Give me a break. The left (myself included) spend weeks in shock at the tactics of the radical right trying to hijack the health-care debate and succeeding. And we complain bitterly about it.

Now, a CEO puts forth concrete proposals for health care reform alternatives, and instead of trying to elevate the discourse by engaging in a critique of the opinion piece from a policy point of view, the progressive blogosphere goes into full-bore echo chamber mode and attacks this man for having the temerity to carefully express his ideas in a national newspaper.

We get the government, the politicians and the debate that we deserve in a democracy. And right now, what we deserve is right-wing demagogues making up crap about death panels. And we only have ourselves to blame.

Today is the beginning. At 12 PM tomorrow in Washington D.C., Barack Obama will be sworn in as the 44th President of the United States of America. I am honestly excited & hopeful for the country under our new leadership. I believe that Barack Obama is uniquely qualified to bring together our nation, every citizen in the country. One man can only accomplish so much, but if we all work together-- liberals and conservatives, men and women, the young and the elderly, new citizens and old, the skeptical and the hopeful-- we can forge a more perfect union. What the future holds for this nation under the leadership of Barack Obama for the next four years will be decided not by the man himself, but by all the people of our country. His success is our success, and his success depends on all of us. As he reaches out across the partisan divide to rivals like John McCain and independent-minded folk like Joseph Lieberman and Colin Powell, Barack Obama is already demonstrating how he will lead our nation. Everyone will be disappointed at times, myself included, but as he builds coalitions across the nation, Barack Obama will have the ability to create better policies, with more public support. It will take hundreds of millions of people, working together at times and as rivals at times, but we will move this nation forward. The United States of America is admired across the world for our openness, our freedoms, our technologies and our innovation. Together we can extend our leadership, and serve as a better example to the world. Yes we can. Today is the beginning.

"Ms. Bair said the assets could be purchased at fair value, the figure banks use to value their own assets. Such a move would remove the challenge of placing a price on assets that rarely trade."

It was a bad idea in September, and it's a bad idea now. Josh has a post up about  this now. And while some things have changed, other things haven't. The banks & their enablers are attempting a sleight of hand, convincing taxpayers to pay $350 billion for assets that are worth about $100 billion. That's total BS.

Not one more penny for the banks until common is wiped out and the unsecured creditors trade that debt for equity. No other solution is acceptable that involves the government funding these banks. No more deals that are so good banks are falling over themselves to get billions in free money from the Feds.

Sorry Citi. Your run is over, close up shop. BofA, tough luck, but you might be hosed. It's time for some pre-packaged bankruptcies before any more taxpayer money goes to fix our failing financial system.

Say it with me kids. No way, no how no bailout. I was right then, and I'm right now. Call Obama on Wednesday and tell that this plan would be BS.

Josh has this shot up currently on TPM, and it's a nice composition. Now, I think the exposure is off, and I question why the photographer shot at 400 ISO instead of something higher, which the 5D is fully capable. By shooting at 400 ISO, it's both underexposed and a little shaky. But despite all that, it is a nice shot.

So how do I know all that? Well, it turns out I've seen the photo (as many of you have) on Flickr, and I've embedded that photo below. While the photographer and Barack will certainly be pleased to see the photo shared widely, I think that TPM should always strive to properly credit the photographer when there is a photo that they deem newsworthy enough or interesting enough to feature on their widely-read website. Many might want to personally thank David Katz for taking the photo, or even ask if he could shoot events for them, or maybe buy photos. I have no idea. But even if credit is not  required (and based on the CC license on Flickr, it appears that credit is required), it is always appropriate to note the person behind the lens.

And this isn't the first time I've seen uncredited photographs on the TPM family of site. In another example, TPM reader DF posted a blog entry on TPM Cafe that included a qyadtych of an election night scene, and never mentioned who took the picture. I am an active photographer, and understand that the photos will travel far & wide once published on the internet, and that's fine with me, to a degree. But seeing photographs used on a site like TPM without attribution does not give the photographer the credit he or she undoubtedly deserves. 

And it's great news for the rest of the country, too. 

What the FUCK! I am SO SICK OF THIS BULLSHIT whereby someone cites Nazi analogies as being facile & gross overstatements, then uses the specter of the Nazi Holocaust to justify their facile comparison with the enemy of the moment.

Give me a fucking break. The Nazi regime systemically murdered 6 million Jewish people and millions of others, including homosexuals, Russian POWs and Gypsies.

The murdered millions of people. The innate need of some to cast their political opponents with that murderous regime belies an inability to express one's own feelings articulately, thus the lazy writer descends into overwrought Nazi comparison.

Six million Jews. Millions of others. Murdered. In cold blood. Comparisons of that with Bush or his supporters is weak and discredits the liberal cause which you claim to support. I am so fucking sick of it.

Millions of people, murdered in cold blood. Try to count to 6 million. Try to read 6 million names. How long would it take you? For each name, this is one life intentionally ended by the murderous Nazis. I can't stand it, and I'm embarrassed to see posts containing these sentiments recommended on a site I enjoy every day.

The Nazi regime murdered millions of people. Some mentally disturbed McCain supporter tried to perpetrate a hoax. Is there really any point of comparison.


Enough.

Here's an example of some of the weak analogies  put forth.

Comparisons with Nazis and other historical extremes are all too often facile and gross overstatements of one's case, and are usually best avoided. It is worth noting, however, that the rise of the Nazis in Germany and other examples of extreme demagoguery from history such as the Cultural Revolution in China under Mao Zedong and the Khmer Rouge genocide in Cambodia contained elements common to many such movements, if in less extreme forms. The Nazis, Mao's Red Guards, and the Khmer Rouge all made use of xenophobia and anti-cosmopolitanism, hatred of intellectuals, disdain for cities and the people who inhabit them, and other forms of divisive populism and "anti-elitism" to build working-class and peasant support and to fashion scapegoats at which popular anger might usefully be directed. Infamously in Cambodia under the Khmer Rouge, even possessing the soft hands of an educated urbanite was enough to get one executed; and at Chinese universities during the Cultural Revolution professors were thrown from their classroom windows to their deaths on the pavement below. Hitler's Nazis are known not only for the death camps they operated, but also for the persecution of artists and intellectuals as well as for festive book-burnings before cheering mobs of working-class Nazi supporters.

No way, no how, no bailout.

Some of these mortgages don't really have a house behind them. Say Alice, Bob & Charles lent $50 each to David so he could buy a house that cost $150. Everyone agreed that David would pay each one back $55, but he'd pay Alice first, then Bob, then Charles.

The housing market tanks 30%. David walks away from the house. Alice, Bob & Charles sell the house for $101 and split the money. How do they split the money? Alice gets $50, Bob gets $50, Charles gets $1.

Guess what-- all those "toxic assets" with no market-- those are like Charles' loan. There's no market because a lot of people think they are worth $0.

Now imagine, if Charles doesn't get at least $20 for that loan, Sam claims that the world economy will collapse. So Sam comes along and says, hey, I'll pay $20 for them using this money I got from the taxpayers. But the taxpayers are pissed about it, because they pay $20 for something with a market value of $1.

Hmmm... What to do. Hey, what if we let Charles decide what the real value is. OK, Charles decides it's "worth" $21. That sure cleans up the balance sheet, now we're out of the woods. Oh, but it sure would be nice if Sam would buy this stuff from me for only $20... a discount! Now the citizens should be ecstatic because they are getting a discount.



----------------------------


That's a cynical viewpoint. Mark-to-market may not be entirely appropriate, but considering how poorly Wall St. did valuing this debt the last 5 years, why should we expect them to do better now? It smells rotten. A sleight of hand to distract you from the imminent gift of $700 billion to Wall St. from Washington. Now that's a cynical point-of-view, but I think it's more realistic than the rosy case being made by Wall St., Congress, the media & the administration.

Be skeptical.

No way, no how, no bailout.

No way, no how, no bailout.


I am still opposed to the current bill. I will list several reasons... first are the if-you-don't-get-this-provision-removed-and-still-vote-for-this-bill, I-won't-vote-for-you-again parts.

1) There is a terrible provision that requires, if in 5 years we have lost money on the deal, requires the president to submit a proposal to raise revenue covering the shortfall.
In a word, are you kidding me? If Congress doesn't have the courage to write a taxing provision now, they certainly won't have the courage in 5 years. The current language is worth than nothing, but it is a transparent smokescreen and an insult to the intelligence of the American public.



2) How much equity we receive for debt shortfalls need to be clearly defined.
See above. If that mechanism is not defined now when Congress holds all the cards, then the future mechanism designed by the treasury secretary and a mountain of lobbyists is sure to be a boon to the banks a bust for taxpayers.

OK, those are the big two. The others:
3) The pricing mechanism needs to be well-defined, and transparently communicated to the public. All the data on what we're buying and what we are paying needs to be available. If we overpay, that needs to be made explicit.

4) These phony lies about how we could break even need to stop. They are insulting.

5) Same with the crap about the executive compensation. These are tiny curbs and while commendable, you need to stop pretending this is some great achievement.

6) Congress needs to be a full partner. Letting one man-- Bush, McCain or Obama-- be in charge of appointing all the key personnel is preposterous. This is a humongous outlay, and the people need a voice in the actual decisions, not just oversight.

This bill, while 1/10 as bad as Paulson's original power grab, is still bad. I have resigned myself to Congress using taxpayer power money to bail out financial firms instead of using saner approaches. I am disappointed. But this bill can still be greatly improved, and it would be a shame if Congress rushed to pass a bad bill instead of taking a few more weeks to pass a decent bill.

No way, no how, no bailout.

It's a joke. The CNN summary lists 4 major points.  Three are total window dressing, and the 4th isn't much better. The original deal was 10x worse, but this is still a bad deal.

1) The money is "phased in."
Only $250 billion initially. ONLY? Are you kidding me? The rest is almost guaranteed to be spent. Total window dressing... congress doesn't want to touch this hot potato again. Cowardly.

2) Executive salaries non-deductible above $500K. Total BS. Most of the excessive salaries are in the form of market-distorting stock grants and options. This will do nothing.

3) Taxpayers can receive equity under certain circumstances.
What a load of crap. We should get $1 of stock for every $1 we pay above market value. The way its structured, taxpayers will probably end up with 1/10 of that.

4) Actual oversight by federal officials.
Better. But what we really need is 100% transparency, in real time, as taxpayers buy this junk. The details of every bond we buy should be made available to the public, for free, via the internet. Anything less is just an attempt to sweep stuff under the carpet.

No way, no how, no bailout.
Call your congressmen and congresswomen. This deal is still crap-- they stuck some lipstick on Paulson's original piggish proposal, but it's still a pig. Kill this deal.

Take that to the bank.

Oh, and if you have time, please do one of these. This meme is starting to sweep the web.

No way, no how, no bailout

A picture is worth a 1000 words.

No way, no how, no bailout.

If you have an account on Flickr, please go ahead and leave a comment & fave the photo. That's sorta my thing there, and this needs to hit the front page. Thanks.

Seriously. It's a disaster. His plan doesn't need to be restructured or expanded or shrunken or altered. It needs to be killed.

If these guys need money, tell them to sell it to the highest bidder. For every dollar of junk they sell, they government will make a a dollar structured investment in the company.

The government never needs to hold the debt. We just facilitate its transfer from those unwilling to hold to those who are willing. Then, if Goldman Sachs or Morgan Stanley or even UBS sell $10 billion of junk, we'll invest $10 billion, buying new stock from each company at the current market rates.

There it is. We just cut the size of the federal expenditure in half, and we know own something tangible in return. The banks get the badly needed infusion of capital, and the taxpayers don't get reamed. But remember,

No way, no how, no bailout.

Read the whole article.

Now to the substance. The Treasury has been using the formula that it will buy assets at "fair market prices". As we have noted, there is simply huge amounts of cash ready to bottom fish in housing-related assets (we saw an estimate of $400 billion a couple of months ago). The issue is not lack of willing buyers; it's that the prospective sellers are not willing to accept prices that reflect the weak and deteriorating prospects for housing. Meredith Whitney, the Oppenheimer bank analyst who has made the most accurate earnings and writedown calls of her peer group, has noted how the housing market price decline assumptions used by major banks fall short of where the market is likely to bottom, given traditional price to income ratios and expectations reflected in housing futures prices.

In addition to the factors that Whitney (and others) have cited, the duration of the 1988-1992 US housing bear market and major financial crises suggests that that a peak-to-trough decline of 35-40% is realistic (obviously, this average masks substantial variation across markets and housing types). We are thus only a bit more than halfway through, as measured by the fall in prices.

Yet as we discussed, the plan makes no sense unless the Orwellian "fair market prices" means "above market prices." The point is not to free up illiquid assets. Illiquid assets (private equity, even the now derided CDOs were never intended to be traded, but pose no problem if they do not need to be marked at a large loss and/or the institution is not at risk of a run). Confirmation of our view came from a reader by e-mail:

I worked at [Wall Street firm you've heard of], but now I handle financial services for [a Congressman], and I was on the conference call that Paulson, Bernanke and the House Democratic Leadership held for all the members yesterday afternoon. It's supposed to be members only, but there's no way to enforce that if it's a conference call, and you may have already heard from other staff who were listening in.

Anyway, I wanted to let you know that, behind closed doors, Paulson describes the plan differently. He explicitly says that it will buy assets at above market prices (although he still claims that they are undervalued) because the holders won't sell at market prices. Anna Eshoo pressed him on how the government can compel the holders to sell, and he basically dodged the question. I think that's because he didn't want to admit that the government would just keep offering more and more.

No way, no how, no bailout.

I've seen so many proposals flying around by congressional dems and progressives to "improve" this bailout bill, but they all miss the point. They are all just putting lipstick on a pig. It's ridiculous. They basically read,

"OK, we'll give a $700 billion gift to the banking industry, but we're going to make them feel bad about it."

Or,

"Well, if we're wasting $700 billion on a bad idea bailout of Wall St., what's another $200 billion to bail out the reckless part of Main St. too?"

no. No. NO. NO! NO!!!

The whole thing is crooked. The bailout is a bad idea being driven by fear. there are much solutions to the crisis that are more likely to succeed and will cost us far less. Kill the bailout, don't make it bigger. It's just terrible, terrible, terrible.

Are you really willing to send $10,000 to Wall St. to pay off the corrupt bastards that got us into this mess? I know the answer is no. That's why you must oppose this bill in any way, shape or form.


No way, no how, no bailout.

No way, no how, no bailout.

The time to act is short. The Wall St. insiders and lobbyists are working with Bushco to ram this $700 billion bail-out down our throat. The only way to stop is through a MASSIVE grass-roots movement aimed at Congress.

Call your representative and senator now. There is not much time. This bill is a disaster for all the reasons outlined in that post. Do you really want to give President Bush a $700 billion blank check-- you trust him? You want Main St. to go into debt for Wall St?

Don't be fooled by the fear mongering. Stop this bail. We are our only hope.


No way, no how, no bailout.