Message from the Fed: Bend over, here it comes Proles! (On the Bailout Series)

My fellow Americans, prepare to get fucked again. Bad news from the Federal Reserve. 01. Quantitative Easing is DC newspeak for increasing the money supply big time. 02. This type of monetary action has the effect of causing Inflation. 03. Yes, my follow Moorlocks, the Fed wants to ramp inflation up. 04. They don’t have […]

Anna Schwartz on the current economic mess (On the Bailout)

Wisdom from an old Monetarist: The credit crunch, which is the recession’s actual cause, comes only from a lack of trust, argues Schwartz. Lenders aren’t lending because they don’t know who is solvent, and they can’t know who is solvent because portfolios remain full of mortgage-backed securities and other toxic assets. To rekindle the credit […]

Entrepanuerial Solutions to the Bailout (On the Baliout aka The Great Looting)

How about new banks? Let Wal-Mart get into banking like they hinted at a few years ago. I could give a fuck if current bankers and their lackeys in congress are opposes. Wal-Mart would have a customer focus and would optimize. Hey, I’d even let the US Postal Service get back into banking. Let them […]

Washington Math Sucks: $30,000 (On the Bailout)

$275 Billion / 9 million = $30,000 (rounded down) I am a sucker. Partially I rent becuase I didn’t buy becuase I didn’t want to buy into a bubble. $30k is essentially being given to those that bought houses they couldn’t afford with the money taken from those who did not behave that way. WTF […]

Good features for any “Stimulus” (On the Bailout)

This makes sense to me: Minnick is a member of the Blue Dog caucus of occasionally conservative Democcrats. His START plan is a $170 billion “bare bones” pure stimulus approach that would put $100 billion immediately into the pockets of low- and middle-income Americans, then use the other $70 billion for basic infrastructure projects that […]

The PurpleStimulus or Let Banks Fail…but fast and other goodies (“On The Bailout” Series)

This started out as a comment at TDAXP [1]. Here is what the USAGOV should do (not what they plan to do [2]) – and it should be done quickly and without mercy: 1) Have Bank regulators set the appropriate capitalization level for the bank 2) Assuming level not met, declare bank insolvent. 3) Wipe […]

“Stimulunacy” – (On The Bailout Series)

Sigh. While the various interest groups disagree over what the hundreds of billions should be spent on, they all buy into the superstition that government spending boosts “demand”. In fact, it does no such thing. A year from now, when the “stimulus” has disappeared without a trace and unemployment is higher than it is now, […]

Is VisiCalc responsible for the Current Finacial Crisis? (“On the Bailout” Series)

John C. Dvorak thinks so. He makes an interesting case.

The Folly of Keynesian/Stimulus Thinking or David Manley is My New Hero (on the Bailout #33)

Here is what David Manley, my new Economic Hero, wrote in a comment on ManSizedTarget: My foolproof ten point plan to end the recession: 1) Boost infrastructure spending and reduce the cost of consumer goods by building a 6-lane highway across the Pacific Ocean to China 2) Lower the interest rate to negative 101% – […]

A Better “Stimulus Plan” (on the Bailout #32)

I am not sold on the idea that a stimulus plan as being discussed, will help anything but allow leftist (workers and the “Vanguard”) to live out their New Deal wet dreams. Stimulus packages don’t work. But if USGOV “needs” to do one, then it should do one that doesn’t cause harm:1) Monetize the TARP […]

The Folly Of USGOV Stimulus packages and Keynesian Economic Theory: (On the Bailout, Part 31)

Stimuluses (Stimuli?)  don’t work from an economics PoV. As blogged here, it may sounds good… An economist named John Maynard Keynes argued that the economy could be boosted if the government borrowed money and spent it. According to this Keynesian approach, this new spending would put money in people’s pockets, and the recipients of the […]

“The Credit Card Bailout” and the failure of Business/USGOV Leaders (On the Bailout, Part 30)

TDAXP covers it all: What is disturbing about our President, and our even worse Congress, is that we are throwing good money after bad in a way that is not only wasteful, but also foolish. The purpose of the credit card bailout is obviously to increase spending. The credit card bailout does so by socializing […]

Attention USGOV: Keep This in MInd When Bank of America comes calling for TARP Handouts (On the Bailout, Part #29)

Found at Tech Dirt: theodp writes “Bank of America has taken steps to cover up the original we-don’t-need-no-stinking-America sentiment of its patent application for Country Assessment, which described BofA’s innovative way of dealing with the problems of ‘a typical American employee [who] demands a high salary, good benefits, a good work environment, vacation time, and […]

Public Policy Guidance on “Too Big To Fail” (On the Bailout, Part 28)

Note for Public Policy going forward: If a business enterprise (public, private or GSE) is or becomes Too Big To Fail, then it needs to be broken apart into smaller components. If this can’t be done under current anti-trust legislation, then new legislation is needed to support this – perhaps in a mostly pre-canned way.

On the Goals – US Auto Industry Bailout Notes No. 1

Goals 1) Re-establish and maintain going forward a viable domestic US auto industry capability that can successfully compete domestically and globally. 2) Minimize the net disruption to the US economy while transitioning and recovering. Goal #1 Implies: – products that consumers want to buy– reasonable profitability above the cost of capital– private ownership– robust product […]

“Monetize the TARP” (On the Bailout, Part 27)

What a fascinating idea from Ray Hennessey! What’s the best way for the government to exit these investments and give back the money (and interest) to the taxpayers? Here’s a thought: Make it a big closed-end fund and sell the shares to the public. That’s right. Make TARP the biggest-ever initial public offering. Already, TARP […]

…and the Bad News: Did the delay of USGOV’s TARP reversal cost McCain the Election? [On the Bailout, Part 26]

There is also bad news to go with the good news: Treasury Secretary Henry Paulson said Wednesday that original plan to purchase distressed mortgage assets from Wall Street firms is not the best use of the $700 billion financial rescue package, and officials will now focus on direct capital injections into the struggling financial firms. […]

Good News: “Treasury Secretary Paulson Says Government Won’t Buy Troubled Assets” (On the Bailout, Part 25)

This is good news! Treasury Secretary Henry Paulson said Wednesday that original plan to purchase distressed mortgage assets from Wall Street firms is not the best use of the $700 billion financial rescue package, and officials will now focus on direct capital injections into the struggling financial firms. I always preferred something like secured loans […]

On the Bailout, Part 24: Rewarding the wrong people at taxpayer expense

I found this via TDAXP: Have you been paying your mortgage? Then it sucks to be you Read it and the discussion and be pissed off like me: GRRRR!!!!! How about for $400, me and a few buddies rough them up and shove a copy of Personal Finance for Dummies up there….well I digress. The […]

On the Bailout, Part 23: “Bank holding company status to aid American Express funding”

Hmmm: American Express said on Monday it won approval to become a bank holding company, in a step that could cut its borrowing costs and give it more access to government money. [Link] I am not sure how this lowers their borrowing costs. Could someone explain that to me? I think this is all about […]

On The Bailout aka The Panic of 08, Part 22: The Tally So Far…

…totaled nicely by Reason magazine:   – $29 billion for Bear Stearns  – $143.8 billion for AIG (thus far, it keeps growing)  – $100 billion for Fannie Mae  – $100 billion for Freddie Mac  – $700 billion for Wall Street, including Bank of America (Merrill Lynch), Citigroup, JP Morgan (WaMu), Wells Fargo (Wachovia), Morgan Stanley, […]

On The Bailout aka The Panic of 08, Part 21: Transparency (not)

I am sadly not surprised by this at NPR: BailoutSleuth tracks one of the first Treasury contracts in its $700 rescue plan. Guess which part got redacted. “The Financial Agent shall receive a monthly fee” of . . . Sigh. Update: I got the link from TechDirt.

On The Bailout aka The Panic of 08, Part 20: The Good, The Bad, and The Ugly

So how is the USGOV Bailout Coming? GOOD: The FDIC is insuring all non-interest bearing deposits. GOOD: The USGOV has not bought an MBS or other derived complex securities… BAD: …yet. BAD: Nobody is talking about changing bank deposit capital requirements to allow banks to loan more (which could be done right away without taxpayer […]

On The Bailout aka The Panic of 08, Part 19: Power, Accountability and “a nasty crossover dribble”

From a FoxBusiness Blog: From the NYTimes today (in passing of course, heaven forbid we highlight and focus on how alarming the changed TARP Bailout has already become): “All told, the potential cost to the government of the latest bailout package comes to $2.25 trillion, triple the size of the original $700 billion rescue package, […]

On The Bailout aka The Panic of 08 , Part 18: McCain Ideas

Here are some of his new ideas: In an effort to seize the initiative in tackling the nation’s financial troubles, John McCain on Tuesday outlined a $52.5-billion package of new tax breaks that he said would stimulate the economy and ease the money problems of many Americans. Details? …said he would lower the tax rate […]