Welcome to the 80's! (Resolution trust group)

[SirNitram]

Oh look. Exactly what's been going on for years in this White House, but someone decided to notice because it's economics.

It's amazing how dense people are.

Who's noticing this that hasn't noticed prior offenses?

Mostly ranting about how now is the time when the conservative wing of America is shrieking about no-oversight, no-review, trillion dollar handouts. Unlike Iraq, which was a Righteous War.

[Big Orange]

The American banks following Milton Friedman's insipid and morally bankrupt ideology are now rattling apart and losing billions due to their unrestricted avarice, prompting the State to save them through corporate welfare while putting strain on the innocent tax payers. Why the fuck should US citizens be forced to save their greedy hides, when the money could've been spent on schools, transport, and hospitals?!

And the US Government may well end up printing money to vainly bolster the economy, which will put the Dollar even more through the floor, and you'll need a wheelbarrow of $$$ to buy a loaf of bread.

[Uraniun235]

Why the fuck should US citizens be forced to save their greedy hides, when the money could've been spent on schools, transport, and hospitals?!

If you had read the thread completely, you'd note that Congress has been convinced that it's the only way to avert total catastrophe.

[Ekiqa]

If you had read the thread completely, you'd note that Congress has been convinced that it's the only way to avert total catastrophe.

Because Congress is in the pockets of big money, who is facing catastrophe.

Milton Friedman has caused so much problems in the world with his theories.

[Big Orange]

Milton Friedman has caused so much problems in the world with his theories.

The select few practicing Neoliberalism don't care about wider longterm problems for the rest of the planet so long as they can make a profit. This bailout is going to cost the US tax payers a TRILLION dollars. Not a million dollars. Not a billion dollars. Not even a hundred billion dollars. But a TRILLION dollars.

[SirNitram]

Milton Friedman has caused so much problems in the world with his theories.

The select few practicing Neoliberalism don't care about wider longterm problems for the rest of the planet so long as they can make a profit. This bailout is going to cost the US tax payers a TRILLION dollars. Not a million dollars. Not a billion dollars. Not even a hundred billion dollars. But a TRILLION dollars.

So less than the likely total cost of Iraq, and about equal to what the DoD simply lost track of and the GAO found out about in 2003? Link

So basically it's the Bush Admin as normal.

[Big Orange]

Fucking hell, I begining wonder if Iraq was a ploy to distract the US Military in order to prevent them from rising up in mutiny against the GOP and its corporate cronies who are both asset stripping everything in America.

However the Democrats are behind this BS as well, while everybody seems to ignore the fact that the Feds ironically has even worse debts running up to 9.6 TRILLION(!!!), and I doubt Obama will wave a magic wand over this mess that has likely been decades in the making (but the heaving dam was punctured open by GWB in the last eight years).

[Ekiqa]

However the Democrats are behind this BS as well, while everybody seems to ignore the fact that the Feds ironically has even worse debts running up to 9.6 TRILLION(!!!), and I doubt Obama will wave a magic wand over this mess that has likely been decades in the making (but the heaving dam was punctured open by GWB in the last eight years).

The dam was punctured by Congress under Clinton when they revoked the regulations emplaced due to the Great Depression, to prevent this very thing.

[SirNitram]

However the Democrats are behind this BS as well, while everybody seems to ignore the fact that the Feds ironically has even worse debts running up to 9.6 TRILLION(!!!), and I doubt Obama will wave a magic wand over this mess that has likely been decades in the making (but the heaving dam was punctured open by GWB in the last eight years).

The dam was punctured by Congress under Clinton when they revoked the regulations emplaced due to the Great Depression, to prevent this very thing.

It began under Reagan, with the loosening of regulations to begin the S&L crisis...

But yes. 1999, Phil Gramm, that's big.

So is the Uptick Rule and Cox as SEC head. Sorry? You aren't going to do your job? Apparently, not an issue in this administration.

[J]

Oh joy, it's even worse than I thought. The $700 billion is effectively a revolving money laundering fund which the Fed can reuse again & again to put trillions in losses onto the taxpayers.

Karl Denninger explains it on this page. Read his analysis and commentary, then watch the videos. It's absolutely frightening.

[SirNitram]

Oh joy, it's even worse than I thought. The $700 billion is effectively a revolving money laundering fund which the Fed can reuse again & again to put trillions in losses onto the taxpayers.

Karl Denninger explains it on this page. Read his analysis and commentary, then watch the videos. It's absolutely frightening.

It's the ultimate weapon against any sensible Left-leaning politics. Only ever nationalize shitty companies that fail. Thus you can forever argue America Is Special and it will never work.

Also, yes. I thought that was obvious. Now taking bets on the failure rate of the debts being bought.. If you bet under 25%, you're a sucker..

[J]

http://www.federalreserve.gov/newsevent ... 80921a.htm

Press Release
Federal Reserve Press Release

Release Date: September 21, 2008
For release at 9:30 p.m. EDT

The Federal Reserve Board on Sunday approved, pending a statutory five-day antitrust waiting period, the applications of Goldman Sachs and Morgan Stanley to become bank holding companies.

To provide increased liquidity support to these firms as they transition to managing their funding within a bank holding company structure, the Federal Reserve Board authorized the Federal Reserve Bank of New York to extend credit to the U.S. broker-dealer subsidiaries of Goldman Sachs and Morgan Stanley against all types of collateral that may be pledged at the Federal Reserve's primary credit facility for depository institutions or at the existing Primary Dealer Credit Facility (PDCF); the Federal Reserve has also made these collateral arrangements available to the broker-dealer subsidiary of Merrill Lynch. In addition, the Board also authorized the Federal Reserve Bank of New York to extend credit to the London-based broker-dealer subsidiaries of Goldman Sachs, Morgan Stanley, and Merrill Lynch against collateral that would be eligible to be pledged at the PDCF.

I can't even keep up with the news anymore, everything is literally changing by the hour.

[Phantasee]

Care to explain what this press release means, exactly? Morgan Stanley and Goldman Sachs are going to start gobbling up banks? What?

[K. A. Pital]

Basically they aren't investment banks any longer.

All investment bank have either bit the dust, or were absorbed by or turned into universal banks, which can draw funds from people's deposits if I gather correctly (investment banks can't IIRC).

What does this mean? Universal banks look "safer" currently than investment banks which were managing more risky funds, and the deposit of universal bank have safeguards against market turmoil.

However, the bad debts are still there and some economists fear that this turn-and-takeover will lull people into a false sense of security, and later this will bite universal banks in the ass, hard. Basically, a new "better" basket was made for the same spoiled eggs.

[Edi]

If I'm reading that right (big if), they just became eligible for bailout despite being supposedly healthy. And they will get the bailout if the precedent is anything to go by.

[K. A. Pital]

Not bailout par se as I understand, but they do have more leeway to leech funds from here and there in their new status, that's right.

[phongn]

Care to explain what this press release means, exactly? Morgan Stanley and Goldman Sachs are going to start gobbling up banks? What?

It means they could, yes, and it also means the pure investment banks are pretty much gone.

[Starglider]

The BBC have a good summary of this development;

---

US banks make shock status switch

The last two major investment banks in the US have changed their status to become bank holding companies, allowing them to take deposits from investors.

The changes should enable Goldman Sachs and Morgan Stanley to raise more funds by opening commercial banks. The move - part of a huge restructuring effort on Wall Street - will also give them access to Federal Reserve support.

The US government has announced a $700bn (£382bn) package to tackle the worst financial crisis for decades. Congress is considering the plan, drawn up by Treasury Secretary Henry Paulson, which would set up a fund to buy back much of the bad debt held by financial institutions, which had triggered the credit crisis.

'Greater safety'

There had been fears, given the recent turbulence in the financial markets, that Morgan Stanley and Goldman Sachs would not be able to survive as independent players, and both their share prices have come under pressure. Both banks had filed requests with the Federal Reserve to change their status, and late on Sunday, the Fed announced it had granted the requests.

The last few weeks have seen dramatic and unexpected changes among banks, with Merrill Lynch being bought by Bank of America and Lehman Brothers filing for bankruptcy protection. Earlier this year, Bear Stearns was acquired by JP Morgan Chase.

Commenting on the change for Morgan Stanley and Goldman Sachs, Chip MacDonald, mergers partner at law firm Jones Day, said: "It creates a perception of greater safety and supervision. It really rationalises the regulatory system".

"It should be good for both Goldman Sachs and Morgan Stanley."

Mr Paulson has urged other countries to follow the American example in dealing with the international financial crisis.

Both presidential candidates have been having their say about the financial crisis.

Republican John McCain said President George W Bush should take the blame for the crisis along with both parties in Congress. Mr McCain said he was enraged by the greed of Wall Street speculators and said the rescue plan should be funded by cutting government waste, rather than through taxation.

Meanwhile Democrat presidential candidate Barack Obama suggested Mr Paulson could be asked to play a role in his administration should he win the presidency. But Mr Obama criticised the bail-out proposal, calling for independent supervision of its implementation.

---

I can understand making the change solely to qualify for bailouts, but who is actually going to put significant deposits into these banks?

[Darth Wong]

However the Democrats are behind this BS as well, while everybody seems to ignore the fact that the Feds ironically has even worse debts running up to 9.6 TRILLION(!!!), and I doubt Obama will wave a magic wand over this mess that has likely been decades in the making (but the heaving dam was punctured open by GWB in the last eight years).

The dam was punctured by Congress under Clinton when they revoked the regulations emplaced due to the Great Depression, to prevent this very thing.

Unfortunately, in America, if you say "Democrat were involved", people take this to mean "both left and right-wingers agreed on this", but that's not what it means at all. The Democratic Party in the US is only "left-wing" by the absurdly right-wing standards of the US. It's like saying that you've got the least smelly piece of shit in the entire shitpile.

[Glocksman]

However the Democrats are behind this BS as well, while everybody seems to ignore the fact that the Feds ironically has even worse debts running up to 9.6 TRILLION(!!!), and I doubt Obama will wave a magic wand over this mess that has likely been decades in the making (but the heaving dam was punctured open by GWB in the last eight years).

The dam was punctured by Congress under Clinton when they revoked the regulations emplaced due to the Great Depression, to prevent this very thing.

Unfortunately, in America, if you say "Democrat were involved", people take this to mean "both left and right-wingers agreed on this", but that's not what it means at all. The Democratic Party in the US is only "left-wing" by the absurdly right-wing standards of the US. It's like saying that you've got the least smelly piece of shit in the entire shitpile.

The repeal passed with solid Republican support and enough Democrats signed on so as to make the Gramm Leach Bliley act veto proof.
Clinton couldn't have stopped it if he wanted to, though the fact is he didn't want to stop it.

Sure there's a large part of the Democratic Party who supported it, but if you'll notice, their candidate *cough*Hillary*cough* lost the primary race.

[Glocksman]

Well, I called my Congressman and Senator's DC offices to voice my opposition to the bill as submitted.

Results:

Congressman Ellsworth (D-IN 08):

Phone answered right away.
Staffer took down my concerns and said the Congressman would work to include oversight in the final bill.


Senator Lugar (R-IN):

Put on hold for a few minutes.
Staffer wouldn't say how Lugar felt, but took down my concerns.


Senator Bayh (D-IN):

No idea, as the phone rang and rang until I got a voicemail message.
The message was that his voicemail box was full and then I was disconnected.


Hopefully others are screaming bloody murder over this as well.

[aerius]

At this point I honestly wouldn't be surprised if they banned all selling on the stock markets and passed a bill saying it's illegal for share prices to go down. We'll call it The Wealth & Freedom Protection Act. They've banned short selling on all financials and their share prices are still dropping, so clearly the next step is to ban all selling, period!

[Admiral Valdemar]

At this point I honestly wouldn't be surprised if they banned all selling on the stock markets and passed a bill saying it's illegal for share prices to go down. We'll call it The Wealth & Freedom Protection Act. They've banned short selling on all financials and their share prices are still dropping, so clearly the next step is to ban all selling, period!

And give everyone a million bucks to spend. Infinite growth and prosperity for all!

But, as Mish has said on his blog, if dropping money from helicopters en masse worked, then Zimbabwe would be the greatest economic power in the world.

[aerius]

The drug junkie analogy where it takes more & more drugs to get the same or lesser high is proving to be quite true. We banned shorting and put the biggest bailout bill to date before Congress, and yet the market in a single day has wiped out all of Friday's gains. Question now is when's the junkie going to OD and die? The way things are moving I'll probably miss it unless I take the next month off work so I can sit in front of my computer all day.

[Ekiqa]

The way things are moving I'll probably miss it unless I take the next month off work so I can sit in front of my computer all day.

You work for the Feds. Means you sit around doing little. Means lots of time to surf the net.