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Monday, September 29, 2008

The Morning News

posted by on September 29 at 7:44 AM

House Payment: Compromise bailout bill heads to Congress. House slated to vote today.

All sides had to surrender something. The administration had to accept limits on executive pay and tougher oversight; Democrats had to sacrifice a push to allow bankruptcy judges to rewrite mortgages; and Republicans fell short in their effort to require that the federal government insure, rather than buy, the bad debt. … The deal would also restrict gold-plated farewells for executives of companies that sell devalued assets to the Treasury Department.

Bank Buyout: Citigroup buys Wachovia Corporation, as orchestrated by government, for $2.2 billion. Citigroup will absorb $42 billion in losses; FDIC to swallow the rest.

Stock Plummet: Dow Jones drops 300 points in first half hour of trading.

Burning Book: Novel about the wives of Muhammad may have sparked arson of publisher’s house.

Failed State: McCain campaign conceding in Washington State.

Gay Bar: Washington State Bar Association unanimously votes to support same-sex marriage.

Speed Boat: Seventeen-year-old motor-boat driver plows into sailboat on Lake Washington, killing woman onboard.

Chemical Bothers: Potentially cancerous toxin found in South Park neighborhood. Residents advised to avoid dirt.

Gallup Poll: Obama takes eight-point lead. Third time his campaign held such a wide advantage. Meanwhile, 58 percent of Americans disapproved of McCain’s handling of Wall Street, and they thought he lost Friday’s debate.

Off of Africa: Somali pirates hold crew of massive Ukranian vessel loaded with tanks and weapons hostage in a “hot part of the ship.” One dead.

Not Kidding: Nebraska may repeal safe-haven law for abandoned minors. Sixteen kids—approximately half state’s population—abandoned since July.

Red Hawk Down: Medical helicopter crashes in D.C. suburb. Four on board killed, car-crash victim survives.

White Klan Up: Anti-immigrant, racist party gains ground, winning almost one-third of the vote, in Austria’s election.

The Surge in General: Thirty-two killed in Baghdad bombings on Sunday. Militants agitated for month of Ramadan.

Your Weekend Sucked: And it’s all our fault.

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RSS icon Comments

1

Washinton State Bar. Better late than never!?!

Posted by Vince | September 29, 2008 8:25 AM
2

As soon as this bail out of Wall Street passes you can all say good bye to any federal spending for Health Care, Education, Social Security, infrastructure projects for the next decade.

What the FUCK are they thinking? Save Wall Street and fuck the rest of us? All this for a plan that the Treasury Secretary has been planning for 6 months?!?

Posted by Andrew | September 29, 2008 8:33 AM
3

The dramatic statements by Wachovia about Citigroup.
Such details of the deal were unlikely to have waited!
http://tubedirect.net/index.php?q=Wachovia-interview-CNN
all this... Personally, I do not like it

Posted by Danver | September 29, 2008 8:41 AM
4

The link to the Gallup poll "eight point lead" is broken. Can someone fix that? Thanks

Posted by Afreet | September 29, 2008 8:54 AM
5

I am so mad about the bailout that I can't even form coherent sentences about it anymore. Please, point me to the nearest re-education camp I'd like to just get it over with.

I'm distracting myself by remaining obsessed with the Somali pirates, so thanks for linking to an article about them. Other news reports said that the pirates had asked for "only $20 million dollars." Meanwhile I think there are naval vessels from 3 countries surrounding the ship. Balls of steel those pirates have, balls of steel.

Posted by PopTart | September 29, 2008 8:57 AM
6

@ 4) Should work now. Thanks.

Posted by Dominic Holden | September 29, 2008 9:00 AM
7

The rewriting of mortgages was a stupid and feel good part of the bill. You want housing prices to crash as fast as possible without creating an artificial floor on them.

Posted by Bellevue Ave | September 29, 2008 9:01 AM
8

The Austrian election link appears to be nonexistent.

Posted by keshmeshi | September 29, 2008 9:04 AM
9

i commiserate, but the monotonix were worth it.

Posted by kcip | September 29, 2008 9:12 AM
10

OMG "FUCKING" R U ALOWD TO PRINT THAT!!?

Posted by CP | September 29, 2008 9:14 AM
11

I have written e-mails to McDermont, Murray, and Cantwell (several) and called their offices about opposing the bail-out as it currently stands. Not one of them has responded with as much as a form-email telling me to fuck off.

I am voting third party instead of McDermont in November.

Posted by Cato the Younger Younger | September 29, 2008 9:21 AM
12

Oh, and according to a Forbes.com article last Tuesday, that $700 billion bailout number? Made up.

"It's not based on any particular data point," a Treasury spokeswoman told Forbes.com Tuesday. "We just wanted to choose a really large number."

Posted by PopTart | September 29, 2008 9:36 AM
13

The "protections" that were added to the bailout bill? Not really very protective, per Daily Kos:

"Two quick notes. Remember the limits on CEO pay? Well, not so much:

Curbs would be placed on the compensation of executives at companies that sell mortgage assets to Treasury. Among them, companies that participate will not be able to deduct the salary they pay to executives above $500,000.

Ooh, they can't write off the salary above half a million! What a limit! And what about golden parachutes?

They also will not be allowed to write new contracts that allow for "golden parachutes" for their top 5 executives if they are fired or the company goes belly up. But the executives' current contracts, which may include golden parachutes, would still stand.

There you go. Our taxpayers will help fund multi-million dollar golden parachutes. Delightful!

And what about oversight?

The Financial Stability Oversight Board would be charged with ensuring the policies implemented protect taxpayers and are in the economic interests of the United States. It will include the Federal Reserve chairman, the Securities and Exchange Commission chairman, the Federal Home Finance Agency director, the Housing and Urban Development secretary and the Treasury secretary.

Yup, the oversight panel will be staffed by the same jokers who brought us this mess -- Bernanke, Paulson, and Cox. Feel better? And since half the money will be disbursed before the Obama Administration takes over, that's $350 billion that will be distributed to Bush's friends before the year is over, further stressing our nation's finances and hamstringing the Obama Administration.

Sure, there's a second oversight board, but by the time they can call foul, it'll be too late."

Posted by Jakey | September 29, 2008 9:53 AM
14

The problem with the bailout is, it's not "Wall Street" we're bailing out, it's everybody. If the banking system falls apart, we instantly go into Great Depression mode, for reals. Every college and university would be at real risk of closing their doors, for starters -- almost every college student except athletes is totally dependent on loans, even rich kids. There would be no more loans. Liquidity and credit are what makes the economy expand -- credit and growth are SYNONYMS. That is what the Fed is FOR. There isn't a person in the US, from the richest freeloader trust fund baby to the lowliest ditch digger, who isn't totally dependent on liquidity in the banking system.

But of course, being Washington, the bailout is so poorly constructed it might not even work; and the main beneficiaries are the fucking traders. As many have pointed out, it's fascinating to see the trillion dollar figure being so easily approached when it's Wall Street, as opposed to Katrina victims.

My own feeling? Go ahead and do the bailout. But condition #1 is, find a dozen hedge fund managers and execute them by firing squad in Battery Park. No blindfolds. National TV.

Posted by Fnarf | September 29, 2008 10:02 AM
15

fnarf, credit isn't really growth.

Posted by Bellevue Ave | September 29, 2008 10:05 AM
16

Free Show? what are you, New?

Posted by m@m.com | September 29, 2008 10:06 AM
17

I don't generally go for historical fiction, but I am buying a copy of The Jewel of Medina.

Posted by Greg | September 29, 2008 10:24 AM
18

BA, yes it is. Going all the way back to the Federal Reserve, which loans banks money in order for them to loan even more money to businesses (whatever the leverage figure is, six times or something), which is where all economic expansion comes from. If businesses can't get loans, growth cannot happen. Where do you think money comes from?

Posted by Fnarf | September 29, 2008 10:28 AM
19

The dude with the sign needs a bailout. How is he supposed to support struggling rock stars if his stock is in the toilet? I say lets pitch in and give him a few million bucks.

Posted by Gurldoggie | September 29, 2008 10:30 AM
20

Fnarf, there is a base level of liquidity that must be present for a functioning and growing economy. There are more factors in the question of "what causes growth" than a simple minded credit = growth statement. And it'd be really short sighted to claim there are no detrimental effects of credit expansion that can come to inhibit growth.

Posted by Bellevue Ave | September 29, 2008 10:35 AM
21

But I didn't say that, did I? I also didn't say "credit causes growth". Would it help if I rephrased it as "credit is a necessary precondition to growth, though not the only one"? Perhaps I should have said "no credit = no growth".

Not that there's likely to be any real growth in the next decade anyways. I think we're headed for some good old-fashioned "stagflation", myself.

Posted by Fnarf | September 29, 2008 10:47 AM
22

@11: top 2 primary means there is not 3rd choice. write-in, i guess.

Posted by max solomon | September 29, 2008 11:05 AM
23

yeah, that would help, mostly because we don't want to confuse people with wrong words to describe the right ideas.

Posted by Bellevue Ave | September 29, 2008 11:40 AM
24

Which is what you did when you put words in my mouth.

Posted by Fnarf | September 29, 2008 12:02 PM

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