Masters Hossein & Noureddine are at it again in the Asia Times. Good stuff, the hard stuff on what a catastrophically bad idea it is giving Henry a trillion of your dollars to play with. (Admit it's also nice they confirm everything I've been ranting about in my last 15 or so diaries.) The atimes title is priceless: Danger - Ben and Henry at work. Read the whole thing, but here are some important excerpts on Ben and Henry's bailout and what's really going on:

THE ECONOMIC CONSEQUENCES

To a previously projected 2009 record deficit of $500 billion, the bailout's $700 billion price tag combined with $200 billion for Fannie Mae and Freddie Mac and $85 billion for AIG, the fiscal deficit would explode to about $1.5 trillion. [And we] should also ask after this $700 billion is spent, what will Congress say to another request say of $300 billion to save the day?

And so on into the future. . . .

As with past and recurring deficits under the Bush administration, the financing of such a monumental deficit can only be achieved through monetization, inflation and exchange-rate depreciation. This will considerably widen external deficits and aggravate food and energy price inflation. . . .

Economic growth will without a doubt be curtailed by a considerable fall in savings and a significant decrease in real government and private expenditures; real government spending will diminish because most of the expenditures will consist of buying worthless financial papers at the expense of spending on social and economic programs. Rapid food and energy inflation will erode real incomes and reduce private spending in real terms, and contribute to rising unemployment, further aggravating already deteriorating trends in the unemployment rate.

CREDIT & LIQUIDITY ARE FINE

. . . contrary to Paulson's claim, credit is not frozen, the US banking system is still lending significantly to the economy, as clearly demonstrated by the Fed's data, with bank credit still expanding at a high rate of 9% per year as of July 2008. Certainly, banks have become more prudent, matching the maturities of their assets and liabilities better, and are no longer replaying the speculative mania that led to the present subprime loan meltdown. . . .

Many people here and elsewhere have said many things about the current financial problems.  I have yet to see anyone give a definitive case about what caused these problems?  

1.  Was it deregulation?  If so, which specific bill(s) was passed by which Congress and signed by which President that caused this problem and what specifically was it that the law did that caused the problem?

2.  Was it an over-priced housing market?  What caused the market to turn downward?

3.  Was it loans to people who could not afford the home in the first place or loans to people who were flipping homes and got caught holding the properties when the prices fell and they no longer could sell them to recoup their investment?  If so, who was at fault for this being possible and what specific action caused this to happen?

4.  Was it caused by greed of people?  Which people and what did they do that caused these problems?

5.  What specifically did any current or past President do that helped bring about these problems.  What specific legislation or action was taken by a President that led to these problems?

6.  What did Republican Representatives or Senators do to cause these problems?  What specific legislation or action did they take that led to these problems?

7.  What did Democrat Representatives or Senators do to cause these problems?  What specific legislation or action did they take that led to these problems?

8.  What specifically did AIG, Lehman Brothers, Fannie Mae and Freddie Mac, Washington Mutual, Wachovia Bank, etc. do wrong and, what should happen to those companies?  Which ones should be allowed to continue to exist and which ones should not?

9.  Were any government agencies lax in their duties?  What specifically did they do wrong and what should they have done to avert these problems?

10.  Was it the price of gasoline or the war?  Again, if you believe these helped cause the financial problems where we may spend $1 trillion to possibly restore stability to the markets, housing or whatever, please be specific in providing evidence that these caused the current problems.

11.  Last week we were told that if something wasn't done by last Friday, the world, as we know it, would come to a financial end.  Then it was Monday and on Monday, the market went down a bunch.  On Tuesday, today, the DJIA went up nearly 500 points.  Huh?  What happened to the end?  Could the end not actually come if there is not a "bailout?"

I am not seeking answers from everyone.  I am not trolling to start an argument or a debate.  I am seeking answers from knowledgable people who can explain these things to me in an understandable manner and as free from bias as possible.  I understand that the last part may be asking a bunch here, but I am curious as to what actually caused this mess.  If one knows of a great online source that gives a great detailed explanation, I would gladly like to review that source.  Thanks.

(cross posted at My Own logic)

There I said it, someone had to. No more dancing around this, McCain is old.
I don't think anymore that McCain is just a liar, I seriously just think he is havnig senior moments.

Two years ago at around this time, I logged onto Daily Kos and harshly criticized John Kerry for what I thought was a lack of financial support for our efforts to win the U.S. Senate. He was sitting on a ton of money left over from the presdiential campaign (which is clearly should have spent then) and did not face anything approaching a serious race in the future. Eventually he gave, but I was steamed. This year is apparanely different as The Hill is reporting that Kerry just donated $1 million of his funds to the DSCC.

"as is often the case, only after fiery markets burn out do we see the risks that buyers ignore and sellers play down."

...

With all the spin going every which way about the now almost worthless mortgage backed securities and the banks that sold them, I think one of the only ways to help us all get through this mess without doing stupid things we will regret might be for ALL of us to take just a few moments of quality time to listen to one of the ONLY media descriptions out there that really tells it like it is.

The 2007 episode of NPR's "This American Life" "The Giant Pool of Money."

Its been in the news quite a bit recently.

The New York Times did an article today, "Daring to Say Loans Made No Sense" praising "The Giant Pool of Money"  as one of the very best pieces of journalism on the mortgage securities collapse (and its also their most downloaded episode ever)

Every time this duck quacks the market goes down.  His dumbfounded and fear peddling visage is like a stock ticker going straight down.  

The fact is the greedy fat catties got their comeuppance!

Paulson lost millions in his trust and his family did too.

This was the most self serving conflict of interest power and money grab in the history of politics.  We cannot trust him and he does not want us to verify.  He has such a little opinion and disdain for middle class americanthat his actions are viscerally repugnant.

The bailout failure is a great day for America.  We should rejoice.

The Bailout had not one provision helping the middle class with their mortgages.  The only way credit will truly flow in the market.  Do no listen to this mumbo jumbo

We were just picking up the tab for the bad investments of some rich wall street execs.  

The free market punishes the greedy.  

Bush, Paulson, and friends were greedy.  

They got us in this mess and only got a few days to try to pick our pockets again.  Pain is finally trickling up and they are finally feeling it.  It is glorious how a free market works!

They are like junkies trying to get their fix again from the public trough.  We must stop them from bringing us all down!

Clearly, markets are going to survive their losses.  

Remember, the rich only get rich if you let them.  

Take a look at exec compensation pay in Europe where it is about 10 to 1 to the lowest paid employee.  In Goldman Sachs it was about 100 to 1.  Paulson made $37 million from commission and bonuses and let us assume his and his lowest paid worker was surely not making more than $37,000.00.  

He wasn't worth it then because his actions laid the groundwork for their demise and he is not worth listening today as his plan will just be a flat out grand theft.

I mean, who in their right mind, buys trash for cash!

So early voting is under way in Ohio...

http://www.cleveland.com/news/plaindeale r/index.ssf?/base/cuyahoga/1222590821279 051.xml&coll=2

"Voter registration ends Oct. 6, but absentee balloting goes on every day through Nov. 3, the day before Election Day. More than voter convenience is at work here. The board hopes 300,000 people vote early. It would mean smaller lines at polling places on Nov. 4, less stress for poll workers, a leisurely way for voters to fill out what could be a three-page ballot, and a means for the board to tally votes faster."

I am a little surprised that they hope 300,000 people would vote early. Knowing that almost 6 million people voted in Ohio in 2004, this goal of 300,000 (or only 5%) strikes me as pretty low. Does anybody have ideas and thoughts, or stats about previous years? Does the 300,000 figure also seem not ambitious at all? Or am I just wrongly assuming that a lot more people would be glad to vote early and avoid the lines on election day?

I debated back and forth about posting this here.  It is something that I wrote for my personal blog.  I work as an accountant, and a lot of my friends were asking me what they should about their banking.

In the end, I decided to post it here.  If anything, deposit insurance is a great example of how progressive politics can be implemented in a way that minimizes individual risk through an efficient governmental structure.  And it has proven to be a bedrock of our financial system, which is arguably one of the most robust in the history of the world.

Without further ado, "Deposit Insurance 101:"

FDIC Insurance.  FDIC insurance covers the deposits accounts of member commerical banks, as well as savings and loans.  All FDIC-insurance is per bank, not per account.  So the combined total of all covered accounts at a given bank count towards the limits.  Member institutions guarantee covered accounts up to $100,000 per depositor for most covered accounts.  IRAs are covered separately up to $150,000 per depositor.