Blogging the “Bail Out” Crisis (Updated)

Believe me, I wish I could write about anything else. I’m frazzled to my core over this thing, and long for the simpler days of just confessing my wretched existence. Tomorrow, after I call my Congresscritters, I may just have to break free and go outside, enjoy the settling autumn some. Forget about it all for a while. Lord knows I’ve been trying. I watched the Sex in the City movie twice yesterday (worth seeing again, if you ask me), but it was only temporary escape.

I’ve found some interesting stuff out there while looking for information. The most notable link I found was to a post at Naked Capitalist, wherein it is revealed that our treasury officials held a conference call with SIMFA analysts on Sunday night. SIMFA stands for Securities Industry and Financial Markets Association. It’s basically a trade group with a strong lobbying agenda. That conference call made its way onto the web via a stealth recording. Here’s a sample from You Tube:

The entire call can be heard in parts:

Part 1
Part 2
Part 3
Part 4
Part 5

Very interesting stuff in that call. For instance, did you know that the so-called “bail out” will be open to all banks in America, even the ones with no discernable problems? They can dump their bad debt into what the treasury officials keep calling “the fund,” telling the callees they can “buy into” it, and what the restrictions are for doing so at various levels.  Does this mean that what they’re trying to do is set up a huge dump-hedge fund for the American taxpayer? I don’t know. I’m frustrated by the limits of my own knowledge.

Do check out the live-blog of the meeting at DealBreaker.

The Red Queen documents the utterly disorienting experience this entire year has been. Her POV was so provocative that it lead me to articulate my own experience of disorientation in her comments. She followed that post up with an interesting theory about justice and fairness as it relates to the public reaction to all of this. She really nails it right here:

We, the American people, don’t want to see the economy fail on a massive scale. But we would rather see the entire system crumble and have to be rebuilt form scratch rather than participate in something so fundamentally unfair.

Charles Lemos delivers a post-mortem of today in Congress Votes for Depression. I understand from Palomino that Charles has a background in some aspect of finance or economics, so he has more knowledge than I do. He thinks we’re doomed, and asserts:

Liquidity is to the economy what oxygen is to life.

What I don’t understand is why this liquidity has to come this way, from this source, so quickly. I was almost sold until I found that conference call. I want a taxpayer conference call that explains to ME what my stake is, and how this bill works. I still don’t know what to make of the entire mess. As I said in Red Queen’s comments:

Word UP. We thought things had gotten wacky under Bush, but ooooh, what a failure of imagination that was. It is absolutely crazy right now. The whole frickin’ country is caught up in the moment. I don’t think that has happened since the Great Depression. Well, maybe when we dropped the second bomb.

I don’t know what to make of it. I can’t organize my thoughts, I suffer from very serious gaps in knowledge, and I feel I am on an emotional tight rope all the time. I try to get the big picture and hold it, but it slips right out of my grasp. We’re not suffering right now, we have enough food and the means to pay the rent, nothing stands to get cut off. But I am plagued by the fear that it could all be different next week. And stuff is going down that I don’t understand. To top it off, I have no idea what to do.

Even more frightening: I was satisfied upon hearing the market lost over a trillion dollars today. I really don’t care. I struggle every day just to get what little security I have. And I am captivated by the question: While suffering, including my own, will occur, is it possible that if we do it differently and let it fail, can we rebuild to something better, more affordable for people like me, with nothing invested, no assets, no retirement, living paycheck to paycheck? In five, ten years, will I be able to afford a house at a more reasonable cost? Is it possible that a fracture and restructuring might force a more balanced market? Hell, I don’t know, but I keep thinking about it.

That’s basically where I am with it. I’ve been cramming like a madwoman for four days now, and I’m only inches closer to a bigger picture view. I understand the risk, but Red Queen is right, I can’t let go of the fairness,or rather unfairness of it all. If market-based retirement accounts and municipal bonds are a bad idea, if reckless credit expansion leads to this, then why save it? How else do we stop it but seize this opportunity to cut off the drunk, so to speak? We did it. Or let it happen. Shouldn’t we be the ones to suffer?

Update: Oh my word, guess who voted no on the bail out bill? Obama campaign co-chair, Jesse Jackson, Jr! This puts him and Obama at odds, and he is strongly against is, calling a $700 Billion earmark for Wall Street. Of course he tries to take full partisan advantage, but it appears the people are on to both sides. Hmmmm. Wonder if this political theater. There has been that pall on it in recent days…

Switcheroo?

Okay, I need some help here understanding these latest developments. Anybody with a background in finance or economics, please weigh in here and explain what is happening if you will. It looks like something quite nefarious, but maybe I don’t understand enough to comprehend the point. If you understand this, please leave a comment and explain to the rest of us, okay?

So the bail out fails, ironically enough on a bipartisan basis. Congresscritters on both sides say they’ve gotten a ton of push back from their constituencies and they fear losing their jobs. So now we have a situation where the goals of the political markets are at odds with those of the financial markets.

Public opinion is driving this, because people realize that most of the crises over the last near-decade have been based on lies, so we’re into “crying wolf” territory. A lot of people just don’t buy it, they see it as a greedy last minute grab before political fortunes shift, as they invariably will this November. This is not to say Obama will win–that is certainly not a given at this time. The public is volatile, they are picking up on the insider games and the jostling for position, and they are quickly discerning that nobody in Washington, let alone Wall Street, is on their side. (I suspect this will put Democratic chances this fall at greater risk.) Incredible. The people are fighting the power structure and winning, at least as far as this battle goes. It remains to be seen how much of a nose we’ll have left after all is said and done.

But, then this happens. WTF?

Under one new step, the Fed will boost the amount of 84-day cash loans available to U.S. banks. The Fed is increasing the amount to $75 billion, up from the current $25 billion starting on Oct. 6. Banks bid on a slice of the loans at an auction.

That move will triple the supply of 84-day loans to $225 billion, from $75 billion, the Fed said.

Meanwhile, the Fed will continue to make $75 billion worth of shorter, 28-day loans available to banks.

All told, the total amount of cash loans — 84-day and 28-day — available to banks will double to $300 billion from $150 billion, the Fed said.

Moreover, the Fed made an extra $330 billion available to other central banks. That boosted to $620 billion the total amount available to the central bank through currency “swap” arrangements, where dollars are traded for their currencies. That total is up from $290 billion previously being made available through such arrangements.

Okay, if I’m reading this correctly, the Fed itself is just going to print nearly 400 billion dollars and pump it in, hoping it will help. Along with what foreign banks are supplying, this action should triple the amount of money in the credit markets. Should I be thanking my lucky stars then that the bail out didn’t pass? I mean, if they’re just going to grab for nearly 2/3 of it anyway, and collect the rest via global support? If the bail out had passed, and considering this action was happening simultaneously with the vote, wouldn’t the price-tag have been something like double the 700 billion?

I am befuddled. I have no idea what this means, but I have a sneaking suspicion it isn’t good, and that important details are being lost in the haze created by all the chaos. The bail out failed, but is hardly off the table. If you have an kind of understanding on these developments, please try to explain it to the rest of us in comments. And thank you in advance.

Police State: An Urgent Protest UPDATED

UPDATE! It worked! Thank you if you wroye or called.

H/T Madamab at the Confluence, via Murphy at PUMApac. Watch this video. It’s about Obama’s so-called “Truth Squad” in Missouri. This action is shades of Bush in 2000 all over again. This squad is not interested in the truth, it’s interested in abusing political and judicial power to shut people up. It is rank un-Americanism. With this move, Obama soundly steps into fascist territory. He will force whatever he wants down your throat and you’re gonna like it or he’ll have you charged.

If you care at all about the Constitution and freedom of speech, you will write or call:

The Missouri Bar
PO Box 119
Jefferson City, MO 65102
Phone: 573-635-4128| FAX: 573-635-2811

This info is from Confluecian angienc, who adds:

The prosecutors in MO (who are state employees) may be prohibited from obeying Obama’s orders under MO state law. They should be investigated by the bar and sanctioned. They should also be removed from their jobs because as attorneys they should know that what they are doing is unethical and an abuse of their position.

Will you care? Will you act? My letter coming later this evening.

Process, Form, & Substance

The title of this post is the title of my favorite writing guide. Written by Richard M. Coe, it was introduced to me by one of my all-time favorite nutty professors, Dr. Bill Sweigart, who also happened to be a white-and-wild-haired Phish phan. We bonded over the fact that he had been in the university so long he had forgotten about Orwell’s own politicization of language, and I never even belonged at the university, so it was obvious to me. That’s a metaphor, for the record. I always appreciated that Orwell found some way to try to own his political bias in his writing.

But the textbook itself was a marvel to me. A process approach was something to which I had not been previously exposed. I had shown a fairly natural talent for writing all my life, owing to my status as a reader, and I thrived for a long time in environments that allowed me to explore genres. But eventually it wasn’t enough. You hit a wall in every revelatory experience, and you either lose interest and move on, or you dig in and master the nuts and bolts. Creative genius will never be enough. Depth and breadth of a principled point of view will not carry that genius beyond anything but navel-gazing.

Process is a bit of what I’ve been going through with this bail out. Sometimes you have to fully engage your rage, and any other accompanying emotion, to cut to the heart of the matter. Here we go with those petals unfurling again. I’m not nearly done, but I’ve decided not to write about it again until I’ve gained perspective. I am a compassionate, empathetic person. Those are my values. But they are not the values that have been on display during this crisis, nor have they been at the front of my mind. I was reminded of them today as I surfed the PUMAsphere and the Internet at large.

I’m not going to name names this time, because this is a sensitive matter, but I am going to talk about what I’m seeing. People are talking reform, and that is a very good thing. It needs to happen. But when people are talking about reform, they are talking about reform of the Democratic Party. In the process they are resorting to some careless rhetoric about Republicans, and failing to connect some dots.

We all know about the narrative sold to us about Republicans by the Democratic Party, we see a microcosm of that same narrative employed against PUMAs and other DCSs. But many of us are failing to identify it as a bogus narrative. Yes, the Republican Party has espoused values that are anathema to liberal sensibilities, namely their pro-life stance and their entitlement stance. We understand that these two issues in particular constitute the chasm between the parties. But we seem only willing to go back in history so far to discern the reason for this. We rely on the readily available history of the boomers and their struggles in the 60s. But not too much further beyond that line we won’t cross lies the story of a Democratic Party that was every bit as corrupt as the Republican Party of the last 30 years. I’m sure I’ll be exploring that history in the coming weeks as the election draws near.

That’s only part of it, of course. And of course, not what I came here to talk about today. You know how this goes at P&L; it’s why you come here. For the thesis buried deep, set to expose the raw nerve. Surfing today, I saw so many people desperate to maintain their world view, instead of shucking off the chains of party orthodoxy. What bothers me about this in particular is that we just had the most intelligent man in politics today, a man PUMAs and DCSs in particular should see as a real leader and truth-teller, Bill Clinton, on half a dozen shows last week say:

I think we make a terrible mistake believing we have to find something wrong with the people we can’t vote for.

Partisanship is bad for America. It’s also bad form. It leads to things like what happened this year, hell, like what happened for the last 8! Partisanship has managed to twist both of our Parties into corrupted monsters, and the road here is long and winding, and littered with the film of thousands of politic snakes shedding their moral skins. No party holds a patent on political corruption. More partisanship will only perpetuate the current reality. If we are to actually BE agents of change, then we must stop this putting Republicans down nonsense. Scattered throughout the comments of the blogs I visited today were comments from Republicans who support the PUMA cause who were put off by the offensive disdain and condescension shown for their party, which they naturally translate as disdain and condescension toward them. We have forgotten yet another piece of the process: audience. When we lose sight of that critical piece, we lose our substance. I often share this quote with my students:

I passionately believe that’s it’s not just what you say that counts, it’s also how you say it – that the success of your argument critically depends on your manner of presenting it.

~Alain de Botton

Bill Clinton apparently agrees. I think we must talk about the corruption on both sides of the aisle, and I think many of our Republican comrades are ready to have that discussion. But they pick up on the unfounded assertions that Republicans are evil, are awful, and just plain bad people, which is the subtext of many of the arguments I’ve seen today. They see rhetoric that seeks to put a fence between them and other voters as rhetoric that devalues their intelligence and denigrates their choices. Remember how that felt? It wasn’t that long ago. Just last week as I recall. I believe they are right, and are reading the subtext correctly. That’s why it is so very critical to pay close attention to your arguments, to argue against them from time to time, and to flesh them out fully. To employ process, form, and substance, as it were. If these Republicans are ready and we are just telling them to keep on their side of the fence, then we are blowing an incredible opportunity to affect real change by uniting with them against a totally corrupt political entity comprised of most of our elected politicians, right and left.

As the always succinct, no-bullshit-allowed-Kenosha said in one of the comments I read today: Corruption doesn’t start with an R or a D, it starts with a C. If nothing else, let us at least be as good Orwell and acknowledge that we are writing from a point of deliberate political bias.

(Let Them Eat) Depression Cake

INGREDIENTS
1 c. shortening
2 c. water
2 c. raisins
1 tsp. ground cinnamon
1 tsp. ground nutmeg
1 tsp. ground allspice
½ tsp. ground cloves
2 c. white sugar
3 c. all-purpose flour
1 tsp. baking soda

`

DIRECTIONS
1. Preheat oven to 350 degrees.
2. Grease one 9 x 13-inch baking pan.
3. In a saucepan, combine the shortening, water, raisins, cinnamon, nutmeg, allspice, cloves, and sugar. Simmer for 10 minutes. Remove from heat and let stand until cool.
4. Stir the flour and baking soda into the cooled raisin mixture, and mix until just combined. Pour batter into the prepared pan.
5. Bake at 350 degrees for 45 minutes.

Be sure not to use more than 3 cups of flour. Also be sure that the raisin mixture has cooled before the flour and baking soda are added, and cool the cake thoroughly before cutting.

Variations: Omit the raisins, or use dried cherries instead
Servings per recipe: 24
Calories per serving: 234 (8.8 fat grams/79.2 fat calories)

Cross-posted from Palomino’s Paddock

Congress in Overtime UPDATED!

UPDATE: BASTARDS! FOX is reporting they plan to pass it by Midnight tonight. I wondered if they were faking it so McCain would leave for the debate. House Reps better hold strong. All of these motherfuckers are just playing games with us. It’s CRAZY! All I’m saying is this: Go read the Declaration of Independence closely. Don’t bother.

(Original post removed. Protest called off. It’s not like anybody cared about doing anything but bitching anyway. I concede to Apathy.)

You can go here if you still want to fight. I don’t personally see the point. While we’re all watching Political Wrastlin’ at Ole Miss tonight, Congress will be busy selling our future to the lowest bidder. But we must not miss the Political Wrastlin’. The people gotta have entertainment while the nations burns, doncha know. Me, I’ll be drunk-blogging it. Vodka. 9:00. Right here.

One last comment for the “economist” on FOX news earlier, who claimed Congress can’t reign in future CEO salaries or else the best and the brightest will just go to Dubai. I say let them fucking go, and deny them immunizations on their way out the door. I don’t want any motherfucker who thinks it’s ethical to ask for a 5 Million Dollar Plus salary applying for the job. His asking price is the measure of his moral center. Idiots. Motherfucking idiots.

Final Update: A commenter asked me via e-mail to explain my take on the econ crisis due to my erratic response today, and I sent him what I think is a reasonable answer. Realizing that my posting here has been very emotional and confusing today, I thought I’d cross-post that comment here:

My stand on the econ crisis. Well, I can understand you confusion. I’ve not been very clear, and today it’s been a lot of “motherfucking” this and that, which isn’t helping either, I realize. I stepped back for a few hours.

Maybe if I explain what I perceive is happening, it’ll explain my position better.

Without a background in economics, most Americans don’t understand what is happening. I know I’m not perfectly clear on it myself. What I know is that I’m hearing a lot of credible voices say this bail out isn’t needed at all, that it’s highway robbery, just as I’m hearing a lot of not credible voices saying it has to happen today. I don’t think it has to happen today. I think we owe it to ourselves and our children to stop and discern what is happening before we plan what comes next, and way before we drop a dime on the problem.

What looks like is happening is that the market is continuing to collapse under leverage agreements they all agreed to at the time, and because of credit issues that arose when people stopped being able to pay mortgages that were staggered to increase in the future, the so-called ARM issue. What congress and Paulson and the president propose is that we pay the creditors directly for their bad practices, rewarding them and leaving those folks who are their credit victims in the lurch two ways: no house and no economic future.

My point of view has a lot to do with it. I don’t have assets or retirement. I’ve never been able to afford them. I don’t have assets or a retirement fund because upward mobility has been denied to folks of my class for a long time now and because I set myself back by making choices when I was very young that were maybe not so smart. Like keeping my baby. Or like refusing to marry for financial stability. I don’t regret those choices, but I recognize the damage they did to my security. So I am very pissed off that people who are completely unrelated to me in every way, whose very reality is so foreign from my own, and who have been the beneficiaries of enormous privilege denied to me by virtue of my birth, are now asking me to save them. I personally think people like me would be better if the whole thing crumbled and we had to start over economically.

But, I’m willing to compromise. I want a bail out package aimed at mortgage holders, not Wall Street. I want the government to force those mortgages to be renegotiated in realistic terms, and I want the government to only bail out primary domiciles. I want that bail out money paying off those mortgages, so it comes to these finance crooks like it should, slowly, over the course of years, instead of printing a lot of worthless money so they can keep their feather pillows fluffy with it. I don’t care if they or I suffer in the meantime. But I will not accept selling my daughter’s future out from under her, and I believe that is what will happen if this bail out is allowed to go through to benefit Wall Street directly.

Bail Out Protests

Check out this video of the impromptu Wall Street Protest. I’m wondering if we could build on that. If this bail out doesn’t pass tomorrow, and congress critters have to work overtime next week (they are scheduled to adjourn tomorrow), then maybe a bunch of us should show up in D. C. over the weekend and be waiting for them when they come to work Monday morning? I don’t know. I happen to be free, so I’d go. But I’m no organizer…if you hear of anything, let me know, k?

Anyway, just a late night, beer-induced post. But that’s all for now, because I don’t want to take away from Palomino’s excellent post below. More tomorrow.

PS. Have you seen this shit? It’s on in the PACwars now, baby.