Notes From Depression 2.0

[mallorys_camera]

I thought of taking photos of the run on the local Washington Mutual branch -- lines of people waiting since six this morning to get their money out. But then I decided even for me, this would be in bad taste.

Meanwhile since advertising is bought in bulk rate ages before it actually airs, Washington Mutual ads are still all over the airways. Some future Ph.D, student fifty years hence might like to study the effect of KGO on the San Francisco Bay area housing collapse: KGO ran -- still runs -- all these ads from sleazy mortgage brokers. If you hear something six times an hour against the comforting backdrop of Ronn Owens, well hey! why not bite?

I have to say those conservative House Republicans are on to something -- an insurance program for mortgage-backed securities just feels better than a blank check for 700 billion dollars. Nonetheless, in the end it all comes out of the taxpayer's pocket so I suppose if the important thing is to pass it quickly then that is what they should do. Amusing to see how little influence Bush has over the members of his own party. He should threaten those unruly Republicans -- "If you don't do what I want, I'll come to your district and campaign for you!" That would bring them around.

Throughout all this McCain is coming across as a man who's mentally unhinged while Palin's interviews with Katie Couric were just embarrassing. The woman is a total imbecile, and McCain is cruising on some hotshot fantasy left over from his Navy flyer days.

Still the sun shines and the Europeans keep buying hot sauce. Welcome Europeans to our colorful Third World country where the custom is to quell our hunger with high-priced habanero products while standing in breadlines!

Comments

[eleanor.livejournal.com]

I understand the desire to get one's money out of harm's way, but it's pure foolishness; as long as folks don't have more than 100K in the bank, WaMu's customer's are safe. It's the corporate investors who are sweating, as well they should.

Not that it isn't a mess, and not that it's even remotely sane to hand over a blank check, or any size, to the people who got us into this mess.

[mallorys-camera.livejournal.com]

Most people do not understand money and with the 24-hour news cycle pitching doom and gloom...

[eleanor.livejournal.com]

Yeah, ti's all about scaring people into doing what they're told. Not that I'm cynical or anything.

[bandicoot.livejournal.com]

They're all stupid people who probably bought houses they couldn't afford and then cry in their beer because they're now in foreclosure.

WAMU failed in great part because of the run on the bank. Do that to almost any banking institution and it'll fail.

I just wish the stupid politicians would keep their dirty fingers out of this. They don't understand the problem except as it affects their contributions and potential reelection. That ass Reid wanted to add an ammendment on oil drilling and it's all downhill from there. Two words - "Unintended Consequences"...

[mallorys-camera.livejournal.com]

And Lehman failed because of short selling.

The more I think about it, the more I blame the 24 hour news cycle on cable news for just about everything. It keeps people in a state of perpetual panic.

They're all stupid people who probably bought houses they couldn't afford

They're all gullible people who bought houses they couldn't afford. Gullability is stupidity, I suppose. But I know some of them and I feel very, very sorry for them.

[nokomisjeff.livejournal.com]

Hey, I rolled over a 6 month CD yesterday morning and put it into WAMU. Got a good rate tooand it's insured.

What the media isn't reporting is why the Republicans weren't happy with the Dems bailout bill. The bill had so much pork attached to it, Hormel would be proud. The Dems are even proposing a federal tax on every stock, bond, option, and futures trade...both sides of the trade. Add that to their desire to increase the capital gains tax, and the capital markets will move to other countries that offer trades at lower prices. Simple Econ 101.

I still disagree with any bailout, and prefer to let the free market take care of things. If Freddie and Fannie didn't have to buy all those garbage loans foisted upon them by Clinton's Housing Initiative, when sub-prime mortgages were legislated into being, we wouldn't have this credit crisis. Politicians are just a tax on those who earn a profit.

[mallorys-camera.livejournal.com]

the Dems bailout bill.

Uh -- it's not the Dems bailout bill. It's Paulson and the President's bailout bill. The modifications requested by the Democrats pertain to transparancy, accountability and some mechanism whereby after the taxpayers save Wall Street's ass, Wall Street gives the taxpayers something back.

Proof of the fact that it's not the Dems bill is the fact that the Dems have no intention of passing it unless it has consensus behind it. They have the votes to pass it now.

[nokomisjeff.livejournal.com]

Oh yeah, but there was a lot of pork attached. Paulson gave them a 3 page deal and by the time it got to the table with McCain and Obama, it had mushroomed into 30+ pages , so it was the Dem's bill. The reason they don't want to pass it alone(which they could) is because it stinks so bad, and they want to be able to share the blame when it goes south.

Still, the ultimate benefit of this is going to be the government, not the taxpayer.
http://www.bloomberg.com/apps/news?pid=20601039&sid=aBEM0cTTdBmA&refer=home
When Obama gets elected, do you think he will refund you, the taxpayer, your money.....or do you think that the money will go for liberal spending programs. It certainly won't go towards reducing the debt, which in fact is a lower % of GDP than our other industrialized friends.

Jeff

[mallorys-camera.livejournal.com]

How interesting that you see the government as an entity whose overlap with taxpayers is minimal at best...

Paulson gave them a 3 page deal

Yes. Which might as well have been a 1 sentence deal: give me 700 billion dollars and don't ask what I'm going to do with it. And I don't care if they tax your trades or your capital gains any more than you care if they provide universal health coverage -- although demonstrably the latter affects you more than the former affects me.

The Dems remember what happened after they pushed ahead the 1994 budget because they thought it was in the best interests of the country not to operate without a budget. Not a mistake they want to make again. Has nothing to do with how good or bad the deal is.

[nokomisjeff.livejournal.com]

Notice that Obama has not come out as being for or against the bail out deal they presented. He's doing what he does best....voting present.

We'll have to agree to disagree on the politics thing:)

Jeff

[mallorys-camera.livejournal.com]

Notice that Obama has not come out as being for or against the bail out deal they presented.

That's not true.

Obama had planned to put out his own proposal. Obama pulled back after Paulson offered his package because he didn't want to complicate the whole mess even further. He spoke out forcibly against the original Paulson proposal, saying that it needed more transparency, more accountability and some sort of linkage to an economic stimulus package for Main Street. These are all changes that have been made to the original proposal.

Obama didn't want to go to Washington because he saw -- rightly in my opinion -- that his presence there in the midst of all this and John McCain's presence there in the midst of all this, would be a distraction. Once there, he contributed to the process by asking questions and by suggesting a process whereby Paulson might be better able to evaluate the House Republicans' concerns & alternative proposals, once those concerns and proposals were actually articulated.

In contrast, McCain said very little. In fact, an aide to then House Minority leader more-or-less admitted that the only reason Republicans were balking at the plan was to give McCain a chance to play rescuer. He didn't do it very well. McCain is actually the guy who "has not come out as being for or against the bail out deal."

We'll have to agree to disagree on the politics thing:)

Political agreement is not one of my criteria for friendship, Jeff. (You might argue here that you and I are not actually friends since we've never met. I won't say that Internet friendships are the same as real life friendships. Still. You know a great deal about my life and I've taken comfort from things you've said. And I hope the reverse is true.)

Misinformation though. That irks me. Dislike Obama on ideological grounds all you want. But don't accuse him of stuff he's not doing.

[nokomisjeff.livejournal.com]

I heard about Obama's alleged plan, which came right out of Goldman Sachs executive suite. His plan wasn't even done by his own folks.

Out of curiosity, as a business owner, what will you do if your business really prospers and your place becomes a union shop by default(Obama's plan)?

Frankly, I'm not that enamored with McCain, and will admit to voting purely for tax cuts and out of my own self interest.

If they want to jump start the economy, cut corporate income taxes from 35% to 10% for 5 years. Eliminate capital gains taxes, and you will see solid growth.

Did you notice that last quarter's growth was 2.8%. Still haven't had that recession yet, but then again, recessions and bear markets only exist in hindsight:)

I still think that a lot of Obama's appeal with educated liberal white voters is that guilt thing.

I never base friendship on politics, but do know a lot of people who do. Last election cycle, I lost about 40% of my LJ friends because they disagreed with me on the politics thing.

It's interesting that my son has become quite the hand wringing socialist. Sometimes, I think I wasted my money by sending him to the best schools in the country to become indoctrinated. But then again, my lovely wife was a card carrying member of the American Communist Party when we started dating, so there might be a genetic component. A year living in the USSR cured her of big government

Jeff

[mallorys-camera.livejournal.com]

I heard about Obama's alleged plan, which came right out of Goldman Sachs executive suite. His plan wasn't even done by his own folks.

Do you have a source for that?

Out of curiosity, as a business owner, what will you do if your business really prospers and your place becomes a union shop by default(Obama's plan)?

I'm trying to keep operational costs down so nobody but me has worked in this store for months. When I used to hire outside help, I paid them considerably above the norm for sales people around here. I think customer service is essential in differentiating businesses that are more-or-less the same (gift shops) and giving good customer service is a skill.

I'm in favor of labor unions.

A year living in the USSR

Did Denise speak Russian?

[nokomisjeff.livejournal.com]

Denise was fully conversational in Russian by the time she did her year.

If you had an several employees that worked for you and they decided to become unionized, and went on strike while demanding $35/hour+full medical+full retirement, would you comply, or would you hire scabs....or would you liquidate the business that you worked up by the sweat of your brow and lose everything. Remember, your customers are depending on you. The Faustian Bargain that the Dems made with unions for their unwavering support could make that possible.

I'll get you that source from Goldman, as I heard it from their 5 year swap desk trader with whom I was doing business. You hear lots of good poop from desk traders, in fact, they get information before it happens.

Jeff