Tuesday, September 30, 2008
COURIC: And when it comes to establishing your world view, I was curious, what newspapers and magazines did you regularly read before you were tapped for this — to stay informed and to understand the world?
PALIN: I’ve read most of them again with a great appreciation for the press, for the media —
COURIC: But what ones specifically? I’m curious.
PALIN: Um, all of them, any of them that have been in front of me over all these years.
COURIC: Can you name any of them?
PALIN: I have a vast variety of sources where we get our news.
I guess today after being ridiculed by Democrats, media observers, and even some conservatives, those cry baby Republicans are now walking back that claim:
– Rep. Michele Bachmann: “We are not babies who suck their thumbs.”
– Minority Whip Roy Blunt: “I think you don’t want to give too much blame to that speech.”
– Rep. John Shadegg: “It was embarrassing for leadership on both parties to lose the bill, so they went out and made a stupid claim.”
– Rep. Marsha Blackburn: “That speech was not the reason I voted against the bill.”
– Rep. Mike Conaway said that Pelosi's speech "didn’t" have any effect on his vote and that he "didn't" know of any lawmakers who turned against the bill because of the speech.
So now that House Republicans are insisting their vote against the bailout yesterday had nothing to do with Pelosi’s supposedly “partisan” speech, you might wonder why at least 10 Republican Representatives flipped their votes. Minority Whip Blunt really thought he had these votes for the bill, right up until they voted no.
Now NBC’s Andrea Mitchell is reporting that conservatives may have been taking their marching orders from former House Speaker Newt Gingrich, who “was whipping against this up until the last minute” — despite the fact that he issued a statement supporting the bill as the vote was about to take place:
MITCHELL: I’m told reliably by leading Republicans who are close to him, he was whipping against this up until the last minute when he issued that face-saving statement. Newt Gingrich was telling people in the strongest possible languageCould Newt Gingrich have recognized that there is no real leadership in the Republican Party? Could he be situating himself so he can be seen as the God Father of the Republicans? It will be interesting to watch.
that this was a terrible deal, not only that it was a terrible deal, that it was a disaster, it was the end of democracy as we know it, it was socialism. And then at the last minute comes out with a statement when the vote is already in place.
"I find fascinating this entire discussion of whether or not voting down the bailout bill yesterday poses an economic danger to the US. Markos, quoting Davis Sirota, isn't worried. It's worth reading what Markos is saying, as I think it represents what many of our own readers believe. But I have to say, I still am worried."
"Sirota says that critics are saying that anyone who is against the bill wants to see America go into another depression. Perhaps some are, but that's not really the point. It's irrelevant what your motivation is for opposing the bill. All that matters if what the economic consequence is of that position. Markos points to the market being up a few hundred points today, and says this is a sign that all is not lost. But credit markets are still frozen."
"Practically no one in America can get a loan right now. No one. So I decided to use the Google and find out more about what this credit crunch really means.But first I talked to our own financial expert, Chris, who told me:"
A market moving up as it is today in NO WAY represents a positive long term direction. Often markets that are going down and are about to capitulate will have radical swings up and down before a big bottom. Many called this crazy movement a few weeks ago and I think I mentioned it at one point. It may or may not be the case this cycle but it's completely wrong, wrong, wrong to say the movement today suggests everything will be OK. Everyone's anger is understandable, but the bigger issue is lessening the impact of this very serious recession that's upon us.
John Aravosis has more that can be read here. He also pulls together a number of articles from different economists and market watchers who point out that there is a lot that is going on which will need to be fixed. We are not out of the woods.
Get it? The Repuglicans were planning on the bill passing, and then were going to attack Democrats who voted FOR the bill.
Talk about gutless Repuglican politicians. Put the economy in harms way for a few cheap political points.
I think some people are fooled by the Great Depression, and what is going on now. They remember looking at their history books and reading about the stock market crash, and seeing pictures of bread lines, and then look around and do not see the same things today, and think well we are not really in trouble.
Yes the disaster that is facing America is not clearly visible, if you look outside today you see people at the grocery store, buying a Big Mac, and getting on with life, but this is just the surface, and there is a lot of turmoil in the economy right now. Take for example the Libor rate, something most people don't know about, but last night banks were so desperate for funds that they paid 11% for $30 billion in overnight funds from the European Central Bank (ECB), up from 3% just Monday. This premium for overnight liquidity is "out of control," and will make it hard for central banks to instill confidence in the future.
Yes a second round of dollars from the ECB and a 28-day injection of funds from the Fed Reserve helped calm some of the worst panic in the markets, but the world economy is a long way from normal.
Credit is near frozen, in part because institutions are hoarding liquidity for the end of the quarter. Problems with the credit market will make it harder for stores who are setting inventory for the upcoming holiday season. Do you see the problem we could be facing?
In an interview with the Associated Press, PM Nuri al-Maliki warned that the future is dark if Iraq and the US do not agree on a security pact. And without a pact, he said, all the security progress made in the last year would be at risk. He points out that the alternative is to go back to the UN security council for an extension of Chapter 7 authorization of foreign troops in Iraq, and that UNSC approval is no longer assured because Russia may be in a bad mood. PM al-Maliki still insists that US troops who are off base and not on a military mission, who commit crimes in Iraq, must be tried in Iraqi courts. Al-Maliki also wants a timetable for US withdrawal by the end of 2010.
Sunday's bombings in Baghdad, and the killing of nearly 100 civilians in Baghdad during Ramadan, raise questions for Iraqis. Is this increase in violence a secular trend, a sign of deterioration, or is it just that guerrillas have more spare time during the month of fasting (when typically people do not work full work days, and lots of people circulate for dinner (i.e. breaking-the-fast) parties. Although this Ramadan was 40% less deadly than last year, it was also more deadly than July and August.
EU mission to monitor the ceasefire in Georgia is fully deployed and has met
Russian forces to discuss their pullback from positions deep inside the Caucasus
country. Under a deal brokered by France after last month's Russia-Georgia war,
Russian forces are due to withdraw from two "security zones" adjacent to
breakaway Abkhazia and South Ossetia by Oct. 10.
Western monitors denounced the Belarussian parliamentary elections — in which all the President's men swept to victory — as flawed. “Voting was generally well conducted but the process deteriorated considerably during the vote count,” said the Organisation for Security and Co-operation in Europe (OSCE) in a statement.
Mikhail Gorbachev has announced he is making an unlikely political comeback almost 17 years after stepping down as the Soviet Union's last leader. Mikhail Gorbachev, now 77, revealed that he and business partner Alexander Lebedev, a maverick ex-KGB officer turned billionaire banker, would form a political party to contest parliamentary elections in 2011. He and Mr Lebedev described the Independent Democratic Party of Russia, the working title of the new movement, as an opposition group.
U.S. helicopters on Monday buzzed a hijacked Ukrainian cargo ship carrying 33
Soviet-designed tanks and other weapons that officials fear could end up in the
hands of al-Qaida-linked militants in Somalia if the pirates are allowed to
escape. The pirates aboard the blue-and-white Ukrainian-operated freighter are
demanding $20 million to release the ship, its 21 crew members, one of whom has
died of an apparent heart attack, and its cargo of T-72 tanks, rifles and
ammunition. The ship, now anchored off Somalia's coast near the central town of
Hobyo, apparently was destined for Sudan when armed pirates overtook it, likely
from a speedboat, and climbed up the side of the ship.
Charlie Gibson on ABC noted that losing 7% on the market in a year would be a huge story; we lost it in a day.
The S&P 500 Index dropped 106.59 points, or 8.8%, to 1,106.42, with energy,
financials and materials fronting sector losses that spread across all 10 of the
index's industry groups.The sell off is the largest percentage drop for the
S&P 500 since Oct. 26, 1987. It also translates into a $700 billion loss for
the day for the S&P, according to Howard Silverblatt, senior index analyst
at Standard & Poor's.
Currently the US economy is in a financial limbo with markets unsure what to do next. This nation's economy is built on the ability to move capitol, which is no longer happening as it should. Loans for practically anything are becoming more difficult.
There is a real crisis here that needs to be addressed. It is time for Democrats to stop coddeling Republicans, and develop a real fix, and then cram it down the throat of Republicans. We can no longer coddle the cry baby Republicans.
Monday, September 29, 2008
Be warned, this is a long video.
I'll Speak Very Slowly [UPDATE].
Little known fact: I have a degree in economics. I went to one of the top three economics schools in the country, and graduated with honors. Caveat: The area I studied was WAY academic. Rather than adhere to market economics, my school focused on the inherent rationality and irrationality of actors in markets. In other words, it focused on the role of investors and their individual and collective emotions as market drivers in and of themselves, completely outside of principles of accountancy or market math.
So with that, over the fold and I'll give my dumbed-down impression of the state of the economy and markets.
I'll try to forget that I've just heard Boehner, Blunt, and Cantor blame Pelosi's SPEECH for the failure of the Rescue Bill. And make no mistake - this is a rescue bill. Stop thinking of its central premise as that of a "bailout". While some "bailing out" will, by necessity, occur, the rescue is the key focal point of this bill.
Imagine that that human body, in its entirety, is the economy. Different parts of the body represent different sectors of the economy. So maybe an arm is the pharmaceutical sector. And maybe a leg is the IT sector, and another leg the energy sector. But the central system to the human body is the heart. If it doesn't function, all other systems in the body shut down.
Blood that flows to and from the heart is comparable to money that flows through the market. The availability of money to leave the heart and travel to other areas of the body - market sectors - is what drives the overall economy. It touches EVERY area of the economy.
The financial services sector is the heart of the economy.
For more read here.
Here’s what he had to say on the subject today:
Nationalization has the best chance of avoiding large losses and possibly even making money for the taxpayer. And it is the best way to deal with the moral hazard problem. It might work like this.
• grants the Federal Reserve Board the power to take any financial firm whatsoever with liabilities and capital of more than $25 billion that is not well capitalized into conservatorship
• requires the Federal Reserve Board to liquidate any financial firm in its conservatorship when it judges that the firm is insolvent paying off in full or not paying off in full the liabilities of the firm at its discretion, unless
• the Federal Reserve Board finds that preservation as a going concern is in the interest of the taxpayer, in which case Congress
• grants the Federal Reserve Board the power to transform equity stakes in the firm into junior preferred stock at par value and then transfer ownership and custody of the firm to the Treasury
• requires the Federal Reserve to terminate conservatorship if the firm becomes
well-capitalized once again.
Additionally, the European Central Bank joined with the U.S. Federal Reserve in doubling the credit swap line that makes dollars made available to cash-hungry banks from $120 million to $240 million. The Bank of England doubled dollar availability to $80 billion, while other central banks offered smaller amounts. Once again European governments are attempting to avert a growing crisis of confidence in the financial markets and the broader economic implications of the current turmoil while not returning to many of the socialist or apperance of socialist responses.
UK Government Nationalizes Bradford & Bingley
The British government on Monday confirmed it was nationalising Bradford & Bingley after hammering out a deal with the Spanish bank Santander, which will buy the embattled UK mortgage lender's £21bn deposit book and branch network for about £600m.
The bank was taken into public ownership on Monday after B&B saw retail savers withdraw "tens of millions of pounds" in recent days as uncertainty grew.
Dutch-Belgian bank and insurance giant Fortis NV was given a 11.2 billion euro ($16.4 billion) lifeline to avert insolvency as part of a wider bailout plan agreed to by Belgium, the Netherlands and Luxembourg, officials said Sunday.
Basically the governments of Belgium, the Netherlands and Luxembourg took partial control late Sunday of struggling bank Fortis NV.
Germany's second-biggest commercial-property lender, Hypo Real Estate, will receive a 35 billion-euro ($50 billion) loan guarantee from the government and a group of banks to save it from potential collapse.
The Icelandic government on Monday said it had taken over Glitnir, the island’s third largest bank, by injecting €600m ($862m) of equity after the lender’s funding position sharply deteriorated.
The bank rescue confirmed market worries about the ability of Iceland’s banks to withstand the current credit squeeze, given their weak base of deposits at home and their dependence on wholesale funding. Icelandic banks have increased their balance sheets aggressively in recent years to expand out of their volatile home market.
"We could have gotten there today had it not been for the partisan speech that the speaker gave on the floor of the House," House Minority Leader John Boehner said. Pelosi's words, the Ohio Republican said, "poisoned our conference, caused a number of members that we thought we could get, to go south."
Rep. Roy Blunt, R-Mo., the whip, estimated that Pelosi's speech changed the minds of a dozen Republicans who might otherwise have supported the plan.
First you can read Pelosi's remarks for yourself and judge if it was so scathing that it could have poisoned the Republican conference, and is worth risking the entire US economy.
During the largest financial crisis in this country's history since the Great Depression, the House GOP has decided to characterize itself as a caucus of cry babies who will not support this country if someone hurts their feelings. Talk about irresponsible cry babies.
Barney Frank has an offer for them:
"Give me those twelve people's names, and I will go talk uncharacteristically nicely to them, and tell them what wonderful people they are, and maybe they'll think about the country."
Here's video of the Republicans whining about Pelosi, and of Frank telling them to grow up:
Steve Benen of the Washington Monthly Political Animal has the best slogan for the Republicans to describe there stand:
"Vote Republican -- We're More Concerned With Our Feelings Than Your Future."
Don't be fooled people, what we saw today in Congress was a complete failure of the Republican Party leadership, and it was a failure of historic proportions. When needed, the Democratic leadership was able to deliver the votes on an unpopular rescue plan, while Republicans voted, 2-to-1, against it, and they voted against for purely political reasons. This had noting to do with Pelosi's harmless speech, but a last gasp of a Party trying to stave-off a blood bath in the congressional elections in November.
From The Associated Press:
Wall Street's worst fears came to pass Monday, when the government's financial bailout plan failed in Congress and stocks plunged precipitously — hurtling the Dow Jones industrials down nearly 780 points in their largest one-day point drop ever. Credit markets, whose turmoil helped feed the stock market's angst, froze up further amid the growing belief that the country is headed into a spreading credit and economic crisis.
Stunned traders on the floor of the New York Stock Exchange, their faces tense and mouths agape, watched on TV screens as the House voted down the plan in mid-afternoon, and as they saw stock prices tumbling on their monitors. Activity on the floor became frenetic as the "sell" orders blew in.
The plan's defeat came amid more reminders of how troubled the nation's financial system is — before trading began came word that Wachovia Corp., one of the biggest banks to struggle due to rising mortgage losses, was being rescued in a buyout by Citigroup Inc. It followed the recent forced sale of Merrill Lynch & Co. and the failure of three other huge banking companies — Bear Stearns Cos., Washington Mutual Inc. and Lehman Brothers Holdings Inc.; all of them were felled by bad mortgage investments.
The Fed said it was boosting the size of its dollar swap arrangements to $620 billion from $290 billion previously. The agreement, with nine central banks, allows authorities to provide short-term dollar loans to commercial banks in an effort to ease short-term funding woes that have resulted from reluctance by commercial banks to lend short-term funds to each other through the interbank market...
"Market participants are reluctant to engage in transactions with each other because of heightened counterparty risk and fear that they could be the next in line to experience a 'bank run' and therefore need all the liquidity they can get themselves," wrote economists at Danske Bank in Copenhagen.
Such fears left Bradford & Bingley and Fortis struggling for funding. Their subsequent collapse then contributed to further tensions in the money market.Amid the money-market tensions, central banks have been "forced to get more and more active in providing liquidity to the market because the market isn't doing it internally," said Don Smith, an economist at brokerage firm ICAP.
His final two lines though I think correctly sum up where we are today, after the failure to pass the bailout bill.
Rejection of the plan means there's no political solution to this financial crisis on the horizon. As it now stands, the markets are on their own.
The next six weeks will tell whether the coup d'etat in the House on Monday has created a political crisis to match the financial one.
Bailout Questions Answered
I’m being asked two big questions about this thing: (1) Was it really necessary? (2) Shouldn’t Dems have tossed the whole Paulson approach out the window and done something completely different?
On (1), the answer is yes. It’s true that some parts of the real economy are doing OK even in the face of financial disruption; big companies can still sell bonds (and have lots of cash on hand), qualifying home buyers can still get Fannie-Freddie mortgages, and so on. But commercial paper, which is important to a lot of businesses, is in trouble, and I’m hearing anecdotes about reduced credit lines causing smaller businesses to pull back. Plus there’s a serious chance of a run on the hedge funds, which could make things a lot worse.
With the economy already looking like it’s headed into a serious recession by
any definition, the risks of doing nothing look too high.
It’s true that we might be able to stagger through with more case-by-case rescues — I think of this as the “two, three, many AIGs” strategy; in fact, we might not be at this point if Paulson hadn’t decided to make an example of Lehman. But right now it’s not even clear who to rescue, and the credit markets are freezing up as you read this (1-month t-bill at 0.04 %, TED spread at 3.5)
On (2), the call is tougher. But putting myself in Barney Frank or Nancy Pelosi’s shoes, I’d look at it this way: the Democrats could start over, with a bailout plan that is, say, centered on purchases of preferred stock and takeovers of failing firms — basically, a plan clearly focused on recapitalizing the financial sector, with nationalization where necessary.
That’s what the plan should have looked like.
Maybe such a plan would have passed Congress; and maybe, just maybe Bush would have signed on; Paulson is certainly desperate for a deal.
But such a plan would have had next to no Republican votes — and the Republicans would have demagogued against it full tilt. And the Democratic leadership cannot, cannot, be seen to have sole ownership of this stuff.
So that, I think, is why it had to be done this way. I don’t like it, and I don’t like the plan, but I see the constraints under which Dodd, Frank, Pelosi, and Reid were operating.
Over the weekend a deal was hammered out, even though John McCain stayed home and did not go to the Hill. The claim was he worked the phones (though he did not talk to a single Democrat), and then went to dinner with Joe Lieberman instead of joining the actual negotiators on the Hill. The one honest thing that John McCain could claim was that he talked to House Republicans, yet when the vote came up today, the majority of Republicans voted against the bill and killed it.
A majority of Democrats voted for the bill. Had the majority of Republicans done the same, it would have passed. John McCain supported this bill, and he is the leader of the Republican party, so why was he unsuccessful in getting House Republicans to join?
Because John McCain is not some great Congressional leader. Many Republicans hate him. He has no real base on the Hill. The canard that he was going to somehow bring everyone together in a bipartisan manner was just a joke. And today is the perfect example of the extent of John McCain's great powers to bring people together.
A basic break down of the last five days is that John McCain faked ending his campaign, took 22 hours to make a 60 minute trip, crash landed into the negotiations in Washington, blew up the talks, claimed he would not debate unless there was a deal, then debated even though there was no deal. He then declared he would return to Washington DC and bring House Republicans into the talks, get their concerns assuaged, but then failed to deliver that which he promised when he couldn't get his party on board.
John McCain was just tested, and failed miserably.
The report states that "serious allegations involving potential criminal conduct have not been fully investigated or resolved." This criminal conduct may include lying to investigators, obstruction of justice and wire fraud.
One really weird finding of the IG report is that Attorney General Gonzales is innocent because he was too stupid to be guilty. The IG report states that Gonzales was largely clueless about the events going on around him, and had no real idea as to his responsiblity. Incredibly it may not have been an act, Attorney General Gonzales may have been that stupid, and had no involvement with decisions regarding U.S. Attorneys. The report also concluded that Gonzales, as the head of the Justice Department at the time, bears "primary responsibility" for what transpired, but he was nevertheless "remarkably unengaged."
Nora Dannehy, a career federal prosecutor is being appointed as the Special Prosecutor.
TPM Muckraker, which has been all over this story from the very beginning, has more on today's report and reactions to it on the Hill.
TIM PARADIS September 29, 2008 02:12 PM EST Associated Press
NEW YORK — Fear swept across the financial markets Monday, sending the Dow Jones industrials down as much as 705 points, as the financial bailout package was defeated by the House.
As the vote was shown on TV, stocks plunged and and investors fled to the safety of the credit markets, worrying that the financial system would keep sinking under the weight of failed mortgage debt.
"Clearly something needs to be done, and the market dropping 400 points in 10 minutes is telling you that," said Chris Johnson president of Johnson Research Group. "This isn't a market for the timid."
The markets were highly volatile, with the Dow regaining ground to trade with a loss of about 360, then falling backing again, trading down 481.39, or 4.32 percent, at 10,661.74. Broader stock indicators also fell. The Standard & Poor's 500 index declined 63.13, or 5.20 percent, to 1,150.14, and the Nasdaq composite index fell 124.29, or 5.69 percent, to 2,059.05.
With Wall Street nervous that the plan may not pass, the yield on the 3-month Treasury bill fell to 0.68 percent from 0.87 percent on Friday. That showed that investors were prepared to get meager returns on an investment as long as it was secure.
The Federal Reserve declined to comment on the market's decline.
By JULIE HIRSCHFELD DAVIS, Associated Press Writer
WASHINGTON - The House on Monday defeated a $700 billion emergency rescue package, ignoring urgent pleas from President Bush and bipartisan congressional leaders to quickly bail out the staggering financial industry.
Stocks plummeted on Wall Street even before the 228-205 vote to reject the
bill was announced on the House floor.
When the critical vote was tallied, too few members of the House were willing to support the unpopular measure with elections just five weeks away. Ample no votes came from both the Democratic and Republican sides of the aisle.
Bush and a host of leading congressional figures had implored the lawmakers to pass the legislation despite howls of protest from their constituents back home.
The vote had been preceded by unusually aggressive White House lobbying, and spokesman Tony Fratto said that Bush had used a "call list" of people he wanted to persuade to vote yes as late as just a short time before the vote.
Lawmakers shouted news of the plummeting Dow Jones average as lawmakers crowded on the House floor during the drawn-out and tense call of the roll, which dragged on for roughly 40 minutes as leaders on both sides scrambled to corral enough of their rank-and-file members to support the deeply unpopular measure.
They found only two.
Bush and his economic advisers, as well as congressional leaders in both parties had argued the plan was vital to insulating ordinary Americans from the effects of Wall Street's bad bets. The version that was up for vote Monday was the product of marathon closed-door negotiations on Capitol Hill over the weekend.
"We're all worried about losing our jobs," Rep. Paul Ryan, R-Wis., declared in an impassioned speech in support of the bill before the vote. "Most of us say, 'I want this thing to pass, but I want you to vote for it — not me.' "
With their dire warnings of impending economic doom and their sweeping request for unprecedented sums of money and authority to bail out cash-starved financial firms, Bush and his economic chiefs have focused the attention of world markets on Congress, Ryan added. "We're in this moment, and if we fail to do the right thing, Heaven help us," he said.
One mistake was when he referred to his "Hero" Ronald Reagan, who he claimed would not sit down with Soviet Premiers Brezhnev, Andropov or Chernenko. McCain claimed that Reagan would not negotiate with the Soviets until Gorbachev was ready with glasnost and perestroika. Brad DeLong has found an April 26, 1982 Time article which says otherwise:
In an interview with Pravda, the Communist Party newspaper, Brezhnev rejected President Reagan’s proposal, made earlier this month, that the two leaders meet informally in New York this June after the disarmament talks at the United Nations General Assembly…
In short, McCain is either ignorant or dishonest. And ignorance in this kind of situation is a form of dishonesty. Why bring up Reagan’s refusal to meet with Brezhnev if you haven’t looked up the facts? John McCain was a congressional candidate running for his first term in his forties with a background as a military officer and as a lobbyist for the US Navy. He presumably had an opinion about Ronald Reagan’s conduct of Cold War diplomacy.
Next John McCain seriously misstated his vote concerning the Marines in Lebanon. He claimed that in 1983 he voted against deploying the Marines in Beirut. Except the Marines were sent to Lebanon in 1982, before McCain came to Congress. Now McCain did vote against a measure to invoke the War Powers Act and to authorize the deployment of U.S. Marines in Lebanon for an additional 18 months.
Next John McCain badly misstated the history of Pakistan. McCain claimed Pakistan was a failed state before President Musharraf came to power. This is not true, Pakistan was a democracy when Musharraf took power in a military coup in 1999. Granted Pakistan was a weak democracy, with a great deal to reform, but still had a democratically elected government, and not a "failed state". For someone claiming extensive foreign policy knowledge, this is simply not acceptable.
In one of the most contentious parts of the debate, Barak Obama made the statement that even Henry Kissenger is for more direct talks with Iran. McCain went apoletic, yet at a foreign policy forum on Sept. 15, Kissinger said: "I am in favor of negotiating with Iran."
McCain again claimed that Russia attacked Georgia without provocation, despite numerous reports from OSCE (Organization for Security and Co-operation in Europe) observers who were on the ground in the Caucasus that show Georgia had been actively preparing a military strike against South Ossetia and began the attack before Russian tanks entered the Roksky tunnel connecting South Ossetia and Russia. OSCE observers also provided NATO with radio intercepts which show that the Georgian authorities ordered that the attack on South Ossetian civilians at night when they were sleeping. Unfortunately Senator Obama agreed with this mischaracterization.
John McCain is no longer a foreign policy expert, if he ever was one, and is not the captain we should want sailing this country through the troubled waters of the world in the years ahead.
Sunday, September 28, 2008
As the largest government intervention in financial markets since the Great Depression, it casts Washington's long shadow over Wall Street not seen in a while. To some extent, key Democratic demands on Congressional oversight and consumer protection have all been met. This the biggest U.S. bailout in our country's history has the tentative support of both Barak Obama and John McCain.
The plan would give the administration broad power to use billions upon billions of taxpayer dollars to purchase devalued mortgage-related assets held by cash-starved financial firms. The Democratic leadership was able to ensure that Congress has a stronger hand in controlling the money than the White House had wanted. Still the basics of the plan still includes the idea that the Federal government will take over huge amounts of devalued assets from beleaguered financial companies in hopes of unlocking frozen credit.
Currently Republicans and Democrats are huddled in private meetings to learn the details of the 110-page bill, and voice their concerns. Democrats did have to surrender their cherished goals of letting judges rewrite bankrupt homeowners' mortgages and steering any profits gained toward an affordable housing fund. However the plan will help struggling homeowners by requirering the government to renegotiating bad mortgages it acquires with the aim of lowering borrowers' monthly payments so they can keep their homes.
The Democrats were able to get some of their biggest demands, such as Executive Compensation, where the rescue would only be open to companies who deny their executives "golden parachutes" and limit their pay packages. Also firms that got the most help through the program - $300 million or more - would face steep taxes on any compensation for their top people over $500,000. The plan also states that the government would receive stock warrants in return for the bailout relief, giving taxpayers a chance to share in recipients' future profits.
The House will Vote tomorrow, Monday morning, and the Senate will Vote Wednesday.
Read The Full Bailout Plan Here
“To understand how this tentative deal was reached, it's important to remember how this all began. The Bush Administration initially asked for a blank check to respond to this problem, which I strongly opposed. It would have been unconscionable to expect the American people to hand this Administration or any Administration a $700 billion check with no conditions and no oversight when a lack of oversight in Washington and on Wall Street is exactly what got us into this mess. If the American people are being asked to pay for the solution to this crisis, their tax dollars must be protected.
U.S. lawmakers on Sunday were set to sign off on a deal to create a $700 billion government fund to buy bad debt from ailing banks in a bid to stem a credit crisis threatening the global economy.After marathon talks into the wee hours of Sunday morning, congressional leaders from both parties emerged with an agreement that altered key parts of a Wall Street bailout program initially proposed by the Bush administration.
Saturday, September 27, 2008
McCain had no defense for Barack Obama's best riff of the night. Fact is,
McCain was wrong on Iraq. As they say, the YouTube doesn't lie:
Here is Biden on NBC.
Fox pollster Frank Luntz’s focus group showed that a majority was “moved” by Obama’s performance.
The media narrative did make mention of this, it will be interesting to see if it holds.
Friday, September 26, 2008
"I do think that John McCain was very helpful in what he did. I saw him this morning, we've been talking with his staff. Clearly, yesterday, his position in that discussion yesterday was one that stopped a deal from, uh, finalizing that no House Republican, in my view, would've been for. Which means it probably wouldn't have passed the House. Now, Democrats are in the majority, they can pass anything they want to without a single Republican vote. But they don't seem to be willing to do that. I'm pleased we can have negotiations now that get us back to things that we think can protect the taxpayers better, create more options, are, frankly, be better understood in the country than the plan, than the path that we were on just a couple of days ago."
I could not believe what I was hearing. Blunt was saying that John McCain was "helpful," because he killed the deal - not because he was looking to create compromise. John McCain was not there to help get a deal done, but to kill it.
That isn't a maverick bringing everyone together as a leader, it's the erratic, confused actions of someone who has no clue. Remember McCain was not going in opposed to the compromise plan. He had totally coopted Barak Obama's principles.
Is this what we can expect from a President McCain? When the choice is between making war or brokering peace, John McCain always goes for war. It's what hot-heads do. Especially when they're no longer at their prime.
House GOP Aides: McCain ‘Not Familiar With The Details’ Of The Financial Bailout
Bailout negotiations “dissolved into a verbal brawl” at the White House yesterday, as some House Republicans, led by Eric Cantor (R-VA), said they wouldn’t back a bipartisan negotiation on the package. The House GOP faction stunned the participants at the meeting yesterday by announcing their own plan which “advocates tax cuts and relaxed regulations.”
Treasury Secretary Henry Paulson has said the House GOP proposal would not work.
“Democratic leaders questioned McCain’s involvement in the House Republicans’ opposition to the plan.” McCain met with House GOP leaders before heading to the White House, but neither party seemed to know what they were talking about:
Boehner and McCain discussed the bailout plan, but Republican leadership aides described the conversation as somewhat surreal. Neither man was familiar with the details of the proposal being pressed by House conservatives, and up to the moment they departed for the White House yesterday afternoon, neither had seen any description beyond news reports.
At 1:25 p.m., McCain left Boehner’s office through a back door, walking across the Capitol’s rotunda to the applause of tourists. Graham conceded the group knew little about the plan the nominee had come to Washington to try to shape.
At the bipartisan White House meeting that McCain “didn’t speak until 43 minutes into the meeting.” He “sat silently for more than 40 minutes, more observer than leader, and then offered only a vague sense of where he stood, said people in the meeting.”
Sen. Chris Dodd said, “Instead of being a rescue plan for our economy it was a rescue plan for John McCain.” Sen. Chuck Schumer urged Bush to “respectfully tell Sen. McCain to get out of town. He’s not helping.” Senate Majority Leader Harry Reid added, “We had [Republican] Senator [Bob] Bennett, a high ranking official, who said these are the principles. And then, guess who came to town? And it all fell apart.”
McCain’s handling of the negotiations serves to underscore his comment in Dec. 2007 that he is “not an expert on Wall Street” and “not an expert of some of this stuff”.
Even though no deal is on hand, McCain has decided it is on firm enough footing that he can deign being in Mississippi for the evening. Of course he wants you to know that he will be right back to Washington DC.
Listening to her stumble trying to explain why the U.S. must never "second guess" Israel's "security efforts" gives me chills. What do reasonable Republicans or conservatives think? When I first heard the argument that Russia was next door to Alaska so Palin has foreign policy experience, I laughed. But I have to wonder did a reasonable person watch her explain why Alaska's proximity to Russia really does offer her foreign policy experience, and think she made a valid argument?
Reasonable people can disagree about the nature of Palin's difficulties. Some will argue that Palin just hasn't had time to learn about government and policy issues. Others will argue she isn't very bright. Others still may make the case that she's just cracking under the pressure. But the cause isn't especially important -- reasonable people should agree that the Republican vice presidential nominee is way out of her depth, and has no business seeking national office.
At the risk of sounding impolite, Sarah Palin is embarrassing herself, her party, her ticket, and her supporters. The notion that she could be the leader of the free world is a joke. It has nothing to do with her being a woman, or being from Alaska. It has everything to do with the fact that she is not prepared, does not seem to have done any preperation before being nominated, and shows little interest in learning now.
Really, what does an earnest honest Republican think about Palin after watching any of her three interviews? Does it give him or her pause? Does he or she cringe, but suppress the fear for the good of the party?
I would like to know.
For a week John McCain tried to cast himself as a populist, but then when a deal was about to be made he threw out an alternative plan that Henry Paulson and Ben Bernanke had already said would not work in Congressional testimony to the House (which McCain probably missed as he was meeting with U2's Bono) and came out against the plan.
Some highlights of the bailout plan that John McCain now doesn't want:
- Two oversight boards would be formed—one with congressional representation, another would have the power to undo decisions by the Treasury Secretary.
- The Treasury Secretary would be prohibited from acting in an arbitrary or capricious manner or any way inconsistent with existing law.- Regular, detailed reports would be made to Congress disclosing exercise of the Treasury Secretary's authority.
- An independent inspector general would be set up to monitor the use of the Treasury Secretary's authority.
- The Government Accountability Office would be required to perform audits to ensure proper use of funds, appropriate internal controls, and to prevent waste, fraud, and abuse.
- Maximize and coordinate efforts to modify mortgages for homeowners at risk of foreclosure.
- Loan modifications would be required for mortgages owned or controlled by the federal government.
- A percentage of future profits from the bailout fund would be made available to the Affordable Housing Fund and the Capital Magnet Fund to meet America's housing needs.
Thursday, September 25, 2008
Washington Mutual, the giant lender that came to symbolize the excesses of the mortgage boom, was seized by federal regulators on Thursday night in the largest bank failure in American history.
Regulators simultaneously brokered an emergency sale of virtually all of Washington Mutual to JPMorgan Chase. The remainder of WaMu, the nation’s largest savings and loan, will be operated by the government. Shareholders and some bondholders will be wiped out. WaMu deposits are guaranteed by the Federal Deposit Insurance Corporation up to the $100,000 limit for each account. WaMu customers are unlikely to be affected.
John McCain said this was a crisis that needed to be dealt with, and then politicized the deal that was almost done. The Politico has more.
I went to look for the Ad, but instead found this longer version. Watch it, it's very interesting.
In the video below, Katie Couric asks Sarah Palin to explain why Alaska's proximity to Russia gives her any foreign policy experience. It is almost sad to watch Sarah Palin grasp at an answer. She does not understand why her answer that you can see Russia from Alaska is being mocked, which is just sad. How has she not improved her answer since she was asked the same question by Charlie Gibson?
Just this morning, in New York, John McCain was pretty straightforward about his perspective on the campaign: "I cannot carry on a campaign as though this dangerous situation had not occurred, or as though a solution were at hand, which it clearly is not. As of this morning I suspended my political campaign."
Yet his suspended campaign looks pretty much like his active campaign.
* McCain campaign offices in battleground states are open and operating, just like yesterday.
* McCain's television ads are on the air, just like yesterday.
* McCain media flacks are all over the news networks, just like yesterday.
* McCain's campaign staffers are working, just like yesterday.
* McCain's campaign website is up, soliciting contributions and promoting McCain's message, just like yesterday.
* For the big White House meeting today, Barack Obama was told not to bring any campaign aides, so he brought a legislative assistant from his Senate staff. John McCain was seen bringing a campaign advisor.
Nothing has actually changed at McCain Campaign HQ. Just one more bit of proof that McCain is no longer the honorable maverick he once claimed to be.
Wednesday, September 24, 2008
“It’s not based on any particular data point,” a Treasury spokeswoman told Forbes.com Tuesday. “We just wanted to choose a really large number.”
So basically they threw a dart at a wall to get the number. That makes me feel so much better.
Doesn’t this seem like a very strong argument for a much smaller appropriation designed to last for another couple of months? There’s nothing to stop congress from appropriating more money in mid-November if the situation seems to warrant it.
First Letterman mocked McCain throughout the show's taping, saying that the whole thing did not "smell right." Letterman kept saying, "You don't suspend your campaign. This doesn't smell right. This isn't the way a tested hero behaves." And he joked: "I think someone's putting something in his metamucil." These are the kind of quotes that could stick.
Then in the midst of taping, Letterman got word that McCain was, in fact just down the street being interviewed by Katie Couric. Dave even cut over to the live video of the interview, and said, "Hey Senator, can I give you a ride home?"
"He can't run the campaign because the economy is cratering? Fine, put in your second string quarterback, Sarah Palin. Where is she?"
"What are you going to do if you're elected and things get tough? Suspend being president? We've got a guy like that now!"
Letterman is watched by a lot of people. This could be very bad for McCain.
The regional spokesman for John McCain in Colorado accidentally sent the campaign’s internal talking points on the candidate’s plans to suspend his campaign to its entire Colorado media list, instead of a list of key volunteers, Wednesday afternoon, PolitickerCO’s Jeremy Pelzer reports.
The memo, titled “TALKING POINTS: SUSPENDING THE CAMPAIGN,” includes a list of points the campaign wants emphasized, and includes this warning from Kise: “Please do not proactively reach out to the media on this.”
Watch CBS Videos Online
Could interviews like this be the reason that the McCain Campaign is trying to postpone Friday's debate, and possibly short circuit the VP debate. CNN's Dana Bash revealed the McCain Campaign's suggested strategy of pushing the first Presidential debate back to October 2nd, the date of the VP debate. The VP debate would the be delayed until another time. Could they be attempting to have no VP debate.
A majority of Americans say the debate should be held on Friday. Just 10% say the debate should be postponed. A sizable percentage of Americans, 36%, think the focus of the debate should be modified to focus more on the economy. 3 of 4 Americans say the presidential campaigns should continue. Just 14% say the presidential campaigns should be suspended. If Friday's debate does not take place, 46% of Americans say that would be bad for America.
Sen. Barack Obama (D-IL) just gave a press conference responding to Sen. John McCain’s (R-AZ) suggestion that they both suspend their campaigns, postpone Friday’s debate in Mississippi, and return to Washington to deal with the financial crisis. Obama said that he would like to the debate to go forward as planned because “it is going to be part of the president’s job to deal with more than one thing at once”:
With respect to the debates, it’s my belief that this is exactly the time when the American people need to hear from the person who, in approximately 40 days, will be responsible for dealing with this mess. And I think that it is going to be part of the president’s job to deal with more than one thing at once. I think there’s no reason why we can’t be constructive in helping to solve this problem and also tell the American people what we believe and where we stand and where we want to take the country.
John McCain claims he is going to suspend his campaign because of the financial crisis. McCain's abrupt announcement came in an email that was sent out at 2:56 PM today. The timing of this e-mail appeared designed to pre-empt Barak Obama, who, according to aides, had already initiated efforts to seek a bipartisan solution.
At 3:09 PM, just 14 minutes after the McCain email, Bill Burton of the Obama campaign sent out the following statement:
"At 8:30 this morning, Senator Obama called Senator McCain to ask him if he would join in issuing a joint statement outlining their shared principles and conditions for the Treasury proposal and urging Congress and the White House to act in a bipartisan manner to pass such a proposal. At 2:30 this afternoon, Senator McCain returned Senator Obama's call and agreed to join him in issuing such a statement. The two campaigns are currently working together on the details."
Obama rejected McCain's proposal to postpone the first debate.
"This is exactly the time the American people need to hear from the person who in approximately 40 days will be responsible for dealing with this mess," Obama said. "What I've told the leadership in Congress is that if I can be helpful, then I am prepared to be anywhere, anytime. What I think is important is that we don't suddenly infuse Capitol Hill with presidential politics."
If this was so important, why didn't McCain suspend his campaign NOW and head back to the Capitol ASAP? Instead, he's waiting til tomorrow -- and, not just tomorrow, but tomorrow after he speaks at the Clinton Global Initiative. He canceled an appearence on David Letterman because, he claimed, that he had to focus on the financial crisis, but then it turned out that he was at another CBS studio taping with Katie Couric.
MALIKI: Actually, the final date was really the end of 2010 and the period between the end of 2010 and the end of 2011 was for withdrawing the remaining troops from all of Iraq, but they [the Bush administration] asked for a change [in date] due to political circumstances related to the domestic situation [in the US] so it will not be said to the end of 2010 followed by one year for withdrawal but the end of 2011 as a final date. Agreement has been reached on this issue. They are willing to respond positively because they, too, are facing a critical situation.Got that? The White House is willing to keep American's, our soldiers, in harms way for another year, just to help McCain win an election.
Support the troops?
Matt Duss of the Wonk Room has more and asks the question: “What did McCain know about this, and when did he know it?”
You can view his statement to the Senate here:
Paulson's claim is laugable. His indignation is a lie. He claims that he was actually looking for oversight, but this is not what Henry Paulson did. He instead put the infamous Section 8 into his proposal.
Section 8 reads:
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.
This is not a statement by someone who has not thought about oversight, or wanted Congress to come up with an oversight plan. This is what is put in by someone who wants complete control. This is a clause that is put in by someone who wants all decision-making power to be consolidated into the Executive Branch, unchallengeable by courts and ungovernable by Congress.
Paulson doesn't think so. I made a mistake last Friday when I was complimentary of Henry Paulson.
Tuesday, September 23, 2008
Good ideas do not need lots of lies told about them in order to gain public acceptance; lies do.
Davies was talking about the selling of the Iraq war, but it applies pretty much to the entire Bush Administration. It was true about the Patriot Act, the Iraq War, Unauthorized surveillance of the American public, Katrina, the list goes on. It should be the rule that we keep in mind as we listen to the debate going on over the Treasurery Bailout.
Paul Krugman points out that this morning Hank Paulson told a whopper:
We gave you a simple, three-page legislative outline and I thought it would have been presumptuous for us on that outline to come up with an oversight mechanism. That’s the role of Congress, that’s something we’re going to work on together. So if any of you felt that I didn’t believe that we needed oversight: I believe we need oversight. We need oversight.
This was a lie by Henry Paulson. If he was telling the truth, then there would have been no reference to oversight, or that it would be worked out with Congress. This is not what Paulson proposed, what his proposal actually did, of course, was explicitly rule out any oversight, plus grant immunity from future review:
Sec. 8. Review.Krugman then states that he is not playing gotcha here, buthis is telling: if Paulson can’t be honest about what he himself sent to Congress — if he not only made an incredible power grab, but is now engaged in black-is-white claims that he didn’t — there is no reason to trust him on anything related to his bailout plan.
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.
The implosion of Wall Street last week resulted in a near-death crisis for John McCain’s presidential campaign. His post-Palin bump eviscerated, McCain was staggered by the re-emergence of the economy as the dominant issue in the 2008 election. His daily-changing positions revealed that McCain, a man who has repeatedly admitted his ignorance of economics, is struggling to cope with his diminished presidential prospects. Armchair psychologists might call the process John McCain’s five stages of grief over the economy.
Denial. McCain’s refusal to confront the realities of the failing Bush economy has long roots and was again on display last Monday. McCain, who has frequently described the economic slowdown as “psychological,” for at least the 18th time proclaimed the “fundamentals of our economy are strong.” As the Dow plummeted over 500 points, McCain reacted to the white-hot crisis on Wall Street by comically announcing his support for a 9/11-style commission to study the causes of and make recommendations to address the meltdown. Willing to kick the can down the road with his since forgotten 9/11 panel idea, McCain also took a head-in-the-sand position in opposing the government rescue of teetering insurance giant AIG:
“We cannot have the taxpayers bail out AIG or anybody else.”
Anger. Sadly, McCain’s denial of the obvious produced an immediate backlash from the press and the public alike. Literally within hours last Monday, McCain reversed course on the underlying strength of the American economy and declared the fundamentals of the economy to be “at great risk.”
Then John McCain did what he does best - he got mad.
(Unsurprisingly, McCain also launched a furious tirade in response to accusations 20 years ago about his Keating Five role during the last U.S. financial catastrophe.) Redefining “economic fundamentals” to refer the U.S. work force, McCain blasted his “opponents” for slandering American workers. By mid-week, McCain found a convenient - if unconstitutional - target for his rage, SEC chairman Chris Cox.
Bargaining. His response mocked as incoherent at best, McCain then proceeded to the third textbook phase of grief over the economy: bargaining. As the Kubler-Ross model describes the bargaining stage, “Now the grieving person may make bargains with God, asking, ‘If I do this, will you take away the loss?’”
So, fast and furious, McCain started to bargain. Acknowledging that as President he couldn’t fire the SEC’s Cox, McCain instead called for his resignation. (This morning, McCain cynically offered up New York Democrat Andrew Cuomo as a replacement.) Within 24 hours, he changed his tune on AIG, now supporting the bail-out package he opposed just the day before:
“The government was forced to commit $85 billion…The focus of any such action
should be to protect the millions of Americans who hold insurance policies,
retirement plans and other accounts with AIG.”
And to be sure, McCain bargained economic surrogate and serial embarrassment Carly Fiorina right out of his campaign. When the details of her massive $42 million severance package from HP became public, the woman who deemed McCain incapable of running a company found herself on the sidelines.
Depression. By last Thursday, a pall of gloom hung over McCain as he entered the fourth stage of grieving, depression. In a move that could only draw attention to his own checkered past in the savings and loan scandal of the 1980’s, McCain meekly proposed the creation of a Mortgage and Financial Institutions (MFI) trust to help the failing firms of Wall Street fend off insolvency. Ironically, McCain had repeatedly opposed the Resolution Trust Corporation in the past, an institution that ultimately poured $400 billion into bailing out the S&L’s, including the $3 billion lost by McCain sugar daddy Charles Keating’s Lincoln Financial.
That same day, McCain tried to fight back, but his heart wasn’t in it. In a foreboding ad fraught with racial overtones, McCain tried to link Obama with former Fannie Mae chairman Franklin Raines. While the Washington Post quickly debunked the spot by noting that Raines is not an adviser to the Obama campaign, Time suggested McCain was playing the race card.
Acceptance. By today, it was clear that John McCain had reached the fifth and final stage of grieving over the economic issue. Just one week after proclaiming the “fundamentals of our economy are strong,” McCain said on the Today Show this morning:
“We are in the most serious crisis since World War II.”
That clarity is letting McCain do what McCain does best - attack. In a cynical attempt at misdirection the Politico’s Jonathan Martin deemed “tossing more chum overboard,” the McCain campaign aired a new ad once again trying to connect Barack Obama to Chicago dealmaker Tony Rezko. And on Sunday, McCain ignored his own week of dizzying incoherence on the economy and thundered at Obama:
“At a time of crisis, when leadership is needed, Senator Obama has simply not provided it.”
Apparently, John McCain’s new-found acceptance of the dismal state of the economy lets him rage against the Obama machine without embarrassment. After all, McCain’s transition manager William Timmons was a lobbyist for Fannie Mae and Freddie Mac. This morning, the New York Times revealed that McCain’s campaign manager Rick Davis pocketed $2 million in lobbying fees from the failed home mortgage giants. And on Sunday, McCain refused to rule out that his adviser and UBS vice chairman Phil Gramm, of “nation of whiners” fame and himself a possible bailout recipient, as Treasury Secretary in a McCain-Palin administration.
To be sure, watching John McCain wrestle with his demons - and ignorance - over the troubled economy has been painful to watch. As crypto-conservative columnist George Will put it:
“John McCain showed his personality this week and made some of us fearful.”
But with his 11 houses and 13 cars, John McCain can afford to work through his cognitive breakdown over the state of the broken economy. Unfortunately, the rest of us can’t. While Americans are mourning the loss of their homes and savings, John McCain is apparently grieving over his potential loss of the White House.
(This piece was crossposted from Perrspectives.)