The Realist

Treasury's Stunning Increase in Issuance

Seems like a lot but it won't even pay for 10% of our new stimulus package? How do we raise the rest?

Wells Fargo: Short Increase Decreases on Positive Earnings

Are people still quoting and paying attention to bank profits? Why would it matter what WFC reported? Are the same people who believe these numbers the ones that were trading the market up this summer because we were going to have a second half recovery.

The only thing that we can be sure about every bank is that they are confirmed liars. Anyone who believe anything coming out of a bank is a fool, and we all know that a fool and his money will soon part.

America Needs a Turnaround Plan

This article is trash. It is just Obama talking points, what a joke.

Yes, raising taxes on those making over $250k is going to get the revenues rolling. And those super rich guys making $250k a year are going to keep hiring the middle class people who need help. So your economic analysis is that taking money from someone will not effect his spending at all, it has no consequences.

This article is a joke talking about our "terrible health care system." What world do you live in? We have by far the best health care system in the world. What proof do you have for this statement? Have you blown out your knee in Canada and had to wait a year to have it scoped? Did you wait twelve months for an abortion in the UK? All those health care systems are crap. For the benefit of 5% of the population that does not work and is poor the rest of the population has to give up their benefits. In your world a health care system that covers everyone in a crappy way is better than one that covers everyone who works hard with excellent care. Well I work for my living, I am not giving up my quality health care so that poor people can have better care. Let them work harder.

How Much Are Fannie and Freddie to Blame?

dlaw, perhaps an economic course would do you well. You put the cart before the horse and can not let go of your cognitive dissonance about politics to take one second to see what you are staring at. Nothing the democrats can do is wrong for you. As long as your fascist Democratic leaders get power anything is fair to say regardless of how inane it is. I on the other hand hate all politicians, I can bad mouth Republicans just as well as Democrats.

The bankers did not stick the paper on Fannie and Freddie. Without those two institutions the banks could never have made this paper. How simple can this concept be and you still can't get it. Duh.

The CDOs were predicated on the fact that Fannie and Freddie could borrow at below market rates. If Fannie and Freddie did not exist these CDOs would never have been created.

Get a life dlaw, learn to look at reality instead of through your partisan prism. Your name reminds me of all our Democratic congressman who are lawyers and no absolutely nothing about economics.

How Much Are Fannie and Freddie to Blame?

Paul Krugman might be an economist but he is not a very good one. Marx was an economist too. Krugman is first and foremost a political hack, so anything he writes is subject to intellectual question.

Fannie and Freddie are actually the central point of this entire fiasco and Krugman needs to be dishonest about this intentionally or else he would be forced to lay blame on his lords the Democrats.

The list of Democrat big wigs that made tens of millions in salary and bonuses at these companies is endless. They were pets of the Democrats and basically a slush fund.

How sad is the net result that the Democrats are responsible for so much of this crisis and it is they who have framed the debate in the media and are forcing us to spend a trillion dollars to cover up their semi-illegal activities.

The Cost of Putting Expedience Before Justice

Absolutely a great article, spot on. The end result of this is going to be money printing and inflation. Treasuries spiked half a percent when this scheme was announced. Do the math, that 1/2 percent is $50 billion a year on our current debt in additional interest. Add to that $35 billion a year for the actual $700 billion and we are looking at $85 billion a year just in increased interest expenses from this bill. How are we going to recoup that?

Mark to Market Myths

This makes no sense to me. None of these assets are marked to market right now anyway. They are all in the Level 3 asset class and valued at what the banks want them to be.

What a joke of an argument. If the banks actually marked all these things to market the banks would all have declared bankruptcy already.

How hard is it to understand that every single bank is currently insolvent? There is absolutely no transparency right now because it would destroy the market. Isn't it obvious enough that this is the case when the government does everything in its ability to help these banks lie, cheat and steal so that we don't know what is really there.

You think this would make the slightest difference anyway. Banks are not lending to each other because they don't trust the assets on the other banks' books. What makes you think that making up values for garbage securities is going to give them more confidence. Just the opposite. Each bank will know how much BS their books are and they will distrust the other banks' books even more.

In Case a $700B Addition to the Debt Isn't Enough

The reason we replace that revenue with additional deficit spending is that Americans are little babies. We want everything now. That is what this garbage baby boomer generation has taught us. They saved nothing, paid very little in SS and Medicare and now vote to expand their benefits at the expense of their children. How can baby boomers get Medicare drug benefits if they have paid nothing into that program for forty years? But that is this country's mentality, all today, don't worry about tomorrow.

We are going to waste $700bil of tomorrow's money just in the hope that we can make all the bad things that were done go away. Which it won't.

These lawmakers are all bigger lowlifes than common criminals. They steal our future so that they can get elected today and stay in office to line their pockets with legal bribes.

Wells Fargo: A Growth Stock During the Great Depression?

You are absolutely correct, now is the time to buy a bank trading above where it traded in Oct 07 at the market top and is now trading at a 16 P/E and who has lied about its loan losses by changing the definition of default from 120 days to 180 days.

A Magic Multiplier?

Wow, people still follow Keynes? He has a lot of good quotes but economically he has been refuted over and over.

You probably believe that the stimulus package worked!

The reason your multiplier does not work is that the banks have already lent this money out, now the $700bil will be used as capitalization for those loans. Furthermore, there is absolutely no proof that they will lend money out.

The Fed has already purchased these instruments from the banks, just not permanently. All those loans the Fed is making to these banks with this garbage as collateral should have the same effect...but it is not.

I do love Keynes' quote that in the long run we are all dead. Although I think most people in this country wished that in the short run all the bankers had died well before this happened.

The way to fix this is to make those responsible pay, and pay dearly so that there is a deterrence from this happening in the future. Sometimes the old Soviet way would work best. I am sure this would not happen ever again if we lined up all the Investment Bank CEOs, CFOs, added in the home builders and mortgage companies guys and put them down like rabid dogs.

JPMorgan and the Concentration of Risk

HE Loans & Lines are barely 20% writedown. This is insane.

For example, if you purchased a house in 2003 at $300k and its value went up to $400k and you took out a $50k line of credit life was good. But when that home dropped back down to $300k you now have a HELOC that has no equity behind it.

These HELOCs are not percentage writedowns, they are 100% writedowns on many of them. To assume only 20% will be written down is nuts.

Time Not for a Bailout, But for Nationalization

Talk about the premise of an article making it worthless.

"It's time for the Democrats to pass a nationalization in the taxpayers' interest bill and dare Bush to veto it."

What a joke. Democrats want any plan that increases the size of government and pays off their NY banking friends. And no idiotic comments like the republicans are the party of the rich. That is just moronic. NY by size is an entire red state, it is just the concentration of blue in NYC and its suburbs that is so left wing that the entire state is always in the democratic camp. These are the democrat's constituents that give them money and keep them in power.

The Democrats can pass a bill today like Paulson's and Bush will 100% sign it. The reason that they have not done this is that they don't want the voters realizing what kind of hypocrites they are, always talking about soaking the rich to pay the poor but then when push comes to shove they send the poors' money to the rich.

This is a democrat's dream, pay off their money supporters and increase the size of government at the same time. I called Sen. Reid's office and was told he did not like the Paulson plan as written, he needed more governmental powers put into the plan to increase his fascist beliefs.

Now with all that said I like some of this plan, the fact that equity and bondholders have to pay for their mistakes. The problem is pretending that the democrats have the country's best interest at heart. What a joke.

Real Capitalists Nationalize

"It's time for the Democrats to pass a nationalization in the taxpayers' interest bill and dare Bush to veto it."

That might be the dumbest comment I have seen. Check you facts, Bush and the democrats are ready to pass this bill regardless of what it does. It is the republicans who are the ones stopping this right now. The Democrats can pass any bill they want, they have the majority and Bush's support, so why don't they? Because they know that the country will blame them for passing a horrible bill.

The current bill is just a pay off to bankers and increase government power. If anyone thinks for a moment that is not what the democrats want to do then you are nuts. These people being bailed out are the democrats largest contributors. If you take a second to look at the red/blue stats for NY you will find that while most of the state is red the largest blue area with all the votes in the state is NYC and its surrounding suburbs, all represented by rich bankers. This works perfect for them and Bush as he is an idiot that listens to Paulson who just wants to pay off his friends.

I do like the plan as DeLong sets it out in that it makes the equity and debt holders pay for their mistakes. Those are the real people who need to pay, they did the investing, they took the risk. The original Bush/Dodd/Frank plan would have taken that risk and passed it on to the taxpayer. The bill passed must include that any bank that takes assistance also has its shareholders and bondholders pay for that help.

Everyone who is against the current bailout as originally outlined needs to thank their republican house members who are the ones that held this up. The rank and file has been flooding them with phone calls, faxes and emails and it is working. We can accept a bailout only if it punished those responsible, not the taxpayer.

And while we are on it, what is up with the JPM/WM deal. Did the government just give WM's good parts to JPM for @1.8 bil and let the bondholders eat all the losses. JPM must pay the real price for WM's good assets, it does not sound like they did that here. So the feds let JPM get a steal on WM's good assets and that is money that comes directly from the bondholders. Now don't get me wrong, the bondholders should lose whatever they have lost, but increasing that loss so JPM could get a $10bil asset for $1.8 bil is a joke. All it does is make sure these banks don't do deals until the next one collapses.

Bill Gross on the Bailout Plan

Gross is a clown who only talks his book. The entire premise of his article is based on his estimation that the bonds are worth 65% on the dollar and this will give the government a return of 7-8%. Has anyone checked his sanity? This man looks straight into the camera and lies his ass off. He can not be so dumb as to believe what he is preaching.

Merrill sold some of these for 5 cents on the dollar and had to finance the other 15 cents.

If these things are worth so much then why don't the banks just open their books and let us take a look.

The truth is the banks need to be bailed out and they are holding a gun to the government's head telling them that if they do not gift the banks money then they will pull the financial meltdown button. They want a bailout, they want to keep control of their companies and they want to keep their equity too. If we don't agree to their demands then boom.

What's the BofA / Merrill Synergy?

You forgot the third and fourth potential reasons for this.

3. Ken Lewis spent the entire weekend smoking crack and by Sunday night he thought a 60% premium meant only 60% of the then current price.

4. Thain has some very sordid pictures of Ken Lewis.