Bailout bill fails; Dow plunges

[Irn-Bru]

Sorry to ruin a perfectly fine Friday evening with this, but I just thought I'd share:

http://reason.com/blog/show/129987.html

It's starting to feel like one of those epic nights at the bar in Washington, DC. You know, the evenings where you know you're running up a tab much bigger than you intended, but the bartender has your card, and it's just so easy to order one more round for the gang.

For those too sozzled or bozwozzled to track what we're spending on on bailouts these days, here's a quick tally:

# $29 billion for Bear Stearns
# $143.8 billion for AIG (thus far, it keeps growing)
# $100 billion for Fannie Mae
# $100 billion for Freddie Mac
# $700 billion for Wall Street, including Bank of America (Merrill Lynch), Citigroup, JP Morgan (WaMu), Wells Fargo (Wachovia), Morgan Stanley, Goldman Sachs, and a lot more
# $25 billion for The Big Three in Detroit
# $8 billion for IndyMac
# $150 billion stimulus package (from January)
# $50 billion for money market funds
# $138 billion for Lehman Bros. (post bankruptcy) through JP Morgan
# $620 billion for general currency swaps from the Fed
# Rough total: $2,063,800,000,000

That's a little over $6,800 for every man, woman, and child, or just under $15,000 for each of America's 140 million taxpayers.

Thanks (but no thanks) to Reason Foundation's Anthony Randazzo for these horrifying numbers, who also says "Oh, and keep in mind that this doesn’t include the hundreds of billions the Fed has and will buy up in commercial paper and lend out to other financial firms."

[KazooSkinsFan]

So you're arguing they would consider themselves liberals, which is what the list is, or did you whiff completely on the point?

No, I am saying that competent people such as Ron Paul, with whom some might agree or disagree, should not be included in the same garbage can with some of the others.

OK RIC, when "I" am asked who "I" think is not a liberal I should not mix people that RIC likes with people RIC doesn't. It's really inane to do that. Got it, thanks. Can you mention how I'm alienated again? That really makes me feel insecure that I'm not a member of the liberal religion which would make me right because liberals agree with me.

[Redskin in Canada]

OK RIC, when "I" am asked who "I" think is not a liberal.

And you can open your own thread to discuss that. That's all now.

[Redskin in Canada]

Back to the topic of the thread with today's news:

New stage for $700B bailout
Paulson says Treasury will broaden reach to include non-bank financial firms and seek out private capital to match U.S. funds.

By Tami Luhby, CNNMoney.com senior writer
November 12, 2008: 11:01 AM ET

NEW YORK(CNNMoney.com) -- Treasury Secretary Henry Paulson said Wednesday the government would broaden the reach of the $700 billion bailout plan to support non-bank financial institutions that provide consumer credit, such as credit cards and auto loans.

http://money.cnn.com/2008/11/12/news/ec ... /index.htm

If the government "broadens the reach" does that not imply an eventual hike in the total amount?


Somehow, this is not going to end up in $700 billion under any possible creative number crunching.

[Deadskins]

Seeing as it's already over two trillion, I think the $700 billion number is pretty conservative.

[Irn-Bru]

Oops, did I say $2 trillion?

Fighting the financial crisis has put the U.S. on the hook for some $5 trillion a report says. So far.

For all the fury over Treasury Secretary Henry Paulson's $700 billion emergency economic relief fund, it seems downright puny when compared to the running total of the government's response to the credit crisis.

According to CreditSights, a research firm in New York and London, the U.S. government has put itself on the hook for some $5 trillion, so far, in an attempt to arrest a collapse of the financial system.

The estimate includes many of the various solutions cooked up by Paulson and his counterparts Ben Bernanke at the Federal Reserve and Sheila Bair at the Federal Deposit Insurance Corp., as the credit crisis continues to plague banks and the broader markets.

The Fed has taken on much of that total, including lending a cumulative $1 trillion in overnight or short-term loans since March to primary dealers through its emergency discount window and making a cumulative $1.8 trillion available through its term auction facility, a series of short-term transactions it began making available twice a month in January. It should be noted that a portion of the funds lent in these programs has been repaid and that the totals represent what has been made available.

The Fed also took on tens of billions in debt, including $29 billion in debt of Bear Stearns, and made $60 billion of credit available to American International Group (nyse: AIG - news - people ). It is committing $22.5 billion to set up a special purpose vehicle to manage some of AIG's residential mortgage-backed securities, and it is financing $30 billion of a second fund to hold $70 billion of multi-sector collaterized debt obligations on which AIG wrote credit default swaps.
The Treasury, in addition to the $700 billion raised in the Emergency Economic Stabilization Act, agreed to guarantee money market funds against losses up to $50 billion, will inject $40 billion of capital into AIG and is backing the conservatorship of Fannie Mae (nyse: FNM - news - people ) and Freddie Mac (nyse: FRE - news - people ), to the tune of $200 billion.The FDIC, meanwhile, is guaranteeing $1.5 trillion of senior unsecured bank debt.Not included in the total are the Fed's long-existing discount window lending to commercial banks, the mortgage modification plan announced by regulators on Tuesday, support for the Federal Home Loan Banks and a myriad of other programs.

Paulson and Bernanke have tried any number of ways to stop the free fall in housing prices and unfreeze the credit markets, with limited success. Rates that banks charge each other for three-month loans have dropped to 2.1% over the corresponding Treasury security, from their high of 4.8% in October. But lending is contracting as banks brace for rising credit costs and corporate borrowers hunker down.

The Treasury has turned its focus from attempting to buy troubled assets from banks, which was the original intent of the October Emergency Economic Stabilization Act, to injecting capital in the form of preferred equity stakes.
It started out with $125 billion worth of investments in eight major U.S. banks and has since expanded the program to an increasingly broad range of financial and nonfinancial companies. And with just $60 billion left of its initial $350 billion authorization under the emergency act, the Treasury faces a growing number of companies--including Detroit's automakers--begging for assistance.

David Hendler, an analyst at CreditSights, says it looks as if government is left holding the bag, and of course that translates into everyone.

"The losses have to be taken, but no one wants to take them," Hendler said at a conference Wednesday, speaking about the banks and their handling of troubled assets. "It seems like the taxpayers are going to be taking a good portion of that."

http://www.forbes.com/home/2008/11/12/p ... ilout.html

[Fios]

sigh

[Redskin in Canada]

Yikes!

This is TRULY OUTRAGEOUS!!!

This is debt that will go beyond a generation. Irresponsible.

The problem is that where the US economy is headed pretty much dictates the future of other economies, particularly your neighbours North and South!!!

[Redskin in Canada]

Battle over Big Three bailout looms in lame-duck Congress

(CNN) -- Congress kicked off a special lame-duck session Monday, and a partisan battle awaits over the fate of the nation's Big Three automakers.

As newly minted legislators convened in Washington on Sunday for this week's orientation and leadership elections, the 110th Congress met in its last session before passing the baton January 6.

Specifically, Senate Democrats were trying to earn GOP support for their proposed bailout of the Big Three automakers. Democrats would like to see a vote Wednesday, but some concede they probably don't have the support.

Senate Majority Leader Harry Reid, speaking on the Senate floor Monday, urged action on the plan.

"The Treasury Department has acknowledged that they could provide the auto companies the temporary assistance to keep automakers solvent by taking money out of the $700 billion we've already provided to the Treasury Department," Reid said.

http://www.cnn.com/2008/POLITICS/11/17/ ... index.html

[KazooSkinsFan]

Ford, GM, just DIE. Congress, LET them die. They are already dead, they just don't know it. They see what they want to see....

Sounds familiar,

[Cappster]

Ford, GM, just DIE. Congress, LET them die. They are already dead, they just don't know it. They see what they want to see....

Sounds familiar,

Now now Kazoo. You know we need to save the flailing automakers and give them money that they will never repay, because giving them money will help them "float" along for a few more months and allow them the flexibility to give all taxpayers a huge discount on their cars even though they won't. You know the only way we move to more government control is to "loan" big corporations a lot of OUR money and when the companies fail, the government can take over and split up all of the assets and give itself more power over the people. Forget government cheese; government automobiles anyone?

[KazooSkinsFan]

Ford, GM, just DIE. Congress, LET them die. They are already dead, they just don't know it. They see what they want to see....

Sounds familiar,

Now now Kazoo. You know we need to save the flailing automakers and give them money that they will never repay, because giving them money will help them "float" along for a few more months and allow them the flexibility to give all taxpayers a huge discount on their cars even though they won't. You know the only way we move to more government control is to "loan" big corporations a lot of OUR money and when the companies fail, the government can take over and split up all of the assets and give itself more power over the people. Forget government cheese; government automobiles anyone?

You're missing the whole point of this. What is the key issue to the omnipresent Left in this? Unions. So how do they have their cake and eat it too? By bailing out the UAW, gaining control over the automobile industry and blaming capitalism. The trifecta. If you're paying attention, watch.

[Countertrey]

Ford, GM, just DIE. Congress, LET them die. They are already dead, they just don't know it. They see what they want to see....

Sounds familiar, Hmm

Don't you understand?

"What's good for General Bullmoose, is good for the USA."

[Redskin in Canada]

It's official: Recession since Dec. '07

The National Bureau of Economic Research declares what most Americans already knew: the downturn has been going on for some time.


NEW YORK (CNNMoney.com) -- The National Bureau of Economic Research said Monday that the U.S. has been in a recession since December 2007, making official what most Americans have already believed about the state of the economy .

http://money.cnn.com/2008/12/01/news/ec ... 2008120112

[VetSkinsFan]

Ford, GM, just DIE. Congress, LET them die. They are already dead, they just don't know it. They see what they want to see....

Sounds familiar,

That's why I own a Nissan (and paying on another one)

[KazooSkinsFan]

Ford, GM, just DIE. Congress, LET them die. They are already dead, they just don't know it. They see what they want to see....

Sounds familiar,

That's why I own a Nissan (and paying on another one)

I'm with you vet. I have bought my last crappy American car. All we do is prop up economically inefficient businesses that SHOULD go out of business.

[Redskin in Canada]

Commentary: Plan for bailout money doesn't make sense

http://www.cnn.com/2008/POLITICS/12/03/ ... index.html

[Cappster]

http://news.yahoo.com/s/ap/meltdown_autos

Bailout approved: Automakers to get $17.4B

WASHINGTON – Citing danger to the national economy, President Bush approved an emergency bailout of the U.S. auto industry Friday, offering $17.4 billion in rescue loans in exchange for tough concessions from the deeply troubled carmakers and their workers.

The government will have the option of becoming a stockholder in the companies, much as it has with major banks, in effect partially nationalizing the industry.

At the same time, Treasury Secretary Henry Paulson said Congress should release the second $350 billion from the financial rescue fund that it approved in October to bail out huge financial institutions.

Tapping the fund for the auto industry basically exhausts the first half of the $700 billion total, he said.

Allowing the U.S. auto industry to collapse in the middle of what is already a severe recession is not a responsible course of action, Bush said.

"It would worsen a weak job market and exacerbate the financial crisis," Bush said. "It could send our suffering economy into a deeper and longer recession. And it would leave the next president to confront the demise of a major American industry in his first days of office."

President-elect Barack Obama, who takes office a month from Saturday, praised the White House move.

"Today's actions are a necessary step to help avoid a collapse in our auto industry that would have devastating consequences for our economy and our workers," he said. "With the short-term assistance provided by this package, the auto companies must bring all their stakeholders together — including labor, dealers, creditors and suppliers — to make the hard choices necessary to achieve long-term viability."

WOW

[Redskin in Canada]

Now GM, Ford and Chrysler cars will work by DECREE !!!

Terrible uncompetitive path.

[Countertrey]

Now GM, Ford and Chrysler cars will work by DECREE !!!

Terrible uncompetitive path.

Waiting for the official 20 year plan from the Supreme Soviet before I pass judgment...

[hailskins666]

retarded.

why can't this country be self contained???? why not put a tax, of say... $5,000, hell $15,000 on every car sold by a foreign automaker across the board. why can't the government make a nissan sentra or a toyota corolla cost ... $30,000, due to import taxes. wouldn't that boost american auto sales without having to bail out anyone with money that really isn't there in the first place?? who cares if it sends japan, china, germany, etc, or any other country into the crapper? why do we have to determine the daily outcome of the stock exchange somewhere in asia?

none of this makes a drop of sense to me. if the federal government had to operate like any other normal business in the US, they'd be bankrupt by the end of their first quarter. but, no, they have and endless supply of taxpayer funds. or so it seems. playing 'friend / buddy 'ol pal' to the rest of the world isn't going to help the situation here at all, no matter how much $ uncle sam throws out.

i really don't get it, dumb it down for me. maybe i'm 'toopid', and someone can put all of this in 'room temperature IQ' terms for me? sure it means hurting someone, somewhere, but when is the gov't going to start doing things to actually help this situation that has emerged, HERE. why not do something, HERE. that is where it all started. land of the free..... whatever, land of the puppets is more fitting.

[KazooSkinsFan]

i really don't get it, dumb it down for me. maybe i'm 'toopid', and someone can put all of this in 'room temperature IQ' terms for me? sure it means hurting someone, somewhere, but when is the gov't going to start doing things to actually help this situation that has emerged, HERE. why not do something, HERE. that is where it all started. land of the free..... whatever, land of the puppets is more fitting.

The best thing the government could do to help is stay out of it. The auto industry in this country has been undone by greedy unions, inept management and corrupt politicians who have supported both to advance their own personal power. Lawyers are scummy, greedy leaches on our economy who produce NOTHING and live off the transfer of personal responsibility from the stupid to the funded. And the scummiest, greediest of lawyers are the ones we elect to "run" our economy. I.E., Politicians.

We need to help our companies be competitive by letting them compete. That means no favoring unions or bailing out inept management. If car companies can't compete on a fair field, that's FINE. Consumers benefit from cheaper cars and the money will go to other industries. Continuing economic inefficiency in order to achieve socialist social engineering objectives is no solution to anything.

BTW, the tariff proposal first of all is trickier then you think since among other things Ford imports cars from Mexico and Toyota builds them in the USA, but it's also a BAD idea even if you can sort that out because in the end it's a tax on the same people, CONSUMERS. Just like the bailout, we end up paying more for crappier cars. Government has screwed up the auto industry enough. Let's give it up and see if they can be saved by fair competition, something we haven't tried in the auto industry for almost a century now.

[Bob 0119]

Welcome Back Kazoo!

How was your trip!

[KazooSkinsFan]

Welcome Back Kazoo!

How was your trip!

Thanks! Stayed in the Embassy Suites on Deerfield Beach by Boca for a week, it was sweet in the suite on the beach. I made a quick New Years trip to the DC area and have been getting back up to speed this week. Hope you and the rest of the Hogs gang had a wonderful Xmas break too.

[Redskin in Canada]

Obama asks for TARP funds - White House

The president-elect asks President Bush to tell Congress he seeks access to $350 billion in remaining bailout funds.

http://money.cnn.com/2009/01/12/news/bu ... 2009011210

Can I get me some ...