The Bail Out Senate Hearing

Today there was a Senate hearing on the bail out. Here is the video:


Buying toxic assets for all banks, including foreign banks is a bad, bad precedent - Senator Shelby

Senator Shelby says the bail out could costs $1 Trillion dollars.

This is shocking that Republicans are stepping up to the plate on this. It does appear to be a bi-partisan Are you kidding me? reaction.

But while they fret and fuss, supposedly this is going to pass with no guarantee it would even work.

Forbes sums it up, Paulson Plays Pinata.

Update 1:

William Greider spells out the Game of Chicken:

Wall Street put a gun to the head of the politicians and said, Give us the money--right now--or take the blame for whatever follows

and further points out:

Both political parties may submit to this extortion because they don't have a clue what else to do and bending over for Wall Street instruction, their usual posture, seems less risky than taking responsibility. Paulson and Bernanke evoked intimidating pressure for two reasons. The previous efforts to restore investor confidence had all failed as their slapdash interventions worsened the global panic. Besides, the Federal Reserve was running out of money. Nearly three-fifths of the Fed's $800 billion portfolio is now loaded down with junk--the mortgage securities and other rotten assets it took off Wall Street balance sheets. The imperious central bank is fast approaching its own historic disgrace--potentially as discredited as it was after the 1929 crash.

Consider this an open thread on the hearings and legislation. Post to be updated.



Thx for Posting the Dog and Pony Show

Robert. I spent a few hours zooming through various parts. I believe each and every senator had a chance to cover his ass for future youtube clips. Each was able to appear thoughtful and reluctant, concerned for the taxpayers and constituents. As per usual.

I predict it will pass by the end of the week.

As it should. That gives savvy folks time to cash out and head to safer currencies.

McCain Obama too

They are now spewing, ushering, sputtering Populist notes but the reality of a real solution is already there.

Clinton has some detailed plans and they are being completely ignored!

HOLC is a good start for this and that's what is needed, the people who are victims need the bailout and as far as these global banking systems, well, I'm seriously wondering what happens if they just plain let 'em burn.

Take the $700B and create the ultimate VC fund that goes directly to the people. What would that do to liquidity yet let this ponzi scheme collapse once and for all.

Basically, the $700+ Billion Will be Used to Redeem....

...toxic paper from our foreign lenders (treasury buyers), without whom we could not exist for another day. That's pretty clear to most of us global players.

But it does present some awesome money making opportunities -- some slam dunks -- for speculators and ordinary Americans, as well. The bailout will crash the dollar, making this a fine time for call options or just simple currency transfers into Suisse, for example.

US dollar set to be major casualty of Hank Paulson's bailout:

What was perhaps even more worrying for investors was an item in the small print of Hank Paulson’s rescue plan. It said that, separate to the $700bn markets rescue package, the US Treasury would plunder the Exchange Stabilisation Fund – the US currency reserves, established in the 1930s – in order to pay for an insurance scheme for the money markets

The Treasury has committed the nation’s FX reserves to supporting the money market industry,” said Chris Turner, head of foreign exchange strategy at ING. “That suggests to us that the dollar has fallen down the list of the administration’s priorities – a worrying development for foreign investors in the US.

The fund’s cash is being funnelled into a new scheme designed to protect money market mutual funds, which mirrors the Federal Deposit Insurance scheme for consumers’ bank savings. “What worries us is that the US Treasury has committed the nation’s FX reserves at a time when the dollar is exceptionally vulnerable,” said Mr Turner.

To me, that's a sure thing.

It's always a bull market somewhere.

nice find

Today I was actually quite surprised that gold didn't shoot through the roof because there are a couple of things I don't have the answer to, but hopefully others here will write posts on...and that is the federal deficit risking plain default and the other is trashing the dollar.

There is so much going on here and now the new buzz word is "main street" ...ha ha ha! Pretty difficult to get solutions passed by our government when they do not represent main street except for the valiant few and they plain do not have enough in numbers in Congress.


Aha! The FBI is now investigating:

Fannie Mae, Freddie Mac, Lehman Brothers and AIG!

The plot thickens!

I've seen this before

Only the first time I saw it, Robert DiNero took a bat to someone's head.

speaking of bats to the head

a gang of laid off auto parts workers just beat to death the CEO of the company that laid them off in India. Just happened.


Ya say ya want a revolution, well, well, ya know....

Somehow I think there is a middle ground although assuredly our government and other elites and officials completely ignore history.

Wipe out the middle class and you have guaranteed unrest, instability and dangerous conditions.

economist discussion slides from Princeton

Princeton economist discussion on the crisis going on.