Palin has Ohio in the Palm of her Hand

How dinky John Sydney?

McCain today after TARP failed:

Sen. John McCain, the Republican presidential nominee, spoke briefly about the need for a bailout plan but did not respond to questions from reporters. link

Mark it up - for the sake of hystery

Public Markup now has the "TARP" bill up in a nice format, along with comment threads.

I gather it's being called the Emergency Economic Stabilization Act. (Roll call here).

What's odd is, in the past, the USian mass has not seemed too bothered when various Powers were given (or considered as possibly to be given) to Asshats Public Servants to serve as czars overseeing drugs or other terrifying, fearsome, or otherwise emergencifying bugbears from the black lagoon.

But somehow here, the middle class and its wingnut angels see a problem with greasing the skids of commerce if the commerce is abstract, has international dimension, and doesn't have some goober from Kansas with his pitchfork standing in front of it.

Swapovia

I don't pretend to understand credit swaps, but this example, from today, made an impression:

NEW YORK, Sept 29 (Reuters) - The cost of protecting Wachovia Corp's (WB.N:Quote, Profile, Research, Stock Buzz) debt with credit default swaps fell on Monday after news that Citigroup (C.N: Quote,Profile, Research, Stock Buzz) was buying Wachovia's banking operations.

Wachovia's five-year credit default swaps fell to about 550 basis points, or $550,000 a year to protect $10 million of debt, from 25 percent in upfront payments plus $500,000 annually before the news, according to data from several dealers.

Wrap-up

This seems a fair summary of TRAP, or TARP, by Blodget

No USian plan under Bush would be complete without a provision ensuring the interpellation of infinite self-delusion:

VERY STRANGE AND POSSIBLY ALARMING: The SEC has the ability to suspend mark-to-market accounting for financial institutions when it thinks doing so is in the public interest. The SEC will also be launching a "study" of mark-to-market accounting. Mark-to-market has been fingered as one of the villains in this collapse. It isn't, but it sounds as though the SEC may have been persuaded that it is. Without mark-to-market, there's a lot more risk of a Japan-type scenario, where banks live in denial for years about how far up the creek they are.

Relief for troubled assets! Just in Time!

From big Wall Street houses to small community banks, executives have expressed an interest in signing up for the bailout. wsj

Let's make that the Troubled Asset Relief Program, or TARP. So many of God's assets are troubled. So little time.

The general public has bristled at the notion of risking $700 billion in taxpayer funds to address mistakes on Wall Street, and many constituents have urged their elected officials to vote against the plan. nyt

One odd thing: The WSJ headline is*:

Crisis Hits Europe's Banks
As U.S. Seals Bailout Deal

But the story doesn't mention European banks a single time.

Guess we're all a little woozy.

[*The story was later reduced to "U.S. Seals Bailout Deal" - "seals" still sounds bit ominous]

As Obama noted after the debate, McCain didn't mention the middle class. Nor do these stories. Perhaps McCain is actually speaking the mainstream argot, and Obama, not.

New New Capitalist Pyramid

snort

Here is one survey of explanations for interest rate swaps.  The explanations mostly seem lame and question-begging to me.  Here is another survey of potential explanations of interest rate swaps.  Good luck and I hope you have JSTOR access.  $

Buy my steaming pile?

best of class

Three fucking pages? I had to put more effort into book reports during grade school, and suddenly that's enough to vest you with the greatest financial powers in the history of the world. DEVIANT BEHAVIOR

see also: war

Let us now blame infamous minorities, terrorists, aliens...

Top economics blogs according to technorati, via projo

An effort at transparency: Public MarkUp.org - comment on Paulson, Dodd, etc. via JOHO.


Impermeable Transparent Guess:

• I never make predictions, but now I'm willing to guess that it's going to take a genuinely brutal collapse, one in which our citizens cannot get even the most basic necessities of life before the spell of American exceptionalism is broken.
• And even when that happens I have no doubt the citizenry will be provided with some appropriate scapegoat abroad, most likely a Muslim or Russian one.
• Hell, they are already ginning up the case against several suspects.

"Gullibility and greed caused this latest calamity, but what allowed those basic human traits to combine to such catastrophic effect was a legal and institutional framework that resulted from deliberate policy actions." Cassidy.

China has over $900 billion of exposure/investment in US Treasury bills and in debt issued by Fannie Mae and Freddie Mac... Helena Cobban via Informant38

Is Everybody In?

READY

Hadron Collider Detector Halves

SET

Sec. 6. Maximum Amount of Authorized Purchases.

The Secretary’s authority to purchase mortgage-related assets under this Act shall be limited to $700,000,000,000 outstanding at any one time.

Sec. 8. Review. 

Decisions by the Secretary pursuant to the authority of this Act are non-reviewable and committed to agency discretion, and may not be reviewed by any court of law or any administrative agency.  [link via Greenwald.]  h/t

GO

Does the WSJ grok the difference between investing and wagering?

Among the measures announced Friday, the Treasury temporarily extended insurance, similar to that on bank deposits, to money-market mutual funds and the Federal Reserve said it would buy commercial paper from the funds. The Securities and Exchange Commission, meanwhile, banned short-selling of 799 financial stocks -- a financial bet that they will fall in price -- for at least 10 days. And the Treasury said it -- along with mortgage giants Fannie Mae and Freddie Mac, recently taken over by the government -- would step up their purchases of mortgage-backed securities to help keep the housing market afloat.

The most ambitious part of the government plan is to create a new entity to purchase impaired assets from financial firms.

The Murdockal WSJ immediately loses track of the analysis, scratching its head over how it would work.

People like Ellen Brown are asking questions we are not hearing from the corporate media:

Treasury bills are the I.O.U.s of the federal government. We the taxpayers are on the hook for the Fed’s “enhanced liquidity facilities,” . . .. What’s going on here? Why not let the free market work? Bankruptcy courts know how to sort out assets and reorganize companies so they can operate again. Why the extraordinary measures for Fannie, Freddie and AIG?

The answer may have less to do with saving the insurance business, the housing market, or the Chinese investors clamoring for a bailout than with the greatest Ponzi scheme in history...

How's that, Ellen?

...the greatest Ponzi scheme in history, one that is holding up the entire private global banking system. What had to be saved at all costs was not housing or the dollar but the financial derivatives industry; and the precipice from which it had to be saved was an “event of default” that could have collapsed a quadrillion dollar derivatives bubble, a collapse that could take the entire global banking system down with it.

...snip...

“The point everyone misses,” wrote economist Robert Chapman a decade ago, “is that buying derivatives is not investing. It is gambling, insurance and high stakes bookmaking. Derivatives create nothing.” link

Add: Phil Gramm: uno, dos.

Poser for a poseur

This crisis is complicated by innovative financial instruments that Wall Street created and distributed. They're making it harder for officials and Wall Street executives to know where the next set of risks are hiding and also spreading the fault lines of the crisis.

The latest trouble spot is an area called credit-default swaps, which are private contracts that let firms trade bets on whether a borrower is going to default. When a default occurs, one party pays off the other. The value of the swaps rise and fall as market reassesses the risk that a company won't be able to honor its obligations. Firms use these instruments both as insurance -- to hedge their exposures to risk -- and to wager on the health of other companies. There are now credit-default swaps on more than $62 trillion in debt -- up from about $144 million a decade ago.

One of the big new players in the swaps game was AIG, the world's largest insurer and a major seller of credit-default swaps to financial institutions and companies. When the credit markets were booming, many firms bought this insurance from AIG, believing the insurance giant's strong credit ratings and large balance sheet could protect them from bond and loan defaults. AIG, which collected generous premiums for the swaps, believed the risk of default was low on many securities it insured.

As of June 30, an AIG unit had written credit-default swaps on more than $446 billion in credit assets, including mortgage securities, corporate loans and complex structured products. Last year, when rising subprime mortgage delinquencies damaged the value of many securities AIG had insured, the firm was forced to book large write-downs on its derivative positions. That spooked investors, who reacted by dumping its shares, making it harder for AIG to raise the capital it increasingly needed.

Few financial crises have been sorted out in modern times without massive government intervention. Increasingly, officials are coming to the conclusion that even more might be needed. WSJ

Let's ask the experts. What would Sarah do?

AIG and Big Think

When times on Wall St. are tough (and moral hazard seems again missing in action) one turns to experts, knowledgeable sources:

AIG Will Be Headed by Ex-Allstate CEO Edward Liddy, Person Says 

The story was soon updated to eliminate that infelicity. For the record, that was not someone named John or Sylvia Person:

American International Group Inc., the insurer that was saved by the U.S. government, will be run by former Allstate Corp. Chief Executive Officer Edward Liddy, a person familiar with the takeover said.

Curious to learn more about our new CEO - (we own it now, right?) -- we turn to Big Think, which purports to offer ideas by experts. There we find "Ideas by Edward Liddy":


Big Think is still in beta. Mr. Liddy, we hope to think, is not. Here's his sole Big Thunk so far. Interestingly, it begins:

No two leaders and no two companies are alike. In different settings and in different times, we all face very different challenges. Sometimes for example, CEOs are called upon to turn a company around, rescue a business that's failed or is failing.

Update: Mr. Liddy, formerly head of Allstate Corp., gets pat on head from WSJ.

Blind man's roulette

"We've re-established 'moral hazard,'"

A person involved in the Lehman talks this weekend offered that breathtaking analysis to the (Murdockal) Wall St. Journal, which repeated it soberly -- a tidbit in its massive coverage of Wall Street in Crisis.

This bloodletting is the cure. The crisis began back in 2000, when Bush/Cheney got elected. Soon after, the regulatory framework - what was left of it -- took a barrelful of buckshot in the face, and people without homes, money, or jobs were buying property and discovering the joys of home equity.

An isolating, maverick, insensate war does not go together with lower taxes and tsunamic mortgage fraud (or, "overtrust" as suggested by someone on the WSJ's "Deal Journal"). The people who re-sent in the clowns in 2004 still do not see this. When Bush & co. bribed middle-class favor by tacitly giving USians freedumb to do anything, say anything, promise anything to one another in the business arena so long as the admin had a blank check to keep shooting people in the Middle East, we as a polity forfeited any claim to "moral hazard."

Should this sort of vision lead not to a dethronement of Bush, but to a sort of sublimation of his lunacy into President Palin, the USian game of "fool me a million times - fool me more fool me more fool me" will have risen to its greatest challenge.

Glimmer.

Grammar aside, there's something of a common theme here

Wot (the F) makes people vote Republican? - Edge (thanks Chris Locke)

Don't think of a mavrik! (spelling reconditioned for Pal(ad)ins) - Lakeoff

Its Not Just Palin — Its The Message - Joe Trippi (who's having issues with apostrophes.

Plus this talk - via Listics

Allied, passim.

This just in

See also.

Back sight, Moose in headlights

You have the seamless flow from 2001's now hard to imagine freedom and relative security to the locked down camp that the US has become.

People have been made to feel very insecure in the name of national security. Many billions of dollars have fallen into dark hands in the name of national security. Informant38

The timing of the Lehman Bros. collapse - along with Fannie/Freddie - you know?

One could almost say that we have been looking at a representation of this, the fall of the $5 trillion market of FM/FM, the evacuation of Lehman, for seven years, only we didn't know. 

The rise of Palin as well.

What if all these events flow from the same jihadist moment commemorated today?

Chrome and Context

The Omnibox.

Congratulations to the versatile AKMA

On his new (to us) business venture:

AKMA consultants work with you to create and establish the business cases behind your information system initiatives.

And upon his 51st.

The Truth is Left Behind

MAX FRAAD WOLFF: The US taxpayers are going to spend somewhere between $100 and $300 billion before this is all over, with this new arrangement where they bring Fannie and Freddie under their wing and assume the debts. So her campaign, her included, officially like this “bailout,” quote-unquote “bailout,” which suddenly makes the taxpayers pay for Fannie and Freddie, which they hadn’t before. So, she thinks in the past that Fannie and Freddie were a burden. They weren’t. But she thinks making them a burden to the taxpayer in the future is a great idea, because she and her campaign endorse making them a burden, even though they didn’t used to be.

 

stricter than that of the Parliament of the Islamic Republic of Iran.

Dick and Dave and Dan and Herb, friend of John McCain

UpUpUpDate: Senator Barack Obama and two other prominent Democrats urged federal housing regulators on Tuesday to cut the golden parachutes of the ousted leaders of Fannie Mae and Freddie Mac, another sign that the government bailout of those mortgage giants could reverberate through the presidential campaign. E. Dash

UPUPdate: Payouts For Ousted CEOs Anger Shareholders 

UPDATE: Some are not left behind, according to NPR: Dan could get $9 million, Dick $14 million, in severance.

As the US Treasury Dept. sets forth on its experiment in nationalization of industry (introduced via Henry Paulson's hoary imitation of Greenspan), it's not easy to find a report of what the former capitalist heads of Fannie Mae and Freddie Mac will receive in acknowledgment of their services. (The $$ it took to make them go quietly).

Message From Dick Syron (WSJ)

To the Employees of Freddie Mac:

As you have probably heard, the Treasury Department announced today that it has placed Freddie Mac and Fannie Mae under the conservatorship of our regulator, the Federal Housing Finance Agency.

Under conservatorship, FHFA will assume direct control of both companies. FHFA has appointed David Moffett, former Vice Chairman and CFO of U.S. Bancorp, to succeed me as CEO. He will be joined by an equally strong non-executive Chairman, John Koskinen. I will retire and have offered to assist in the transition.

...

It has been a pleasure and an honor to work with all of you.

Sincerely,

Dick

In December 2007, Syron told financial analysts that he expected Freddie Mac would incur heavy losses because of the weakening housing market and rising mortgage defaults. [1] Despite these forecasts, and concerns over the fiscal stability of Freddie Mac due to larger-than-expected write-offs, Syron reportedly took home over $19 million in cash, stocks, and other executive compensation in 2007. [2] Mr. Syron was terminated September 6, 2008, under a Federal Housing Finance Agency plan for conservatorship of Freddie Mac.

The new head of Freddie Mac is Dave:

David M. Moffett (1952) is the current CEO of Freddie Mac. He was previously an executive with U.S. Bancorp. He also served as senior advisor to the Carlyle Group, and has been a director at eBay since July 2007.

The new head of Fannie Mae is Herb (Allison), who replaces Dan:

On September 7, 2008, Mr. Allison was chosen to head the Federal National Mortgage Association, as part of an emergency federal conservatorship of the financial institution caused by the housing market crisis. The FNMA, often called Fannie Mae, is the financial institution created during the New Deal as a governmental financial institution, but that was subsequently privatized, that provides liquidity in the market for mortgages by guaranteeing consumer home mortgages.

In 2000, Mr. Allison accepted a leadership role in a start-up academic organization, the Alliance for Lifelong Learning, Inc., a joint venture of Oxford, Stanford and Yale Universities. There, as President and Chief Executive Officer, he ostensibly helped build an online learning forum for adults that provided the highest quality college-level courses. However, the Alliance for Lifelong Learning web site is now a misleading link farm and there is no obvious evidence of its still existing or ever fulfilling its stated mission. [Editor's note: Hopefully he'll have better luck with Fannie Mae].

THIS DOMAIN MAY BE FOR SALE
LONG DISTANCE LEARNING, FURTHER EDUCATION TRAINING EDUCATION	Education is a progressive discovery of our own ignorance

After leaving Merrill Lynch in mid-1999, he served as National Finance Chairman for U.S. Senator John McCain's Presidential Campaign.

Paulson spells it out, passes buck:

"...only Congress can address the inherent conflict of attempting to serve both shareholders and a public mission. The new Congress and the next Administration must decide what role government in general, and these entities in particular, should play in the housing market."

Palin can have her moose and eat it too and that's ok with me

I like to think I'm a pretty tolerant guy. If it should turn out, for example, that Ms. Sarah Palin not only enjoys blowing moose to smithereens, but in fact also enjoys blowing moose tout court, I would not find anything necessarily disqualifying therein to her right to hold the most powerful political office on earth.

So long, that is, as she kept her moose proclivities from obtruding upon high level meetings with the army chiefs of staff etc.

What seems like it ought to be disqualifying, though, is when the leader of an ostensibly secular state fails to respect the distinction between her private beliefs regarding the divine and its place in human affairs on the one hand, and the duty to fulfill the obligations of her public office as inscribed in the Constitution on the other.

It would seem part and parcel of deep religious faith -- of the very nature of an "act of faith" -- that such a profound commitment is accompanied by an awareness that the "grounds" of the belief posture derive substantially and inelastically from modalities that fall outside the realm of science, of empirical evidence, of logic, and of shareable proof.

To "have faith" then is to have something that you fully understand might not be available to others, indeed to many others, who, if you happen to be a politician, may participate in all sorts of ways in the deliberations, decisions and effects flowing from those decisions that you make in your public capacity.

To speak to citizens of a state with the grandiose presupposition that they either already share your beliefs or ought to share them -- because your beliefs stem from an authoritative source that they ought to know, even though nowhere in the foundational language of the state does it require citizens to have that ethical obligation relationship with a/the divinity (in Palin's case, a divinity that probably would have frightened the founding fathers into pledging their most fervid allegiances back to King George) -- is to speak as an imbecile. That the USian media allow political leaders the latitude to speechifyingly link their Godly inspirations to earthly business is a pretty clear sign of a social and political discourse at the level of the diapered inane.

I'd welcome hearing of other ways of looking at the relationship of sacred belief to secular authority. Because right now, it seems to me the once in-vogue tradition -- the background radiation that has long alleged that Reason is what provides secular rulers with the proper relationship to those whom they rule -- is fading fast. It's paler than a medieval French tapestry left out to dry for eight or nine centuries. It's paler than McCain's arse in the moonlight. It's bloody unencarnadined. 

 

Freedom from wealth accumulation on the march

Treasury Secretary Henry Paulson is planning government intervention to back troubled mortgage giants Fannie Mae and Freddie Mac. WSJ

Privatize Profits, Socialize Losses.

Privatize Profits. Redistribute Bush-enhanced fraudulent lending fallout.

Privatize Profits. Democratize pyramidal sub-prime bail-out.

Centralize Assets. Democratize Liabilities.

Gov. Palin: Did you really say that?

Has anyone in the alleged profession of journalism asked Sarah Palin if she said,

“So Sambo beat the bitch!”

Or if she regularly uses the term "Arctic Arabs" to talk about Alaska's aboriginal people?

A few people would like to know.

Fresh with freezer burns

Palin Power: Fresh Face Now More Popular Than Obama, McCain

"what was most impressive was her speech’s freshness." asshat2

His campaign manager is a corporate lobbyist. His chief fundraiser is a corporate lobbyist. His chief political adviser is a corporate lobbyist. There are, by some counts, around 150 different corporate lobbyists who are either on the campaign staff or are major fundraisers for the McCain campaign. Paul Waldman.

Whither, withered testes?

About a year ago, the US held firm at 48th place in the World Press Freedom Index, well behind Mauritius, Namibia, and Bosnia & Herzagovina. The Index is compiled by Reporters Without Borders. Iceland ranked first, Eritrea last.

Due to the special effort made by USian journalists to be fair, balanced and inane (thanks to Jay Rosen for the link), I can't wait to see where we end up this year.

And if McCain becomes President Palin's bitch?

She's quite the enthusiast.

Recession

Among the items  receding even further than they were not too long ago:

• Credit Card Company customer service. Call, and get the usual menu of options, only, very hard to locate that human. Living humans are a dying breed.

• Denver, CO and St. Paul MN. If anyone detected actual political activity, i.e., life, during either convention, I'll eat McCain's withered testicle.

• Corporate Infrastructure::Politics = Country Music::Music.

• Abandonment of the needy: The code of the survivalist mooseeating Northern exposure.
  

McCain-*-Pain courtesy of Mr. Locke.

One possible palindrome (buffo)

At the moment, Palin offers the comedy of an old tale of Boccaccio - the January-May marriage, always humorous, always untimely and always ill-fated.

To the dreary country muzak lovin' programmed porkers in St. Paul, she's viagra.*

By 2011, she'll be putting their hero through some times. Working his, you know, ED thing, the rumors about his competence. Spider Woman nicely suggesting his time has been and is done gone.

And hers will have come.

*"a big lift for Mr. McCain" ~ the inevitably feckless Adam Nagourney.

Tell us what you really think, Peggy

"They're all bummed out..."

via Digby

A comment here.


Noonan offers a clarifuckation.

Times remains perfect

The New York Times remains perfect in its ignorance of Amy Goodman, even though the journalist was arrested in St. Paul and her credentials were stolen by SS. Only mention of Goodman in a story is in comments to a useless bit of reportage.

Scared police is no police

While Cindy McCain and the Republicans inside the RNC shat dimes for the proleptically unfortunate of Lousiana (and admired themselves for so doing), US journalists were getting beaten, robbed and incarcerated by USian polizei in St. Paul.

• Secret Service ripped press credentials from the necks of legitimate journalists with high-level passes to the convention, and walked away, ignoring requests for ID, receipts.
  
• Minnesota Police advised the journalists to not be present in the streets, but to spy on the demos from afar, through telephoto lenses.
• Police removed batteries from journalists' cameras.

Scared police is no police.

About Cindy McCain

MRS. McCAIN: Well, obviously you heard my husband's message yesterday, and throughout this convention we are not Republicans, we are Americans.

we've said time and time again we are always the most generous;

we were always the first ones to respond

we're always the last ones to leave.

my husband and I are glad to be the first ones to step forward in this effort

It's our pleasure to be the first ones involved in that

and to be -- encourage everybody else to match what we do.

Q What will be the focus of your speech tonight?

MRS. BUSH: Well, tonight, Cindy and I will be talking about these very same issues. This is -- as you know, the program that was scheduled for tonight at the Republican Convention has been canceled. And that speech was going to be about Cindy McCain...

So reassuring to know the candidate is a seasoned, thoughtful man with great depth in foreign policy and uninclined to go all nuculur on the ass of

Korea -

The single greatest threat facing the West -- the prospect of nuclear materials in the hands of terrorists -- has been vastly diminished. McCain

Iraq or Iran or Russia

I believe the greatest threat today is the specter of international terrorism, along with situations that give rise to it and render it more dangerous - whether this means a failed state in Iraq, a nuclear armed Iran, weapons proliferation, or a Russia that exports autocracy. McCain

Especially Russia

McCain Vows to Both Work with Moscow, Expel Russia from G8

In what was billed as a major address today on nuclear non-proliferation, John McCain offered the latest installment in the ongoing saga of strategic incoherence that passes for his foreign policy. Just months after calling for a "League of Democracies" and the expulsion of Russia from the G8, McCain today portrayed Russia as an essential partner in the global struggle to contain the spread of nuclear weapons.

And Iran and Darfur

Over the past year in multiple speeches and in his November 2007 article in Foreign Affairs, McCain outlined a vision of the world's 100 democracies as like"-minded nations working together in the cause of peace." The organization, which would not include Russia, could act "with or without Moscow's and Beijing's approval." As the LA Times noted, McCain's League "could use military force as well as economic and diplomatic pressure" in Iran, Darfur and other global hot spots.

and Russia

As former Bush UN Ambassador John Bolton noted last month, McCain takes a particularly dim view of the prospects for partnership with Russia. McCain, he said approvingly:

"Takes an even harder line than I do. He wants to toss them out of the G-8. He is not about to be pushed around by an assertive Putin." link

And the Russian Empire

“I think it’s very clear that Russian ambitions are to restore the old Russian Empire,” he said. “Not the Soviet Union, but the Russian Empire.” - McCain

MOSCOW - A top Russian diplomat on Tuesday dismissed U.S. presidential hopeful John McCain's threat to expel Russia from the G8, saying he should get himself elected first and brushing off the prospect of expulsion. Can.com

And Islamic terrorjism:

[ John McCain: We face a transcendental challenge of radical Islamic extremism…We're facing a transcendental challenge…transcendental challenge…transcendental threat…transcendental challenge….a transcendental threat to everything we stand for and believe in…] Colbert

And Hurricane Gustav...

Nuthin like that alarmist Boosh -

A Republican with ties to the campaign said the team assigned to vet Ms. Palin in Alaska had not arrived there until Thursday, a day before Mr. McCain stunned the political world with his vice-presidential choice.