et alli.

Speaking Personally

 

On Mondaythe twelfth day of US financial crisis "pandemonium, and fear" associated with market panics struck as the U.S. House of Representatives voted aganist financial rescue legislation endorsed by the President and bipartisan house leadership.  Having voted on the question Representatives will adjourn today for Rosh Hashanah with unfinished business left to be done latter but almost certainly too late to "get in front of the curve."

Its unfortunate John McCain referred last week to "my Republicans." 

Three Important Stories

 

Les banques européennes face à la crise financière

House votes against bailout; markets plunge

10394.92 -748.21 (-6.71%)  Sep 29 4:10pm ET

Quotes and Pointers

 

"When I took office in 1993 with Clinton promising a whole investment agenda, public investment of the sort you are talking about and Newt you are talking about, we had a huge budget deficit but we could not do it because Alan Greenspan said we are not going to at the Fed reduce short term interest rates and you are not going to have a second term unless you get that budget deficit under control."

Robert Reich  Round table discussion about 30 sec from end of clip

"...since Keynes we have recognised that it is appropriate to allow government deficits to rise as the economy turns down if there is also a commitment to reduce deficits in good times. After using the economic expansion of the 1990s to bring down government indebtedness, the US made a serious error in allowing deficits to rise over the last eight years. But it would be compounding this error to override what economists call “automatic stabilisers” by seeking to reduce deficits in the near term.

Indeed, in the current circumstances the case for fiscal stimulus – policy actions that increase short-term deficits – is stronger than at any time in my professional lifetime. Unemployment is now almost certain to increase – probably to the highest levels observed in a generation. Monetary policy has very little scope to stimulate the economy given how low policy rates already are and the problems in the financial system. And experience around the world with economic downturns caused by financial distress suggests that while they are of uncertain depth, they are almost always of long duration.

The economic point here can be made more straightforwardly. The more people who are unemployed the more desirable it is that government takes steps to put them back to work by investing in infrastructure, energy or simply through tax cuts that allow families to avoid cutting back on their spending."

Lawrence Summers

Out and About on the Net...

...Sometimes with Snarky Twiter Lines

How Much Will This Cost? How Does This Constrain the Policy of an Obama-Biden Administration?

Motorola Building Up 350-Person Android Team. Nokia Also Sniffing Around.

Iridium flares for another $500m 

et alli is cross posted at The Intelligence Forum
A.Word.A.Day:
politicaster
from Wordsmith.org

http://abcnews.go.com/Video/playerIndex?id=5903025

http://delong.typepad.com/sdj/2008/09/how-much-will-t.html

http://www.ft.com/cms/s/0/290ca9f6-8d8b-11dd-83d5-0000779fd18c.html

http://www.techcrunch.com/2008/09/28/motorola-building-up-350-person-android-team-nokia-also-sniffing-around/

http://www.lemonde.fr/economie/article/2008/09/29/les-banques-europeennes-face-a-la-crise-financiere_1100613_3234.html#ens_id=1089411

http://www.theregister.co.uk/2008/09/29/iridium_merger/

http://www.kansascity.com/news/breaking_news/story/818818.html

http://wordsmith.org/words/politicaster.html

http://finance.google.com/finance?client=ob&q=INDEXDJX:DJI

 

Speaking Personally

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On Friday the eleventh day of US financial crisis President Bush chose to speak to the nation at 8:30am as US trading markets opened.

 

THE PRESIDENT: Good morning. My administration continues to work with the Congress on a rescue plan. And we need a rescue plan. This is -- it's hard work. Our proposal is a big proposal. And the reason it's big and substantial is because we got a big problem.

We also need to move quickly. Now, anytime you have a plan this big, that is moving this quickly, that requires legislative approval, it creates challenges. Members want to be heard. They want to be able to express their opinions, and they should be allowed to express their opinions

There are disagreements over aspects of the rescue plan, but there is no disagreement that something substantial must be done. The legislative process is sometimes not very pretty, but we are going to get a package passed. We will rise to the occasion. Republicans and Democrats will come together and pass a substantial rescue plan.

Thank you very much

 

See also:Text of Bush's statement Friday    (Sept. 19)

and for reasons I do not understand the markets accepted this.  The DJIA actually gained.

 

On the evening of Friday the eleventh day of US financial crisis presidential debates were held and my feeling is that the two candidates are less than evenly matched in what Robert Stein called The Demeanor Debate.

 

John McCain looking anywhere but at his opponent alleged Obama does not know what is going on.  However the substance of Obama's remarks said otherwise and Obama looked at the camera and John McCain.  John McCain, perhaps with more candor than intended, admitted to playing a big role in scudding the bailout/rescue plan --" I met with my Republicans..." 

 

Three Important Stories

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NYU's Altman sees 50-55 percent chance of GM default

 

Reid, McConnell Say Agreement Nears on U.S. Bank-Rescue Program  

 

Who's Afraid of a Big, Bad Bailout?

 

 

Quotes and  Pointers

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"I'm hopeful the worst of the crisis may be behind us if we can get Congress on board with the package.  The government's role is to stop a crisis from turning into a catastrophe.''

Stephen Roach

 

'Yes, I went back to Washington, and I met with my Republicans in the House of Representatives. And they weren't part of the negotiations, and I understand that. And it was the House Republicans that decided that they would be part of the solution to this problem.'

John McCain

"We are about to see what stake China really has in the survival of the globalized world economy.  As in 1931, the political arguments are all against such an operation.  Only the far-sighted will see that the economic case for a rescue is compelling." 

Harold James

 

Out and About on the Net...

...Sometimes with Snarky Twitter Lines

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Nobel laureates endorse Democratic candidate and his plans for science.

Value Investing Benjamin Graham style  -- Free stock quotes with Altman z-scores.

DoodleBuzz

 

et alli is cross posted at The Intelligence Forum

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A.Word.A.Day: isthmus from Wordsmith.org

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Speaking Personally

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"Crisis, pandemonium, and fear" are associated with market panics but these are the words George Stephanopoulos of ABC used to describe the atmosphere in the White House cabinet room as the President, two presidential candidates, and congressional leaders tried to get an agreement on how to frame legislation on special powers and huge emergency spending by government to "get in front" of the pending US trust/liquidity crisis.  The leaders of the United States were unable to reach an agreement.

On Thursday the tenth day of US financial crisis there are still two plans.  As the day moves forward Friday "Crisis, pandemonium, and fear" will be translated into the markets because another bank, Washington Mutual,  has failed and traders don't like to go into weekends with big uncertainties.

  

Three Important Stories

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Bailout deal stalls as Republican lawmakers revolt

China astronauts blast off, set for country's first spacewalk

Wall Street worries, Main Street woes

Quotes and  Pointers

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'The Massachusetts Institute of Technology (MIT) in collaboration with an industrial team, is working on development of a comparatively small accelerator system to deliver the proton therapy to patients. When perfected, an even more rapid expansion of proton facilities should almost immediately occur. The St. Louis, Missouri facility, and the two Florida hospitals mentioned above are each planning to use one of these systems.'

Proton Therapy -- Wikipedia

Out and About on the Net...

...Sometimes with Snarky Twitter Lines

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Amish's ways clash with need to regulate, protect cattle

What Caused the Credit Crisis

Loving Dubbya

et alli is cross posted at The Intelligence Forum

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A.Word.A.Day: shoal from Wordsmith.org

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Speaking Personally

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On Wednesday the ninth day of US financial crisis Congress held hearings. In the morning chairman Bernake made the case to a joint committee that the financial crisis is not just a Wall Street problem but an American problem.    I admire the chairman's patient demeanor.  He counters "bailout" questions with "reform" answers and introduced the possibility of real-time oversight. 

In the House Nancy Pelosi made clear she will not support the $700 bailout unless it will pass with a strong bipartisan majority.  An unfettered bailout is unpopular with the electorate.  Democrats don't intend to give Senator McCain a populist issue he can ride to the White House. If the President really wants a bill perhaps he would need to get Obama and McCain to sign on.  

It appears that there are now two plans in play or development -- Senate, and House.

  

Three Important Stories

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Bringing Down Wall Street as Ratings Let Loose Subprime Scourge

 

Analyst downplays McDonald's credit concerns

Original Treasury bailout plan is dead, but revised plan emerging 

Quotes and  Pointers

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'This is why the Dodd plan is good. Say the Treasury pays the bank Y for a bundle of assets, and finds that in the long run it is unable to sell them for more than X < Y. Then the difference Y-X is deemed to have been invested in the common stock of the bank as of the date of purchase.'

Brad DeLong

Out and About on the Net...

...Sometimes with Snarky Twitter Lines

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Freddie Mac to Pay Moffett at Least $900,000 in Annual Salary  -- Compensation limits example?

Ruling out US-style bailout plan, EU looks to tougher regulation

et alli is cross posted at The Intelligence Forum

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A.Word.A.Day: shoal from Wordsmith.org

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Speaking Personally

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On Monday the seventh day of US financial crisis it looks like some in Congress are more interested in executive compensation for bringing US economic interest to the brink of bankruptcy than in preserving the US economy.  When companies are insolvent and ask for government financing they should not be allowed to pay millions to inapt executives while families are paying and average of $5000 each for the bailout...This amounts to huge transfers from many to a few.

Any company seeking low cost government sponsored financing should be willing to agree to some reasonable schedule of executive compensation.  Of companies not tapping public finance would be free to pay any amount executive compensation approved by their owners...

By late afternoon on the 7th day Secretary Paulson has agreed to Compensation limits and equity stakes.

On Tuesday the eighth day of US financial crisis Congress held hearings...four federal mandarins of the highest rank, one secretary and three agency heads, looked grim as they listened to opening remarks from the senators because it is apparent  the Senate will look carefully and make changes in the Paulson Plan. 

Secretary Paulson wants $700 billion to address the US liquidity crisis. The news report that he has agreed to compensation limits and equity stakes is erroneous.  Initially he wants to go into the markets and buy certain assets, mortgage backed...beyond that he can not be specific because he does not think the public would understand which really means he will use some portion of the $700 billion to purchase credit default swaps from the estimate $62 Trillion pool as the pool is unwound.  Bernake use the phrase moving toward a "central counterparty" in the context of CDS which implies an exchange where CDS are traded.

I am still trying to get my head around all this but it now appears that there are three plans in play or development -- Paulson, Senate, and House.

  

Three Important Stories

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Report: Paulson Agrees on Equity Stake

New York to Regulate Credit Default Swaps

Push for central credit derivatives counterparty

 

Quotes and  Pointers

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 'Democratic leaders have broadly embraced the administration's proposal to spend up to $700 billion to take troubled assets off the books of faltering firms and are not questioning the need to give the Treasury Department expansive authority to halt the meltdown in world markets. But by attempting to limit executive pay, they risk alienating key Republicans who object to such restrictions and delaying passage of the rescue plan, which in turn may stir renewed fear in the markets.'

WP By Lori Montgomery, David Cho and Howard Schneide

I

Out and About on the Net...

...Sometimes with Snarky Twitter Lines

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The sad truth about China's tainted product

Sebelius signs T. Boone Pickens energy pledge 

Draft of continuing resolution aims to avoid government shutdown

 

et alli is cross posted at The Intelligence Forum

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A.Word.A.Day: monadnock from Wordsmith.org

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Speaking Personally

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Friday the President in his closing remarks on the financial crisis commented that we do what is necessary to get the nation back on its long term growth trend...I think he telegraphed that the national economy is in recession.  

Sunday Paulson and several congressional movers and shakers were on the morning talk shows.  'Appearing on CBS News' Face The Nation, Paulson said the $700 billion plan was the "least costly" option..."We felt this was the best way to stabilize the situation, unclog the system so that it can work." '  Nancy Pelosi and the likely next US President Barack Obama are acting  like a sovereign wealth fund asking for several  concessions to main-street interest before authorizing spending $700,000,000 to address Wall Street's problems.

The stage is set for the first round of presidential debates next Friday.

Three Important Stories

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An Overview of the Crisis and What to Do about It

What Wall Street Should Be Required to Do, to Get A Blank Check From Taxpayers

Grazing On The Paulson Plan

 

Quotes and  Pointers

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 'You can blame lots of the crisis on government -- more than most people think -- but at the end of the day it is hard to escape the conclusion that markets simply have performed horribly in a number of important regards.'

Tyler Cowen 

"Congress will respond to the financial markets crisis by taking action this week in a bipartisan manner that will protect the taxpayers' interests. The Administration's $700 billion proposal does not include the necessary safeguards. Democrats believe a responsible solution should include independent oversight, protections for homeowners and constraints on excessive executive compensation. 

"We will not simply hand over a $700 billion blank check to Wall Street and hope for a better outcome. Democrats will act responsibly to insulate Main Street from Wall Street. 

"As we proceed to deal with this crisis, this is clear recognition that the party is over for the Bush Administration's anything goes, failed economic policies that have damaged our economy, undermined the middle class and further pointed out the need for a New Direction."

Nancy Pelosi

 "Wall Street as it has long been known -- a coterie of independent brokerage firms that buy and sell securities, advise clients and are less regulated than old-fashioned banks -- will cease to exist," 

WSJ  By JON HILSENRATH, DAMIAN PALETTA and AARON LUCCHETTI

Out and About on the Net...

...Sometimes with Snarky Twitter Lines

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In a financial crisis, Obama shows a steady hand

ABC Exclusive: New Doubts Over Palin's Troopergate Claims

Bank crisis cartoon

 

et alli is cross posted at The Intelligence Forum

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Speaking Personally

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Buying Time...The Paulson Plan, that is how I think of it because he is the point man presenting things, is so big I can't yet get my mind around it.  Barney Frank is reported to be buying into it so enabling legislation in the house should be greased.  Certainly the picture of Paulson in a press conference with most of Congress's movers and shakers, Democrats and Republicans alike, standing behind him says volumes.

 

Until Congress acts the details are unclear.  I rather suspect that when elation has passed the DJIA will resume its down trend...too bad for short traders since they will be on the sidelines.  Somehow when the sausage making is finished I also suspect Detroit auto makers will come away with 50 billion or so simply to save the jobs.

 

 

Three Important Stories

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Thoughts on the Big Buyout

Angler: The Cheney Vice Presidency

press reports on Bishop Duncan  

Quotes and  Pointers

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'The White House has expressed concern that other major US financial institutions are likely to founder due to the credit crisis. The authorities have drawn up a list of companies whose bankruptcy would harm the entire US economy. No names have been made public.'

RNW

 

 

'Heading into this week, the SPX was sitting just above huge put open interest at the 1,250 strike. A decisive break below the 1,250 strike could see selling exacerbated due to delta-hedging by index and ETF put sellers.'

Todd Salamone

 

"We will try to put a bill together and do it fairly quickly.  We are not in a position to give you any specifics right now''

Barney Frank

 

"...when the banks make their assets transparent (should be a requirement for participation), we will discover if any executives misrepresented their assets and filed false reports with the SEC. That could be prosecuted under Sarbanes-Oxley, and perhaps a few executives spending time in jail might help with the moral hazard issues."

Calculated Risk 

 

Out and About on the Net...

...Sometimes with Snarky Twitter Lines

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Stuff White People Like

Irons Fruit Farm - Corn Maze

Drawing the V.P. Candidates

et alli is cross posted at The Intelligence Forum

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Three Important Stories

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LOSING THOMAS FRIEDMAN....

Good religion needs good science

 

The Humpty Dumpty Economy

 

Quotes and  Pointers

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'We tell poor nations they have to make their financial markets transparent before capital will flow to them. Now it's our turn. Lacking adequate regulation or oversight, our financial markets have become a snare and a delusion. Government only has two choices now: Either continue to bail them out, or regulate them in order to keep them honest. I vote for the latter.'

Robert Reich

 

 

Out and About on the Net...

...Sometimes with Snarky Twitter Lines

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Lewis: Financial Services to be "Tough" through 2009  --

 

WELLS FARGO & COMPANY

McCain Palin -- cartoon... and if you have a button machine it makes a great campaign button for more of the same.

 

et alli is cross posted at The Intelligence Forum

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Three Important Stories

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Do Central Banks Have an Exit Strategy?

Near-term U.S. economy recovery is wishful thinking: ECRI

Democrats Reluctantly Embrace Offshore Drilling

Quotes and  Pointers

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'Ms. Pelosi and her fellow Democrats say that they are making the change reluctantly but that the political climate rendered it impossible to try to retain the drilling ban this year. So rather than see the moratorium expire and open the way to drilling as close as three miles from the coast, they said they were pushing any drilling at least 50 miles offshore, requiring states to agree to it and tying the whole package to a series of clean energy initiatives that have so far languished in Congress.

“The reality,” Ms. Pelosi told reporters Thursday, is “if we don’t have something in the bill, it’s drilling three miles offshore."'

Carl Huse

'

''Hillary Clinton is as qualified or more qualified than I am to be vice president of the United States.  She is qualified to be president of the United States of America. She is easily qualified to be vice president of the United States of America, and quite frankly, might've been a better pick than me.''
Joe Biden

Out and About on the Net...

...Sometimes with Snarky Twitter Lines

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Rangel Tries to Explain Back Taxes on Villa  -- Hmm...

 

YourMorals.Org  --

 

Barack Obama to Guest on 'Saturday Night Live' Season Premiere -- Celebrity!

 

et alli is cross posted at The Intelligence Forum

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Speaking Personally

If you google "The Future of Energy Policy" its obvious the topic has been around for a while although the United States still has no formal energy policy.  Since its been decades without a formal energy policy there is no good reason to create one now...its best left to the next administration.  However its likely that energy policy will come into play this month and next especially if the bill Nancy Pelosi is working so hard to clobber together passes in Congress and is vetoed by the President.  And its possible the dispute could attach itself to continuing resolution action which would not be good for weakened stock  markets.  

Meanwhile several Roman Catholic bishops and archbishops are choosing election time to confront Democrats on the party's reproductive rights stands.  Their timing is either lousy or political and worse its politically clumsy.  However, it will be interesting to watch Nancy Pelosi explain politics 101, "I misspoke myself",  to her archbishop.

.

Three Important Stories

Council on Competitiveness Challenges Next President to Execute 100-Day Energy Action Plan for America

Pelosi on Energy Bill: Whose Side are You On? The American Consumer and the Taxpayer, or Big Oil?

Pelosi camp responds to archbishop's critique

Quotes and  Pointers

'In the past, only juniors who seemed promising candidates for National Merit semifinalist were encouraged to take the PSAT, including many students in the advanced International Baccalaureate program at East High.  The majority of Kansas students take the ACT instead of the SAT as their college entrance exam, she said. Taking the PSAT is "part of the culture" at East, she added.

"They take the test typically as sophomores and again as juniors," Wren said. "It's the same culture we need to create in all of our buildings."'

http://www.kansas.com/209/story/524392.html

'Dubai is a weird and amazing place. Almost two million in this city-state and only about one-sixth are true citizens, the rest being a strangely close approximation of the actual mix of the world in terms of black, white, brown, olive and yellow. It feels like you’re everywhere and nowhere at the same time. I’ve been through Dubai a handful of times before, but just in terms of transit, so this was my first time to really notice that. It’s like Epcot made real, right down to the Mall of the Emirates which could pass for a Mall of America-clone, replacing the indoor amusement park with the indoor ski slope (truly bizarre given the heat but you can see what people would love it—I’ve got some video I’ll post). You do notice the massive build-out going on. I’ve never seen so much construction so concentrated in one place—not even traveling in China.'

Thomas P.M. Barnett

Out and About on the Net......Sometimes with Snarky Twitter Lines

Bishops criticize Biden's abortion statements  --  Internal Revenue should look at this...

 

Kansas Bankers Surety ending coverage of deposits beyond FDIC’s $100,000 limit -- A big canary sings...

 

Solazyme Produces First Algal-Based Renewable Diesel to Pass American Society for Testing and Materials D-975 Specifications --

 

Obama strumpet-sex scandal ruse spreads malware -- Trick or Treat...

et alli is cross posted at The Intelligence Forum