai96123.pdf )
One of the bs talking points is that they 'made money on this'. I think someone is spinning the fact that the RTC did not use all their money and had $17B left over. Somehow that gets spun into a profit.
And it still didn't stop economic stagnation, a collapse of their real estate prices, and massive public debt.
Just look at our record for bailouts so far. They've only made things worse.
I am really concerned the US is plain going to default!
Dr. Doom says that is not probable and the US has assuredly taken on higher deficit to GDP ratios in the past...
but this time, with all of these foreigners holding US debt I really am not so sure on this one.
Looks like we need to do digging into this possibility.
2 years old! Jesus we know it's way worse before they just started hanging gobs of money to wall street!
... the MOAB (Mother of All Bailouts) currently in front of Congress.
And it is not clear at all to me that even the MOAB is going to succeed. In fact, I hate to say this, but I suspect it won't. It just throws entire generations' worth of savings down the rathole.
http://www.openleft.com/frontPage.do
The chart was made long before these massive bailouts started.
As for the Bailout of the Bailouts, I think the $700 Billion number will be about as accurate as the Bush Administration estimates for how much the Iraq War was going to cost us.
In the end the Federal Reserve is going to have to start monetizing debt from money printed out of thin air. I truly believe that.
Excellent research midtowng!
I have a question, on the change of the US defaulting on it's federal debt, that graph I see, when is the date of that assessment?
We're not even seeing the new deficit numbers or costs of this bailout being reported accurately.
You have $700B, I see $800B for this new plan and the previous tally ranges from $500B to $900B.
This is the ultimate question to me and one I have been asking for a week now. Are they going to bankrupt the United States and how do we alert people to this possibility if it is one?
My house, savings, 401K ??? Pension? Social Security? Lots of people are invested and not rich. They have lived conservatively and saved over long periods of time. Not everybody in the markets is rich. May they all rot in hell including the 59 million stupid effing American s that voted for Bush and gave him a second term. He can't get the hell out fast enough.
Another sucker n chump one was the new jobs would be in high tech and all one has to do is study hard, go to school and work hard.
Then....they worked like the dickens to offshore outsource as many of those jobs as possible.
Great post, hear, hear!
Everything I have read to date, they are refusing to force consequences on these people are correct the reasons as to why we got here.
Both sides, Democrats and Republicans.
They cannot even report the numbers right. As far as I know the total bail out to date is the previous $900B plus this new $800B, numbers which change hourly.
This is exactly what I've been talking about. I wish the Democrats would voice such an obvious rebuttal to that "tax and spend" propoganda spewed by so many political campaigns.
Also, Blueneck made a good point about the bridge collapse in Minneapolis. I think the Obama campaign will bring that up though. I saw Joe Biden mention large scale infrastructure improvments in a recent interview, allluding the Minnesota tragedy.
from a historical standpoint it's hard to object to the government's mass bailouts since similar debt-producing methods were put into action to save the U.S. from the Depression; maybe we've been headed for socialism this entire time...
I think there are now a lot of buzz words flying around that are affecting main street (that's us) where people don't know what they are talking about because it's all obscure trading rules.
Uptick rule was a regulatory rule that stopped the short sellers from increasing downward pressure on a stock when it was in free fall. The rule has been around forever, but removed in 2007.
There are a lot of questions today on why this rule was not put back into place since it worked quite well since the 1930's and instead this sudden outright ban.
Investopedia has some same definitions to decode this nomenclature unique to traders.
This is just incredible, comrade. I guess risk is just for the lowly US citizens, especially when it comes to their careers.
in the Instapopulist the plan? This is ridiculous. It's like they are trying to remove risk out of the system and there is no way they could do in depth analysis on any of this in such a short period of time.
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