It is all about maintaining the status quo, the status quo, the status quo, ad infinitum. The more things change, and in this case allegedly change we can believe in, the more they stay the same.

Disillusionment is setting in...I knew the R's are no good and unrehabilitatable but I thought there was still hope for the D's. Maybe not though...judging by Rubin, Summers, Geithner, etc.

I don't get Obama. He's a smart guy and yet in this area he lacks common sense. He seems to be dazzled by the financial wizards, not giving much weight that they are the very same ones who burned the house down. Why would you hire a bunch of arsonists to rebuild your house?

Well, anyway it scared the pants off Pandit the Bandit when Citi fell to 97 cents. Although I think he got over it.

He is still going ahead with the $10 million dollar remodel of his office. The best and brightest of the finance world have had to skip a few junkets to resorts and for a few months had to scale down the golf trips and lavish conferences.

I thought G's new plan had the government getting 5/6's of any gains and the private parties getting 1/6 rich.

Here's whats happening. The banks are like a dying patient on life support. Usually when a patient is dying he gives the doctor advanced directives such as DNR, Do Not Resuscitate, or no extraordinary measures to keep the body going. But this dying patient, the banks, want to stay alive as long as possible. Since Dr. Geithner is part of the financial family, he is not thinking clearly. He has an emotional attachment to the dying patient and also wants to keep the dying body alive as long as possible. Hence, Dr. Geithner is using all means at his disposable. And Obama is following the advice of his doctor. But in the end, the patient will die.

Oh My God. Some one might get rich fixing the bad paper the government sponsored enterprises Fannie and Freddie foisted on the market. Perhaps a problem of this size requires skills not likely to be found at minimum wage. Likewise any private capital invested will be subject to both economic risk and substantial political risk (see AIG clawback).

BTW, where was your concern when Clinton chums Franklin Raines and Jamie Gorelick were making 20+ million at these government sponsored enterprises?

Let's see now. If the republicans get in, they would do nothing and the whole system would fall completely apart.

So now the Democrats are and they do exactly the wrong thing and the system falls completely apart. Only not as quickly.

C

From early reports regarding the toxic assets plan, it appears that the Treasury envisions allowing private investors to bid for toxic mortgage securities, but only to put up about 4% of the purchase price - the remainder being "non-recourse" financing from the Fed, Treasury and FDIC. This essentially implies that the government would grant bidders a put option against 96% of whatever price is bid. This is not only an invitation for rampant moral hazard, as it would allow the financing of largely speculative and inefficently priced bids with the public bearing the cost of losses, but of much greater concern, it is a likely recipe for the insolvency of the Federal Deposit Insurance Corporation, and represents a major end-run around Congress by unelected bureaucrats.

Next Wednesday is April 1, commonly known as "April fools" day, the following day is the G-20 summit. The "Dollar fraud" imposed on the rest of the world will not stand as the world has figured out what has happened (been done) to them collectively. The latest "TIC" data, along with the Fed announcing full blown monetization of Treasury debt is proof of this. Now we sit back and wait for one of three events that will occur virtually simultaneously.

The Dollar and U.S. Treasury bonds will begin their "farewell" waterfall dives while Gold will explode out of nowhere. These events ALWAYS occur as a sovereign nation bankrupts. Prices for goods will explode almost overnight while interest rates skyrocket as foreigners hit bid after bid offered by the Fed while saying "thank you sir may I have another?". The Fed can in no way accommodate and purchase all of the new oncoming debt that Treasury will issue, let alone buy the existing debt that foreigners are sure to be offloading. The Fed will be overwhelmed and thus the value of Dollars and Treasuries will crater.

So we have a new plan to save the system being offered today by the Treasury, and "here we go again" as Ronald Regan used to say. With debt as prevalent as it is, there is no way that the "old, bad, and rotten" debt will be reflated by issuing new debt. This is purely a numbers thing, and the numbers say that debt levels are so high and so out of whack that we are beyond reflating AND retaining a stable currency at the same time. What will happen very soon is a panic out of Treasuries which will put interest rates at unthinkable levels. The markets are rallying hard today just as the have in the past with each and every other past "plan". We will need a larger alphabet soon as we are running out of available letters with all the "plans to save the system".

As interest rates begin driving hard to the upside, what do you suppose this will do to the ticking time bomb called "commercial real estate"? This sector is multiples of sub prime, Alt-A, etc.. This sector is hanging on by a thread right now as retailers struggle to pay rent and landlords struggle to make monthly payments. Even if Treasury rates don't skyrocket (they will), Commercial real estate is the next sector to be hollowed out, not to mention credit cards. The banks are already insolvent, is there such a thing as "double secret insolvent"?

So roughly 10 days from now the world will meet in London for a "post April fools" meeting. In the past, the U.S. swung the big stick, set the agenda and made the rules. Not this time, this time the world knows that we are sick and dying. They know that the U.S. has spread its "disease" far and wide to the four corners of the earth. The world is calling for a move to stability and transparency, this is intolerable to the U.S.. Stability would mean "settlement", this can never happen using Dollars. Transparency can never happen because if we actually got to see what has really happened behind the scenes, panic would be far too passive a word for what would occur.

Please keep in mind that until the "new" currency has some kind of Gold backing or tie, paper of any kind will not be trusted. The sooner this happens, the sooner the world can start moving forward again. Imagine waking up to the banks and markets being closed, your Dollars not spending, and having sparse food supplies in your cupboard, a cruel April fools joke for sure. This is no joke, we will bare these conditions very shortly as time is running out on the borrowing ability of our Treasury. Could it be the ultimate April fools joke that we lived in a 40 year long Ponzi scheme?

I don't think Geithner's newly announced $trillion bail-out is a much different animal than the previous "troubled" asset relief programs (different spots, maybe). In the end it's about making the quarter-slots suckers cover the house while it purposely loses to its mobster silent partners on the same rigged roulette wheel (they land on black, they win; land on red, we lose).

It’s not so much that the Barons of Wall Street will be “made whole” and enriched further with taxpayer bail-outs, as it is the fact that their lives will be spared. Okay, maybe that's too harsh, but the upper bunk in Madoff's cell is available I hear. We may not need a Robespierre (necessarily) but we do need to cut the head off this snake that is exploiting the economy by slowly eating its own tail instead of feeding it more tail.

Excuse all the hackneyed metaphors, but the system needs either a complete rebuild or to be junked, not a tune-up and a wax. How can Obama claim that overhauling health care, transportation, infrastructure, education, energy and “greening” America are part of the solution to our economic misery, but transforming the “greed-is-good” finance-fairy based economy is not?

Will the next bubble burst in, let’s say, twenty-five years be distant enough that we’ll have forgotten this one? Cuz it sure as hell didn’t take long to forget the lessons of the last one.

The insolvent banks need to be re-organized in receivership, there is no other way to change their culture and behavior. They will still be open and operating but the charlatans who have run them can be shown the exit.

Giving them more money will rescue their leadership who got us into this, their stock and bond holders, but it will do nothing for the nations economy.

Geithner's plan will only sink this nation into deeper debt. The money would be better spent on jobs, health care reform or infrastructure, not the banking black hole.