September 30, 2008
Grassroots effort? Sure. Produced, choreographed, and filmed by Hollywood professionals, including Jeff Zucker, President of NBC.
attacks devotionals featuring brainwashed children are where it's at in 2008.
Via Powerline, which quotes Andrew McCarthy suggesting the bill should also take care of CRA.
As I argued with Qwinn, I'm in favor of destroying Qwinn, but I can't see how Democrats won't turn around and say, "Oh, you're pushing your political priorities in this bill? Okay, we want the government to bail out people defaulting on the mortgages they can't afford. That's our priority."
Another quote has an economist saying "Let the markets work."
And here's the Washington Post's breakdown of the bill, section by section.
With that, I'll try to keep off of the bailout thing today.
Clinton McCain Ad:
— Dave in Texas You all think you're soooooo smart.
Week 4 results, combined with group 3 splitters, weighted and adjusted using DiT "Arbitrary and Capricious" indexing method.
1 mesablue 36
1 buzzion 36
3 JPT 35
3 chinpoko-mon 35
3 Hazy Dave 35
6 Nodakdrunkhobos 34
6 DaveSObscenelyNamedPicks 34
6 Roman Legions34
9 DrZin 33
9 AliceH 33
9 The Slicing Hammers 33
9 Drew W. 33
9 Yeah Right Whatever 33
9 jimmytheleg3 33
9 Physics Geek33
9 Super Karate Monkey Death Car33
19 All Hail Alex 32
19 JarvisW 32
19 Liberrocky 32
19 gresmi 32
19 Dave R 32
19 Murph 32
Update - I know this isn't the most important thing in the world, but as "Prof. Festus X." notes below, the media almost seems to go out of its way to find unflattering pictures of conservatives while at the same time finding new and interesting ways to make their hero look heroically heroic.
It may not be bias, but it's far from professional.
— Purple Avenger Liberal bastion of integrity and high moral standards, Alcee Hastings(1), has apologized for crude remarks slaming Palin last week.
"anybody toting guns and stripping moose don't care too much about what they do with Jews and blacks."
"I regret the comments I made last Tuesday that were not smart and certainly not relevant to hunters or sportsmen,"more...
— Gabriel Malor Happy Jewish New Year to any of our secret overlords who happen to pass through.
September 29, 2008
— Ace Tom Frickin' Coburn. Not exactly a liberal pansy. Not a socialist by most accounts.
Taxpayers deserve to know that there is no guarantee this plan will work, but there is a guarantee that we will face a financial catastrophe if we do nothing. If banks continue to fail and stop lending the average American could lose their job, be unable to secure a loan for a car, home or college education, and find their life savings and retirement in jeopardy. Our economy depends on having liquid assets available for credit and lending just as an automobile engine needs oil. If those liquid assets stop flowing, our economy will be seriously damaged and will require far more costly and lengthy repairs.
This bill does not represent a new and sudden departure from free market principles as much as it represents an emergency response to congressional actions that have ignored free market principles, and our Constitution, for decades. If anyone in Washington should offer their resignation it should be the members of Congress who peddled the fantasy of free home ownership without risk. No institution in our country is more responsible for the myth or borrowing without consequences than the United States Congress.
As much as members of Congress want to find scapegoats, the root of this problem is political greed in Congress. Members of Congress from both parties wanted short-term political credit for promoting home ownership even though they were putting our entire economy at risk by encouraging people to buy homes they couldnt afford. Then, instead of conducting thorough oversight and correcting obvious problems with unstable entities like Fannie Mae and Freddie Mac, members of Congress chose to ignore the problem and distract themselves with unprecedented amounts of pork-barrel spending.
Plus, the worthless promise of Fannie and Freddie to guarantee (oops! maybe not!) these shit mortgages then induced Wall Street to sell them as very secure, um, securities. And induced banks and private investors to buy them.
Since the Democrats will probably arrange matters so that more Republicans vote on for the bailout next time, but an equal number of Democrats change their votes to "Nay," I guess we should start working on a Plan B.
Federal government begins chartering its own lending agencies for creditworthy businesses? (Including things like GMAC.) That'll do some good.
Sounds kinda socialist but when banks stop lending someone is going to have to be the lender of last resort.
Hmmmm... Extremely provocative. So much raw red meat my arteries just puckered.
— Gabriel Malor I'm still skeptical we face a credit crunch requiring unprecedented government intrusion into the financial services industry. Today the Fed released the latest data. The weekly updates are current as of September 17 and they are instructive. more...
— Ace 33% in favor, 32% opposed, 35% not sure.
I don't post this to claim the public knows best. I didn't think that before and I don't think it now.
I'm posting it to disabuse people of any idea that the path to electoral success runs through opposition to the bailout.
And the numbers moved that much so far. Wait 'til things get bad.
At the end of this some of you might look back and think, "Christ, that was our last best chance to avoid the road to serfdom."
— Ace At Instapundit.
"Off the record, every suspicion you have about MSM being in the tank for O is true. We have a team of 4 people going thru dumpsters in Alaska and 4 in arizona. Not a single one looking into Acorn, Ayers or Freddiemae. Editor refuses to publish anything that would jeopardize election for O, and betting you dollars to donuts same is true at NYT, others. People cheer when CNN or NBC run another Palin-mocking but raising any reasonable inquiry into obama is derided or flat out ignored. The fix is in, and its working."
Thanks to CJ.
— Ace From, um, "Inspector Asshole." Anyone who's been reading these threads knows he's lived up to his name, at least as regards being a real burr in my sock.
It is -- to be unavoidably insulting -- my opinion that the more one actually knows about this crisis, the more one accepts it is, in fact, a crisis. (And quite likely a fixable one.) In this case, Inspector Asshole read something about the mark-to-market rules and it changed his mind.
What are those rules? Basically that whenever someone conducts an arms-length (legit) transaction in an asset, anyone holding similar securities must mark down the value of their securities to reflect the new market price. And thereby reduce the level of assets they show on their books. And since valuable properties (not as valuable as they once were sold for, God knows, but still valuable) are being deleveraged down to near zero value (sometimes by intentional manipulation -- some want these companies to go bankrupt in order to buy them out during bankruptcy proceedings), this not only reduces a company's paper assets, but it invokes rules about how much cash a bank or lending company must keep on hand in relation to its assets and obligations. As many of a bank's assets (these artificially diminished toxic assets) are now pretty close to zero, a bank can wind up bankrupt on paper when, in reality, it actually has a fairly decent balance sheet.
Some propose temporarily suspending these mark-to-market rules... perhaps let them value these assets on paper according to their best price in a two-month window after the housing bubble broke. That would, hopefully, reflect a diminished but still somewhat realistic value, far less than the prices they once sold for, nicely corrected by the bubble burst, but nowhere near the close-to-zero value these assets supposedly have now.
Before you take this to be a panacea-- the only thing we need to do --bear in mind Newt Gingrich was proposing this (among other measures) two weeks ago but has now decided that some sort of rescue is now required, and that simply reforming the mark-to-market rules is not, at this point, going to stabilize the markets and get credit flowing again.
Helpful, probably. But not helpful enough. Because the reality is that these assets can't be sold at the moment, so even if they're marked up on paper to something resembling a realistic value, banks and institutions holding them are still currently sitting on billions in unsalable, illiquid assets.
More on Mark-to-Market: From November 7, 2007. Predictable.
If you think banks are writing off large amounts of assets now, wait until new accounting rules take effect this month.
The Royal Bank of Scotland Group estimates that U.S. banks and brokers, already under massive losses caused by the collapse in the subprime credit market, potentially face hundreds of billions of dollars in write-offs because of what are called Level 3 accounting rules, according to Bloomberg.
* The SECs New Take on Loan Commitments
The U.S. Financial Accounting Standards Board Rule 157, which is effective for fiscal years that begin after November 15, 2007, will make it harder for companies to avoid putting market prices on securities considered hardest to value, known as Level 3 assets, the wire service reported.
''The heat is on and it is inevitable that more players will have to revalue at least a decent portion'' of assets they currently value using ''mark-to-make believe,'' Bob Janjuah, Royal Bank's chief credit strategist, reportedly wrote in a note published Wednesday.
Janjuah noted that, for example, Morgan Stanley has the equivalent of 251 percent of its equity in Level 3 assets, Goldman Sachs has 185 percent, Lehman Brothers has 159 percent and Citigroup has 105 percent, according to Bloomberg.
On the other hand, Merrill Lynch has Level 3 assets equal to 38 percent of its equity. As a result, Janjuah believes Merrill ''may well come out of all of this in the best health.''
In the fair value hierarchy, Level 1 is simple mark-to-market, whereby an assets value is based on an actual price. Level 2, known as mark-to-model and used when there aren't any quoted prices available, is an estimate based on observable inputs, Bloomberg explains.
Level 3 consists of unobservable inputs, such as those that reflect the reporting entitys own assumptions about what market participants would use to price the asset or liability (including risk), developed using the best information available without undue cost and effort, according to FASB. There is no verification requirement if the assumptions are in line with those of market participants.
Mike Pence is still claiming that repealing or modifying mark-to-market would substantially fix the problem. Well, for one thing, that allows companies to hold on to these for longer and perhaps avoid bankruptcy, but it doesn't actually fix the problem of these assets having a current value of zero.
Further, the Pence plan also involves loans and insuring the value of mortgages -- which seems to me to be an even bigger intervention in the market, and potentially putting the US on the hook for even more obligations it couldn't possibly cover if they all went tits up.
Allowing holders of these securities to suddenly mark up their values does little at all to restore market confidence or get the markets in these assets functioning again.
I just think the more loans you give these guys, the more you're increasing the odds they won't actually pay them back. Balance sheets don't look much better with huge loans on them.
Anyway, Inspector Asshole (ahem) weighs in below:
— Ace INSIDERS SAY TO DO OTHERWISE WOULD ENCOURAGE DEMOCRATS TO VOTE AGAINST IT, THE SAME WAY PELOSI'S "UNPATRIOTIC" SPEECH CAUSED REPUBLICANS TO VOTE AGAINST IT
Is that breaking news? Or just obvious?
Obvious, I think. But I figured I had to trick people into reading the headline. Nothing else seems to work.
This hobbyhorse must be put aside. A lot of people are saying Nancy Pelosi tanked the bill due to her hyperpartisan speech attempting to claim this was the fault of Republicans..
Our claim? That's putting partisanship above country and the national interest. Of course a fragile alliance for an unpopular bill is going to be undone by that bullshit.
So I'm afraid I don't quite grok those who say they don't mind the rescue, necessarily, so long as McCain and the Republicans aren't putting the blame (rightly) on Chris Dodd and Barney Frank and attacking the Democrats' favorite bit of socialism, the CRA.
I just saw someone saying this yet again at Hot Air.
I don't get it.
Pelosi's to blame for indulging in partisanship before the vote, but oh, we should have some partisanship on our side too before the vote. Our partisanship is cool.
Well, our partisan attacks will actually be accurate, and may actually move votes, but making them now precludes any chance of a rescue.
The Democrats are already cutting their throats by signing this -- you think their constituents are pro giving money to Wall Street?
We can finish cutting necks later.
So, please. A bit of plausibility and realism here would be nice.
If you want the partisan attacks and CRA deauthorization now, fine, but don't say you're in favor of a rescue if you can have those things first. You can't have them first.
— Ace Since people are screaming "socialism," make it voluntary.
All taxpayers can contribute money that would ordinary go to paying their taxes into a pool to purchase these toxic assets at a 1:1 ratio. Take $1000 you would have paid Uncle Sam in taxes and instead direct that $1000 directly into paying into a pool to purchase these assets.
Some limitation must be placed on this, of course. Perhaps a minimum of $1000, or up to 10% of your entire tax liability or $20,000 total, whichever is lower.
You buy into the pool. Once you buy in, you are owed pro-rata profits on how the pool performs. You may not get your money back, but if you do, you'll get a special low capital gains rate on these profits. Say...5%.
Now, people are going to want to invest in the pool, because either way, that money is gone, as it was being paid to the government anyway.
Any fool will make the maximum allowable contribution to the pool. Those who still think this is socialism can choose not to buy-in, however. Their choice. If they'd rather their taxes go completely to funding the government's ongoing functions, fine by me.
But most will deem it not socialism. It's people choosing to invest their tax payer dollars into a program run by government officials but whose profits are purely private. If government involvement is still too "socialist," fine, charter a purely private organization (but formed by government license and legislation) and with lots of oversight. Including shareholder rights to fire the board.
The program is sunsetted after six years maximum. They can take up to six years to sell out these toxic assets, but only six. At six years they must sell anything left, even if the lots are being sold for pennies on the dollar.
How you like that?
Now, the thing is, people will say, "Ace, that is virtually exactly what is being proposed anyway. You're just making tiny tweaks to make it not 'socialist'.
Exactly. It is no different, really. But if you want the branding, there it is.
— Ace Like I said in the comments: I am not an economic alarmist myself and I get my take from people who aren't economic alarmists.
So when they suddenly become economic alarmists, I'm alarmed.
Incidentally, don't mislead yourselves into thinking I'm unaware that I'm taking an unpopular position and it could cost me traffic, and readers, and therefore salary.
100-1 against. I know this. I know this is a Schiavo-level split, the same sort of split that caused readers to abandon some blogs.
So I do know that I could actually gain traffic and readers by rah-rahing the KILL THE BILL position.
But I can't. Because I honestly think most conservatives are very wrong on this.
And not only are they very wrong, they're very wrong with possibly dire consequences. And not only that, there's the possibility that all faith in capitalism will crater and we'll have three generations of real socialism.
I have to be honest. I cannot be 100% sure, but I'm sure enough that I'll risk losing a lot of readers: We are in trouble. There is a chance that a crisis will not lead to a vicious-circle deleveraging and halt to a lot of economic activity, but the odds that it will seem much greater.
So I'm not taking this position to annoy people. Or because I have money in stocks. I don't own a single stock. And my credit's bad, so, honestly, this kind of doesn't really affect me. I've been on a pure cash personal economy for years.
I'm taking this position because I think it's right.
— Ace And we're not done yet.
— Ace Only the first day's bad news.
And it's not just a market sell-off. A market sell-off, in and of itself, only has implications (mostly) for those who lost money.
This sell-off is anticipatory. The market is looking ahead to see a sharply contracting economy, failing business, greatly reduced economic activity, plummeting consumer spending, layoffs, bigger government debts (lower tax receipts plus more outlays for unemployment, etc.).
— Ace I hope those opposing this aren't relying on last week's news and opinion.
I'll tell you what's going on. The pubic hates this but it's necessary. Republicans are hoping it passes with the bare minimum of Republican support so that the majority of the caucus can run against it.
But they are hoping it passes. Most are, at least.
For those who are taking a purely doctrinal position on this (and by "purely doctrinal," I mean hand-waving the details of the bill and our current situation in favor of relying on very general principles), I really must urge you to read Big Lizards' post on this.
It's a longish read but worth it.
The Food Fight: Pelosi's hyperpartisan speech. Note, again, McCain could have hung this crisis around Obama's neck, but wisely chose to hold fire until the crisis had been addressed.
Barney Frank, however, had a lot of fun calling Republicans temper-tantrum children putting the economy at risk because their "feelings were hurt."
That doesn't absolve Pelosi -- but if anyone thinks we can win on a spiteful response, you're dreaming.
And Here... We... Go! As Joker says.
One of the reasons we need Republicans on this is to keep the left-wing bullshit out of it.
Democrats are willing to keep that out -- in exchange for the bipartisan cover provided by Republican votes.
But if Republicans aren't voting for it, Democrats will have to put all that ACORN shit in again to bribe their utraliberal minority members.
Which is what they're now promising to do.
Republican intransigence on this makes it nearly guaranteed there will be billions and billions of dollars for ACORN. And more money for the CRA. And more guaranteed mortgages for people who can't afford them.
— Ace You know why McCain didn't hammer Obama on this during the debate? Because he was trying to keep it nonpartisan, or bipartisan, until the situation could be fixed.
He knew, unlike Nancy Pelosi, that injecting partisanship into this would destroy it.
The Democrats are trying to get their partisan blame in before it passes (and it may yet pass) because then know the moment the President's signature is on it McCain and the Republican caucus begin explaining the facts of the situation to America.
— Ace Just to clarify:
Open Blog is something I declare, usually on weekends or days off. I haven't minded the occasional open blog post slipping in, but it's now kind of becoming an anytime sort of thing, so I just wanted to clarify.
Unless there's some reason a post needs to go up now (like it seems obvious I'm away from the computer but some big breaking story just hit), open blog should be reserved for the times I say "Open Blog." Though I usually don't specify the end time, it's basically until, say, 10am the following morning, or 10am the first weekday after a weekend.
I'm thinking about opening up late-night open-blogging generally, from like 11pm to 10am everyday, but I haven't decided that yet.
— Ace Not smart by Pelosi, but also not smart to vote against a bill just because Granny Rictus McBotoxImplants is a bubbleheaded partisan whore.
Opponents said part of the reason for the opposition from Republicans was what they termed a partisan speech by House Speaker Nancy Pelosi, said one GOP source.
"Pelosi's partisan speech has caused our members to go berserk and may cost us any remaining chance to pass the bill," the source said.
DNC-Identified Jew Eric Cantor Holding Up the Speech... It was the "unpatriotic" that did it.
Incidentally, in case this joke is stale and people don't get why I'm calling Cantor a "DNC-Identified Jew:" the DNC released a negative "fact-sheet" about Cantor in which five of six bullet-points stated he was Jewish.
They apparently were really hoping that big negative -- J-E-W-! -- would hurt him in the upcoming election.
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