The Odd Landscape

15 Comments

1. 

   SusanD on September 21, 2008 at 11:46 am

   You have more faith in the Democrats than I do.  They’ve been pretty Jello-ish.  Flap your arms, yell “BOO!” and they all run in the direction they’ve been scared into.

   • 

     BooMan on September 21, 2008 at 11:56 am

     It’s not that I have faith in the Dems so much as I can’t see them getting a compromise bill that will win majority support.  It’s actually in the Senate where and then the conference, where I suspect a cave-in.  It will be very tricky getting this bill through to the president’s desk.  But whatever comes out, I expect Bush to sign it.

     • 

       DaveW on September 21, 2008 at 1:32 pm

       I’m not so sure Bush cares one way or the other at this point.

2. 

   Zandar1 on September 21, 2008 at 12:08 pm

   No, Bush doesn’t need a bill.  The world’s done with him.  He’s truly irrelevant right now.

   McSame is the one who needs a bill.  He’s the one that needs this problem to vanish off the front pages.  The longer it stays there, the stronger Obama’s numbers get.

   But let’s not forget Wall Street is running both sides of the aisle, and both Obama and McSame’s campaigns.

   It’s only a question of how much flat out bribery the Democrats will add on to this bill above and beyond the $700 billion Wall Street will get for starters.

   • 

     BooMan on September 21, 2008 at 12:30 pm

     the president is never irrelevant.  Bush needs a bill.  

     • 

       DaveW on September 21, 2008 at 1:33 pm

       He’s irrelevant when you have a decent Congress. And he should be.

     • 

       idredit on September 21, 2008 at 4:17 pm

       Bush is irrelevant b/c he does not know there’s a derivatives problem. Soaked in JD.

       Cheney needs a bill because all the biggies – not just the banksters – are up to their eyeballs in derivatives. For the past decade the money making instruments of the super rich.

       Soon, we’ll saying

       It’s the derivatives, Stupid

       unregulated high-risk credit bets

       The grim facts, BIS reported in June 2008 on derivatives traded. It’s a quadrillion problem – that’s one thousand trillion…that’s how much were traded then and growing.  To be exact, $1.14 quadrillion. [$548 trillion in listed credit derivatives plus $596 trillion in notional(face value) OTC derivatives]

       I’m with you that Dems should pass what they want and let Cheney tell Bush to veto it. They’ll be blamed but at least they can point to including something for the janitors who mop the floors.

       Obama, Volcker and Buffett had a summit. Quite likely Buffett reminded Obama derivatives are weapons of financial mass destruction. He was right on in 2003. Wise. very wise.

3. 

   Ed J on September 21, 2008 at 12:43 pm

   of the NYT:

   A $700 Billion Rescue Plan for Wall St., but Will It Work?

   That’s the HEADLINE. At the top-left corner of the front page.

   The Treasury Department, as overseer of the financial system, has in recent weeks unleashed a vast array of initiatives in a bid to stave off catastrophe. It took over the country’s largest mortgage finance companies and put untold billions of taxpayer dollars on the line to prop up other lenders.

   Now, although the details are still being worked out, the government is dispensing with rescuing one company at a time, and instead is taking on a vast pile of bad debt in one gulp.

   If it all comes to pass — if Uncle Sam becomes the repository for the radioactive leftovers of bad real estate bets — will the crisis lift? Will the fear that has kept banks clinging to their dollars, starving the economy of capital, give way to free-flowing credit?

   Most broadly, what are the long-term costs of the government’s stepping in to restore order after so many wealthy financiers became so much wealthier through what now seem like reckless bets on housing — bets now covered with public dollars?

   And then more questions follow:

   But significant skepticism confronts the plan. Under a proposal circulating Saturday, the Treasury could spend as much as $700 billion to buy mortgage-linked investments, then sell what it can as it works out the messy details of the loans. But no one really knows what this cosmically complex web of finance will be worth, making the final price tag for the taxpayer unknowable. One may just as well try to predict the weather three years from Tuesday.

   Also, what message does that send to the next investment bank caught up in the next speculative bubble and contemplating the risks of jumping in while wondering who is ultimately on the hook if things go awry?

   Whether or not this thing passes is not nearly as important as the question posed by The Times – will it work?

   • 

     DaveW on September 21, 2008 at 1:37 pm

     If by work you mean delaying the bill for a while longer, it probably will work. It seems necessary to try something, but the debt it will dump on the government will be deadly.

4. 

   mainsailset on September 21, 2008 at 1:21 pm

   Actually Bush is supremely relevant. Like it or not he still holds the title of leader of their party as well as this nation.

   Older I get the more I’m inclined to respect time as a great tool to find answers. As I nash my teeth waiting for Obama to sally forth with a great plan that the movers & shakers can rally behind, I’m also learning to respect his penchant for a broader view that takes time to sort out.

   McCain’s insistence on substituting impatience for judgment just so he can get a sound bite is all the more reason for Obama to slow the process down.

5. 

   robertdsc on September 21, 2008 at 1:43 pm

   This seems like a good time for Obama to make up some of the ground lost on FISA. If he can stick with support for re-regulation and consumer protection, I think that would speak volumes.

   Sadly, I’m not sure he can do that.

6. 

   americanforliberty on September 21, 2008 at 2:13 pm

   Blank check for Iraq,
   A now W wants a Blank Check for Wall Street. If the banks won’t loan money to each other, why should the American Taxpayer.

   I say all strings attached, because it was the Republicans lack of oversight and Regulations for 6 years that brought this economic disaster./

7. 

   robertdsc on September 21, 2008 at 2:32 pm

   I spoke a little early:

   http://thepage.time.com/obamas-prepared-remarks-in-charlotte-north-carolina/

   First, there must be no blank check when American taxpayers are on the hook for this much money.

   Second, taxpayers shouldn’t be spending a dime to reward CEOs on Wall Street.

   Third, taxpayers should be protected and should be able to recoup this investment.

   Fourth, this plan has to help homeowners stay in their homes.

   Fifth, this is a global crisis, and the United States must insist that other nations join us in helping secure the financial markets.

   Sixth, we need to start putting in place the rules of the road I’ve been calling for for years to prevent this from ever happening again.

   Stick with it, boss man. Stick with it. Please.

8. 

   mainsailset on September 21, 2008 at 2:35 pm

   Yeah, thanks cause I was just going to comment that this is indeed a global crisis and Congress doesn’t really have the luxury of choosing a protectionist fix here, no matter how good it looks on paper. Good for Obama.

9. 

   on September 21, 2008 at 3:31 pm

   Congressional Leaders Stunned by Warnings

   As Senator Christopher J. Dodd, Democrat of Connecticut and chairman of the Banking, Housing and Urban Affairs Committee, put it Friday morning on the ABC program “Good Morning America,” the congressional leaders were told “that we’re literally maybe days away from a complete meltdown of our financial system, with all the implications here at home and globally.”

   According to the shock doctrine, as explained by Naomi Klein, the powers that be take advantage of events which bring the population into a state of shock to quickly engineer transfers of wealth to the wealthy.

   Glenn Greenwald has a good discussion of this:

   The complete (though ever-changing) elite consensus over the financial collapse

   Atrios has a bunch of good posts on this. What everyone should be asking:

   What changed between Monday and Friday? What new information did you have at the end of the week that you did not have at the beginning of the week which caused you to go from $0 to $1 trillion?

   And Matt Stoller has posted an email from a lawmaker describing how this will play in Congess:

   Here’s the industry’s play: progressives will approach Nancy with ideas for reform, and she’ll agree to push for their proposals, and she’ll really mean it. Then industry lobbyists will go to Dennis Moore, Melissa Bean and a few other Democrats, and tell them how dire the consequences of the proposals would be, and that the members who understand how the economy works need to step up to stop Nancy and the crazy liberals from doing something rash. Then those Democrats will go to Steny and tell him how terrible Nancy’s crazy ideas would be, and how we can’t rush into something like that without much, much more thought. Maybe Barney will try to talk to Dennis or Melissa, but it will become apparent quickly that they have no idea what they’re talking about; they’re just repeating by rote what the lobbyists told them to say. Melissa may actually be dumber than Sarah Palin. Barney will realize he might as well talk to the lobbyists directly and save a step. The lobbyists will agree to something inconsequential, but certainly nothing that would really affect the industry’s conduct. Then the leadership will do the math and conclude that because the vast majority of Republicans will vote against any bill, we can’t get enough votes without the Dennis and Melissa crowd. The only way, our leadership will conclude, to get anything at all passed is to include nothing more than the inconsequential proposals that the lobbyists agreed to. Then we’ll all go along because it would be wildly irresponsible not to act when we’re staring over the brink of a complete collapse of world financial markets.