The other day, maybe Friday, I saw on Larry Kudlow’s show, people talking about Mark To Market as a way to get out, or help get out of this financial crisis. Today, I saw Republican Representitive Issa saying we could change the Mark To Market rules and work our way out of this, without a bailout. Then on Kudlow again, I heard some other wall street insider say Mark To Market.
What is it?
Issa was proud to have voted against this bailout bill, even after the stock market dropped 777 points.
If Mark To Market will save us, someone, please educate me!
Ok. Seriously. What should happen now? What should the Congress do? I won’t ask what should the President do because it is not only irrelevant but just plain wrong.
KC Replied:
This question requires more than one answer. On one level, it’s one of those “well you’re so smart, YOU think of something” questions for which there IS no good answer. Like when you get in a car with a drunk and you’re careening over the cliff and he turns to you and asks “What do we do now?” There are no good options now, so arguing about options is pointless, as is kicking the crap out of the drunk, no matter how attractive that option is at the moment. There’s no way you’re not going over the cliff, no matter how much you don’t want to be in that situation. And to the drunk, it seems like this emergency means you all have to get behind him and work fast, and there’s no time for questions or debate. That’s where we are; guess who’s the drunk? This is the same question we were supposed to answer on The Surge; “Well, do YOU have a better idea?” Yeah, the better idea is to STOP DOING THINGS THE DRUNK SUGGESTS, starting with going to war in the first place. In fact, consider doing the opposite to whatever he/they suggest. And don’t let them drive anymore. Take away the keys. Did I stretch that metaphor past the breaking point?
On the other level, we can start debating options, take suggestions, etc., in fact we probably have to do just that. I vote no on the trillion dollar bailout with no oversight. I look at that row of Fed Reps and I see people from the private sector who see one last chance to grab as much money as they can for themselves and their friends before they bolt for the horizon and the Hell with the rest of us poor trusting slobs. Is it going to cost the taxpayer money? Yes, lots. So did the WPA program under Roosevelt. And it’s going to take time, and we’re not going to do everything right. And we may not be the world power we are today by the time we get out of this mess. But dammit, we have to stop listening to the drunks at the wheel.
Which gets me back to my first level: Let’s take some time to talk about how Phil Gramm, Bush, Reagan, Norquist and all the other pinheads who have been expounding on the wisdom of the marketplace and the inherent evil of gov’t regulation WERE WRONG, and led us directly to this situation. Gov’t oversight, as repugnant as it is to those being overseen, is necessary because this crap happens when you let these guys do whatever they want. Let’s have that conversation A LOT, so the lessons sink in and we don’t find ourselves here again in the next generation. And while we’re at it, let’s talk about how maybe it’s not such a good idea to have 99% of our media run by corporations that tout this anti-gov’t drivel to their own benefit and to the exclusion of any other opinions. Actually, with the waning of broadcast in the age of cable and satellite, that ship has probably sailed, but that doesn’t mean we can’t call the spade a spade.
Congress is actually doing the right thing as of right now. Nobody seems to be leaping into the Bush solution (and make no mistake about where that proposal came from; it came from the same folks who brought you Iraq, War on Christmas, Defense of Marriage, The Surge and all their other hits). Let’s hope Congress keeps a firm grip on their newfound cojones and actually comes up with a solution. You’ll know they found the right one when the puppets on FoxNews howl in protest.
[Things have been changing rapidly, and this is already a 5 day old conversation. I don't think KC will mind me sharing.]
But even that wasn’t the top political threat McCain faced last week. Bigger still was the mounting evidence of the seamless synergy between his campaign and Fannie Mae and Freddie Mac, the mortgage monsters at the heart of the housing bust that set off our current calamity. Most of all, it was the fast-moving events on that front that precipitated his panic to roll out his diversionary, over-the-top theatrics on Wednesday.
What we were learning — through The New York Times, Newsweek and Roll Call — was ugly. Davis Manafort, the lobbying firm owned by McCain’s campaign manager, Rick Davis, had received $15,000 a month from Freddie Mac from late 2005 until last month. This was in addition to the $30,000 a month that Davis was paid from 2000 to 2005 by the so-called Homeownership Alliance, an advocacy organization that he headed and that was financed by Freddie and Fannie to fight regulation.
I know most people cheer for their side. I too watched the debates not to be convinced, but rather to see how convincing my guy was. I watched the debates as a fan. Here’s my take.
Honestly. I was disappointed. McSame seemed to dominate the debate. My guy seemed to hesitate and stutter. Now its true that O’man counterpunched effectively, but I learned in HS that you don’t make a persuasive case starting with the words “Ya know”. It felt like that Johnny Mac talked more and when Jim Lerher told them they were even on time half way through, I couldn’t believe it.
As a fan of Barry Obama, I was frustrated. I assume that means the fans of John McCain must think he won.
After a week where he seemed truely out of touch, and downright confused it felt like McCain took it to Obama. If agression is the criteria, McCain won.
But there was this weird thing too. And I don’t know what to make of it. If it was a tactic, it was briliant, if it was an accident, it was bizzare. SO I don’t know what to make of the fact that McCain never looked at Obama. Never.
I suspect it was a tactic to not treat him as an equal. Like when he kept saying Obama doesn’t understand, I think his never acknowledging Obama was meant to dismiss him as not an equal. I have no idea how that will play in Peroria~
Right now there is no deal on the bank bailout. Senator McCain is LIKELY to make the debate tonight. And the Democrats are in a no win situation.
Here’s the way I see it. The country (probably) desperately needs this bailout. I think they’re thinking that something like a run on the banks might happen. Maybe Paulson told Congressional leadership that there’s not enough money in the FDIC for it to cover all the withdrawals if a lot of people start pulling their money out.
Washington Mutual failed today, and was bought out. There really actually IS a crisis.
But the PEOPLE are really pissed off about CEOs and rich people doing wrong and getting bonuses and golden parachutes. This is small potatoes when it comes to the size of the bail out we’re talking about – but mark my words – the key to the whole deal is the word “accountability”!
People are pissed off. The Republicans in the House of Representatives won’t back the bailout and their Republican President and their Republican Fed Chairman. They’re running for re-election. They’ll say they protected the people and are trying to hold others responsible, who should be held responsible.
THEN … the economy will collapse!!! Maybe the whole country.
Meanwhile the Democrats and Paulson, are left to either let the country slide into Depression or they could lose the election and save the country.
So what it turns on is that the people don’t know what’s good for them. But they’re plenty pissed off.
The thing is … it seemingly MUST HAPPEN NOW. Otherwise why not wait 40 days for the election and then fix things?
Again … it all turns on if Hank Paulson is correct, and if he’s telling the truth. Could he be SO conspiritorial as to make this all up, convince the Democrats, have Congress go back to the Repuplicans, and then say “Nevermind!”?
I don’t think so. I think the Democrats are going to save us … and then get hurt politically. THIS more than anything else, might win John McCain the White House. THIS more than anything else, could keep the Dems from gaining enough votes for Cloture in the Senate. THIS might make 4 more years of unholy mess in Washington.
“Obama has been furthest out of line, however, on Social Security, stooping to the kind of scare tactics he once derided.
Obama said Saturday as he campaigned in that retiree-heavy state. “Millions of families would’ve been scrambling to figure out how to give their mothers and fathers, their grandmothers and grandfathers, the secure retirement that every American deserves.” This is simply false
To Democrats who worry about whether their nominee is willing to do whatever it takes to win: You can calm down.”
It is arguable that, because of his inexperience, Obama is not ready for the presidency. It is arguable that McCain, because of his boiling moralism and bottomless reservoir of certitudes, is not suited to the presidency. Unreadiness can be corrected, although perhaps at great cost, by experience. Can a dismaying temperament be fixed?
Help. I’m drowning. Drowning in debt; first of all. Secondly I’m drowning in information. The problem is I don’t know how much of it is bad information.
Here’s a second problem. I don’t know who knows what information is good. There are lots and lots of opinions out there right now, about the biggest ever government bailout of anyone or anything.
Lots of people are happy about it. Lots of people are angry about it.
I saw Conservative Larry Kudlow practially screaming about it today. Really sounding holier than thou and angry about our government’s new RTC (Resolution Trust Corporation) type bailout. But he specifically said that he was mostly in favor of it. His cronies were all sounding against it too.
Somewhere in there he said the most important thing. The thing that Donna Brazille said on Sunday. The thing that has been bugging me for the last couple days.
We don’t know.
We don’t know what this deal will be. We don’t know who it protects, or even who it should. We don’t know what it will cost …
But what really scares me is, besides Henry Paulson, Secretary of the US Treasury, we don’t even know who knows what is being proffered. I don’t even think he knows, what, or how much exactly, he’s getting us all in for. And I don’t know if Senator Chris Dodd, chairman of the banking committee, or Senator Charles Schumer (my buddy) of New York, or David Bloomberg mayor of New York whom some people are proposing run this new entity, or even the bloddy bankers and brokers, really know what it is they are dealing with. Do they know what they are getting us into?
Dodd said, on Sunday that he and Republican John Boehner were told something SO scary, that they shouldn’t talk about it on TV. But that scary thing is what will happen if the government doesn’t bail the banks out to this tune of 700 billion. Now Boehner is a toady little weasel, but he kept the same talking points as Dodd, and that is very scary because he’s totally partisan.
SO … do they know what is coming? These are fearless leaders who just had the crap scared out of them by Hank Paulson?
My gut tells me Paulson is telling the truth and that a real real bad boogeyman is just outside our door, but I don’t know … and neither do you!
5 Trillion dollars is more than the size of the economy of Japan. The second largest economy in the world.
T Boone Pickens says 700 billion is the largest transfer of wealth in world history. [That's our money going to the middle east. Money that we personally borrowed from the Chinese!]
Lehman Brothers collapsed under 690 billion dollars in debt.
The publisher of Forbes said this is the worst economic crisis he’s ever seen.
Alan Greenspan says this is the worst economic event in 100 years.
Things are bad. The Republicans … last 8 years … yeah but … filibuster … yeah but … war … Cheney … He lied … Yeah but … welfare for the rich … yeah but lying about war … deregulation … housing crisis. FIVE TRILLION DOLLARS IN GOVERNMENT GUARANTEES!
Come on people! Vote Republican – they out and out lie, they deceive, they destroy. No they don’t run th … right now … COME ON PEOPLE! Do you really want this group running things again ?
Experienced leaders can certainly blunder if their minds have rigidified (see: Rumsfeld, Donald), but the records of leaders without long experience and prudence is not good. As George Will pointed out, the founders used the word “experience” 91 times in the Federalist Papers. Democracy is not average people selecting average leaders. It is average people with the wisdom to select the best prepared.
Sarah Palin has many virtues. If you wanted someone to destroy a corrupt establishment, she’d be your woman. But the constructive act of governance is another matter. She has not been engaged in national issues, does not have a repertoire of historic patterns and, like President Bush, she seems to compensate for her lack of experience with brashness and excessive decisiveness.
Dick Cheney was secretly running the country while da Dub was blissfully ignorant. At least about illegal invasions of privacy. I suspect its typical rather than a unique usrpation, but this exceprt, from a new book called “Angler: The Cheney Vice Presidency” by Barton Gellman, focuses on the illegal spying on American’s without a search warrant.
Here are some clips from the Washington post. In it they prove what should clearly be impeachable offenses by the Vice and also by Alberto Gonzales who was way in over his head and not yet Attorney General. There’s so much wrong here it is hard to find the excerpts to pull, this two part series should be read in its entirety, but here are a couple powerful paragraphs.
“Even now, three months into a legal rebellion at the Justice Department, President Bush was nowhere in the picture [1]. He was stumping in the battleground state of Ohio, talking up the economy.
With a nod from Cheney, Hayden walked through the program’s vital mission [2]. Gonzales said top lawyers at the NSA and Justice had green-lighted the program from the beginning. Now Attorney General John D. Ashcroft was in the hospital, and James B. Comey, Ashcroft’s deputy, refused to certify that the surveillance was legal.
That was misleading at best. Cheney and Gonzales knew that Comey spoke for Ashcroft as well. They also knew, but chose not to mention, that Jack L. Goldsmith, chief of the Office of Legal Counsel at Justice, had been warning of major legal problems for months.”
…
“We could have gone to Congress, hat in hand, the judicial branch and the executive together, and gotten any statutory change we wanted in those days, I felt like,” he said in an interview. ‘But they wanted to demonstrate that the president’s power was supreme.’”
…
To his credit, Ashcroft, and his battered Deputy Comey, were the heroes in this, defending the Constitution against the VP’s claims that this was what the president wanted, when, of course, the president didn’t even know what was going on.
“Was Comey going to sit there and watch a barely conscious man make his mark? On an order that he believed, and knew Ashcroft believed, to be unlawful?
Unexpectedly, Ashcroft roused himself. Previous accounts have said he backed his deputy. He did far more than that. Ashcroft told the president’s men he never should have certified the program in the first place [7].”
…
”
All hell was breaking loose at Justice. Lawyers streamed back from the suburbs, converging on the fourth-floor conference room. Most of them were not cleared to hear the details, but a decision began to coalesce: If Comey quit, none of them were staying.
At the FBI, they called Mueller “Bobby Three Sticks,” playfully tweaking the Roman numerals in his fancy Philadelphia name. Late that evening, word began to spread. It wasn’t only Comey. Bobby Three Sticks was getting ready to turn in his badge.”
…
It was close to midnight when Comey got home, long past the president’s bedtime. Bush had yet to learn that his government was coming apart.
That’s what Alan Greenspan called what happened today with the $690 billion dollar bank collapse at Lehman Brothers. AIG bought Merrill Lynch at a huge discount just to save it.
All of these salvagings of private commercial financial institutions (see Freddie Mac and Fannie Mae et al) are done in the distraction of the weekend.
George Bush has wrecked every economy he touched.
I saw a woman on “Hardball” today, blaming this all on the Democrats. She was a beautiful woman with really big balls.
The difference is, once reminded, I’m against it – profoundly against it! Really. Its bad. Any moral person would be against war, especially against preventative war. I mean, war for peace? Can you say George Orwell? Its disgusting. Its stupid. Its doubletalk. A religious person might even say its EVIL!
Is there an etiquette for updating a previous blog post? Is it wrong to update an old post? I’m beginning to think that when I post gets updated it should be marked as such.
But, should we leave the old lines in and put a line through? Should each change be annotated?
Left work a bit early on Friday. Drove the 60 or 70 miles to Ithaca, where my old pal Bren and I screamed and cheered and felt like we belonged at a “Progressive” talk radio show recording of Rachel Maddow. I love Rachel. Its not always elegant to hear someone express their political views. Rachel makes her’s elegantly. Dr Maddow speaks in concise burst of reason, without ever reaching to the depths of vulgarity that many talk show pundits do.
Friday she asked the question “Should Obama fight back with lies and innuendo” in the same manner that the other side does? Her question got a mixed response from the highly partisan progressive crowd.
Most of the people there looked like Bren and myself. 50′s, grey, passionate, liberal, long haired and hopefully smart.
My old friend Dave Westgate used to say. “If the media and the college professors and intellectuals are all liberals, maybe that means something. They’re the most educated or the most informed.”
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Saturday was off to Dad’s – whom I couldn’t find for 1 and 1/2 hours, because we miscommunicated on who would drive whom. He drove himself. I waitied for him to come home.
The ceremonies were ceremonies.
“We’re all great. Thanks to the sponsors. Give us money. Yay!”
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Sunday was the big trip to the Bronx. Justin showed up around 1, landed on the couch. We went. We saw. We conquerred. Derrick Jeter hit his hit that would tie him with Gehrig for 1st all time in hits in Yankee stadium. Alex hit a slam. Giambi hit a bomb. Derek hit one. Mariano made a save (thank you Jose Veras).
After a long bus trip and seats that were litterally above the pigeons (I was too uncomfortable that high up. We were above the screen in the upper tank! It was hot. It was muggy. It was muggy. (I know. I said it twice)
Sorry for the interruption. Technical difficulties at the network source have been cleared up and you may again make your comments. [And we know you will!]
