I guess you have to see this one to believe it. Here's the Huffpo article featuring Glenn Beck on Katie Couric:

http://www.huffingtonpost.com/2009/09/21/glenn-beck-obama-better-f_n_294052.html

Pfffffbblt.
Anyone smell a cancellation coming?

Seems to me you don't have to "speak" to have a town hall meeting - especially if your office has a projector, laptop, a screen, and a staffer who types well!

Tell the crowd the rules first (one speaker at a time, no applause, no interruptions, etc), and if if factions in the crowd drown you or someone else out, fire up the laptop!

Take the questions by hand - pass out pencils and paper, and have the questioners pass the questions up front. Shuffle the questions.

Re-type the question.
Type the answer.

As long as the crowd plants don't get violent, you've just gained control back over your town hall...

I read Desidero's standout piece read the actual statements as well as Wattree's  blog and saw President Obama weigh in as well as walk it back a bit. These two triggered one another.

What happens then? When you're triggered, you can't respond with the logical part of your brain, heart, or other compassion circuitry in your system. The signal gets sent directly to the reptile in there, and your reptilian brain can eat it's own young. It's bad for pretty much everyone, unless it's a true emergency. Maybe TheraP can explain in more depth.

Advertisers know this - they design ads to hit multiple triggers, so before you know it, you're in the store, clicking "buy", in the restaurant horking down a hamburger, or at the bar inhaling an ice-cold gimlet before your better angels can return to the bridge and order, "wait a minute, it's much better for your being to go for a short sunset walk. Off with the TV, please." (Or perhaps the blog, for that matter...)

Political advertisers especially know this - so it is a major testament to the collective consciousness that more of us were thinking rather than watching when we elected Obama last fall. (Perhaps more of those that weren't were lifted up by "yes we can" rather than those scared by the Wright-McCain 9/11 riot refrains as they rushed to the polls.)

The good news is there is a gap - between the instant the buzzer goes off and the time the snake takes over. It's been shown that meditation widens the gap.

So, let's get back to health care, energy and other far more important items. If we do this work, will we be able reach for salad rather than a soda? Save rather than whip out the credit card? Walk rather than drive?

What else do you do to widen the gap and give the logical brain or compassionate heart a chance at the captain's chair before the system goes into arrest?

And how do you get us to do more of it? (Struggling with this one myself!)

Anyone?

Update - Wattree's commentary - the first link may not work right...

It is painful to watch Michael Steele these days. Much earlier in my career, I too had accepted a fool's errand.  And there was a humiliating moment where I realized that I was not only being used, but being burned as well. It makes you angry. So do the Republicans realize what is going to happen if they raise Rush up their masthead and set Steele adrift in a rowboat? It's almost comical that they feel the rain but are still sailing straight into the reef that will split their ship. I bet in a few years there will be three our four fragments all calling themselves some form of neo republican progressive tax evangelical anti social issue party...

The Republican party hasn't found a way out of the wilderness yet because they haven't practiced yoga. (And probably never will). If they did, they might encounter relative and absolute truth. They might understand that though they can crow over absolute truths, in the relative world, forces must be opposed. Simply put, there is no other force that can keep massive companies from running amok in the economy or the environment other than government. Perhaps they blinded themselves to the environmental side, but now the economics is obvious.

But be warned, democrats - the opposite is also true. We don't want a government so odious it picks on small businesses for forgetting to cross their t's because the big ones are just too hard to catch falsifying the whole form (or designed it with their lobbyists).


The political power that holds MNCs in place can be opposed by the same political forces grown during the Obama candidacy. The Obama network needs to be used to fuel House and Senate elections. Or House and Senate candidates need to figure out that they can fund raise much more effectively and directly for the people with these models. Once this happens, some meaningful progressive reforms can truly happen. But until then, vox populi is drowned out by big money and influence.

It's time for some splitting. The republican party is heading for one. There are some massive financial companies that need one. And if house and senate candidates are serious about serving people, they ought to split from the old money model too.

Well, I don't really have a defense of Rick Warren. Too much I disagree over. 

I'm in Colorado, and I've received 3 robocalls in the last four hours - one McCain, one Rudy, and one Palin.

Back in early September, I had posted at TPM that the Palin pick would cause headaches for the democrats. Based on what my friends and family in Alaska had said, her debate performances with Halcro and Knowles, how she'd defeated Murkowski in the primary and Knowles in the gubernatorial election, and the articles I'd read about her in the Anchorage Daily News, Wasilla Frontiersman, and Juneau Empire, I'd made several points:

 

1. An immediate corporate tax cut for companies that do not layoff workers. With a sunset provision and limit on executive compensation. Perhaps an additional tax cut to executives who cut their own management compensation.

 

Remember Charles Schwab cutting his compensation after 9/11? Leaders do the right thing in times like this. But giving them an added incentive might help.

 

There may not be a way to keep the public from cutting their spending, but this would go a long way to stopping “it’s the next depression” mentality in the collective mind. And yes, it must be all workers – this is a world wide crisis, and we are interconnected to everyone else. Remember what happened with Hawley Smoot – if we are protectionist, it gets worse for everyone, including us.

 

1. A moratorium on foreclosures and an executive order for lenders to workout the loans. Some cash flow is better than none. And it behooves the banks to work with employment agencies to get their borrowers back to work if need be. Perhaps an executive order that merged banks with employment agencies until the banks are solvent again… hmmm.

 

1. A massive short-term hiring program for “due diligence” – people need to sit down, mortgage by mortgage, tranche by tranche, swap by swap, and determine who owns what piece of the pie.

 

1. Rail now. Launch local, state and federal mass transit improvement and expansion programs. Keep people working, keep products moving. And with oil costs, the logical place to go here first is rail. This is leading to longer term solutions, but there are miles of unused track in this country, which is why I propose it first, as well as I believe it is one of the more viable long-term solutions we’ll need to address energy concerns.

 

Things that are already done:

 

1. Increase the deposit insurance.

 

Allow non-financial companies/entities in good credit condition (A1/P1/F1) to borrow commercial paper from the FED (in progress). When the state of California couldn’t make payroll, this was a must.

Many years ago I was an EMT. And here is what I learned about handling emergencies:

 

 - First, take your own pulse. Even among emergency personnel, people have different responses when you’re toned out. Some are overexcited (I often was); some are anxious; some are fearful, and remember the calls that went wrong; and there are those that are truly unfazed, who could sleep through it. They are rare, and this post is not for them. Once you know how you feel, you can choose how you act.

 

 - Second, those that are injured are often more calm than anyone around them. Savor the irony.

 

Third, if you and the patient are calm, you can help everyone else dial it down. When you deliberately breathe easy and deep, speak calmly and slowly, and move in a measured way, it helps others do the same.

 

That gives crucial time to assess.

 

Information is the key to calm

If you want to keep everyone else involved calm, information is key. And when it really matters, no bullshit. Tell the family and the patient what is happening, what procedures are available, and what the plan of action is. Tell them what you need them to do.

 

Did you watch Obama explain the bailout to the questioner in the debate? That’s the idea.

 

Remember, everyone wants to help in these situations. And if they know what is happening, and have most of the same information you do, they can stay calm themselves, even when things are very bad.

 

We need that now. And the public really needs to know what is still working.

 

One of my favorite all-time movies is Apollo 13. Lovell and Kranz both wrote books that are even better, but the film, at least the first time, gives you that tense feeling in the gut that comes from a crisis as well as the key information as it happened. It puts you in the capsule.

 

Here’s what they did:

-       Houston, we’ve got a problem… enough said.

-       They took the time to assess. “Work the problem. Don’t make things worse by guessing.”

-       They started with what works (the LEM) and went from there.

-       They defined the problem in terms of what needs to be done, and let people improvise solutions, but did not lose sight of the sense of urgency “The guys upstairs handed us this one and we’ve got to come through. We need to find a way to make this (square filter) fit into the hole for this (round filter cartridge) with nothing but this (spacesuit parts, paper, tape, plastic bags, etc).

-       Be honest about the crisis with the media. It is what it is.

 

I may be taking my own pulse for a while here, but I sure won’t be going to the bank. Let’s see what Bush says today. It had better be a tour de force.

Those of you in the financial industry, like myself, may share the same tight gut I have had for the last two weeks. Bush is scheduled to speak today, and I wager few will find his voice reassuring. Perhaps if Bush was flanked by Clinton, Bernanke, Volcker, Greenspan and other reputable leaders, each with their turn to speak, the country may respond. Frankly, our leaders owe us details, data, and a good explanation. This is truly one of those times a Ross Perot hour of basic economics would be valuable. The message must be about calm as must be the tone; we must act in opposition to our instincts at this point. The media must mirror this message, not fan flames.
Pension funds and mutual funds (mutuals account for about $26 trillion of the market) are bound by their obligations to their owners to move into "safer" investments in times like these. Imagine the price pressure as the largest segment of the stock market suddenly wants to sell and move to bonds, treasuries, or gold. And that is what is happening here.
If you do not need investment money, do not sell.Your deposits are insured up to $250,000 by the government; do not go to the bank.Go to work, and continue to do your job.
We will certainly need the assistance of our government, and we need transparency and open communication.
Fundamentally, this crisis is about residential real estate. And the government, FNMA/FHLMC and banks need to go through their mortgage portfolios and report the true data to the public. - We have a right to know which banks have the most exposure, and which have the least. - We have a right to know which states/cities have the most exposure.
FDR, speaking in his fireside chats, spoke famously about fear. Personally, I prefer contemporary Sci-Fi author Frank Herbert's mantra, "fear is the mind killer..." and there are others out there. We must face our fears, and not succumb to our panic instincts now. We must act together, and not craft hasty policies, but ones that are targeted to the places that need help most. And above all, we must not be hasty ourselves, even though our reptilian instincts are no doubt sending strong messages. 

Many of you are no doubt happy to see Obama's rise in the polls, which I think in a broad sense are due to the economy, Obama's calm performances as a candidate, and consistent message, compared to the McCain campaign chaos, Palin interviews, and the debates. It's a change year.
For the Obama team to rapidly reverse some of the Bush policies, it would be very helpful to have a filibuster-proof margin in the senate. So take a look at these:
http://www.fivethirtyeight.com/search/label/senate%20polls

538 not only shows the surprise gains in North Carolina and Oregon, but now the most recent polls show McConnell's seat is at risk in Kentucky.
Vote from abroad shows the same trend, but is more aggressive in predicting democratic gains:
http://www.electoral-vote.com/evp2008/Senate/Maps/Oct04-s.html

http://www.pollster.com/polls/2008senate/

Pollster.com has been a bit later to show the same trends, but the news there is essentially the same. There are many more poll sites, but the trends I'm currently seeing look promising for the democrats legislative agenda should Obama win in November. Is it Christmas for the democrats change agenda? We'll see, but it's looking better and better.

My company has purchased loans before. We sent people to the selling bank, parked ourselves in a conference room stocked with coffee and snacks, and did something called “due diligence.” This means we spent a week analyzing the loan files and repayment history. Sound exciting? Guess again. But before we bought a portfolio, we wanted to understand the fundamentals of each loan, and decide which ones we wanted, and which ones we didn’t. 

My understanding is this $700 billion dollar bailout is to purchase distressed assets from financial institutions, to reduce the pressure on their reserve for loss provisions, reduce pressure on credit default swap (CDS) buyers so that they won't need funds to fulfill them, reduce market pressure to sell mutual funds that purchased collateralized debt obligations (CDOs) with these assets as the underlying security, prevent a further deflation of M3, and thereby restore short-term credit market stability. Fine.

But what exactly are we, the taxpayers buying here?

 

There isn’t a single mention of any due diligence in these bailout proposals. There isn’t even a discussion as to how they came up with $700 billion. Why not? Folks, this due diligence process is what the regulators did in the S&L crisis. This is what JPM Chase may do with the WAMU assets they were forced to buy by the regulators.

 

First, let’s assume those assets are primarily distressed mortgages. So let’s just play with numbers for a moment to understand what I’m asking and how much it might cost – at least I can provide a concrete example, which is more than I can say for our leadership.

 

Let’s say there are 2.8 million homes now in the foreclosure process. Let’s start there, then we can go to the ones that are 60-90 days delinquent later. 

 

In my due diligence trips, I look at 5-10 files per hour. These were commercial mortgages and loans, with more complex cash flows, multiple borrowers, and environmental reports to skim as well as appraisals. I’ve also reviewed consumer mortgage files – they take much less time, once you know where things are in the loan file. Let’s say a typical reviewer can analyze 10 per hour. 80 per day. Let’s assume a 20-day working month; a single person ought to be able to review about 1,600 files per month. To review 2.8 million files in a month, you’d need 1,750 people working at this pace. I bet you can find that many in the financial sector right now who have been laid off this year. So pay them $20 per hour; it would cost $5.6 million bucks.

Want it done in two weeks? Hire about 3,500 people.  Etc.

 

Where to start?

The easiest place would be the bank(s) with both the highest number of foreclosures and the highest dollar amount of foreclosures. Then the bank(s) with highest dollar amount of foreclosures, then largest number of foreclosures.

 

So what would we get with this little project? Is it worth more than $3.2 million paid to Alaska to study the mating habits of King crabs? I bet it is.

 

We should get:

1. The repayment history – vital, because it paints a picture of what the borrower can handle and gives the reviewer an idea of how to work the loan out.
2. Credit report – know how the borrower handled their past credit
3. Collateral value estimate, i.e. an appraisal – likely a high estimate, but this along with www.zillow.com or a tax assessment, you get an idea of what the home would sell for
4. Debt coverage  - this tells you what the lender thought the borrower could afford
5. Source of repayment – was it one income, or two? (hint – if the lender gave two people a mortgage they can barely afford, and one loses a job…)
6. Are there other liens? (if the borrower got a purchase money second mortgage, for example)
7. Liquidity – how much the borrower had to cover bad times (likely zero)
8. type of property – was it a rental property? Vacation home? Primary residence? The disposition of the property could vary depending on the answers here.
9. If it was a rental, was it rented? Is it now? For how much? Are the rent payments on time? How much of a vacancy has it had?

 

Once you have this data, you’ve got something real to go back to the regulators with. You can see which mortgages may need a deferment, so the borrower can get back on their feet, and which ones truly are due for foreclosure. Put it in a database, and analyze it. Are there concentrations? (We already know there are – California and Florida have the highest number of foreclosures, Arizona, Ohio and Michigan, etc.)

 

{Here is an aside – many of these mortgages were done from institutions regulated at the state level. So what are these states going to do here? Can’t they foot part of this bill? If South Dakota has the lowest number of foreclosures, why should their taxpayers pay a proportionately higher share of the bill?}

 

OK, now for the other assets. Like I said about the mortgages, we need to get to the core assets that are a problem. I have no direct experience with what information changes hands when a CDS is sold or a CDO is packaged and sold. Since the initial buyer of these swaps or CDOs can (and frequently) does trade them, we’d need to get to the core of the problem – the original seller. So can any TPM member with experience here comment if a similar due diligence program can cut to the chase with these derivatives? What are we being asked to pay for here?

 

Why hasn’t the President or the Fed or the regulators issued an order to get this done? I don’t see the problem. If my company can buy hundreds of loans this way, why can’t the Feds do the same thing here while the bailout negotiations are in process. Even if it costs $20 million, that’s a drop in the bucket compared to what they’re asking. This isn’t rocket science. It’s in the trenches analysis. And it would seem that the legislators would have a much better chance at crafting a bill that actually would work if we knew what we’re getting.

 

So again, what are we buying here?

 

How about some real information instead of bloviation and doom prognostication?

 

C’mon. Get cracking.

As Letterman so adroitly put it, you can't suspend the Presidency if there is a crisis. For those independents who didn't already know McCain makes hasty and rash decisions, they ought to have a pretty clear picture by now, and that appears to be evident in the polls. Survey USA polled on it, and most Americans think the debate should go on.
Well, if McCain is too busy being in DC to help with a bailout when he is not even on the senate committee tasked with it to debate tomorrow, I say let him - with one caveat.

Obama should have this opportunity to answer the moderator's questions himself, with full airtime from the media. If McCain isn't there to counter, too bad. 

I've posted before about the bailout, and I do think there are some genuine reasons to do it, but absolutely not without oversight, and additional regulation. Reclamation of corporate bonuses/pay might also be a part of the price tag too.
I spent a good part of today looking at the TED spread, M1, M2, and the commercial paper market as well as looking at business news. And I can't conclude there is a rush to get this done, though it sure looks bad for large banks. Look at the increase in the non-financial commercial paper market volume - Microsoft, for example, just announced a program to lend about $2 billion in commercial paper. So perhaps, even when large lenders collapse, other stronger ones step in to fill the gap.
So let me go outside of my area of expertise and ask, what would you do if you knew you were going to lose the election this fall? Not just lose, but lose congress as well?
Would you try to get a bailout so large it effectively inhibits your opponents' ability to implement their plans, without any ability to regulate the results?
Usually, I'm fairly sanguine about the economy, despite the sub-prime mess. But what I am forecasting right now is a drop in consumer spending leading to a recession. 
IMO, the way out is for the government to spend us out of it on things we need (for example by increasing domestic spending on health care, infrastructure, alternate energy) and cutting spending on things that don't directly improve the domestic economy (i.e. the Iraq war, etc.)
Finally, I'm no expert, and I believe that different opinions must be heard - so by all means weigh in on this. Do you read the commercial paper volume charts differently than I? Do you see something different in M1 and M2 that shows runs on banks? Is your company in a non-financial industry and planning to cut operations because they can't borrow?
Or is there something political behind the smoke and mirror show being put on by Paulson?
If you disagree, where is the data that shows we need to act now? 

This may be buried under the avalanche of Econ/Palin posts today, but in in light of the Federal Reserve bailout package granted to AIG, I can't help but comment.
$85 billion is a staggering sum to bail out a company; there is precedent for this, of course, such as Chrysler and others. Yet the government has also, in the past, acted to break up corporations when they have become too powerful - i.e. monopolies (Standard Oil, AT&T).
One of the planks in Nader's platform is to end corporate "personhood" as determined in the US body of law. Perhaps a compromise that may eliminate some of the massive losses we saw in 2000 (Enron) and now this year:
Once a corporation has become large enough that its failure can bring down the financial system, isn't it time to break that corporation up? Similarly, once a corporation gets large enough that it is deliberately avoiding providing the services in its mission (health care companies), isn't it time to break it up? Or providing a product that flat out is addictive and responsible for long-term health problems and death?