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Bailouts for the Little Guy
Why can't the federal government take all of our bad assets off our hands, not just those of big banks and financial institutions? That's what "Buy My Shit Pile.com" is wondering. Go there to publicly post your own now dubious investments and call for your own personal bailout. As the site says:
remember, when estimating the value of your 1997 limited edition Hanson single CD "MMMbop", it's not what you can sell these items for that matters, it's what you think they are worth. The fact that you think they are worth more than anyone will buy them for is what makes them bad assets.
If I can't have my Dazzler #1 multiple copies propped up, the consequences for the economy will be...well, really, we can't even think about it. Just act! Now!!
Fluffy|9.23.08 @ 12:51PM|#
Today's outrage:
http://www.bloomberg.com/apps/news?pid=20601087&sid=aEyg9syOgmjE&refer=home
They are now saying they won't pay a market price for these
securities, but a "hold to maturity" price. Essentially that means
they're telegraphing that they intend to pay the face value for the
securities.
So A) everyone who was saying yesterday that maybe the Treasury
could make a profit on these securities has had the rug pulled out
from under them and B) the size of the giveaway just got a lot
larger, because most of these securities have already been marked
down on the balance sheets of the investment banks. So we're going
to pay these banks more than what their own balance sheets say the
instruments are worth, handing them a huge windfall.
This is insane.
|9.23.08 @ 12:56PM|#
Haha, Dazzler? Did you think she was hot or something? Hell at least Dazzler is somewhat respectable, I had more than one copy of SuperPro #1, a comic that was more of a crossover marketing gimmick for the NFL. Not to mention my several copies of Superman's death, rebirth, funeral for a friend, that wolverine with the claw marks on the cover, amazing spiderman #300 with a hologram on the cover, Punisher scratch and sniff cards (I kid you not they smelled like gunpowder, or were supposed to at least)...etc, etc...
gmatts|9.23.08 @ 12:59PM|#
I have a big pile of dollar bills circa 1998, can I put these now distressed assets on buymyshitpile.com?
|9.23.08 @ 1:01PM|#
It sounds like, among other things, that we can expect high inflation as a result of all of this. I guess that'll be great when I can pay off my mortgage and student loans with a couple of paychecks, not so great when I can only afford to buy a loaf of bread a month.
|9.23.08 @ 1:05PM|#
Matt Yglesias is reporting the following:
I just heard Ben Bernanke saying that there should be no
"punitive measures" for companies that participate in a bailout
because that might discourage firms from participating.
Interesting point Mr. Bernanke -- but don't we want to discourage
banks from being bailed out and making it only an attractive option
as a last resort.
These guys aren't even pretending that this is anything but welfare
for Investment Bankers.
Just so that I understand this right.
A single mom on welfare deserves to have some type of punitive
aspect as a condition of receiving government handouts.
Investment Banks that are actually still solvent deserve no strings
attached free government money.
And here I thought it's the left that's socialist.
|9.23.08 @ 1:05PM|#
Fluffy-
I thought that was what that lying sack of shit Paulson said, but I
was trying to pretend I heard incorrectly.
As far as I can see, this whole thing is just a scheme to fix the
banks' balance sheets, by paying (as you rightly put it) face value
for worthless assets.
|9.23.08 @ 1:06PM|#
Link to the Yglesias post above: http://yglesias.thinkprogress.org/archives/2008/09/punitive_measures.php
Fluffy|9.23.08 @ 1:13PM|#
I don't want to go out too far on a limb here and start making
predictions that will fail and make me look stupid, but am I the
only one who thinks that Paulson overplayed his hand on this one,
and that the likelihood of this bailout actually taking place is
receding by the hour?
Everywhere I look - left, right and center - I see nothing but
disdain for this plan and outrage. How does the Congress end up
passing a plan everyone hates?
|9.23.08 @ 1:16PM|#
How does the Congress end up passing a plan everyone
hates?
You mean like UIGEA? Or continued funding for the war? Or telecom
immunity?
There's a reason they have approval rates so low they could walk
under a rock with a ten-gallon hat on.
|9.23.08 @ 1:18PM|#
How does the Congress end up passing a plan everyone
hates?
Because the know full well that the reality is:
What are you gonna do? Vote 3rd party?!?!?!
JMR|9.23.08 @ 1:20PM|#
Fluffy, I wish you were right, but it's gonna happen regardless
of the yelling of the right and left at the moment. Of course, it's
NOT
http://www.webofdebt.com/articles/its_the_derivatives.php
gonna actually help any more than pissing on a forest fire would
help put it out, because it's "only" a Trillion of the taxpayers'
dollars, and these crooks are in the hole for FAR more than that if
my guess is right...
|9.23.08 @ 1:22PM|#
"Decisions by the Secretary pursuant to the authority of
this Act are non-reviewable and committed to agency discretion, and
may not be reviewed by any court of law or any administrative
agency."
Am I the only one who thinks inserting this should be an
impeachable offense? That whole "preserve, protect, and defend the
Constitution" thing has gone by the wayside, I guess.
|9.23.08 @ 1:23PM|#
What I'd like to know is how bad the consequences would be if the government simply did nothing. "How bad" also should include the duration of the pain. I've heard insane hyperbole from government officials touting the bailout, so I'm not talking about their assessment of the situation. If I went by Paulson et al., I'd be getting measured for a leather suit and wiring my gas tank to explode if tampered with.
|9.23.08 @ 1:25PM|#
How does the Congress end up passing a plan everyone hates?
Because the know full well that the reality is:
What are you gonna do? Vote 3rd party?!?!?!
Homer: America, take a good look at your beloved candidates.
They're nothing but hideous space reptiles. [unmasks them]
[audience gasps in terror]
Kodos: It's true, we are aliens. But what are you going to do about
it? It's a two-party system; you have to vote for one of us.
[murmurs]
Man1: He's right, this is a two-party system.
Man2: Well, I believe I'll vote for a third-party candidate.
Kang: Go ahead, throw your vote away.
[Kang and Kodos laugh out loud]
[Ross Perot smashes his "Perot 96" hat]
|9.23.08 @ 1:26PM|#
Somebody on CNBC this morning was claiming we were "fifty trades
away" from a total meltdown of the financial system,
Thursday.
Whatever the fuck that means.
lunchstealer|9.23.08 @ 1:28PM|#
So, are Paulson and Bush getting their economic advice from Robert Mugabe or something? This is getting ludicrous.
lunchstealer|9.23.08 @ 1:29PM|#
Somebody on CNBC this morning was claiming we were "fifty
trades away" from a total meltdown of the financial system,
Thursday.
Whatever the fuck that means.
I think that means that some of those 'toxic' mortgages turned out
to be mortages on Chernobyl.
|9.23.08 @ 1:31PM|#
If I went by Paulson et al., I'd be getting measured for a
leather suit and wiring my gas tank to explode if tampered
with
"It's my snake, I trained it, and I'm gonna eat it!"
robc|9.23.08 @ 1:34PM|#
ProLib,
What I'd like to know is how bad the consequences would be if
the government simply did nothing. "How bad" also should include
the duration of the pain.
My completely pulled out of my ass opinion:
Really, really bad.
Not that long.
Also, amazingly strong growth from 2010 to 2020.
kablammo|9.23.08 @ 1:35PM|#
"They are now saying they won't pay a market price for these
securities, but a "hold to maturity" price. Essentially that means
they're telegraphing that they intend to pay the face value for the
securities."
I think Bernacke & Paulson structured AIG right, but this
certainly doesn't sound good. Note though, that while mark to
market seems to be out (for a number of reasons, not the least of
which is that there is almost no market for this illiquid toxic
waste), a "hold to maturity" valuation should not just be be the
bare notational, but rather the notational discounted for past and
likely future failures of the underlying securities. Somehow I just
don't see that sort of meaningful analysis happening under the
Treasury's watch when the private sector, with a huge profit
incentive to get it right, completely missed it.
|9.23.08 @ 1:36PM|#
. . ."fifty trades away" from a total meltdown of the financial system. . . .
That's exactly what I'm talking about. Nonsense. Even some of the
disaster companies are sounder than they are being made out to be.
For instance, Washington Mutual has something like a quarter
trillion dollars in deposits. So long as there isn't a run on those
deposits--and there hasn't been one yet--the bank can likely
survive all of this.
Another interesting development is the move of the remaining
investment banks to bank holding companies. Back when I was in
banking, I got into several discussions about why broker-dealers
and the like should consider doing just that. Although the
regulatory environment is stricter under the Fed and the FDIC,
Gramm-Leach-Bliley liberalized things enough to make the move a
tempting one. The major loss is that they won't be able to leverage
at 30:1 ratios anymore.
robc|9.23.08 @ 1:41PM|#
JMR
e-gold was the problem
Before e-gold existed, we never had problems like this.
|9.23.08 @ 1:41PM|#
"It's my snake, I trained it, and I'm gonna eat
it!"
"Pinchy would have wanted it this way."
Dagny T.|9.23.08 @ 1:47PM|#
gimme some money.
You the new drummer for Spinal Tap?
I was just thinking about how that song has become the new Wall
Street anthem.
"You know what I want...or maybe you don't."
kablammo|9.23.08 @ 1:54PM|#
"What I'd like to know is how bad the consequences would be if
the government simply did nothing. "How bad" also should include
the duration of the pain."
Really. Freaking. Bad. 1-2 years in duration, possibly a lot longer
and deeper if it scares off the foreign investment in Treasury
securities which has been financing our fiscal stupidity for
years.
Start with hundreds, possibly thousands, of bank failures (BTW, the
failure of IndyMac alone drained almost 15% of FDICs reserves). Add
in thousands of closed business and deep double digit unemployment.
Wipe out a couple hundred bilion in retirement funds and the
welfare state road show will begin in earnest. The government will
undoubtedly respond by cranking up the presses and printing more
money to pay its debts, expanding the money supply and throwing
napalm on the inflation fire.
|9.23.08 @ 1:54PM|#
I was just thinking about how that song has become the new
Wall Street anthem.
And soon, "Hell Hole" will be the anthem for the rest of us.
Where's my last of the V8 Interceptors again?
kablammo|9.23.08 @ 1:57PM|#
"Washington Mutual has something like a quarter trillion dollars
in deposits. So long as there isn't a run on those deposits--and
there hasn't been one yet--the bank can likely survive all of
this."
Its not the individual depositors that can cause the big problems;
its the ABS/MBS derivatives, ratings downgrades, collateral calls,
settling losing default swaps.
Look at AIG - it wasn't a solvency issue, it was a liquidity
issue.
fyodor|9.23.08 @ 1:59PM|#
How does the Congress end up passing a plan everyone
hates?
They've got the public convinced that they'd hate the alternative
worse. And no one wants to be accused of "doing nothing" when bad
stuff is happening.
And here I thought it's the left that's socialist.
Valid as criticism against the Republicans, but it's hardly like
the Democrats are blocking this, only trying to put in more
regulation.
BTW, I saw a prominent British Labour politician on the BBC last
night say, "If the banks, why not the utilities?" So yes, the left
is more socialist, even if our current crop of Republicans have
hardly forsaken socialism themselves.
|9.23.08 @ 2:02PM|#
Check out Paulson's performance
before the Senate Banking committee.
Regarding a lack of oversight in his proposed plan he
says:
We gave you a simple, three-page legislative outline and I thought it would have been presumptuous for us on that outline to come up with an oversight mechanism. That's the role of Congress, that's something we're going to work on together. So if any of you felt that I didn't believe that we needed oversight: I believe we need oversight. We need oversight.
And then think about the fact that his plan included the following
language:
Decisions by the Secretary pursuant to the authority of this Act are non-reviewable and committed to agency discretion, and may not be reviewed by any court of law or any administrative agency
Dagny T.|9.23.08 @ 2:02PM|#
"Hell Hole" will be the anthem for the rest of
us.
Unless McCain wins, and Palin gets fat, and THEN it could be "Big
Bottom"! (Grasping at straws? Perhaps. But it's better than the
alternative.)
|9.23.08 @ 2:13PM|#
BTW, I saw a prominent British Labour politician on the BBC
last night say, "If the banks, why not the utilities?" So yes, the
left is more socialist, even if our current crop of Republicans
have hardly forsaken socialism themselves.
I don't think it's at all valid to say that the left is "more"
socialist. They just have different recipients of their wealth
redistribution plans. (And that is exactly what the Paulson plan
is.)
My point isn't that Dems are necessarily better (although if I have
to choose between welfare for the poor vs welfare for Investment
Banks I would most definitely choose the former) it's that the
argument put forth by MANY libertarians that only "THE LEFT" is THE
SOCIALISTS should be put to rest once and for all.
robc|9.23.08 @ 2:15PM|#
Stop wasting my time
You know what I want
You know what I need
Or maybe you don't
Do I have to come right flat out and tell you everything?
Gimme some money, gimme some money
I'm nobody's fool
I'm nobody's clown
I'm treating you cool
I'm putting you down
But baby I don't intend to leave empty handed
Gimme some money, gimme some money
Oh yeah! Go Nigel, Go!
Gimme some money, gimme some money
Gimme some money, gimme some money
Don't get me wrong (Gimme some money, gimme some money)
Try getting me right (Gimme some money, gimme some money)
Your face is OK
But your purse is too tight (Gimme some money, gimme some
money)
I'm looking for pound notes, loose change, bad checks,
anything
Gimme some money, gimme some money
Gimme some money, gimme some money
Gimme some money, gimme some money
Gimme some money, gimme some money
Gimme some money, gimme some money
Gimme some money, gimme some money
|9.23.08 @ 2:19PM|#
Unless McCain wins, and Palin gets fat, and THEN it could be
"Big Bottom"! (Grasping at straws? Perhaps. But it's better than
the alternative.)
Well, you at least plausibly got to "Big Bottom". I was trying to
somehow get to "Sex Farm", but couldn't do it.
|9.23.08 @ 2:21PM|#
I just turned my PC speakers up to 11.
Episiarch,
The song you're looking for is "Lick My Love Pump."
|9.23.08 @ 2:28PM|#
Everywhere I look - left, right and center - I see nothing but disdain for this plan and outrage. How does the Congress end up passing a plan everyone hates?
Because everyone will just blame the other party.
|9.23.08 @ 2:34PM|#
The thing that still irks me is, at this point nobody even knows
how "toxic" these mortgages are. Or to put it another way,
nobody knows the real value of these supposedly terrible
mortgages.
And most importantly, there is now ZERO incentive to determine
their real value since the Feds are willing to pony up "$700
Billion" (or $1 trillion or whatever number some spokesman pulled
out of his ass this morning) to bail them out. This is just the
most enormous cash giveaway in history--what if the "toxic"
mortgages are really worth $100 billion more than whatever the
bailout turns out to be?
Does that mean $100 billion goes into someones pocket? Seriously, I
don't exclaim a "WTF?!" lightly, but WHAT THE FUCK?!
|9.23.08 @ 2:34PM|#
I can't help wondering where we'd be right now if the energy devoted to seeking government "relief" had been directed toward analyzing and cleaning up those toxic loan portfolios.
|9.23.08 @ 2:38PM|#
I bought a house I could afford and took out a mortgage that was
perfectly within my ability to pay.
I get something good out of all this, right? Right?
Oh.
Dagny T.|9.23.08 @ 2:40PM|#
We missed the obvious contribution to buymyshitpile.com: Shark Sandwich.
|9.23.08 @ 2:43PM|#
Matthew,
When I get that time machine perfected, you want to go back to 2003
and buy a mansion with no-money-down, and a balloon payment? We
could cry about how there was no way we could have managed to read
all the fine print and wait for Paulson to swoop down to save
us.
|9.23.08 @ 2:54PM|#
What a dumb P.O.S. policy the federal government was
promoting.
"Oh, I see. So people are moving more frequently than they used to
and our economy is more dynamic. Let's promote a massive increase
in ownership of non-liquid, geographically set assets, driving up
home values and simultaneously making home value something that
"matters" because we're turning the typical know-nothing about
economic matters and in thousands of dollars of credit card debt
American into a quarter to half-million dollar investor. What could
possibly go wrong?
|9.23.08 @ 2:59PM|#
Matthew,
Then we can fulfill the real reason I built a time machine:
Punching the greatest douches of history in the junksack.
Starting with Paulson.
robc|9.23.08 @ 3:05PM|#
SugarFree,
I like the way you think. Some people would use a time machine to
kill Hitler or Stalin or whoever but that would alter history.
Instead just punch them in the junk. Probably no affect on history
and you would still have the pleasure of doing it.
|9.23.08 @ 3:21PM|#
We missed the obvious contribution to buymyshitpile.com:
Shark Sandwich.
If you actually had a copy I it would be worth real money, no need
to have the government buy it.
|9.23.08 @ 3:23PM|#
Punching the greatest douches of history in the
junksack
Wasn't there a Twilight Zone episode about this?
Kolohe|9.23.08 @ 3:28PM|#
Somebody on CNBC this morning was claiming we were "fifty
trades away" from a total meltdown of the financial system,
Thursday.
Whatever the fuck that means.
Probably refering to
this '500 trade from armageddon' story from the NY Post.
|9.23.08 @ 6:12PM|#
Folks
I need some advice on pricing some shit for Buymyshitpile.com
535 congress critters - barely used $19.95 for the entire lot.
(full disclosure - not much use for them)
You think this shit will sell or is that price too high?
economist|9.23.08 @ 6:43PM|#
My cousin still has a lot of beanie babies left over from the beanie baby bubble back in the 90s.
BakedPenguin|9.23.08 @ 6:48PM|#
Wasn't there a Twilight Zone episode about this?
Submitted for your approval: Several of this country's most
powerful douchebags, all with unbruised, unswollen genitalia. As
they go about their business, they believe their junk to be safe-
as it would be, but for the Twilight Zone
|9.23.08 @ 8:44PM|#
Fred | September 23, 2008, 6:12pm | #
Folks
I need some advice on pricing some shit for Buymyshitpile.com
535 congress critters - barely used $19.95 for the entire lot. (full disclosure - not much use for them)
You think this shit will sell or is that price too high?
Fred, if you're asking me to buy, that's about three orders of
magnitude too high.
But it's the Government that's buying, so you should add
five or six zeros between $19 and the decimal point.
Mike Laursen|9.24.08 @ 2:19AM|#
Start with hundreds, possibly thousands, of bank failures
(BTW, the failure of IndyMac alone drained almost 15% of FDICs
reserves). Add in thousands of closed business and deep double
digit unemployment.
If this crisis really runs that deep, Paulson's bailout ain't going
to prevent it from happening.
alan|9.24.08 @ 3:10AM|#
If I can't have my Dazzler #1 multiple copies propped up,
the consequences for the economy will be...well, really, we can't
even think about it. Just act! Now!!
As a wee lad, I one day road my bike to the town pharmacy and
purchased the first issue of a comic book about a guy with a
flaming skull who road a motorcycle. If I had a time machine, I
would show up there, and say, 'hey, kid, buy four copies of that,
and don't unseal the wrapper!'
alan|9.24.08 @ 3:20AM|#
Scratch that, it couldn't be correct. I
would have had to been around eight before riding around the town
and collecting comic books. First issue of Ghost Rider was in 1973
and I'm a little younger than that! Probably a reissue.
|9.24.08 @ 3:56AM|#
So the poor kid with 80,000 dollars in student loan debt, and no
job prospects due to the corruption on Wall Street, can't get
bailed out because of bankruptcy laws that protect Sallie Mae, but
the guys who caused the corruption on Wall Street are getting
handed the keys to the U.S. treasury? If we're gonna start
repudiating debt, it seems only fair that the poorest should move
to the front of the line. Kill Sallie!
(tongue in cheek, but only halfway)
|9.30.08 @ 10:45PM|#
Why can't us little guys get in on the public aide checks? All I'd need is $335K. Deduct my $320K mortgage, give that to my mortgage company and send my creditors $15K to knock out those credit cards. I'd be able to do my part to stimulate the hell outta the economy with my $50K gig at the post office, that's for damn sure. Multiply that by 100 million homeowners and that's what the government would need to spend on fixing this mess they got us into.
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