BREAKING NEWS: We don't have any money for anything
by the mollusk, Fri Oct 03, 2008 at 09:35:51 AM EDT
According to the New York Times, the House has just approved the bailout package with the pivotal tax break for toy wooden arrow producers. The budget deficit next year will be $1.3 trillion. The positive news is that if you own a house, there is a good chance it will retain several more percentage points of its value for a few more years. If you don't own a house, good job on your fiscal restraint and go fuck off.
So now, of course, the economy is back on track on the the government will sell all of these mortgage-backed securities at a profit. Just like the Iraq War was going to be funded by oil revenues. cough.cough.
Update [2008-10-3 15:11:42 by the mollusk]: Oh, by the way, here's Krugman's ringing endorsement of the plan.
For the fact is that the plan on offer is a stinker and inexcusably so. The financial system has been under severe stress for more than a year, and there should have been carefully thought-out contingency plans ready to roll out in case the markets melted down. Obviously, there werent: the Paulson plan was clearly drawn up in haste and confusion. And Treasury officials have yet to offer any clear explanation of how the plan is supposed to work, probably because they themselves have no idea what theyre doing. Despite this, as I said, I hope the plan passes, because otherwise well probably see even worse panic in the markets. But at best, the plan will buy some time to seek a real solution to the crisis.It brings tears to my eyes in its beauty and simplicity. Like a delicate tulip.
http://www.nytimes.com/2008/10/03/opinion/03krugman.html?_r=1&ref=opinion&oref=slogin[Update] OK, this is really strange. Again, from Krugman.
Has the bailout already failed? OK, I know thats premature. And I place no weight at all on the fact that the Dow plunged after the vote. But it is interesting that short-term Treasury yields are down only 0.13% on one-month suggesting that the flight to safety continues unabated. Against this, John Jansen reports some signs that money markets are unfreezing, slightly. Well learn more next week. But I have a prediction: well before January 20, Congress will be asked to vote on bailout 2.0.
Still trust Paul Krugman's judgement on this? Think he'll be for the next one too?