September 2008 archive

I’m Sure Giving Henry Paulson All That Power

Just Warms The Heart As You Look Forward To

Another Heck Of A Job Brownie Moment

Bailout Plan in Hand, House Braces for Tough Vote  

 

  By CARL HULSE and DAVID M. HERSZENHORN

Published: September 28, 2008    

WASHINGTON – The House braced for a difficult vote set for Monday on a $700 billion rescue of the financial industry after a weekend of tense negotiations produced a plan that Congressional leaders portrayed as greatly strengthened by new taxpayer safeguards.

The 110-page bill, intended to ease a growing credit crisis, came after a frenzied week of political twists and turns that culminated in an agreement between the Bush administration and Congress early Sunday morning.

The measure still faced stiff resistance from Republican and Democratic lawmakers who portrayed it as a rush to economic judgment and an undeserved aid package for high-flying financiers who chased big profits through reckless investments.

European governments swoop to save troubled lenders

 

 

By Matthew Saltmarsh and Landon Thomas Jr.

Published: September 29, 2008



PARIS: Just days after the United States government brokered the sale of the largest U.S. savings and loan, Washington Mutual, regulators in Britain and Belgium swooped to engineer emergency rescues of two leading banks with heavy exposure to soured mortgages.

In the latest sign of trouble to hit Europe from the global credit crisis, the Belgian, Dutch and Luxembourg governments announced a partial nationalization of the troubled Belgian-Dutch financial conglomerate Fortis, involving a combined injection of €11.2 billion from the three governments, which take a 49 percent stake.

Prime Minister Yves Leterme of Belgium, who was joined Sunday by the European Central Bank president Jean-Claude Trichet in an unprecedented appearance, unveiled the accord after a weekend of emergency talks in which the governments had tried to broker a whole or partial sale of the bank to private bidders

USA

Paulson will have no peer

The Treasury chief will gain sweeping, even unparalleled power under Congress’ compromise plan.

By Peter G. Gosselin, Los Angeles Times Staff Writer  

WASHINGTON — Despite all the constraints Congress supposedly wrapped around him, Treasury Secretary Henry M. Paulson is about to become the most powerful mortgage financier of the modern era — most likely of any era.

Buried beneath the 100-plus pages of detail that Paulson’s financial rescue plan has picked up during its 10-day journey from a Bush administration wish list to a bipartisan congressional compromise is the striking fact that the Treasury secretary got almost everything he sought — an eventual $700 billion and the authority to spend it largely as he sees fit.

To be sure, congressional bargainers did make one huge change.

And in the process, they created a potential stumbling block as the Treasury tries to stabilize the deeply damaged financial system by acquiring toxic mortgage-backed securities.

Under terms of the compromise announced Sunday, any firm selling troubled assets to the government would have to give Washington the right to take an ownership stake in the firm — a more sweeping requirement than had been expected.

I can hardly make sense of it anymore.

Things seem to be spiraling faster and faster circling around a black hole of an energy drain.

Trouble in River City my friends.

I had my dad insist tonight there was a deal, but there’s not nor is there any indication that this one is a good one-

It’s not $700 billion in a lump (a made up number anyway).  It’s subject to legislative and judicial review.  It’s punitive in terms of executive compensation.  It will purchase equity except that most of it won’t.

Or so people say, but they’re the same people who said things were ok in the first place so why should I trust them?

Krugman is mildly in favor, Sirota thinks it’s a sellout.  Pelosi is peddling that there isn’t enough discipline among House Democrats and who knows?  I don’t think I’d vote for it.  Calls are said to be running 100 to 1 against.  It is a Republican policy meltdown and is correctly labeled that way in public perception.

Notable items on my agenda that are missing or unclear is where is the attempt to shore up the underlying asset rather than the 40x leveraged derivative?  I think that would be a heck of a lot cheaper.  And why do you want to maximize buy in?  This is not fucking flood insurance.

I don’t get the urgency either.  The fact is that given our actual economic activity we ought to be trading 2000 points lower and it will happen sooner or later.  Forty days is going to change things a lot.

Or not.  It’s very disappointing to hear dial backs in the urgent program of public works and infrastructure projects including green energy.  How come we’re not spending an Iraq Occupation on them?

And Chinese me no Chinese, someone who owes you a billion or 2 is a thief, a trillion or 14 a valued customer.

Or in for a penny in for a pound and as any fool knows a pint is a pound the world around and if you’ve ever paid $2.50 for a beer you know how true this is.

Earlier today, at the Yokohama Bunka Gymnasium, the legendary Great Muta won the All-Japan Triple Crown chamionship.  Muta, the alter ego of the also legendary Mutoh Keiji, added to their belt total, as Mutoh is the New Japan Pro Wrestling IWGP Heavyweight champion and also holds an independent tag team title.  IE: It’s five belt Mutoh/Muta!