Thursday, September 25, 2008

FDIC Takes Over WaMu

WaMu not only didn't survive the weekend, it didn't even survive the evening.
The Federal Deposit Insurance Corp will seize Washington Mutual and sell its deposits to JPMorgan Chase for an undisclosed sum, CNBC has learned. The deal is expected to be announced during a Thursday night conference call at 9:15 p.m. ET.

Federal regulators have been heavily involved in putting together the transaction, which comes as WaMu is besieged by a huge number of bad mortgage loans on its books.

The exact details of the deal aren't known as yet, but JPMorgan is expected to acquire WaMu's deposits and branches, as well as other operations. The deal isn't expected to expected to result in any hit to the bank-insurance fund.

The MAVERICK plan is go. It will be a bloodbath tomorrow on Wall Street after this. They will have to pass a plan, and the House GOP crazy ass tax cut plan is what will result.

God, this was all planned out from the beginning. Jesus hell. Obama and the Dems are going to get ROLLED.

[UPDATE] God, it's all coming together.
The plan circulated by Cantor calls for a mortgage-backed security insurance fund, rather than taxpayer-funded purchases of those securities. The plan calls on the Treasury to design a system to charge premiums to MBS holders to finance the insurance, according to a fact sheet.

Republicans also seek ``temporary tax relief'' provisions aimed at allowing financial companies to free up capital. It also suggests that regulators call on financial institutions to suspend dividends, along with other steps to address liquidity problems.

`Wall Street Pays'

Cantor said the House Republican proposal ``does not leave the American taxpayers with the bag and makes sure that Wall Street pays for this recovery.''


[UPDATE 2] It's official. We've just seen the largest single bank failure in US history tonight.

Washington Mutual, the largest U.S. savings and loan, was closed by the federal Office of Thrift Supervision, and the Federal Deposit Insurance Corp was named receiver. Customers should expect business as usual on Friday, the FDIC said.

The bailout came after the thrift suffered deposit outflows of $16.7 billion since Sept. 15, the OTS said.

"With insufficient liquidity to meet its obligations, WaMu was in an unsafe and unsound condition to transact business," the OTS said.

Seattle-based Washington Mutual has about $307 billion of assets and $188 billion of deposits, regulators said. The nation's largest previous banking failure was Continental Illinois National Bank & Trust, which had $40 billion of assets when it collapsed in 1984.

The transaction gives JPMorgan roughly 5,400 branches, and fulfills JPMorgan Chief Executive Jamie Dimon's long-held goal of becoming a retail bank force in the western United States.

It comes four months after JPMorgan acquired the failing investment bank Bear Stearns Cos at a fire-sale price.

And now the GOP has just walked out of the bailout talks.
A meeting at the White House between President Bush, congressional leaders and the presidential candidates was meant to speed approval of an agreement. Instead, the session revealed deep divisions between Democrats and House Republicans.

As a result, House and Senate leaders and Treasury Secretary Henry Paulson rushed to Capitol Hill at 8 p.m. to try to hash out a deal.

But shortly after 10 p.m., Rep. Barney Frank, D-Mass., the lead House Democrat on the issue who had been in close talks with Paulson for days, accused Republicans of refusing to negotiate.

"At this point, we have absolutely no participation or cooperation from House Republicans," Frank said.

The next step was not clear late Thursday night. One thing seems certain: Lawmakers won't recess for the year on Friday, as originally planned. Instead, if they can't reach a deal in the next 24 hours, they're likely to work through the weekend.

I feel physically ill. The only thing worse than the Paulson plan is the House GOP plan.
The bankruptcy provision is not the only sticking point, however. House Republicans are not on board, according to Minority Leader Rep. John Boehner, R-Ohio.

"House Republicans have not agreed to any plan at this point," Boehner said.

Instead, they issued a statement of economic rescue principles that calls for Wall Street to fund the recovery by injecting private capital - not taxpayer dollars - into the financial markets. Easing tax laws would prompt investors to put in their own dollars, they said.

Insanity. Pure insanity. The GOP is hoping for the biggest game of chicken ever tomorrow when the bottom drops out of the Dow. They won't budge. Even worse I'm betting there's scads of Bush Dog Democrats willing to go along with this insanity.

And then John McSame swoops in tomorrow to side with his GOP buddies being all MAVERICKY.

There's very likely going to be lines around the block of WaMu depositors getting their money out NOW NOW NOW. We call that a BANK RUN, people. You'll see it on every cable news channel tomorrow morning. The GOP bailout plan will have to be passed NOW NOW NOW.

We're getting Shock and Awed.

I'm going to bed.


What's this? We were close to a deal for UberBailout at 4 PM going into Preznitman's photo op.

Now, three hours later the deal is dead...and guess who killed it?
Efforts to resolve differences over a $700 billion Wall Street bailout hit a major snag late Thursday, with a person close to presidential candidate John McCain saying "there is no deal"—a sentiment echoed by sources close to Democrats involved in the negotiations.

The source close to McCain told CNBC that the agreement as it has been described publicly by Congressional and Senate staffers is "dead."
I stand corrected, but I'm not surprised. Sarah Palin was a Hail Mary. But "suspending his campaign" (cough cough) was only HALF his plan. The other half is being The Maverick That Saved America From UberBailout, apparently.

Joe Sudbay, Taegan Goddard and Marc Ambinder were right eariler today and they called it. This IS an elaborate plot for McSame to vote no on the UberBailout.

Obama and the Dems are about to get MAVERICKED right out of this election unless they can stop it.

This might be the key pivot, folks.

[UPDATE] I'm watching MSNBC and they are talking about a House Republican plan that pays for the bailout not with taxpayer money, but through "removing tax and regulatory barriers" for the private sector so they can pay for this themselves.

It's brilliant. McSame will get behind this plan 100%. He can play Plan A or Plan B out of this.

[UPDATE 2] It's worse than I feared. He's going for the whole ball of crazy GOP neocon masturbation here.
A group of conservative Republicans in the U.S. House of Representatives offered a mortgage insurance plan on Thursday as an alternative to the Bush administration's $700-billion Wall Street bailout.

As Congress struggled to find agreement on modifying the massive Bush proposal to attack the housing market crisis, three members of the Republican Study Committee criticized the administration's proposal and presented their own ideas.

"We think this insurance model works... This is an alternative," Wisconsin Republican Rep. Paul Ryan said at a press briefing where he distributed a one-page proposal.

He said dozens of House Republicans are involved in the group developing the alternative insurance approach.

Texas Republican Rep. Jeb Hensarling, chairman of the study committee, said its more than 100 members "remain skeptical, fearful and unconvinced" about the administration's plan.

"The insurance model is one that appeals to us," he said.

The conservative group called for the U.S. government to offer insurance coverage for the roughly half of all mortgage-backed securities that it does not already insure.

The Treasury Department, they said, should charge premiums to holders of those securities to finance the insurance.

They also called for temporary tax cuts and regulatory relief for businesses. In addition, they said, financial institutions participating in their proposed program would have to disclose more about their mortgage asset holdings.

This is such a bad plan I don't know where to begin, it's doubling down on the already hideous problem that we made before...making even trillions more in bad bets on a falling housing market.

But McSame will jump on it. He will say it's Wall Street paying to clean up their own mess, when the TAXPAYER IS ON THE HOOK ANYWAY, because the government is providing insurance policies on worthless toxic debt paper!

This is a horrendous plan. But it's McSame's only shot for getting into the White House. He'll say "I'm making Wall Street pay for its own mess, Obama is making YOU pay for it."

He might win in a landslide if he plays this right. It's smoke and mirrors but he will sell this, the GOP will sell this, and the President will sell this, and the Dems will have no choice.

And McSame the Maverick will have saved America. It's f'cking brilliant. It's the greatest con I've ever seen, but it's f'cking brilliant.

Global No-Confidence Vote: On The Clock

The UberBailout is on the clock according to both sides. There's a basic skeleton of a deal out now that would phase in the $700 billion over time:
The chairman of the House of Representatives Financial Services Committee said the $700 billion U.S. officials want for a financial services bailout would be doled out over time rather than granted all at once.

Rep. Barney Frank, interviewed on CNBC television, indicated a deal on legislation to authorize the fund was near. It would include curbs on compensation for executives whose companies are able to sell bad assets to the government.

"There will be some phasing in of the $700 billion, there will be some equity protection ... for the taxpayers, there will be restrictions on CEO compensation for those companies that participate, there will be very strong oversight, there will be strong efforts to reduce mortgage foreclosures," the Massachusetts Democrat said. the same time the Republicans like Richard Shelby are saying the two sides are still pretty far apart.
Sen. Richard Shelby, the ranking Republican on the Senate Banking committee, emerged from a closed-door meeting about the mortgage plan at the White House and said no deal had been reached yet. "I don't believe we have an agreement," Shelby said. Shelby has emerged as an opponent of the Paulson plan in recent days. Shelby talked to reporters briefly and then re-entered the meeting.
Then again Senator Shelby is pretty damn crazy, his brilliant idea is just to have the Fed magically produce the money out of its ass and skip the taxpayer altogether. Wall Street naturally seems to be confident a deal will be reached tomorrow, the Dow jumped 196 points in Dead Cat Bounciness.

So what's the deal? Which one of the four scenarios are we looking at here?

Right now I'm not sure. Congressional Republicans seem bound and determined to be on the "no deal" side of things. Democrats are acting like they've gotten all the nifty provisions they've wanted, but it still means throwing billions at a problem that we've already thrown billions at. Remember, ultimately neither side wants to do this, it's political suicide to turn into the bums everyone wants to throw out.

Still, both sides are quite beholden to the corporate interests that run this country. Those that aren't don't stay in Washington long at all. Meanwhile as I said, the clock is ticking: WaMu is shopping for a deal (and they are getting plenty of Fed help) as the evidence mounts that it won't survive the weekend, and Helicopter Ben may have no choice but to toss out another rate cut to stoke the furnace.

If there's not a bailout on the President's desk by the time WaMu goes under, things may get Very Very Bad(tm). We're already seeing the results of the credit crisis, and the honest truth is the UberBailout won't fix it. Liquidity is NOT the issue: basic insolvency is. The latter is causing all the problems with the former, and this does nothing to help the former.

As long as housing prices keep falling (and they will) we have not hit bottom yet. And it anything, the rate of decline in the housing market is actually increasing now.

Sales of new U.S. single-family homes in August fell to its lowest point in more than 17 years while prices hit four-year lows, a government report on Thursday showed, in a sign of continued weakness in the housing sector.

The annual sales pace was down 11.5 percent from July to 460,000 homes and was sharply off the 510,000 pace expected by economists. The August decline was the biggest since November 2007.

The median sales price of $221,900 was off 5.5 percent from July, the lowest since $211,600 in September 2004.

The August sales pace was the weakest since 401,000 in January 1991.

Much more pain is ahead folks. The UberBailout won't do a thing to stop it. It's not a question of a soft landing. It's not a question of keeping the economy from crashing. The question is how many casualties will the impact of hitting the housing bottom cause, and how widespread the damage will be. It's looking to be global at this point, other countries are already crawling into their economic bomb shelters.

You can forget both candidate's promises of health care and clean energy and new jobs. They're not going to happen. Whoever is President is going to be spending all their time trying not to be Herbert Hoover.

It's just a question of how many individual elements will survive the coming systemic meltdown.

Be prepared.

Cross-posted at the Frog Pond.

Oh. Mah. Gawd.

Just...Ugh.(h/t Think Progress)

This woman could not operate a 3-way bulb, much less an entire country. Here's a thought, does Alaska have a recall process?

Four Scenarios

There are basically four outcomes for Uberbailout as far as Obama and McSame are concerned, I list them in order of likely occurance.

1) Both vote for it. This favors McSame, as it takes away any attacks Obama can make on the economy. It becomes more or less impossible at that point for Obama to go after McSame on the Wall Street mess after voting to give $700 billion to Wall Street. Even if the Democrats finagle the deal down to $150 billion or whatever, it's still UberBailout and the voters will hate it across the board. It will basically arrest Obama's momentum cold, which is what McSame badly needs right now in order to have any chance of winning.

Evidence for: Wall Street lobbyists and Preznitman have made it clear this needs to pass, and the Dems fold like lawn chairs when it comes to anything tough.
Evidence against: Obama is smarter than this, but still badly outnumbered.

2) Both vote against it but it passes anyway. This favors Obama for the same reason both for it favors McSame, it preserves the current status quo of the last week: Obama keeps on kicking McSame's ass on the economy and especially if the UberBailout passes it turns into "Throw the bums out".

Evidence for: Obama and McSame mutually benefit, as does Wall Street.
Evidence against: Congressional Dems and Bush do not. I doubt they will throw themselves on the pyre for bipartisan unity, and the whole deal could come completely apart, pissing off Wall Street. That's something that just won't happen. Wall Street lobbyists aren't going to take the risk, and neither are Congressional members on either side of the aisle.

3) One votes for, the other against. Political suicide and the end of the election for whoever does, the White House for whoever doesn't.

Evidence for: If either side wants to throw the towel in, this is how to do it. Also, if either side really DOES have some absolutely voodoo deadly evidence on the other, this is the honorable way out to fall on your sword for the country. The loser goes down with the bill, the winner gets to vote against it, and our President is decided five weeks ahead of time.
Evidence against: Politicians never play to lose at this level, but still, I have this higher than Option 4 for a reason.

4) The UberBailout Deal Blows Up. No bill is passed and Congress goes home. The taxpayer is spared...for now. McSame goes all MAVERICK and refuses to vote for it, Obama refuses to commit political suicide as outlined in Option #3 and the entire deal falls apart.

Evidence for: Anybody who votes for this thing is in serious danger of losing their job in November, and hey, the markets are still gonna be there. Plus, McSame is still crazy.
Evidence against: Wall Street will financially castrate everybody they can find and say that Congress left 'em no choice. The news is full of stories at this hour that a deal has more or less been reached. The economy really does do the Jenga tower in an earthquake thing and a much uglier bill has to be passed in January, or Bush summons everybody in December to pass Super Hyper UberBailout Champion Edition: The World Warriors or something. Tent cities, riots, martial know, all the things I'd like to see avoided on general principle.

So, in conclusion: Yeah, I see option 1 there as most likely, which is McSame Plan B in action, but the actions the McSame campaign took this week will of course require them to do something else completely batshit crazy in a couple of weeks once Obama starts regaining the lead.

Then again...McSame is crazy. Logic may not have anything to do with it.

And Obama's Reponse Is kick McSame square in the nuts.
Barack Obama is committed to hosting a public, televised event Friday night in Mississippi even if John McCain does not show up, an official close to the Obama campaign tells the Huffington Post.

In McCain's absence, the Senator is willing to make the scheduled debate a townhall meeting, a one-on-one interview with NewsHour's Jim Lehrer, or the combination of the two, the official said.

Well played, detective. Well played indeed. It's blowing up in McSame's face now, and it's all starting to fall apart.
Such a course of action could make life incredibly difficult for McCain, who has called for the suspension of the debate in light of the current economic crisis. Should he stay in Washington D.C. -- if a bailout is not completed by then -- and let Obama alone reach tens of millions of television viewers?

A lot, of course, depends upon what the debate commission decides to do. At this point in time, there is no indication that they are going to postpone the affair, as the McCain campaign has asked.

McSame blew it. It's going to be interesting when historians take apart the last two weeks.

Another View

On the other hand, Joe Sudbay at AmericaBLOG thinks that McSame's big Plan B is actually Plan A in a funny hat.
Are we dealing with an elaborate scam from the McCain campaign? Is McCain going through all this drama just so he can vote NO on the bailout package? That's a developing theme. Taegan Goddard writes:
Democrats fear this morning that McCain is setting up a scenario in which he will vote against the bill, rally conservatives to his side and, most importantly, distance himself from both President Bush and Congress before the election.
Marc Ambinder has this:
My colleague Nora McAvalnah tells me that sources close to Senate Democratic leadership now fear that McCain's true motivation for calling off his campaign and coming back to DC is simply to cast a "no" vote against the bailout, despite his private statements to the contrary. And it's a smart maneuver: nothing says "maverick," like voting against Bush and standing with the American public, who remain very wary of the proposal.
Gee, no one could have predicted that. McCain puts politics first.
Sad part is I can buy this too. It could be the ultimate MAVERICK!11!!!! move.

Who knows at this point. Maybe McSame is just completely demented right now.

Playing To Lose

OK, super cynical Devil's Advocate time here.

  1. Whoever is President will be a one-term guy, guaranteed. The economy will see to that.
  2. McSame's team is now playing to lose. Obama has to be in the White House to go down hard as the GOP regroups along the Palin/Huckabee axis that only true believers can save us from the end times. 2010 they plan to take back Congress, 2012 the White House and endless war, lockdown, riots, conscription, insanity, wheeeeeeeeee.
  3. But Hillary needs McSame to win and go down hard as the GOP becomes Twelve Years Of Total Assclownery And War. McSame will almost certainly attack Pakistan and Iran, and if he doesn't, oops unfit for office due to medical reasons Witchhunter General Palin will. The great thing is that the hideous state of the economy will dial the crazy batshit stuff back to the kind of crap we have currently, only in a different country. Hillary will then come in to do what Obama could not and save us. This entails crazy insanity like Big Dog sticking up for McSame's decision to suspend his campaign. Just totally wacky stuff.
I'm actually pretty friggin depressed to come up with an entirely plausible situation where it would be in the best interests of the country to actually let McSame/Palin have a crack at running the White House so that I can vote for Hillary four years from now.


Super Nationalization Treasury Bonanza Time!

WOW! For the low, low price of $2 trillion taxpayer dollars, nationalizing YOUR mortgage industry will get YOUR US Treasury OODLES OF CA$H (KA-CHING!)
But these are small-time deals. My analysis suggests that Treasury Secretary Henry Paulson (a former investment banker, no less, not a trader) may pull off the mother of all trades, which could net a trillion dollars and maybe as much as $2.2 trillion -- yes, with a "t" -- for the United States Treasury.
WOW! How do I get in on this GREAT DEAL?
Here's how: As short-term financing dried up, Fannie Mae and Freddie Mac's deteriorating financials threatened to trigger some $1.4 trillion in credit default swap payments that no one, including giant insurer AIG, had the capital to make good on. So Treasury Secretary Henry Paulson put Fannie and Freddie into conservatorship. This removed any short-term financing hassle. He also put up $85 billion in loan guarantees to AIG in exchange for 80% of the company.

Taxpayers will get their money back on AIG. My models suggest that Fannie and Freddie, on the other hand, are a gold mine. For $2 billion in cash up front and some $200 billion in loan guarantees so far, the U.S. government now controls $5.4 trillion in mortgages and mortgage guarantees.

Wow that's great! And all we have to do is pay off our mortgages like we've been doing? I mean the fact people couldn't pay their mortgages off in the first place and are already tapped under mountains of personal debt and are tapped out got us into this mess in the first place, but yeah we'll just all eat ramen for the next decade and GIT R DONE!
Fannie and Freddie each own around $800 million in mortgage loans, some of them already at discounted values. They also guarantee the credit-worthiness of another $2.2 trillion and $1.6 trillion in mortgage-backed securities. Held to maturity, they may be worth a lot more than Mr. Paulson paid for them. They're called distressed securities for a reason.
That's AMAZING! We should have nationalized these mortgages a long time ago! We can pay off our national debt just through the power of crappy securitized mortgage products! It's all so clear to me now!
Now Mr. Paulson is pitching Congress for $700 billion or more to buy distressed loans and CDOs from the rest of Wall Street, injecting needed cash onto balance sheets so that normal loans for economic activity can be restored. The trick is what price he will pay. Better mortgages and CDOs are selling for 70 cents on the dollar. But many are seriously distressed (15-25 cents on the dollar) because they are the last to be paid in foreclosures. These are what Wall Street wants to unload the quickest.

Firms will haggle, but eventually cave -- they need the cash. I am figuring Mr. Paulson could wind up buying more than $2 trillion in notional value loans and home equity and CDOs for his $700 billion.

What a financial genius! It's almost like he planned this so America could make BIG BIG BUCKS!
So the U.S. will be stuck with a portfolio in the trillions of dollars in bad loans and last-to-be-paid derivatives. Where is the trade in that?
OH NO! Tell me there's a bright side to this problem, because I'm thinking that as a taxpayer, I'll be stuck with a nationalized super-disaster that will drive the US into becoming a third world economy where it takes a hundred dollars to buy a loaf of bread!
Well, unlike Mr. Buffett or any hedge fund, the Treasury and the Federal Reserve get to cheat. It's not without risk, but the Feds, with lots of levers, can and will pump capital into the U.S. economy to get it moving again. Future heads of Treasury and the Federal Reserve will be growth advocates -- in effect, "talking their book." While normally this creates a threat of inflation and a run on the dollar, and we may see dollar exchange rates turn south near term, don't expect it to last.
WOW so the Feds can CHEAT! That's AWESOME AND GREAT! You say the dollar will eventually turn around because everyone will want to buy dollars because we really have these super-valuable mortgages on the books the taxpayers bought for LOW LOW PRICES?!?! Why didn't we do this EARLIER?!?!
You can slice the numbers a lot of different ways. My calculations, which assume 50% impairment on subprime loans, suggest it is possible, all in, for this portfolio to generate between $1 trillion and $2.2 trillion -- the greatest trade ever. Every hedge-fund manager will be jealous. Mr. Buffett is buying a small piece of the trade via his Goldman Sachs investment.

Over 10 years this could change the budget scenario in D.C., which can also strengthen the dollar. The next president gets a heck of a windfall. In the spirit of Secretary of State William Seward's purchase of Alaska for $7 million in 1867, this week may be remembered as Paulson's Folly.

WOW! Ten years from now we'll be the richest company on Earth!

Of course in the meantime we'll be in breadlines facing double digit employment and a dollar not worth the paper it's printed on, but hey, what a GREAT INVESTMENT OPPORTUNITY!

Somebody should tell McSame, I'm sure he'll be interested!

Lets Go Back Old Skool

Old Skool Keating Five, yo. (h/t C&L)


A Series Of Opening Statements

The trial of Sarah Palin's bestest buddy Senator Toobs is underway this morning. As always, excellent and comprehensive coverage can be found at TPMMuckraker.
The trial of Sen. Ted Stevens has officially begun, with attorneys making their opening statements at 9:30 this morning to the jury of mostly white-collar professionals.

It has been just under two-months since the sitting senator was indicted on seven counts of false statements for allegedly lying on his financial disclosure reports on gifts he received from the oil pipeline company, VECO. Stevens demanded a speedy trial and attempted to have the case moved to Alaska in part to accommodate his ongoing re-election campaign in Alaska. District Court Judge Emmet Sullivan complied with a quick court date, but declined to move the trial out of the jurisdiction in which the charges were filed -- Washington, D.C.

Among the witnesses scheduled for today, is John Hess, a former VECO engineer whose initials are on the renovation plans to Stevens' home, the Anchorage Daily News reports.

This one's going to be good. One has to wonder how deep into the current Wall Street mess Senator Toobs is in.

Well, That Was Just An Estimate You See

We took a look at your economy like you asked, ma'am, and our more detailed repair estimate is $700 billion $1.2 trillion.

The banking system needs another $500 billion to survive beyond the $700 billion rescue plan being contemplated by Congress, said Pimco founder Bill Gross.

Gross said on CNBC that the government bailout plan will help free up bank balance sheets so they can start lending again, but will provide only about $50 billion in real capital to the system.

"The plan goes far but it doesn't go far enough in terms of recapitalization," he said. "The banking system and the investment banking system in total really requires about $500 billion more. Where that comes from is still up in the air."

The Federal Reserve will need to step in to quell fears of counterparty risk-- the worry that one partner in a deal won't hold up its end--and provide assurance that it will be a clearinghouse to make sure transactions get done, Gross said.

"There's a lack of trust anywhere in terms of other counterparties," he said. "The Fed to a certain extent has to assume this level of counterparty risk. It has to be a clearinghouse. Otherwise things don't get done."

On the economy, he predicted tough sledding in 2009, with an unemployment rate of 7 percent that he called "not tragic but certainly not good for the millions of Americans who are going to be out of jobs."

There's an inherent danger with the predictions of the guys who screwed up this badly in the first place, and that goes all the way up from Wall Street to King Henry and Helicopter Ben to Nameless One and Preznitman.

The inherent trust problem is what the American people have with the people who got us into this mess in the first damn place. "Hey, we're really sorry about your job loss, we had to reduce headcount so we could keep our country club dues. But we'll be thinking about you guys when we use your tax money for our company, because really the only other choice would be to fire ourselves instead of just you."

Wall Street's so happy that the Dow is up 200 points right now. They are confident they'll get everything they want and more out of the pockets of the American people, and that there's nothing we can do about it.

And of course the best part is $1.2 trillion will invariably turn into more trillions and more trillions. It's the ultimate corporate welfare package, and we're paying for it.

Zandar's Thought Of The Day

At this point we need to start asking ourselves if McSame is letting Obama win because he doesn't want to put up with just how bad the next four years are going to be.

I think the old man has finally said "Screw it, let the Democrats have the damn White House, we'll take it back with Congress in 2010/2012."

So the UberBailout is the pair of shackles around Obama's neck. Surely there won't be money for health care or green energy initiatives...Wall Street has screwed up so badly that we'll be facing that 12 percent unemployment rate and the "loss of millions of jobs" the President was talking about anyway. McSame doesn't want to go down as Herbert Hoover.

He's going to leave that to Barack Obama instead.

Obama I think needs to level with America just how painful fixing 28 years of Reagan/Bush/Clinton/Bush policies is going to be.

Meanwhile Out On Main Street

Weekly jobless numbers rocketed up to nearly 500k.

The DOL reports on weekly unemployment insurance claims:

In the week ending Sept. 20, the advance figure for seasonally adjusted initial claims was 493,000, an increase of 32,000 from the previous week's revised figure of 461,000. It is estimated that the effects of Hurricane Gustav in Louisiana and the effects of Hurricane Ike in Texas added approximately 50,000 claims to the total. The 4-week moving average was 462,500, an increase of 16,000 from the previous week's revised average of 446,500.

But John McSame has to go to Washington to save us!

This All Has Been A Disaster For McSame

Obama is pulling ahead in poll after poll this week. There has been a sea change. Americans are pissed, and they just don't trust McSame.
State by state, Sen. Barack Obama (D-Ill). is showing signs of breaking open a presidential race that looked deadlocked through much of September.

A new wave of polls released Wednesday showed decisive leads for Obama in the critical states of Colorado, Michigan and Pennsylvania.

That follows noticeable progress in polls in Virginia, which had looked safe for Sen. John McCain, and Florida, which had looked promising for McCain.

This is the first time that one of the candidates has dominated state polls in the most closely contested battlegrounds.

Republican strategist Karl Rove had predicted this tectonic shift, writing at earlier this week: "[I]f the movement toward Obama in national polls continue to percolate down to the states, we could see an Obama lead later this week."
These polls are the reason behind McSame chickening out of the debates, pure and simple. He's afraid. He's losing. He can see it slipping through his fingers when he was basically tied.

He sees the Obama wave coming, so he's calling a time out. Can we afford that kind of behaviour in a President?


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