I read the news today - oh boy (Monday edition)

It's Monday! Time to refocus our attention on financial chaos!

LONDON (CNNMoney.com) -- Stock around the world took another heavy beating Monday, with shares in Japan falling to their lowest level in 26 years, as fears of a global recession continued to sweep markets.

U.S. futures, which offer an indication of how Wall Street may open when trading begins in New York, were sharply lower.

European shares tumbled, with Britain's FTSE 100 down 4.8% in midday trading. The CAC-40 in Paris was down 6.5% and Germany's DAX fell 4%

In Asia, Japan's benchmark Nikkei index finished the session 6.4% lower -- its worst closing level since October 1982. Hong Kong shares were pummeled, with the Hang Seng index plunging 12.7%.

Meanwhile, here in these United States, the layoffs have begun in earnest:

Layoffs have arrived in force, like a wrenching second act in the unfolding crisis. In just the last two weeks, the list of companies announcing their intention to cut workers has read like a Who’s Who of corporate America: Merck, Yahoo, General Electric, Xerox, Pratt & Whitney, Goldman Sachs, Whirlpool, Bank of America, Alcoa, Coca-Cola, the Detroit automakers and nearly all the airlines.

When October’s job losses are announced on Nov. 7, three days after the presidential election, many economists expect the number to exceed 200,000. The current unemployment rate of 6.1 percent is likely to rise, perhaps significantly.

There isn't much more to say. This is just more of the same economic pain and chaos we've watched unfolding for weeks. We built our economy on sand - the sly manipulations of greedy men - and now the waves are washing it all away.

Greenspan has admitted to Congress that he greatly underestimated the power of greed. I find that darkly amusing. Many of us have been watching this travesty in disbelief for half a generation. I'm sure it was simply convenient to look the other way. Like the breached levees in New Orleans post-Katrina, this was all entirely predictable (and planning for the obvious outcome -- terribly inconvenient.)

Kucinich: Taxation without Representation

Apparently I am not the only voter now disenfranchised by Obama after this epic 'giveaway' to Wall Street. I am also not the only one who has noticed that the Democrats are now marching in closer lockstep to Bush than many Republicans. We live in interesting times.

In an excellent essay, Chris Hedges takes Obama to task for pushing the bailout bill and offering no alternatives - after promoting himself as a candidate who will not bow to lobbyist demands. Given the choices - Obama or McCain - many of us feel we will have to choose the lesser risk (Obama,) but he has greatly hurt his credibility with this promotion of bankers over home owners.

That said, the best quotes in this essay were from Kucinich:

"This was the largest single act of class warfare in the modern history of this country," Rep. Dennis Kucinich, D-Ohio, who led the fight in the House against the bailout, told me by phone from Cleveland. "It is a direct attack on the American people's ability to be able to stabilize their homes and their neighborhoods. This single vote will define the careers of everyone. We are back to taxation without representation, to markets that are openly rigged."

"We buried the New Deal," he said of the vote. "Instead of Democrats going back to classic New Deal economics where we prime the pump of the economy and start money circulating among the population through saving homes, creating jobs and building a new infrastructure, our leaders chose to accelerate the wealth of the nation upwards. They did so in a way that was destructive of free-market principles. They ripped away all the familiar moorings. We are in an uncharted sea where the traditional roles of the political parties are being switched. The Democrats have unfortunately become so enamored and beholden to Wall Street that we are not functioning to defend the economic interest of the broad base of the American people. It was up to the Republicans to protect not just a so-called free market but the American taxpayer and attempt to block this. This is an outrage. This was democracy's Black Friday."

In his phone interview with Hedges, Kucinich went on to say:

"Some of the most powerful speeches against this were given by members of the Republican Party who are on the political right," Kucinich said. "They did a superb job in poking holes in the underlying assumptions of the bailout. They say what they believe. Give me somebody who says what they believe and I can figure out how to get them to a new place. When people say one thing and do another it is very hard to be able to move a debate."

"We had two take-it-or-leave-it propositions and the second one was worse than the first," Kucinich said, referring to the plan that came loaded with pages of tax cuts. "Tax cuts are antithetical to a bailout. We never solved the problem. There were never any hearings on the bill. This premise, that we could prop up the stock market with a $700-billion investment and create some liquidity, was flawed. The problem is that banks do not want to loan to each other. It is not a liquidity problem. Banks are afraid they are going to collapse in short selling. There is a war going on between security firms and banks. Banks are under assault. They are not loaning. The dynamic is driven by the Accounting Standards Board, the Securities and Exchange Commission and the Fed."

"We face a perfect financial storm," Kucinich warned. "The elements are the deficit spending for the war of 3 to 4 trillion dollars, the trillion and more tax cuts, the war itself and the lack of serious investment in the country. We are being hollowed out. We are going to see more unemployment and more people losing their homes. With $700 billion we could have made a real investment in the country, in jobs, in infrastructure and in homes. Instead, we got robbed."

Yes, definitely.

And this obviously has done nothing to calm the growing economic storm. We may as well all step out of our houses (those of us who still have houses,) and toss our life savings into the wind, as to throw $700 billion of borrowed money at Wall Street hoping that the hurricane will move back out to sea.

This bill was all about bailing out corporate donors. You know it. I know it. Many in congress know it. And yet so many voted for it anyway. Black Friday indeed.

It is our job as voters to pay attention to which members fought it - fought for us - and to vote for them. The rest should be tossed out of government forever. I'm sure their Wall Street buddies will be happy to take them in.

As for Obama... he is obviously less economically clueless than McCain. But I have lost my faith that he is the solution, the leader we need in this time of economic calamity. He has shown that he is no Roosevelt; he has shown that he doesn't vote the talk of helping the average American.

Obama has quite a bit of answering to do for his part in epic fleecing of the American people. If elected president, I can only assume that one day he will realize the consequences of his actions. Hopefully he will one day learn to be a real Democrat, or at least a real leader of the people.

The arrow to nowhere

A few of the Senate's (pork) additions to the Wall Street bailout legislation are hilarious. Or they would be... if the nation weren't on the brink of economic collapse.

These senators couldn't save our houses... but they took a special interest in reducing the tax on wooden practice arrows?

You can't make this stuff up.

Excise Tax Exemption for Wooden Practice Arrows Used by Children -- Cost: $2 million over 10 years

Current law imposes an excise tax of 39 cents, adjusted for inflation, on the first sale by the manufacturer, producer, or importer of any shaft of a type used to produce certain types of arrows. This proposal would exempt from the excise tax any shaft consisting of all natural wood with no laminations or artificial means to enhance the spine of the shaft used in the manufacture of an arrow that measures 5/16 of an inch or less and is unsuited for use with a bow with a peak draw weight of 30 pounds or more.

Praise the Lord! Our children can practice for the next Stone Age!

Lou Dobbs, on the war path

Lou will be fun tonight. (I guess 'fun' isn't quite right; 'madder than a wet hen' might be a better description.)

Here is the email alert about tonight's show:

Lou Dobbs Tonight
Friday, October 3, 2008

Tonight, it’s official: Both houses of Congress have passed the $850 billion Wall Street bailout that rewards massive banks and corporations for their deceptive lending practices, shady accounting and reckless, greedy transactions.

Now it’s on its way to the president for a slam dunk signature. It’s another big win for the ultra-wealthy and another insult to the ordinary men and women who make up this country. We’ll have complete coverage.

Plus:

* House members are the latest to have to explain their votes on the mega-bank mega-bailout. They love to talk about ending pork, but this bill was loaded with it.

* California’s budget crisis is worsening. Gov. Arnold Schwarzenegger sent a letter to Treasury Secretary Henry Paulson saying his state may need an emergency loan up to $7
billion. California is not the only state struggling for funding during this credit crunch. New Mexico and Massachusetts are considering cancelling large infrastructure projects.

* Congress is rushing through meaningless legislation ahead of its latest vacation, rather than addressing the major issues that matter to Americans. Congress didn’t pass appropriations bills, but instead lumped spending measures into a continuing
resolution. On the critical legislation like e-verify, lawmakers simply passed a temporary extension. And, Congress will break without passing real foreclosure relief for struggling families.

* Manufacturers, unions, and farmers groups are outraged at the way this country’s faith-based free trade policies created the current economic crisis. Today, the Coalition to Fix America's Economy will announced a proposal to revive our manufacturing sector and to make manufacturing and farming part of the economic dialogue for our presidential candidates.

(Lou - seriously - can we 'revive' a manufacturing sector that was shipped overseas to China?)

Whether you agree with his stance on immigration or not, you have to admit he's relentless when it comes to Congress, Wall Street and lobbyists.

Pin the tale on the donkey... and the elephant

These capitalists generally act harmoniously and in concert, to fleece the people.

- Abraham Lincoln

While the media trumpets the passing of this 'historic legislation -- and the taxpaying public, their children, and their grandchildren are left to pay the bill -- here is a little background that McClatchy was kind enough to print:

Lax oversight? Maybe $64 million for D.C. pols explains it

The Wall Street financiers and firms whose problems have prompted a $700 billion federal bailout are no strangers to Capitol Hill or to politics.

Since 2001, eight of the most troubled firms have donated $64.2 million to congressional candidates, presidential candidates and the Republican and Democratic parties, according to data from the nonpartisan Center for Responsive Politics.

The donors include investment bankers Bear Stearns, Goldman Sachs, Lehman Brothers, Merrill Lynch, Morgan Stanley, insurer American International Group and mortgage giants Fannie Mae and Freddie Mac. Since March, with the exception of Goldman Sachs and Morgan Stanley, all of these companies have been bailed out by the government, sold to other companies at deeply discounted prices or simply failed.

Both political parties have become beholden to Wall Street.

Legislators failed in several instances to conduct oversight hearings or to raise concerns as the Bush administration adopted rules that fed the mortgage frenzy and set Wall Street on the route to disaster.

For instance, in 2004 when the Securities and Exchange Commission adopted a major rule change that freed investment banks to plunge tens of billions of dollars in borrowed money into subprime mortgages and other risky plays, congressional banking committees held no oversight hearings.

Congressional inaction also allowed mortgage agents to earn high fees for peddling loans to unqualified homebuyers and prevented states from toughening regulations on predatory lending practices.

Democratic Sen. Christopher Dodd of Connecticut, the chairman of the Senate Banking Committee who ran unsuccessfully for his party's 2008 presidential nomination, has received nearly $1.3 million from employees of the eight troubled firms since 2001.

Dodd didn't respond to repeated requests for comment. His office said he's unaffected by campaign contributions and stressed that he was the first to "sound the alarm about the subprime crisis," shortly after assuming the chairmanship in 2007.

In the House of Representatives, Massachusetts Democrat Barney Frank, has collected about $78,000. Frank, the chairman of the House Financial Services Committee, has taken the least cash of the four House and Senate banking chairmen of recent years.

He said that's probably because he "fought like hell'' against administration limits on state predatory lending laws, but had limited influence until Democrats won the House majority and he became chairman in 2007. He said he'd just become the panel's ranking Democrat in 2004 when the SEC rule was adopted, and "I don't remember that issue coming before us."

Former Ohio Rep. Michael Oxley, who was the Republican chairman of the financial services committee in 2004, when the SEC rule was adopted, received more than $260,000 from the eight banks before he left Congress in 2007. Oxley last year was named vice chairman of the tech-heavy Nasdaq stock exchange. He couldn't be reached for comment.

Sen. Richard Shelby, the Alabama Republican who was the banking committee chairman when the SEC rule was adopted, received more than $152,000 in donations. Jonathan Graffeo, a spokesman for Shelby, said that campaign donations "are not a factor in Sen. Shelby's decision-making."

Shelby said that Democrats blocked his attempts to rein in the roles of mortgage giants Fannie Mae and Freddie Mac and his push for a closer review of the SEC's regulation of investment banks. He said the SEC rule left a staff of fewer than 20 overseeing trillions of dollars in assets.

The Democratic and Republican presidential candidates, Sens. Barack Obama and John McCain, have received a combined total of $3.1 million. A small portion went to their Senate campaigns.

Indeed, it's impossible to say what, if anything, Wall Street bought with its $64 million. Politicians and political parties take money from a wide variety of sources, many of them with competing interests and opinions, but experts interviewed by McClatchy said that inaction by the Congress helped set the stage for the current crisis.

Some state regulators, recognizing early signs of trouble in housing markets, sought help from Congress when the Bush administration adopted rules barring states from enforcing tough laws targeting predatory lending — the practices that were enabling unqualified applicants to obtain subprime mortgages.

With Wall Street serving a key role in buying, bundling and reselling subprime mortgages, state officials couldn't get Congress to intervene, said John Ryan, the executive vice president of the Conference of State Bank Supervisors.

Read the rest...

'Campaign donations' are not a factor in decision-making... please. I see that line over and over in the above story. What a joke. I'm sure the banks always make donations out of kindness and respect, with no strings attached. Perhaps they simply like you guys, shucks.

We've been sold out.

Even the Wall Street Journal - and you have to admit the irony there - ran with the following story:

Bank Lobbyists Regained Clout After Vote in House

WASHINGTON -- After defeat of the financial rescue bill in the House this week, Washington sought advice and ideas from lobbyists of the same industries blamed for creating the mess.

In White House meetings and phone calls Thursday, President George W. Bush and top advisers pleaded with industry groups to help save the $700 billion financial bailout plan, following its defeat Monday in the House of Representatives.

Members of Congress also opened their doors after largely shutting out industry lobbyists earlier.

Read the rest...

I have nothing else to say. Sadly, this was predictable. So is the coming crash of the economy and subsequent collapse of the dollar.

"B Day" in the House of Representatives

Question of the day... will our allies in the House cave to pressure from the Senate 'Millionaire's Club,' or will they take the time to do this right?

Our future depends on this answer, and we don't have long to wait.

I'm sure most of us weren't terribly surprised when the Senate voted 74-25 vote to bail out Wall Street with only a few superficial changes (supposedly to pacify angry American taxpayers.) The Senate is stuffed with millionaires; most of them painfully out of touch with the struggles of mainstream America.

It frightens me to see that both of our presidential candidates voted in favor. This leads me to believe that nothing will really change after this election - not unless we get this right... and get it right before the election. This is probably our only chance to participate in our government, which is our right as American citizens. Somewhere out there, our forefathers are watching us.

Today the bailout mess falls back on the House of Representatives, where we still have some influence (all members of the House are up for re-election in November.)

From all accounts, corporate lobbyists are working around the clock to switch 13 votes from 'No' to 'Yes.' They have apparently been successful in changing 7: Jim Ramstad (R-MN), John Shadegg (R-AZ), Zach Wamp (R-TN), Ileana Ros-Lehtinen (R-FL), Shelley Berkley (D-NV), Emanuel Cleaver (D-MO) and John Lewis (D-GA) will probably now vote in favor of this bill.

Other possible switches include Pat Tiberi (R-OH), Pete Hoekstra (R-MI), John Yarmouth (D-KY), Brian Bilbray (R-CA), Steve Rothman (D-NJ), Lee Terry (R-NE), Jim Gerlach (R-PA), Tim Murphy (R-PA), Jason Altmire (D-PA), and Gabrielle Giffords (D-AZ). I don't see any changes from my representatives in Indiana; and I'm proud of them for demanding other options.

While some representatives are switching their vote and will now favor the Senate bill, still others may actually change their vote from Yes to No; including Ed Markey (D-MA), Charlie Melancon (D-LA), and Spencer Bachus (R-AL).

Bush's first Treasury Secretary, Paul O'Neill, called Paulson's plan "crazy" and "lunacy" with potentially "awful" consequences for the world's largest economy. Strong words... from someone who should know. Many of our nation's best economists agree with O'Neill.

Paulson's strongest supporters admit that it will not raise stock prices or boost the economy as we sink further into a recession. Why should we rush through a bailout plan - one that everyone agrees will be ineffective - that gives $700 - $850 billion of our tax dollars to Wall Street?

I found it interesting that Joe Lieberman mentioned on FOX that this government bailout will be "good for John McCain." No mention of what is best for America; best for generations of American citizens who will inherit this debt. But then again... we're talking about Joe Lieberman, so this can't really come as much of a shock.

Our entire financial future - as a nation - is hanging in the balance. Congress should stay in session for as long as necessary to craft a better and cheaper plan; because there are definitely other options. One alternative, called the 'No Bailouts Plan' has already been proposed by Pete DeFazio (D-OR). The DeFazio bill is designed to fix the banking system by providing insolvency relief instead of a bailout.

Another bill currently in the works by Rep. David Scott and Rep. Doggett - with the aid of economist James K. Galbraith - plans to help ordinary people by creating a modern version of the Home Owner's Loan Corporation (HOLC). This will address the mortgage crisis on Mainstreet by taking over mortgages and keeping people in their homes with reasonable serviceable mortgages.

Taking pieces from each of these bills and crafting something that works for all of America is the job facing the House today.

They can fold their tent and walk away, leaving this disastrous government bailout intact; or they can craft something much better. Each of these alternative bills fails to address all of the issues facing our economy. Patched together by a determined and responsible congress, they could form the foundation of a sound and humane solution to financial and economic meltdown facing our entire economy -- not simply Wall Street.

Congress undoubtedly wants to go home so Friday; passing the existing Senate plan would be the easy way out. It is up to us to demand otherwise and stop this $850 billion disaster in its tracks.

Warren Buffett on Charlie Rose

Interesting... Buffett actually wants to pay higher taxes (or so he said.)

Jon yells at nearly everyone

Here it comes... jammed down our throat

Notice how the Dow miraculously recovered today after its terrifying tumble? Do you ever feel like you're being squeezed and squished from all directions - especially the corporate media - so that you will shut up, put up, and go back to quietly consuming?

Today the Senate will take up the emergency 'bail the fat cats out of hot water' bill, with the pretense of doing it to save us -- we who demanded that this not be done without a lot more thought and a little helping hand for the people losing their homes.

It appears that the Senate (made up of rich guys) is going to force the hands of the House by making the first move; something that almost never happens (but can happen if lobbyists and bankers scream loudly enough.)

And of course that media drumbeat -- powered by White House talking points -- is now pounding home the desperate need to act immediately (now now now! Before rational thought can kick in. Before we realize... that we've been stampeded by fear yet again.)

I guess there was no way we were going to beat the lobbyists. They pulled the market strings, people lost money and the terror began. So Bush and Paulson will get what they want, and the Wall Street fat cats will get to have their cake, eat it, and buy 10 more they can stick in the freezer. Band-aids for our own suffering? That was always a pipe dream.

At least we put up a fight this time.

When the dollar finally collapses from the weight of this debt (and the subsequent debt when this doesn't work;) and y'all have no food, no gas, no jobs and no future... remember this 'we must do it now now now' moment.

Remember the people who said this must be done immediately, with a half-ass plan, and without the intelligent input of the economists.

Remember who gave away your farm: put the blame squarely on the robber baron in chief and his vast array of financial stooges, cheered on by the loud demands of an arrogant corporate media. And then demand a lawsuit. If we can't impeach... perhaps one day we can imprison. God knows enough laws were broken. Pelosi is a coward: judges and lawyers are not.

I now suspect that the dollar is doomed. If you think things are bad now... just wait.

Our big day (did democracy win?)

Much is being made of the 'popular revolt' staged by the taxpaying public. Perhaps because - unlike anything congress has managed to patch together over the last 20-30 years - this revolt was truly bipartisan. It was a mass outcry of anger, disgust and deep mistrust.

Some interesting and reflective essays have been written in the wake of the congressional rejection of the government bailout plan; all musing on the 'historical meaning' of the pressure we put on congress, and the fact that they actually listened to us.

Did democracy actually win yesterday? Only time will tell. I'm sure the lobbyists are in full swing.

Here are a few slices of the victory pie:

Celebrating The Bailout Bill's Failure--And Looking Ahead

Whether you favor the $700 billion bailout or not, the House vote today should make you cheer--loudly.

Why?

Because the majority vote against it shows that Washington is not entirely in the service of the political donor class, by which I mean Wall Street and the corporations who rely on it for their financing. These campaign donors, a narrow slice of America, have lobbied and donated their way into a system that stacks the economic rules in their favor. But faced with as many as 200 telephone calls against the bailout for every one in favor, a lot of House members decided to listen to their constituents today instead of their campaign donors.

The GOP members voted overwhelmingly against the bill, while two-thirds of the Democrats favored it. Right now you can be sure that cajoling and arm twisting is underway in an effort to persuade 16 GOP members (or perhaps a dozen Republicans and a few Democrats) to vote the public largesse for Wall Street.

None of this is to say that we need, or do not need, some government intervention in the markets. Rather it is to say that the administration has failed to make its case, instead assuming that just as with the war in Iraq and the Patriot Act, it could stampede Congress into thoughtless action and terrify the public into going along.

Also, do not get stampeded by the awful, ill-informed, and heavily one-sided coverage on cable TV, which I have been monitoring. Several friends have emailed me in a panic asking if they should sell their holdings. Politicians and cable news deserve a lot of blame for fostering fear.

The Dow Jones Industrial Average, a measure of just 30 companies out of millions, closed down just under seven percent. Back in 1987 the Dow fell 22 points in a single day, and it was not the end of Western Civilization or even investing.

The stock markets may fall more. They also may rise. After all, Goldman Sachs shares were in a free fall just before the Bush administration declared a crisis, and even with today's 12.5 per cent drop, they are trading at more than $30 per share higher than at the low point eleven days ago.

Questions abound: Do we believe in markets, which can be volatile--or only in managed markets biased by government policy to the upside? Or do we believe in corporate socialism?

Michael Scherer, writing in Time Magazine about the 'popular revolt:'

A Failure Of Leadership

There was a lack of trust, a loss of confidence, a popular revolt.

Nearly every major political leader in America supported the bailout bill. The President of the United States. The Vice President. The Treasury Secretary. The Chairman of the Federal Reserve. The Chairman of the Securities and Exchange Commission. The Democratic and Republican nominees for president. The Democratic and Republican leadership of the House and the Senate. All of them said the same thing. Vote yes.

But the leaders anointed by the U.S. Constitution to most reflect the will of the people voted no. This is a remarkable event, the culmination of a historic sense of betrayal that the American people have long felt for their representatives in Washington D.C. Roughly 28 percent of the Americans approve of President Bush. Roughly 18 percent of Americans approve of Congress. These numbers have been like that for years.

Now those bad feelings have manifested themselves in the starkest of terms. Not enough of the American people believed their leaders. And so the politicians that were most exposed ran for cover. With an election on the horizon, 95 House Democrats and 133 House Republicans opposed the bill. Now, there is significant potential for grave effects on the nation.

By George (no pun intended) I think we got their attention. At least for a day.

Indiana congressmen vote 6-3 against bailout bill

Indiana congressmen voted 6-3 yesterday - across party lines - against the bailout plan.

Voting in favor of the bill were Joe Donnelly(D), Brad Ellsworth(D) and Mark Souder(R).

The following Indiana congressmen voted against the bill: Andre Carson(D), Baron Hill(D), Pete Visclosky(D), Dan Burton(R), Steve Buyer(R) and Mike Pence(R).

In their own words:

Voted NO: "It is now imperative that Congress come together and develop a response to the crisis facing our financial markets that reflects the American people's belief in personal responsibility and fiscal discipline." -- Rep. Mike Pence, Republican.


Voted NO: "I have been rushed to judgment by the Bush Administration before. There hasn't been enough time to evaluate the impacts this legislation would have if enacted, or to consider alternatives. Congress deserves time to weigh the benefits and the potential pitfalls of borrowing this money." -- Rep. Baron Hill, Democrat.


Voted NO: "We are now in the golden age of thieves. And where I come from we put thieves in jail, we don't bail them out." -- Rep. Pete Visclosky, Democrat.


Voted NO: "I am bothered that Secretary Paulson offered an immediate government solution rather than taking the time to explore effective private sector and market based solutions. The Paulson plan was an unprecedented infusion of government power into the private financial sector." -- Rep. Steve Buyer, Republican.


Voted YES: "When there are serious people discussing the possibility of another economic depression, it is time to act. The rescue plan was not perfect, but it was necessary. And while no one took any pleasure in voting for it, the alternative -- doing nothing -- is potentially disastrous and therefore unacceptable." -- Rep. Joe Donnelly, Democrat.


Voted NO: "I believe this particular bill would be devastating to the economy and create an inflationary nightmare. We must also ensure that we are not inadvertently purchasing bad debt from China or other countries." -- Rep. Dan Burton, Republican.


Voted YES: "Ultimately this is about that worker in Vincennes who is wondering if his pension will be there in the future; the single mother in Greencastle who dreams of sending her children to college; or the small business owner in Boonville who is trying to meet payroll. These are the Americans that have everything to lose if Congress fails to act." -- Rep. Brad Ellsworth

CNN rewrites history: No longer "America's most trusted news source?"

Another news alert from CNN, this time the "AMERICAN MORNING QUICKNEWS:"

~~~~~~~~~~~
TOP STORIES
~~~~~~~~~~~

MARKETS MAYHEM AFTER U.S. BAILOUT FAILURE

Investors continued to dump shares Tuesday after U.S. lawmakers unexpectedly rejected a Wall Street bailout plan, triggering the largest point drop in U.S. market history.

...FULL STORY

STOCKS CRUSHED

Stocks skidded Monday, with the Dow slumping nearly 778 points, in the biggest single-day point loss ever, after the House rejected the government's $700 billion bank bailout plan.

...FULL STORY

BE AFRAID!

Oh please.

First problem - CNN - is that we have other news sources, so there is a difference of opinion as to whether this was the worst drop in history. The New York Times - and they are in fact right there in Wall Street land - compares it to 1987's Black Monday, but doesn't scream "panic!" at us.

And CNN -- its fine that you decided to round up from 777 -- but lose the 'biggest single-day point loss ever' unless you intend to back it up. Now you're trying to trump the Great Depression. Get over it. We're not afraid. We now know there are greater things to fear than fear itself: we fear the collapse of the dollar which would be far, far worse than this Wall Street tantrum.

Another questionable assertion in this CNN alert: "U.S. lawmakers unexpectedly rejected a Wall Street bailout plan"....?

I'm sorry, but the passing of the bill was always questionable and in no way expected. The stock market should have known this well in advance.

Perhaps to CNN's cynical ownership - and even the cynical stock market - the fact that congress actually listened to the people and to their collective consciences was indeed unexpected. But anyone who was paying attention realized that there was quite a bit of doubt yesterday morning as to whether the bill would make it through both the angry progressive Democrats demanding greater protection for the taxpayers (Republicans as well,) and the conservative Republicans demanding that the market regulate itself - and that includes paying for its own bailout.

This breaking news alert is total hogwash, designed by its wording to strike fear into our rebellious, unrepentant hearts.

Obviously CNN is no longer the most 'trusted news source' they claim to be. They received their talking points memo from the White House, and are going full 'fear tactic' in their reporting.

I'll stick with the New York Times, thank you. Americans and the brightest economists in the nation are all greatly relieved today. CNN can go sit in the corner and sulk.

Here is a more calm and reflective (not to mention informative) news release from the New York Times:

For Stocks, Worst Single-Day Drop in Two Decades

Even before the opening bell, Monday looked ugly.

But by the time that bell sounded again on the New York Stock Exchange, seven and a half frantic hours later, $1.2 trillion had vanished from the United States stock market.

What had started 24 hours earlier, with a modest sell-off in stock markets in Asia, had turned into Wall Street’s blackest day since the 1987 crash. The broad market, as measured by the Standard & Poor’s 500-stock index, plunged almost 9 percent, its third-biggest decline since World War II. The Dow Jones industrial average fell nearly 778 points, or 6.98 percent, to 10,365.45.

Across Wall Street, no one could quite believe what was happening on the floor — the floor of the House of Representatives, not the New York Exchange.

As lawmakers began to vote on a $700 billion rescue for financial institutions, the Voyageur Asset Management trading desk in Chicago went silent. Money managers gaped at a television screen carrying news that seemed unthinkable: the bill was not going to pass. Shortly after 1:30 p.m., the rescue was rejected.

Once again, the New York Times (with perhaps a greater grasp of history) reminds us that this has happened before, 20 years ago. Most of us are old enough to remember that day. The world didn't end, and neither did the stock market. It does appear that Wall Street expected the bill to pass... but anyone listening to the congressmen themselves wouldn't have been anywhere near as convinced.

Considering the alternative risk of 'crushing' the dollar itself -- I think most Americans will allow Wall Street this temper tantrum. Because of course that is exactly what this is: a temper tantrum.

Anyone who has had a small child knows the only solution is to let the baby cry and scream and stamp its feet until completely spent; not coddle and give them whatever they want, virtually guaranteeing a repeat performance whenever they want something new.

Bail out Mainstreet, not Wall Street

Daily Show: Last week's classics

Excellent Essay: The Power of 'No'

An excellent essay, "The Power of No," has been posted to Common Dreams by Dave Lindorff. Without any more yapping from me (I've ranted enough today,) here is an excerpt:

As Nobelist economist Joseph Stiglitz has written of this outrageous rip-off, there are four problems facing the financial system, and the bailout proposal only addresses one--getting the toxic mortgages off the banks' books and onto taxpayers' hands. Left unsolved is the gaping hole in banks' balance sheets in the form of loans made to people and companies which cannot be repaid, which will mean they still won't start lending money again. Left unaddressed too is the continuing collapse of housing prices, which will inevitably lead to more bank collapses even after the bailout. Finally, Stiglitz says there is the general loss of faith in the financial system--a major crisis which the bailout will also not solve.

Stiglitz doesn't even address a fifth problem which is that this trillion-plus-dollar boondoggle (and when you add in the bailouts of Fannie Mae, Freddie Mac, AIG, Bear Stearns, the multiple mega-bank failures and the pending auto-industry bailout, you're already talking $1.5 trillion and counting), all of it with borrowed money, the stage is being set for a collapse in the US dollar, with consequences that will reverberate through the economy. Consider: if the dollar collapses, as many experts say is almost inevitable with this kind of huge addition to the national debt, oil prices (which are set in dollars) will soar to compensate, the price of all the other goods that Americans import--more than half of everything we use in daily life thanks to the decimation of American manufacturing--will rise dramatically, and ultimately, in an effort to stem the bleeding, interest rates will have to be raised, thus bringing what's left of the economy to a grinding halt.

All of this is readily predictable--and indeed a group of over 200 prominent economists has written Congress joining Stiglitz in opposing the bailout plan--but that doesn't matter to the proponents of the bailout in Washington. What they want is to get past Election Day, and the bailout may do that, unless the public gets really aroused.

The tsunami of calls and emails to Congress, and last week's nationwide demonstrations against the bailout suggest that the public is waking up to this looming disaster and to the fact that they are being sold a bill of goods.

Ron Paul mentioned (quite heatedly) the impending collapse of the dollar. Lindorff goes into much greater detail about the fallout of such a collapse, in our manufacturing-free US economy. Think the price of gas is high right now? Imagine struggling even to afford food.

And yet good ol Nancy Pelosi and Harry Reid were up there on the stage again last night, grinning and hugging each other (and that jackal Paulson;) as though they had just saved the world. Once again, to no one's surprise, they sold us out to the Neocons. (It is my fondest wish for our nation that they both find themselves without jobs after election day this November. Traitors... both of them. Its not like they need the employment; they can each live out their days in luxury on their lobbyist kickbacks alone.)

Could it really be true, that this time... congress is actually listening to us?

Dueling News Alerts

Interesting. It appears that CNN has a much shorter grasp of history than the New York Times; either that or a much more aggressive 'BE AFRAID' agenda.

(File this under 'reading between the lines.')

First, the CNN 'Breaking News' Alert:

-- Dow suffers biggest point drop in history, falling nearly 778 points in reaction to House vote rejecting economic rescue.

The biggest drop in history, eh? Not according to the New York Times News Alert:

Breaking News Alert
The New York Times
Monday, September 29, 2008 -- 4:49 PM ET
-----

Dow Closes Down 777 Points

The Dow Jones industrials closed 777.68 points lower on Monday -- a 6.97% drop, the biggest loss since 2001 -- after the government's bailout was defeated in the House.

The broadest measure of the American stock market, the Standard & Poor's 500-stock index, fell 8.77 percent, its biggest drop since October 1987. The Nasdaq composite index fell by more than 9 percent, after the House defeated the bill by a vote of 228-205.

Notice that CNN rounded up to 778 and called it the 'biggest drop in history' which apparently is not true. The New York Times has the Dow down 777 points, and described the drop as the biggest loss since 2001. Big difference, wouldn't you say?

Apparently New York is a little less hysterical than Atlanta.

And as for Wall Street... sorry guys. No free ride. Not today, and not on our dime.

People are losing their houses, not just their yachts. Our sympathy is a little worn right now. That, and your robber baron in chief has cried wolf so many times that we're sick and tired of being afraid. We are - in fact - more inclined to anger right now.

By the way, no diss towards wolves intended by the use of the 'cry wolf' idiom -- I have a lot more respect for the intelligence and integrity of wolves than I ever will for our robber in chief.

What we're saying

Loved the foreign traders in their white shirts and ties. Nice accents, but the facts are a bit shaky.

My favorite quote was the very last: "When the financial guys win, they win alone."

Ron Paul: Corporatism not Free Market

Ron Paul, today on the House floor

Kucinich: This is not the plan

Kucinich expresses his reservations

The bailout plan and the roll call

Inquiring minds want to know:

The actual text of the Government Bail Out Plan -- by the way I just tried to open this file, as linked from The New York Times, and received the message "the file is damaged and cannot be repaired." Needless to say I burst out laughing. Apparently the file and the bill have a lot in common!

The congressional roll call (the tally of votes and how your representative voted.) I noticed that both Dennis Kucinich and Ron Paul were listed in the 'Nays' column, along with my own representative. If Kucinich and Paul together are against it - and Bush actually liked it - I know all I need to know about it's ramifications for the taxpayer, our economy and for democracy.

Good coverage in the New York Times:

House leaders pushing for the package kept the voting period open for some 40 minutes past the allotted time, trying to convert “no” votes to “yes” votes by pointing to damage being done to the markets, but to no avail.

Supporters of the bill had argued that it was necessary to avoid a collapse of the economic system, a calamity that would drag down not just Wall Street investment houses but possibly the savings and portfolios of millions of Americans. Opponents said the bill was cobbled together in too much haste and might amount to throwing good money from taxpayers after bad investments from Wall Street gamblers.

I am starting to wonder if my interest in this drama is based solely on financial (and democratic) considerations, or because it is history-in-the-making. A peculiar side effect of being a history buff: the ongoing fascination, even when the ship is sinking (and you're on it.)