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21 September 2008

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William R. Cumming

Agree fully with Welsh plan. Note that insider activity is booming. Led of course by Treasury officials that don't seem to realize that they represent John Q. Public not the Wall Streeters. Does the ICC (International Criminal Court) have jurisdiction over criminal financial crimes? This looting of the the Treasury and public fisc is getting unbelievable. Congress is as bankrupt as Lehman!

Nancy K

fnord I think your suggestions sound just like what we need. I think the average thinking American is getting really tired of CEO's that barnkrupt a company, walking away with everything. Also, why shouldn't the wealthiest 5% pay more in taxes. As the bible says, those whom much is given, much is expected.

Curious

The price of Trash, Paulson wanst to pay as pure Gold... It's crashing all over.

http://www.nakedcapitalism.com/2008/09/lbo-loan-prices-continue-to-fall.html

With banks still holding LBO loan inventory that they'd like to be rid of, and recent sales requiring seller financing, it's no surprise that loan prices continue to decay.

The value of leveraged loans fell to record lows during the past week, creating further potential mark-to-market losses for both investors and banks.

The average bid on the most traded US leveraged loans dropped 330 basis points to an all-time low of 84.28 per cent of face value, according to data from Standard & Poor’s LCD and Markit.

The average bid for Europe’s most traded leveraged loans fell to its lowest level in seven months but, across a broader range of loans, the average price also fell to a historic low....

Simon Hood, joint head of leveraged loans and mezzanine debt at European Credit Management, said: “With renewed volatility in the stock market and concern about the economic situation, a dawning of reality that the economy will get worse has taken over and we have seen a drift downward of prices, accentuated by recent events.”

The spread between the price at which traders were quoting bids and offers nearly doubled, indicating a level of uncertainty and illiquidity not seen since last August when the credit crunch hit.

Mr Hood said buyers were sitting on the sidelines awaiting stability before investing.

ExBrit

For the first time in my life I have taped a printed paper to the back window of my car. It says: NO BLANK CHECKS FOR WALL ST. CROOKS. TELL CONGRESS.

It's an attempt, no matter how futile, to wake up the populace. Driving around today I'm getting quite a few thumbs up.

Curious

BAM...

everybody dumps dollar and going to places that holds value.

Dumping $1Trillion liquidity into the market has consequence people. Inflation will be raging mad.

http://www.msnbc.msn.com/id/12400801/

Oil prices spiked more than $25 a barrel Monday — the biggest one-day price jump ever — as anxiety over the government's $700 billion bailout plan battered the dollar and touched off frenzied buying of safe-haven investments including crude.

Light, sweet crude for October delivery jumped as much as $25.45 to $130 a barrel on the New York Mercantile Exchange before falling back somewhat to trade at $123.77,up $19.22. The contract was set to expire at the end of the day, adding to the volatility; the October price began accelerating sharply in the last hour of regular trading.

JerseyJeffersonian

Unfortunately, I'm not surprised by the brazen fashion in which the bribery is being forwarded. This is just golden parachutes for the Banker Boyz. Gotta have 'em. It's really just SOP, don't ya know.

No, what really gets me riled up is the bigger context of the marketing of the Paulsen "plan".

The way in which this abomination of a "plan" is being sold should remind everyone of the way in which con men always work. They always want the marks to commit right away, lest they miss out on this unique, time-sensitive opportunity. Quick, quick, quick! No time to THINK what the ramifications of this "opportunity" really are. If you want to slow the decision making down, the pressure to buy into the grift immediately just goes up. (H/T to the Rude Pundit for this thought.)

Remind you of how the Patriot Act was sold? Remind you of how the Iraq war was sold? Crisis! Crisis! You should all just listen to Your Betters; They have your interests at heart, trust Them.

Can you imagine how much toxic financial sludge will be piled onto the tab should Congress go along with this? I mean, in the past our "representatives" couldn't be bothered to even read the Patriot Act before signing off on it, although things that should have given them pause were there to be seen in the text of the proposed law. But now, in a further devolution, this whole scam, once embraced, will be beyond any legislative OR judicial review. Yeah, that sounds like something that our "representatives" can get behind, alright.

JerseyJeffersonian

Unfortunately, I'm not surprised by the brazen fashion in which the bribery is being forwarded. This is just golden parachutes for the Banker Boyz. Gotta have 'em. It's really just SOP, don't ya know.

No, what really gets me riled up is the bigger context of the marketing of the Paulsen "plan".

The way in which this abomination of a "plan" is being sold should remind everyone of the way in which con men always work. They always want the marks to commit right away, lest they miss out on this unique, time-sensitive opportunity. Quick, quick, quick! No time to THINK what the ramifications of this "opportunity" really are. If you want to slow the decision making down, the pressure to buy into the grift immediately just goes up. (H/T to the Rude Pundit for this thought.)

Remind you of how the Patriot Act was sold? Remind you of how the Iraq war was sold? Crisis! Crisis! You should all just listen to Your Betters; They have your interests at heart, trust Them.

Can you imagine how much toxic financial sludge will be piled onto the tab should Congress go along with this? I mean, in the past our "representatives" couldn't be bothered to even read the Patriot Act before signing off on it, although things that should have given them pause were there to be seen in the text of the proposed law. But now, in a further devolution, this whole scam, once embraced, will be beyond any legislative OR judicial review. Yeah, that sounds like something that our "representatives" can get behind, alright.

WP

Now, the scam is becoming cliearer. First the government buys the trash from the brokerages at inflated prices and the trash goes into the treasury. Then the Treasury sells the trash at rock-bottom prices to Carlyse Group (GHW Bush and Co.) and others of similar Ilk.
Then, Carlysle ENFORCES THE CONTRACT AT FULL FACE VALUE, dispossessing the poor suckers who bought the houses and making a huge profit.

These crook are stealing America from us!

And, of course, the Dems will go tagging along like a bunch of sheep.

TR Stone

I've never been a fan/supporter of the NRA, but it may come to the "right to bear arms".

Mr.Murder

Wait until people find out how much Social Security money was squandered in no bid contracts.

judith weingarten

Perhaps they do expect the tumbrils rumbling. The 3rd Infantry's 1st BCT is training for:
homeland duties.

Are any of you as frightened by this as I am?

Maureen Lang

FYI- 9/23/08, 9:37 a.m. ET-
Sen. Dodd now gaveling open the Senate Banking Committee with:
Paulson
Bernanke
Cox
Lockhart (FHFA)

Telecast on CSPAN3, it’s also on CSPAN 1 until 10:00 am & available online @ the Committee website live feed:

http://banking.senate.gov/public/index.cfm?Fuseaction=Hearings.Detail&HearingID=7a41ae9e-30b2-4d7f-8f1b-4ef2e8ae28f7

zanzibar

Maureen

I wonder if Sen. Dodd and his Banking Committee will only be hearing from the guys that got it wrong consistently.

What is it about our country that they guys that got drunk and crashed the car into the wall at high speed are given crack and an 18 wheeler as a reward! They need to be sent to jail to sober up while the sober folks that got it right all along should be the one's in charge.

Paulson, Bernanke, Cox and Lockhart all deserve to be fired immediately!

DaveGood

May I suggest we all just skip the warm, fuzzy Tar and feathers stuff and go straight to the torch\pitchforks\rope\ scenario?

DaveGood

Dan Bradburd

Thinking about the bailout--and the way it has been presented--Naomi Klein's Disaster Capitalism came to mind. She hasn't got all the details down, but her description of the pattern seems spot on, and, in this particular case, eerily prescient.

Curious

The crisis occurred (to greatly oversimplify) because the financial system allowed entities to place bets on whether or not those mortgages would ever be paid. You didn't have to own a mortgage to make the bets. These bets, called Credit Default Swaps, are complex. But in a nutshell, they allow someone to profit immensely - staggeringly - if large numbers of subprime mortgages are not paid off and go into default.

The profit can be wildly out of proportion to the real amount of defaults, because speculators can push down the price of instruments tied to the subprime mortgages far beyond what the real rates of loss have been. As I said, the profits here can be beyond imagining. (In fact, they can be so large that one might well wonder if the whole subprime fiasco was not set up just to allow speculators to profit wildly on its collapse...)

These Credit Default Swaps have been written (as insurance is written) as private contracts. There is nil government regulation of them. Who writes these policies? Banks. Investment banks. Insurance companies. They now owe the buyers of these Credit Default Swaps on junk mortgage debt trillions of dollars. It is this liability that is the bottomless pit of liability for the financial institutions of America.

In fact, they can be so large that one might well wonder if the whole subprime fiasco was not set up just to allow speculators to profit wildly on its collapse...

http://www.dailykos.com/story/2008/9/23/133349/153/556/607628

zanzibar

Newt Gingrich gets the politics of the Wall Street Crony Welfare Bill right.

Curious

Getting real — and letting the cat out of the bag

Whoa — it seems that Ben Bernanke ditched his prepared testimony and, instead, let the cat at least partly out of the bag.

I believe that under the Treasury program, auctions and other mechanisms could be devised that will give the market good information on what the hold-to-maturity price is for a large class of mortgage-related assets. If the Treasury bids for and then buys assets at a price close to the hold-to-maturity price, there will be substantial benefits.

First, banks will have a basis for valuing those assets and will not have to use fire sale prices. Their capital will not be unreasonably marked down …

As I wrote earlier this morning, the whole “take these assets off the balance sheets” line is fundamentally disingenuous; the key question is what price Treasury pays for the assets. And here we have Bernanke effectively saying that it’s going to pay above-market prices — prices that allegedly reflect “hold-to-maturity” value, but still more than private investors are willing to pay.

...
What possible justification can there be for doing this without acquiring an equity stake?

No equity stake, no deal.

http://krugman.blogs.nytimes.com/2008/09/23/getting-real/

taters

Certainly I would never condone this - it has to be sending chills.

Outrage as Indian minister says murder of CEO by sacked mob 'serves as a warning'

Rhys Blakely in Bombay

Indian business leaders have expressed outrage at a government minister's comment that the beating to death of a chief executive by a mob of sacked workers "should serve as a warning for management".

Lalit Choudhary, 47, the head of the Delhi-based operations of Graziano Trasmissioni, an Italian car parts maker, died of head wounds on Monday after being lynched by scores of employees he had dismissed.

The incident, at Graziano's plant in Greater Noida, a suburb of the Indian capital, came after a dispute between the factory's management and workers who had demanded better pay and permanent contracts. Mr Choudhary was holding a meeting with more than 100 former staff to discuss a possible reinstatement deal when the attack occured.

The murder has left much of corporate India in shock. However, Oscar Fernandes, who heads India's Ministry of Labour and Employment, declined to criticise the attack.

The minister said: "Workers should be dealt with compassion ? Workers should not be pushed so hard that they resort to whatever happened."

The Government has admitted that there exists widespread resentment among the hundreds of millions of Indians who have failed to benefit from their country's economic renaissance.

http://www.timesonline.co.uk/tol/news/world/asia/article4817414.ece

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