Generation Depression

Over at Scholars & Rogues, Greg Stene puts out a pretty sobering thesis but one I've been talking about coming for a long time now: The end of the so called "Millenial Generation" as the driving consumer force in America.

We may be witnessing the absurdly quick end to the Millennial Generation.

This coming Monday, September 29th may take care of it all.

For years:

• we had the advertising world getting a handle on the Millennials at a huge cost and professional upheaval of all it once held true
• we had the world of employment turning itself upside down to accommodate the Millennials’ justified lack of employer-loyalty, work performance on their own terms, and the quick-shift from employer-to-employer they represented
• there was the idea of friendships made in social groups being more important than those made at work
• the world of casual friends on social networks was good enough for a lot of people
• the form of independence from the Millennial stereotype so carefully crafted as the youngsters refused to accept the limitations of the stereotype and grew beyond it every two years or so, keeping marketers from ever really understanding them
• and the confidence in themselves and the future, that some older people around them never quite got used to …

It all ends over this short weekend.

Two things came up this Thursday night, the 25th.

First, the apparent coming agreement on the massive $700,000,000,000 bailout has been tossed up on the rocks of uncertainty (sounds like a place where it rains a lot) in a mess of a president, two contenders, two political parties, a power struggle and just way too much to bother with here.

So, the money markets become even more unstable, even more unsure of the future. You begin to kiss off investment money into companies and their expansion because money is far too valuable to invest in anything remotely risky, and nearly any company’s survival these days is a real risk.

You begin to kiss off jobs, since companies can’t expand without investment and loans. You begin to kiss off sales since people are afraid to spend money because they’re afraid of losing their job and their homes.

Second thing, announced relatively late this Thursday evening. Washington Mutual (WaMu) failed … the United States’ largest bank failure ever … “the biggest bank failure in history,” according to the New York Times. Regulators rushed in, took over, and sold the whole damned thing off to J.P. Morgan Chase.

This biggest bank failure ever. Tonight. In this country.

And in this crisis of confidence, the Millennials died.

Absolutely. Those of you in that vital 18-35 age bracket like myself? I got news for you.

We're screwed.

The time to start doing what your parents did that you made fun of, as in work two jobs to pay the bills, cut up those credit cards, clip coupons, scrimp and save and treat your job(s) like the lifeline(s) they are is pretty much NOW.

You're not going to like the next several years. You're going to be pretty broke. Your parents are going to be broke and they're not going to be able to help you anymore. You're going to have to sell the video game consoles and the plasma TV and the give up the nights out getting plastered pub crawling with your crew, dig?

You're not going to be the next Bill Gates. You're not going to be CEO of the company. You're going to be working a shitty job where you're going to be making a choice between food, gas, and your bills from week to week. If you lose your job, and eventually you will, it's going to be pretty bad for you and your loved ones. Your company's going to reduce headcount. Your friends are going to get laid off. You're not going to get that raise or bonus this Christmas, ok?

1) Make a budget. Figure out what you're spending each month on bills, rent, credit cards, food, gas, whatever. Figure out what you're making now. Figure out what you need to cut to come out ahead. Then cut it. Cut it now and save up some money. You're gonna need it when things get truly shitty in the months and years ahead...and yes, I said years.

Do you work for a bank or financial firm? Your job's in real, real trouble. You most likely will not have it next year. It's just beginning, folks.

And it's going to get significantly worse. Suck it up now. Hate your boss? Hate your job? Hate your co-workers? You'd better get over it. You're gonna need the money. Got credit cards? Got a car payment? Got that $15 bucks a month on that MMO or Netflix or satellite radio or the cell phone contract or the broadband internet deluxe cable service?

Start figuring out where you can make cuts now, then DO IT. I did.

2) Make friends at work. You're going to need contacts to get jobs. Quit acting like you're the most important person at your job, you're not. You will be downsized or replaced. You will get stomped on by other folks who are gonna claw over your corpse to advance. Be worried about keeping the job you have, not getting the job you want.

3) Get your shit together. You're gonna have to. It's going to be hard. You have no idea. Your grandparents and great grandparents did. Ask your parents about 1977-1981 sometime. Your idea of a downturn is the dot-com bust. That was nothing compared to what's ahead.

4) Be prepared, as I keep saying. You know this is coming if you're reading this. Act on it. Don't wait.

5) Remember how we got into this mess. Easy credit. No regulation. Rampant greed. Tax cuts and massive spending on wars and bailouts and profit profit profit always profit. You've read my posts. You know what's going on.

Finally, VOTE on Election Day. That's how you make a difference. It starts by getting educated on the issues and voting. Local, County, State, National. Learn who the candidates are, what they stand for and vote.

Epic Campaign Suspension/Resumption Failure

The view from across the spectrum today is that McSame crumbled under Obama's pressure and plan to turn the debate into an hour long prime time interview with Jim Lehrer if McSame didn't show.

It's definitely not helping him that he already had in place ads that he had won the debate 12 hours before said debate, when it wasn't clear he would be at said debate, meaning...he was going to be at the debate all along and knew it.

Between this and Sarah Palin's utterly miserable performance this week with Katie Couric prompting calls for Palin to resign, and the McSame campaign taking the blame for screwing up yesterday's bailout deal, this is about as far into EPIC FAIL territory as you can get short of live animals and rubber pants.

Tonight is Obama's clearest opportunity yet to deliver a crushing, final blow to McSame, and both of them know it.

The Big Lie Continues

Once again Republi-scum are trying to blame the economy on minorities, in preparation of the entire next four years of an Obama administration. Today Double G catches the National Review pinning the WaMu collapse on hiring Hispanics and gays.

National Review's Mark Krikorian notes that (1) Washington Mutual became the largest bank to fail in American history yesterday and (2) its last press release touted the fact that it was named one of America's most diverse employers, having been "honored specifically for its efforts to recruit Hispanic employees, reach out to Hispanic consumers and support Hispanic communities and organizations"; for being "named [one of] the top 60 companies for Hispanics"; for "attaining equal rights for GLBT employees and consumers"; for having "earned points for competitive diversity policies and programs, including the recently established Latino, African American and GLBT employee network groups"; and for being "named one of 25 Noteworthy Companies by Diversity Inc magazine and one of the Top 50 Corporations for Supplier Diversity by Hispanic Enterprise magazine."

While juxtaposing these two facts -- (1) WaMu has a racially and ethnically diverse workforce and (2) WaMu collapsed yesterday -- the National Review writer headlined his post: "Cause and Effect?" He apparently believes that the reason Washington Mutual failed may be because it employed and was too accommodating to large numbers of Hispanics, African-Americans and gays. Is that why Lehman Brothers, AIG, Bear Sterns and so many others also failed -- too racially diverse of a workforce? Ironically, the night before, National Review's Mark Steyn and Hugh Hewitt agreed with one another that The Atlantic Monthly was forever destroyed as a journalistic entity because it employs Andrew Sullivan, whose writings about Sarah Palin are "a form of mental illness."

At roughly the same time, Law Professor Glenn "Instapundit" Reynolds promoted this article by University of Oklahoma Professor David Deming, which described "Obama's thinly veiled hatred for this country's unique culture and institutions" and said he was "a hollow man that despises American culture," and the article predicted that "more Americans will come to this realization and elect McCain/Palin in a landslide." Professor Dunning explained that Sarah Palin compares favorably to Obama because she -- unlike he -- was "unassisted by affirmative action" and "is not embarrassed by being an American." Then, this shining light of the right-wing blogosphere lavished praise on that article in a post entitled "Alien Obama" and explained that "Barack Obama despises America and American values because he has never known or experienced them, as he did not grown up in a normal American culture"; that "Obama is un-American"; and that "[Obama] is not one of us" (Professor Reynolds then linked to that "analysis," too).

Yesterday, The Atlantic's Ross Douthat argued -- more or less persuasively -- that both presidential campaigns have decided, for different tactical reasons, that it's in their interests to ensure that the election entails no real substantive differences between the two candidates and that the election has therefore become "an election about nothing." Even if that's true, the need to banish the faction that has been driven by drooling, ugly cretins like these -- the people whose twisted mentality brought us torture and rampant lawlessness and endless authoritarian destruction and who crave still more of all of that (and economic crises always exacerbate hatemongering extremists and render their bile infinitely more dangerous) -- is, by itself, reason enough to care about the outcome.

Make no mistake about this. Race will be the scapegoat of this economic meltdown, and it will be laid at the feet of America's first minority President. The plans are already being drawn up and executed.

Just as eight years of Clinton's penis was the source of everything that could have remotely gone wrong with the 90's, Obama's skin color will be the source of everything wrong with the next four years to Republicans.

This is just a taste of the racism, bigotry, and hatred America is in store for from Republicans should Obama win.

We Have Crossed The Event Horizon

And the Sarah K. Palin Will You Please Go Now! calls are only beginning. National Review's Kathleen Parker starts the avalanche.

Palin’s recent interviews with Charles Gibson, Sean Hannity, and now Katie Couric have all revealed an attractive, earnest, confident candidate. Who Is Clearly Out Of Her League.

No one hates saying that more than I do. Like so many women, I’ve been pulling for Palin, wishing her the best, hoping she will perform brilliantly. I’ve also noticed that I watch her interviews with the held breath of an anxious parent, my finger poised over the mute button in case it gets too painful. Unfortunately, it often does. My cringe reflex is exhausted.

Palin filibusters. She repeats words, filling space with deadwood. Cut the verbiage and there’s not much content there. Here’s but one example of many from her interview with Hannity: “Well, there is a danger in allowing some obsessive partisanship to get into the issue that we’re talking about today. And that’s something that John McCain, too, his track record, proving that he can work both sides of the aisle, he can surpass the partisanship that must be surpassed to deal with an issue like this.”

When Couric pointed to polls showing that the financial crisis had boosted Obama’s numbers, Palin blustered wordily: “I’m not looking at poll numbers. What I think Americans at the end of the day are going to be able to go back and look at track records and see who’s more apt to be talking about solutions and wishing for and hoping for solutions for some opportunity to change, and who’s actually done it?”

If BS were currency, Palin could bail out Wall Street herself.

If Palin were a man, we’d all be guffawing, just as we do every time Joe Biden tickles the back of his throat with his toes. But because she’s a woman — and the first ever on a Republican presidential ticket — we are reluctant to say what is painfully true.

What to do?

McCain can’t repudiate his choice for running mate. He not only risks the wrath of the GOP’s unforgiving base, but he invites others to second-guess his executive decision-making ability. Barack Obama faces the same problem with Biden.

Only Palin can save McCain, her party, and the country she loves. She can bow out for personal reasons, perhaps because she wants to spend more time with her newborn. No one would criticize a mother who puts her family first.

Do it for your country.

You know, Keith Olbermann and Rachel Maddow called this last night. McSame's campaign has been full of Hail Mary bombs with 8 minutes left on the clock. Now he'll just throw another Hail Mary and Sister Sarah will step down.

The Palin Resignation watch is officially on. After THIS interview, do you blame McSame?

Zandar's Thought Of The Day

Are House GOP members playing chicken with their Stupidiplan to run FOR John McSame or AGAINST him?

I would have said last night that McSame was leading this revolt. Now I'm not so sure. It could be the House GOP telling both Bush and McSame to eat shit and die, and they really do believe they will get their plan passed.

That's the $3 trillion question.

It's On!

Super Action Debate '08 is ON.

11:24 AM - McCain Officially Going To Debate: The McCain campaign releases a statement saying that John McCain will attend tonight's debate. Here's an excerpt:

Senator McCain has spent the morning talking to members of the Administration, members of the Senate, and members of the House. He is optimistic that there has been significant progress toward a bipartisan agreement now that there is a framework for all parties to be represented in negotiations, including Representative Blunt as a designated negotiator for House Republicans. The McCain campaign is resuming all activities and the Senator will travel to the debate this afternoon. Following the debate, he will return to Washington to ensure that all voices and interests are represented in the final agreement, especially those of taxpayers and homeowners.

Let the games begin.

Oh wait, the game's over. McSame just completely lost and looks like the erratic dingbat he is right now, with his erratic dingbat witchhunter Veep. He loses the debate...because he's at the debate. He played chicken and folded. He's now dancing to Obama's music. The last 48 hours just make McSame look like a crazy old man.

EPIC FAIL.

Death Watch 2008

Well, WaMu's down. Who's next on the block?

Investors are pulling out of Wachovia and National City right now.

Shares of Wachovia and National City tumbled on worries about heavy mortgage losses after talks on a $700 billion financial sector bailout bogged down and federal regulators seized Washington Mutual in the largest bank failure in U.S. history.

A collapse of the bailout talks in Washington could prolong and deepen the freeze in various parts of the credit markets and could deepen losses on banks' balance sheets from troubled mortgages and other loans.

Both are down 20-25% as of this morning. National City has been slowly dying for months now, being Ohio's largest retail bank and stuck in Rust Belt Mortgage Hell.

[UPDATE] NCC is crashing hard, down more than 40% to under $3 and falling. I don't see NCC surviving the weekend at all. Wachovia I give 40% odds of making it.

MAVERICKED The Revengification

I'm glad I'm not the only guy who sees the wrecking ball coming at high speed this morning. Steven D at the Frog Pond:

McCain's campaign denies he has backed any plan, yet, but this smells like a doublecross to me, and we all know Steve Schmitt, McCain's campaign manager is a Rove protege who cares more about winning elections than doing what's best for the country. This so called plan (outlined on a one page handout given to reporters) is a mere election year ploy so these conservative Republicans and the McCain camp can run campaign ads blaming Obama and the Democrats for not taking action on "their" bailout plan, which they will claim would have cut your taxes.

It's cynical, its a non-starter with the Bush administration and it has no basis in reality much less any chance of successfully stopping the financial sector bleeding even if it could be passed. Just one example of how ridiculous this approach is: how do you know how much to charge a bank for this insurance program when you can't evaluate the value of the asset because you don't know the default risk of that asset? The answer: you can't.

In other words, this is a a typical right wing Republican solution. A gimmick that places party before country. Expect its proponents to get lots of airtime on the cable news shows, however. After all, these are very serious people with a "plan" to save the world. The fact that they are playing games with your financial future: Priceless.

Tristero at Hullabaloo:

In other words, what we need is someone to make everyone sit down and cut the bullshit. Just like St. John McCain says he is prepared to do with the real Shia and Sunnis. And don't for a minute think this September Surprise won't work with the hoi polloi.( Or that there won't be an October surprise even more grandiose and dramatic than this one.)

What to do? If they are truly serious about solving the financial crisis - which has the unfortunate aspect of actually being really real - then first, Congress should adjourn until that narcissistic idiot McCain is safely out of town. The second step? Blame McCain for any and all delays. The third step? Blame McCain. Get it?

This isn't about obstreperous Republicans blocking a needed financial bailout because it doesn't fit some whacked ideology. This is about a campaign bailout. McCain's campaign bailout. The focus must remain entirely on his manipulativeness and his deeply unserious meddling in affairs he has not the slightest ability to understand. Once he slinks away, the very serious business of what to do can be addressed.

And then it's time to blame House Republicans for being ideological dingdongs.

Clif at Sadly, No!:

The claim by the conservative dirtbags in the House that their “insurance” plan is kinder and gentler to the taxpayers seems to me to be a rancid stream of raw sewage being marketed as chocolate fondue. Without the full details of either plan, I could be wrong, but, in general, it seems that the “insurance” model is simply a way of giving more taxpayer money to the companies that created the mess.

The difference between the dirtbag proposal and the White House proposal is that under the dirtbag proposal, the distressed company holding a troubled mortgage-based asset gets a taxpayer-funded insurance policy for the full value of the asset in exchange for a small premium payment. Under the White House proposal the federal government pays an amount to the distressed company that will, at least temporarily, assuage the company’s financial woes in exchange for the troubled mortgage assets and an equity interest in the company.

Now compare the two results. Under the dirtbag proposal, if the mortgage-based asset performs, all the upside goes to the distressed company, and if it doesn’t, the taxpayers bear the full downside, potentially the entire “face value” of an otherwise worthless asset. Under the White House proposal, if the mortgage performs, the taxpayers may get more than they payed for the asset plus an appreciation in the government-held equity interest; if it doesn’t perform, the taxpayers’ liability is limited to the amount paid to buy the asset. The dirtbag proposal potentially costs the taxpayers more and gives the taxpayer no upside.

Granted the final dirtbag plan might continue provisions that mitigate or eliminate some of these problems. But the point is that on its face the insurance model will cost taxpayers more and provide all the upside to distressed companies. Or am I missing something here?

The question is once again:

1. Do the Dems fail to see the trap once more?
2. Will they fall for the trap?
3. Will they become trapped and be forced to fold?
4. Can McSame take advantage and use it to vault to the White House?

Unfortunately, I'm thinking the answers to all four of those are "Yes" and it pisses me off. As Digby says, the GOP started a frackin war on general principle. They'd rather let the market crash than admit their basic, fundamental economic policies have been precipitously wrong.

And once again the Dems have been right there with the assist, failing to do a damn thing about it over the last eight years. Why would they start now?

We're about to get MAVERICKED. McSame will swoop in when the time is right. The Bailout will not happen, and over the next couple weeks as Steven D says the "conservative Republicans and the McCain camp can run campaign ads blaming Obama and the Democrats for not taking action on "their" bailout plan, which they will claim would have cut your taxes."

The only question is how quickly the Dems will fold.

Given what I think's going to happen on Wall Street, the answer may be as soon as this weekend at the worst, but I honestly think we're going to the see the GOP use the same tactics we've seen before. Wall Street will crash over the next couple of weeks and the GOP will blame the Dems for it, the the Dems fold and GOP has "fixed" the economy THEY THEMSELVES BROKE. Checkmate.

With the overwhelming evidence of past performance of both the GOP and the Dems, I'm just not seeing other outcomes. Because the truly scary part is the things Preznitman were saying 36 hours ago are very real outcomes of this game of chicken. We could very well see a systemic meltdown from this, as I've been warning about for months now. It's not going to take much at this point, and the GOP is betting our country on the theory they can get enough political mileage to put McSame in the White House before a global systemic collapse happens.

Given the GOP's history of being off by orders of magnitude in their calculations, what do you think?

This is the BIG ONE, folks, that's what I think. It's happening now. The Crash of Ought Eight is upon us. Dow's down 100, Bush is screaming that he'll get the GOP in line, but it's too late. Not going to happen. They know their only political chance is to run against Mr. 26%.

Assume the position, folks. This is one game of chicken we're all about to lose.

Washedup Mutual

Pretty scary news this morning, again, Washington Mutual was seized by the FDIC and sold to JPMorgan Chase for $1.9 billion, a complete fire-sale price. Since last Monday, WaMu has quietly lost nearly $17 billion in deposits as people have gotten their money out.

Now the question is what do the people who have their money still in WaMu do?

I'm hoping nothing. I'm hoping it's business as usual as the FDIC says. That is most likely going to be wrong.

I just don't see how there's not going to be a major bank run on WaMu's remaining assets now. This is the same government that 36 hours ago warned of dire economic consequences if there was no bailout deal. If even one percent of WaMu's remaining creditors head to cash out, it's going to be a nightmare. The bank just doesn't have that amount of physical cash on hand. No bank does. No bank keeps that much cash around, it's all electronic numbers.

My honest fear is that this morning there's bank runs at WaMu's remaining branches. Look, people are, well, stupid at times. They collectively panic. I know how I would feel if my bank was WaMu right now. I would have been one of the people that got their money out last week.

Even worse, this bank run panic spreads to other banks. More of them are going to start to fail. more of them have to be rescued by the FDIC until the FDIC has to be rescued, that's the next big domino to fall.

And the really scary part is I believe after the bailout deal, whatever form it takes, is signed...the banks will fail anyway.

StupidiNews!

• The Chinese prepare for their country's first spacewalk mission this weekend.
• Tropical Storm Kyle could cause problems for Maine and the Canadian Maritimes next week.
• The UberBailout is affecting every other piece of legislation, including spending bills...that is if the bailout is even still needed.
• Once again reports in Europe have surfaced that Bush refused to back an Israeli attack on Iran earlier this year.
• Most US workers spend 25% of their time online goofing around, but that's actually a good thing.

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.''

MAVERICKED!

[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.

MAVERICKED!

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.

...at 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 law...you 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.