We are in the midst of a very severe, long lasting recession which likely will be dated from Dec 2007, despite the anomaly of 2Q08, which was buoyed up by the "stimulus" and gas purchases.
And we have just committed $700 billion to an ill thought-out absurd "rescue" of the investment bankers, who will be (quietly) throwing parties this evening, assuming the libor (interbank) market doesn't meltdown by 5pm.
We've now spent our neeeded stimulus on (at best) bank capitalization), not that the taxpayers will "get" anything for the money. We'll have difficulty sellling the bonds even for this bailout, and when we do we'll be driving up short term rates and crowding out private borrowing in the international capital markets, so corps may have even a tougher time with their short term commercial paper. D'oh!
What can be said? We're in a terrible, desperate situation, with the idiot cronyists of Bushco pissing themselves, while Krugman(!) writes this morning "we are going over the edge"---and he's not one of the Doomsayers!
Posted by euzoius at October 3, 2008 11:59 AMPonzi is catching his private jet to the islands right now! The money has already been wired ahead of him. Be sure to waive him goodbye!
Posted by Nobody at October 3, 2008 12:13 PMPonzi's broker is selling out his positions as we speak.
Posted by Nobody at October 3, 2008 12:19 PMWow, I just looked at the markets again. Ponzi is selling out lot. Perhaps he wants a villa on one of those artificial islands in the Arabian Sea?
Posted by Nobody at October 3, 2008 12:31 PMWell, I guess most people though the market would soar. The Market Street knew the truth and is heading South as fast as their trades can run.
Rats running from a sinking ship. How predictable.
If Bush wanted to be a hero, he would veto!
Posted by Nobody at October 3, 2008 01:11 PMIan Welsh at Firedoglake and The Agonist has been predicting how the economy would dissolve for months and he has been very, very accurate. He has warned, since Paulson opened his mouth , what would happen with the bailout if passed.
Now, he is like so many of us. He is just plain angry.
http://firedoglake.com/2008/10/03/the-bailout-stupidity-it-burns/#comments
I just learned my Congressman, Hank Johnson voted Nay. Hurray for Hank.
Also, reading Firedoglake, I discovered the Trojan Horse in the bill that reduces bank reserve requirements to Zero. Mathematically, now banks may have infinite power to lend money with zero capital. I could not figure out how the highly leveraged investment banks could become "Bank Holding Companies". Now, I understand. This destroys the legitimacy of the whole banking system.
We are deeper in trouble than I thought. The whole system is crooked.
Posted by Nobody at October 3, 2008 05:14 PMThe link to "reserve banking" in my prior post is wrong. the link should be Fractional-reserve banking.
Posted by Nobody at October 3, 2008 05:18 PMOf course we're screwed. How long can we export energy dollars without balancing it with exports of real products? It wouldn't surprise me a bit if the urgency of this bailout had something to do with the U.S. looking like it was going to default on some of it's massive foreign debt. And that default has almost become inevitable. It's not if, but when.
There has been faux economic growth brought about by cheap and readily available credit. Now that the consumer is tapped out and deep in the red, he has to stop spending. There will likely be a prolonged and painful recession, or even an inflationary depression.
The bailout will do nothing to help out those who are over their heads in debt. We have been shedding good paying jobs that can support a family in the name of corporate profit and "globalization". The investor class has enjoyed the fruits of this game for the past 10 years. Now, the chickens have come home to roost and all of those imaginary gains have vanished. If you adjust for inflation, they have realized a substantial loss.
There is a reason for all of the domestic spying, sneak and peak search provisions, FEMA detention camps, private para-military armies, etc. and it's not to counter "Islamo-fascism". The government is now ready to deal with hungry and homeless protesters by the thousands who may get distruptive or worse without having to worry about their Constitutional Rights. Those in power have known the score for a long time, and I don't mean George Bush.
Oh yeah...about time for another blurry OBL video starring that bad look alike actor isn't it?
Posted by brisa at October 3, 2008 09:09 PM