1) Fox News Commentary, ~2:45pm Monday:
"It seems to me that the markets are taking the worst dives when the politicians are talking, then they recover when the politicians shut up."2) via Dustbury:
"Rather than use the $700 billion (or whatever...) to bail out failing banks, why not take that money and pay off the mortgages of every single American who makes under $1 million a year?3) via Vodkapundit:
THAT would stimulate your economy, right there. If my mortgage were paid off, we would immediately start building a big carriage house/garage with an apartment above it. I’d also buy a Wii."
Free markets didn’t get us into this mess, and so it seems unlikely that they’d react quickly enough to get us out of it. Especially given the political climate of the last, oh, century. Washington and markets have been in bed together since at least the time of Teddy Roosevelt. And the offspring have turned out even uglier than predicted.4) Thaddeus (McCotter?) on Fox News, ~3:45 Monday:
"There are two things that can happen when artificial deadlines are set on legislation during a crisis: either bad laws are proposed which do not become law, or bad laws are proposed which do become law."5) Belmont Club: read it all.
6) Varifrank 1, John Galt Lives!:
Shocking Poli-sci students the around the world -- American taxpayers refuse to continue fund banks that give out bad loans!7) Varifrank 2, Saturday worries:
(First question of the day) - Why Nancy Can't Count?
Second question of the day - "Hey, if this is such bad news, why do I feel so good"
Tonight I found myself thinking that the fate of 8 billion people around the world rests in the hands of 100 people in the Senate and 440 in the House and there probably isnt 10 of them that any of us would not find ourselves not immediately repulsed from and in dire need of a shower afterwards, if we simply shook their hands.8) This WSJ article could inspire me make a movie "Bonnie, Clyde, Fannie, & Mae".
Worse, its in these law school rejects, half-wit pseudointellectuals and failed businessmen which comprise the whole of the body of the federal legislature, each of whom hates the other more than the man next to them; that the world is hoping that they will all work together to create a solution...
I honestly have more anxiety tonight than I have had at any point since September 11th 2001. I have to sit here quietly and hope that congress essentially nationalizes the banking industry, this is supposed to be the upside. This is supposed to be the good news. The alternative is we go into another depression. Gee, thats some sort of choice we got there, slow death by strangulation or all at once with poison...
And it all happened because someone said that it should be as easy to buy a house as it was to rent an apartment and then set about passing legislation to see that the entire banking system of the world could be made worthless because people with no basic economic common sense or credit rating were given more money than they even begin to handle. Then they passed legislation to make sure that no one was penalized for foreclosure or bankruptcy. Did they do it on purpose? Did they set about to wreck the joint when they went down this route? Or was it all just an accident?
9) One week later shows that the veto-wielding Bush didn't show up (and didn't have to).
10) Oliver Kamm:
I'm not going to defend the bankers and I certainly favour strong regulation. Moreover, Sarkozy's remarks are patently more sensible than those of - to take a random example - a Holocaust-denying millenarian with a doctorate in traffic management. But they are still platitudes. The financial crisis is not due to an absence of regulation - it derives rather from bad economic policy allied to bad regulation...11) Anchoress on Pelosi's re-barks:
In short, we are not seeing the crumbling of capitalism. We've seen scandalous behaviour by some bankers, who packaged good assets up with dubious ones and sold them on to investors who didn't understand those risks. We've seen incompetence by ratings agencies that misvalued those financial instruments. And we've seen an inherent problem of what economists call asymmetric information within financial markets. But the most fundamental weaknesses have been in policy - in economic management and in regulation. There is no painless route out of the mess we're in; but the mess is not intrinsic to the Western financial system and could have been avoided. Policymakers will learn from the experience.
That may sound a feeble conclusion, but the lesson will be important in future financial crises. Recall that the 1987 stock market crash did not lead to recession, let alone anything comparable to the Great Depression, because central bankers - unlike their counterparts after the 1929 crash - flooded the financial system with liquidity. Financial capitalism - more accurately, the system of voluntary exchange - is a resilient arrangement because its practitioners and regulators learn from past mistakes. The same will be true of this crisis, bad though it is, and bad as it will get.
First off - all the headlines are blaming the House Republicans for killing the bill - that is wholly predictable of the press - but it was The Pelosi’s own Democrats who backed away from the bill and kept it from passing. The Democrats could have done this on their own, and did not. If the bailout bill was everything good they said it was - and it was apparently good enough for the fearless leader Obama to claim all the credit for it - then Pelosi-the-Vicious should have had her usual lockstep results from her crew; she did not have that.12) IBD summary: read it all.
Increasingly Vicious Pelosi reminds me of the chihuahua that used to sit on my neighbor’s porch and snarl at everyone in her rhinestone collar. We children used to wonder what it would be like to just walk up to that creature and boot her in the *** - to send her sailing across the road. But none of us had the nerve, or the stomach, to kick a dog.
The woman is incompetent, petty and unworthy of her high office. She should be made to step down.
13) What hath the fear industry wrought?
There isn't any recession. The latest figures show that we clearly were not in one as of midsummer, whether you use the rule-of-thumb definition - two consecutive quarters of GDP shrinkage - or the looser concept of a sustained and significant economic decline.14) Random thought:
The economy shrank marginally (-0.2%) in the fourth quarter of 2007, but otherwise it's been growing steadily for years. In the most recent quarter it grew at a vigorous 3.3%... The OECD has just raised its forecast of U.S. growth for the full year from 1.2% to 1.8%... the fastest growth of all the G-7 countries.
So if we're not in a recession, why does everyone think we're in one? Partly it's because in a global economy, it's possible to produce economic growth that many people don't feel...
A more profound reason that people believe we are in a recession can't be found in the GDP tables at all. It's in their minds, what psychologist and author Judith M. Bardwick calls the psychological recession - "an emotional state in which people feel extremely vulnerable and afraid for their futures."
The No. 1 cause, she says, is not falling incomes - most people's incomes aren't falling - but rather people's worry about job security, "the mother lode of anxiety poisoning their view of reality." Even if they keep their jobs, they know that benefits may well be cut. Then add the lack of confidence in financial institutions and market swoons that have eaten into investors' portfolios.
What's so insidious about it, she says, is that "as people try to gain some sense of having control through knowledge, they increase their fears and sense of vulnerability by seeking out and therefore exaggerating the bad news. In this way the psychological recession is self-fulfilling."
So the feeling of vulnerability trumps the statistics. After all, not only is the economy growing, but the unemployment rate, now 6.1%, is still not high by historical standards (after the 1990--91 recession it hit 7.8%, and after the 1982 recession it hit 10.8%). Yet it doesn't matter... If I'm afraid that my sky may be falling, then the sky itself is falling.
(read this related scrappleface article)
(inner pessimist) My company's stock has lost a third of its value.15) Sabotage, a la october surprise?
(inner optimist) My company's stock is having a 33%-off sale. Better buy some now!
Is it too hard to believe that (washington democrats) would stoop to sabotaging the market to win the election? Its revolting, but the more I think about it, the more evidence I see. And trust me, its not something I want to see. I've spent the afternoon trying to figure out why Nancy Pelosi acted the way she did with this vote... sometimes the best way to kill a bill is to make it so distasteful that even its supporters wont vote for it... You can flap your arms and say you tried real hard, but what the President said he wanted to do is going down in flames. It's going down in flames not because it isn't actually necessary but because some people want to see Bush lose...16) The Gingrich Plan?
Since 2006, Democrat leadership in the legislature have demonstrably:
1. Tried sabotage the American Military so that it would be seen to lose in Iraq.
2. Deny Americans access to their own oil.
3. Destroy the American Financial System. They spent three months telling us we were dead certain in a recession earlier this year. We weren't. What they seem to have learned is that they needed to go
further in the effort to scare... you.
4. Do we all remember Senator Chuck Schumer and his role the Indymac bank failure? I'm wondering how many bank failures have started because of "whispering campaigns". How many banks were shorted because of an engineered effort to cause the bank to crash?
To what benefit? None of this to benefits America or the American People. Its not as part of an idealogical dispute, but purely to benefit the Democrats.
I cannot get past the idea that the Democrats have engineered this whole scene...
Gingrich did have a suggestion on Fox tonight that would almost instantly free up the markets before these beasts consider another bill: the Secretary of the Treasury can experiment with relaxing the spectacularly stupid Mark to Market accounting scheme. Gingrich thinks he should do it tomorrow morning, because it would work and because Congress could not do a damn thing about it. Gingrich issued this challenge to Paulson and Cox: just try it for two weeks. If it works--if it frees up the world's credit as most people believe it will--then keep it in place. If the markets continue to tank, then you can always reinstate the (arcane and divorced from reality) rules.17) Vodkapundit:
But if the markets do heat up, the Republicans are in a much stronger position to demand what they want in any bailout bill--and the Dems would really be walking the plank to do something stupid without them.
It’s one of those strange paradoxes of the modern economy. When things go (down), everybody flocks to the dollar — even when the (problem) began right here in the US... Why? Because despite all our problems, we still have the freest, most dynamic economy in our weight class — which means we might be the first to get into trouble, but we’ll go in less deep and stay in for a shorter time.18) Cry fraud and let loose the hounds of investigation.
19) Observation: Yesterday's slide - up to the second coverage. Today's rebound - not so much.
20) Another good one from Scrappleface.
21) Following the first post - Monday's Fox News Commentary:
"It seems to me that the markets are taking the worst dives when the politicians are talking, then they recover when the politicians shut up."Congress on holiday = major rebound. Someone should tell Pelosi et.al. to "talk to the hand".
22) ex AIG head turns down $22M severance package. That's nice.
23) because dipsticks vote. lemmings too.
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