nancy Pelosi needs to shut the hell up. instead of quips, maybe she could have been proactive in holding republicans accountable for this mess months ago. This was not totally unpredictable.

Pelosi made a ridiculous statement. "Morning Joe" was lampooning her this morning.

...today simply don't realize how quickly this is going to morph in a freakin' monster that's going to make the shitstorm over votes for FISA and AUMF look like days at the beach.

There will be hell to pay for any Democrat that votes in favor of this bailout.

Hi Jerome. Nice to see you too. I haven't seen you since Obama started winning.

...the past 24 hours...see my diary concerning what Paulson just said on Sunday in a phone conference to a group of bankers...essentially, what we're ending up with is exactly what he wanted--perhaps with even more bias towards the status quo than even he was asking for--in the first place...

Sorry for the long citation but this seemed pretty relevant and it is not a simple problem to wrap one's head around:

Whenever there is a systemic banking crisis there is a need to recapitalize the banking/financial system to avoid an excessive and destructive credit contraction. But purchasing toxic/illiquid assets of the financial system is not the most effective and efficient way to recapitalize the banking system.

[...]

In the Scandinavian banking crises (Sweden, Norway, Finland) that are a model of how a banking crisis should be resolved there was not government purchase of bad assets; most of the recapitalization occurred through various injections of public capital in the banking system. Purchase of toxic assets instead - in most cases in which it was used - made the fiscal cost of the crisis much higher and expensive (as in Japan and Mexico).

[...]

So instead of purchasing - most likely at an excessive price - $700 billion of toxic assets the government could have achieved the same result - or a better result of recapitalizing the banks - by spending only $175 billion in the direct purchase of toxic assets. And even after the government will waste $700 billion buying toxic assets many banks that have not yet provisioned for such losses/writedowns will be even more undercapitalized than before. So this plan does not even achieve the basic objective of recapitalizing undercapitalized banks.

[...]

Thus, the Treasury plan is a disgrace: a bailout of reckless bankers, lenders and investors that provides little direct debt relief to borrowers and financially stressed households and that will come at a very high cost to the US taxpayer.

[...]

Congressional Democrats have fallen for this Treasury scam that does little to resolve the debt burden of millions of distressed home owners.

Nouriel Roubini - Is Purchasing $700 billion of Toxic Assets the Best Way to Recapitalize the Financial System? No! It is Rather a Disgrace and Rip-Off Benefitting only the Shareholders and Unsecured Creditors of Banks RGE Monitor 28 Sep 08

The full article is probably worth a read if you are really engaged on this issue, this is one of the guys who has been warning us about this all along, just sayin'.  It tends to confirm our worst instinctive fears and suggests there has been a lack of good advice and/or lateral thinking on the part of the decision makers in our Congressional leadership.  Am I missing something here?

The President is useless and both houses of congress are no better.

A Failed President working with a failed congress to bailout failed banks...How can this fail? -- Jay Leno

to start a new, alternative party in reaction to overnment corruption. With a commitment to completely naked, open government.

No smoke-filled rooms. No hidden 'agreements'.

No pork.

I'm sick about it, but the alternative would have neem far worse. I do think at least we did a better job of framing it, though snd the House Republicans can't get their act together.

I would like to retire in 25 years and my wife and I are both socking it away in 401k's.   I don't view this crisis as anything that shakes my faith in investing, but I would like to see this pain be short lived.

So people can read it for themselves and make up their own minds.

John McCain heard "Bail Out!" and came a runnin'.

Hi all, I'm one of the organizers of Get FISA Right and wanted to let you know about the No blank check for Wall Street's Send a message to Congress activism campaign on the bailout.  Here's how you can help:

If you're on Facebook:

1. Sign up as a fan and watch your "updates" for what's next
   
2. reply to the No blank check for Wall Street thread on Nancy Pelosi's profile
   
3. share this link with your Facebook friends, and ask them to reply -- and to forward it to THEIR friends

1. sign up for our annoucement email list and check your email for what's next!
   
2. email this information to your friends, and ask them to help


3. phone or email your legislators and tell them how you feel

Thanks -- and please help get the word out!

jon

I'm pleased with the way this deal is shaping up. They will pay for it in the end.

The Gov will be reimbursed by the banks if they cannot sell the securities after 5 years for at least what we paid for them.  The banks will be confident to free up liquidity now which we need.  At the same time they're on the hook if Gov erred on the side of overpaying for the bad debt.

The government gets an ownership stake (warrants) in the companies so that WE realize benefits when the companies turn around.

CEO pay is limited (if not enough).

The government will step in to renegotiate troubled loans with the goal of keeping people in their homes.  This gets to the heart of the crisis and why the securities are toxic in the first place.

Look, nobody wants the government to step in and rescue the hated investment/banking industry, but the fact remains, You can't let credit dry up while the market settles itself without putting the economy in a serious downward spiral.

For those who are opposed to this bill, there is petition against it  - whatever that may be worth now.

Credit is about borrowing from the future.  

Our lives today in terms of use, energy, all aspects of life, is about borrowing from the future.

Maybe this goes much deeper than a bad bailout, goes to the way we finance our lives.  Maybe it's time to look at all of this very differently.

All of the articles about this sound like broken records because the underlying assumptions are sick and wrong.

How about we focus on a transformation to pay as you go, or not owing everything to the future, securing our kid's lives, taking care of what essentially important (health care, the environment).  

This bailout is crap because all of the underlying assumptions that make it seem urgent are crap.

Looks better than what they started with. Unfortunately, it's still closer to that starting point than I think most of us would have liked. I haven't been convinced that doing nothing is a wise move, but I'm going to wait and see how the economists respond to this compromise.

Nancy has a penchant for stupid announcements. She really is an old school pol, trying to make a headline statement whenever she can.

So the plan is for the federal government to buy $700 billion of foreclosed properties.

Did you know the federal gov't doesn't pay property taxes?

Did you know school districts rely on property taxes?

The bailout, as written, will be devastating to school districts and other local gov't that relies on property taxes. See Proviso Probe for a more in-depth discussion.

This issue needs to be addressed in the legislation.

Life is imitating art again

Wealthy Teen Nearly Experiences Consequence

SOMERSET, NJ--In what local authorities are calling a "near tragedy," Charles Wentworth, a 17-year-old Rutgers Preparatory senior and member of the affluent Wentworth family, came perilously close to suffering a consequence resulting from his own wrongdoing Saturday.

Wentworth, reportedly ignoring the protests of his classmates, got behind the wheel of his turbocharged Supra 2000GT after consuming half the contents of a bottle of Goldschläger at a friend's party. While driving westbound on Route 27, a disoriented Wentworth drifted across two lanes of traffic and collided with a minivan carrying a family of four, bringing the teen face-to-face with a potentially life-altering lesson.

Wentworth escaped unscathed and unpunished, however, when his airbags deployed and a team of high-powered attorneys rushed to the scene and rescued him from the brink of personal responsibility...

Well, if wall street is nonplussed... that probably means that the bill is better than we think it is...

There is going to be no Great Depression. We didn't fall into a Great Depression after the 1987 stock market crash, nor after the great Savings & Loans debacle in the late 80s. The bailout is an attempt by the Bush Administration to expand the powers of the executive branch and to redistribute income to the very rich.

If you guys hate Pelosi so damn much, maybe you liked Hastert and Gingirch better.

Seriously.