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POPSFinancial Crisis Part II: U.S. Automakers Next "Some 18% of sales volume" from bad credit buyers. Watch the banks and credit companies like Capital One here flee the industry to strengthen their own positions. High gas prices have hurt car sales no doubt.
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POPSBritish bank bailout to make 692 billion available "They've got additional capital now if they want it, they've got an unlimited source of liquidity," said Terry Smith, chief executive of the money brokers, Tullett Prebon. "That certainly should stop the panic in terms of people wondering whether or not the banks are safe."
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POPSBernanke, Paulson, Trichet May Act to Unblock Lending (Update1)
Rates are also surging in the commercial paper market that many U.S. companies use to finance their day-to-day operations. Yields on overnight U.S. commercial paper jumped 0.94 percentage point to 3.68 percent. `The Federal Reserve must now act as a clearing house'' for banks and ``must also take another bold step: outright purchases of commercial paper, said Bill Gross, manager of the world's biggest bond fund at Newport Beach, California-based Pacific Investment Management Co. Europe's Dow Jones Stoxx 600 Index having its steepest intraday decline since 1987 and emerging markets, until now the locomotives of the world economy, hit particularly hard: exchanges in Russia and Brazil halted trading. One less complicated step would be for central banks to lower rates in concert. Traders are betting that the Bank of England will lower rates at a meeting this week, and that the Fed will cut its benchmark by at least half a point at or before an Oct. 28-29 gathering.
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POPSThe Obama Sell Off I know that the reason I moved everything I had out of the markets is that if Obama gets in he's going to destroy a minimum of 1/7th of the economy with his medical idiocy. He's also going to destroy investment with his tax increases and who can tell where the next huge failure will come from with that kind of uncertainty. Better to sit on the sidelines and see what happens than try to guess exactly what the Democrats might destroy next.
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POPS"I'm Barack Obama, and I Approve This Bailout" Both left and right on Main St. oppose the bailout bill, and for good reason. Take a look here at how mad many on the left are. Here is his punch line to the get-a-long Democrats in Congress--call it a hard left hook: To the former, the Democratic Party, I say: your support of this Bill as it stands or in any form that simply hands over money and asks the market to take care of the mess makes you our enemies, not our advocates. ...then he lands one squarely on Obama's jaw: To Barack Obama I say: you are a fraud on public credulity. You are no more a "change" agent than I am the Pope. With your support of this bailout, you have acted in direct contradiction to your promise of change Last chance to call your house rep before they RUIN both the market and the economy with those latest Bailout bill.
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POPSSenator DeMint Has Outlined A Plan For Economic Growth EXPAND ENERGY EXPLORATION • Permanently Repeal Bans on Energy Exploration and Expedite Production: Expedite offshore and oil shale exploration, ensure states share in energy revenues, and prevent endless litigation from frivolous environmental lawsuits. REFORM FAILED GOVERNMENT INSTITUTIONS • Schedule the GSEs for Privatization: Transition Fannie Mae and Freddie Mac over a reasonable time period to truly private companies without special government privileges and expose them to real market competition. • Stabilize the Dollar: Repeal the Humphrey-Hawkins Full Employment Act, which diverts the Federal Reserve’s attention from long-term price stability to short-term economic growth. In an effort to fuel the economy, this additional mandate has encouraged the Fed to keep rates artificially low, leading to economic booms and busts, a rise in inflation and the decline of the dollar.
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POPSWhy Would Warren Buffett Stoop So Low?
The market still works! With all due respect to Buffett, nobody has yet made a compelling case to me that there is, in fact, a crisis that extends much beyond overleveraged banks with bad business practices. There's a simple fact lost among all of this fearmongering and jawboning about how bad things could get if the government doesn't throw $700 billion (or more) at failing financial institutions. The stock and vulture-capital markets are still generally working, in spite of the cries from politicians and failing speculators to the contrary. The market also has a really good mechanism to help struggling financial companies get money. It's called "price," and it's still functioning. You can see it in action by looking at the one-year CD rates that various banks are offering to entice people to deposit money with them. When the people lobbying the hardest for a bailout are those who stand to benefit from it, you have to ask whether their motives are altruistic or self-serving.
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POPSVOODOO ECONOMICS Over 20 years have they gone and resisted transparency thru smoke and mirrors and other charades, now the only question remains: Can we actually save Capitalism? And should; we?
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POPSNewt Gingrich Blasts Proposed $700 Billion Bailout Plan This idea that we're going to buy the paper and some bureaucrat in Washington is going to be responsible for $700 billion in bad paper, I think, is socialism at its worst. I can't imagine why this administration is doing it. I think it is profoundly wrong, and I hope it is defeated if it comes to the floor in this form. GINGRICH: Well, if this is going to be rewritten, they ought to be prepared to meet all weekend. They ought to postpone the debate. I think it would be a tremendous sign for America and the world if Senator Obama were to work side by side with Senator McCain, jointly try to develop a joint bill. It think it would be a great act of the patriotism and good for the whole country, and I think it would put them beyond partisan maneuvering. So I would hope that Senator Obama would reconsider. I think the idea that Senator McCain is prepared to work while Senator Obama wants to go talk doesn't speak well for Senator Obama's judgment.
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POPSThe big bailout is unlikely to work It's easy to understand why the United States is considering an apparently indiscriminate reward for those who took too much risk. The stakes are very high, and a disorderly deleveraging would be worse than an orderly one, even if the orderly one isn't perfect. The debate about whether or not the United States will need a huge intervention of public capital into its banking system and wider economy is over. The crisis requires a huge outlay of public funds, both to clean up after the many banks that will fail and to soften the blow to homeowners and consumers. Banking is a confidence game, even if done soberly and responsibly.
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POPSBarney Frank and Chuck Schumer’s Role In Fannie Mae's Failure In Congress, they made sure there was no additional oversight, no additional limit on executive behavior and compensation, and no further restraint on the growth of the companies’ mortgage-backed-securities portfolios, among other changes. (All of these needed reforms, by the way, have been championed for years by Sen. John Sununu.) They wanted more loans to people who might not qualify for traditional bank financing. And, as The Wall Street Journal has pointed out, Frank “pressured regulators to ease up on their capital requirements — which now means taxpayers will have to make up that capital shortfall.” Barney Frank is the very symbol of Washington’s deliberate refusal to prevent the collapse — the predicted collapse — of Fannie Mae and Freddie Mac. Rules were relaxed and money was loaned and predictably low income families defaulted on loans that they never had any business getting in the first place and now you and I have to pay for it.
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POPSFinancial Wizards & Snake Oil Salesmen Republican philosophy allows Wall Street to do what they want. This past week shows the result of that allowing that kind of trust and free resign. "Fool me once, shame on you. Fool me twice, shame on me. Fool me over and over again, and maybe it's time we stopped listening to the financial wizards who keep insisting that they don't need any oversight." It is human nature to take what they can get away with, and when someone, anyone, in charge, says they don't need oversight, that's the time to pull in the reigns, sharply.
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POPSIn 2002 (!!!!) An Attempt to Save The Coming Market Crisis Was Made Mr. Speaker, it is time for Congress to act to remove taxpayer support from the housing GSEs before the bubble bursts and taxpayers are once again forced to bail out investors misled by foolish government interference in the market. I therefore hope my colleagues will stand up for American taxpayers and investors by cosponsoring the Free Housing Market Enhancement Act.
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POPSWhat is more important the stock market or the economy? The premise here is daytrading (which I do for a living), naked short selling, and other forms of speculation among the wall streeters have created a drag on the economy and the real stock market. I wonder if raising the capital gains tax would shut down some of the unhealthy speculation which helped cause the current mess we're in.
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POPSDid Bush encourage the financial debacle? in his own words--take risk---no worries, we'll bail you out if you're a bank or a mortage company--but not if you're a homeowner who didn't understand----all those new homeowners that are walking away may never own again..... great job Mr President
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POPSDemocrats: Fannie, Freddie And The Housing Crisis and Freddie Mac and Fannie Mae are GSEs. The GSEs give to Democrats primarily. Republicans tried to reform it, but got out lobbied every time. In 2005, Republican Mike Oxley, then chairman of the House Financial Services Committee, brought up a reform bill (H.R. 1461), and Fannie and Freddie's lobbyists set out to weaken it. The bill was rendered so toothless that Card promised to oppose it and Oxley pulled the bill instead. When there was a Republican Congress, Congressional leadership tried to do the right thing, but Fannie and Freddie's lobbyists picked off some weak Republicans. With a Democratic Congress, Fannie and Freddie just feed at the trough. Third, these guys are some of the most powerful figures in the Democratic lobbyist-operative firmament. Obama was forced to fire James Johnson, his first VP Vetter. Johnson had been CEO of Fannie Mae. Johnson, while a consultant for Fannie and Countrywide, was passing out below market loans to Senator Dodd among others.
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POPSGreg Mankiw On Freddie And Fannie The Harvard economist weighs in. He called for reform in 2003, but he's not bragging. He's just expressing regret that bailouts aren't the answer to the financial crisis.
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POPSWill there really be any change?
Would Obama be as bad or worse? Likely not. Just the lesser of two evils or what Ralph Nader calls the "evil of two lessers." No choice to settle for in his judgment. Especially when both candidates support global militarism, backing Israel and the Christian Right against Iran, unilaterally attacking Pakistan, staying in Iraq for the duration, upping the ante in Afghanistan, and risking a dangerous Eurasian confrontation with Russia. Both conventions are over. It's Obama v. McCain, and expect the winner to disappoint like always and on what voters say matter most - ending aggressive wars and addressing long-neglected social needs, made all the worse given capitalism's global crisis and both parties' commitment to privilege. After the Democrat convention ended, author, media activist, critic, and independent filmmaker Danny Schechter wrote: "You won't hear a call for a national crackdown on the corporate crime, fraud, and abuse that, in just the last few years, have robbed trilli
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POPSUN: Georgians Effectively Blocked from Homes On Saturday, Sen. Bob Corker, R-Tenn., a member of the chamber's foreign relations committee, visited Gori to observe the distribution of U.S. food aid. Asked whether the United States was considering new military aid, Corker said "these subjects are part of a longer and mid-term discussion" when Congress reconvenes in September. Russia supplies the EU with about a third of its oil and about two-fifths of its natural gas. British Prime Minister Gordon Brown said European nations should adopt a united energy policy to avoid becoming too dependent on Russia. He said the EU nations should "use our collective bargaining power." "Without urgent action we risk sleepwalking into an energy dependance on less stable or reliable partners," Brown wrote in The Observer newspaper. Brown said he spoke with Russian President Dmitry Medvedev by telephone Saturday, and told the Russian leader "to expect a determined European response" to the crisis.
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