Blub Blub Blub

So, bailout passed the Senate, includes additional tax breaks, you'd figure Wall Street would be happy, right? I did.

I was wrong too. Dow down 348, as the unemployment numbers and the credit crisis refusing to loosen up does a number on stocks.

Stocks declined Thursday as a fresh batch of dismal data agitated a market already on edge about a freeze in the credit markets and the bailout bill as it heads to the House.

"Congress is dragging its feet to get this passed," said Tom Schrader, managing director for U.S. equity trading at Stifel Nicolaus Capital Markets in Baltimore. "I think economic worries are starting to settle in. Wall Street is starting to worry that the more credit dries up the longer it's going to take to reverse the negative consequences of what we've already seen."

The Dow Jones Industrial Average lost 348.22, or 3.2 percent, to close at 10482.85. The S&P 500 shed 4 percent and the tech-heavy Nasdaq fell 4.5 percent.

Tomorrow may be a lot better with the bailout most likely passing, but today was a messy, ugly day as it hit home just how bad things are going to get bailout or no bailout.

We're not going to turn around nine straight months of job losses overnight.

Obama Wins The Internets

...with his shiny new Obama '08 iPhone App.



It makes me squee with Awesome And Win.

Michi-Gone

McSame's Straight Talk Express is pulling out of Motown...for good.

John McCain is reportedly giving up attempts to swing Michigan into the Republican column in November.

The Associated Press and Politico this afternoon are both quoting unnamed Republican officials as saying that McCain has canceled a trip to the state next week, plans to stop running ads on TV after this week, and is dispatching staffers to states where he has a better chance to win.

While Democrat John F. Kerry won Michigan in 2004, McCain had targeted the state's 17 electoral votes. But the economic crisis, which hit Michigan earlier than other states, is proving to be unfriendly terrain for McCain, who trails Democrat Barack Obama in polls in voters' confidence in fixing the economy.

I expect him to do the same in Wisconsin and Iowa soon. It's all McSame can do to hold Ohio and Florida at this point, he loses those, he's done...and guess what? McSame's in serious trouble in Florida now.

Florida Republican leaders hastily convened a top secret meeting this week to grapple with Sen. John McCain's sagging performance in this must-win state.

Their fears were confirmed Wednesday when four new polls showed Sen. Barack Obama leading, a reversal from just a few weeks ago when McCain was opening up an advantage.

The polls come amid a cascade of bad news about the economy, an issue that McCain has struggled with in recent days.

With some grass roots organizers complaining about coordination problems with the campaign, Republican Party chairman Jim Greer gathered top officials at the state headquarters in Tallahassee on Tuesday afternoon. He swore the group to secrecy.

As it is, Pennsylvania's firmly Obama country now. Biden can deliver a killing blow tonight on Palin nationally and break this thing wide open like a pinata this week.

Right To Wrong

Sure, Sarah Palin completely trainwrecked in that interview with Katie Couric. The right would support her on that no matter what she said...well, almost. You see, during that interview in one fell swoop, the Republican VP candidate just tore up 35 years of the right fighting Roe v Wade and endorsed the basic Constitutional argument supporting the decision. Steve Benen explains:

As jaw-dropping as Sarah Palin's interviews with Katie Couric have been, we'd heard rumors for days that there was more embarrassment yet to come. The rumors were, if anything, understating the case.

Last night, Couric and the "CBS Evening News" ran one more segment, posing the same questions to both Palin and Joe Biden. As you've no doubt heard, Palin talked about why she disapproves of Roe v. Wade, and why she also believes in a constitutional right to privacy. Asked to name other Supreme Court rulings she disagrees with, Palin offered humiliating gibberish. Her responses looked even worse, if that's possible, when compared to Biden's sound and sensible answers to the identical questions.

That "constitutional right to privacy" is THE fundamental argument behind the Roe v Wade decision, as dday points out at Hullabaloo.

I don't know if she believes in the right to privacy or if she believes in the words "right" and "privacy" and saw them together and took a stab at it. But this is a major, MAJOR no-no for the fundies and the wingnuts. She undermined the entire intellectual argument against Roe without even recognizing it. Taking her logic (if it can be called that), if there's a Constitutional right to privacy then there's a right to keep medical decisions confidential, not a state's right but a fundamental Constitutional right.

This is about 35 years' worth of arguments crashing down right now. If any backlash could cost her the nomination it would be over this. This reaches into Harriet Miers territory.

It's the fact that Palin was completely oblivious and ignorant to the main argument of Roe v Wade. That's in the right-wing fundie handbook, folks. If Sarah Palin is too emptyheaded to grasp the basic arguments behind the concept (and actually more than a few kudos to Katie Couric for going there) and commit a faux pas of this political magnitude, she' done. They can't blame the Evil Liberal Media on this one.

C'mon Get Angry

Robert Reich believes Obama needs to tap into America's newest energy source: PISSED OFF AMERICANS.

Angry populism has always been a potent force in American politics. And
now, with wages dropping, jobs insecure, fuel and food and
health-insurance costs soaring, and millions of homes in jeopardy -- and
what's perceived to be a massive tax-payer bailout of some of the richest
people in the land -- angry populism is about to explode. McCain has
already tried to cast himself as an angry populist, even though he still
wants to give the very rich a bigger tax cut than George W. gave them, and
cut taxes on big corporations (oil companies alone would reap $1.2 billion
a year under McCain's plan). Barack Obama, whose plans for middle-class
tax relief and afforable health care will genuinely help America's middle
and working classes, has been expressing more indignation lately on behalf
of them. But anger doesn't come as easily to Obama as it does to McCain --
even though McCain seems quite ready to aim his anger anywhere and
everywhere.

Democrats should be angry populists, given their traditional role of
protecting and championing the underdogs in American politics, and
especially considering the absurdly wide gap that's opened up between the
rich and everyone else. But in recent years Democrats have ceded the
mantle to Republicans, who now mimic the faux populism of Sean Hannity and
other right-wing talk show demagogues. (The recent maneuvering in the
House over the bailout bill is really over this. House Democrats are
getting the same angry mail that House Republicans are receiving, and
don't want to be seen as lending their support to this ugly bill without
Republicans signing on.)

Obama has a clear opening here, and he needs to use it to help get things DONE.

Another Bad Day

On Wall Street. Those bad unemployment numbers have knocked about 250 points off the Dow, other indicies are down 2.5-3.0% right now.

Folks, once again, this unemployment picture's not gonna get better for years. We've been bleeding jobs for nine months, and it's not going to recover until late next year at the earliest.

Must Be Video Day

Because here's Obama in Grand Rapids, Michigan today speaking about jobs.



Now this is the Barry we need to see a lot more of between now and November 4.

How We Got Here

From the Big Picture guys, here's video of Democratic Senator Byron Dorgan talking about the Gramm-Leach-Bliley Act of 1999, aka the "Financial Modernization Act"...a big huge chunk of How We Got Into This Mess In The First Place.

Senator Dorgan says "In ten years, I think we will in time say 'We should not have done this'."

He was wrong of course.

It only took us nine years to greatly regret this legislation.

Magnetic Fridge Poetry, Alaska Style

Ahh Sister Sarah, you give us classics like this:

"On Good and Evil"

It is obvious to me
Who the good guys are in this one
And who the bad guys are.
The bad guys are the ones
Who say Israel is a stinking corpse,
And should be wiped off
The face of the earth.

That's not a good guy.

(To K. Couric, CBS News, Sept. 25, 2008)

And it gets better from there.

I have my own poem.

"This Will Be Good"

Caribou Barbie
Takes on the entire world
With the power of self-confidence
And a small baggie of moose jerky.
You have to admire her
For taking a bullet
For her seventy-two year old dad.

Like golf
This debate will be low score wins
On the Gaffe-O-Meter.
To this I say the following:



Less is More.

Cafferty On Palin

My work here is done. I believe I will have a cookie now.

Opposing The Bailout

Double G takes the "You're an idiot to oppose the bailout" Village crowd to task.

Washington Post business columnist Steven Pearlstein has spent the week insisting that only gross ignorance could account for opposition to the Paulson bailout. After the House rejected the bailout plan on Monday, he wrote a column -- entitled "They Just Don't Get It" -- arguing that bailout opponents simply "don't understand the seriousness of the situation." He scoffed at the idea that any well-informed person could question -- let alone oppose -- the specific Paulson bailout plan Steve Pearlstein favors.

The Pearlstein column isn't as bad as Glenn makes it out:

Americans fail to understand that they are facing the real prospect of a decade of little or no economic growth because of the bursting of a credit bubble that they helped create and that now threatens to bring down the global financial system.

Politicians worry less about preventing a financial meltdown than about ideology, partisan posturing and teaching people a lesson. Financiers have yet to own up publicly to their own greed, arrogance and incompetence. And leaders of foreign governments still think that this is an American problem and that they have no need to mount similar rescue efforts in their own countries.In the coming weeks and months, all of these people will come to understand how deep the hole really is and how we're all in it together.

They'll come to understand that the giant sucking sound they hear is of a massive deleveraging of the global economy and the global financial system as households, governments, businesses and investment funds adjust to living in a world with less debt and more inflation.

Now, he's dead right on the problem. It's the solution where Pearlstein fails.

And they will come around, reluctantly, to the understanding that the only way to get out of these situations is to have governments all around the world borrow gobs of money and effectively nationalize large swaths of the financial system so it can be restructured, recapitalized, reformed and returned to private ownership once the crisis has passed and the economy has gotten back on its feet.

Borrowing gobs of money is how we got into this mess in the first place. We already owe $10+ trillion, plus $50+trillion in unfunded garbage.

There are no gobs of money TO borrow. Regulation yes. Borrowing gobs of money? Already did that, not working.

Glenn has more on the fix:

all sorts of other Actual Experts -- not just Pearlstein's idiot-readers and moron-left-wing-bloggers who have the audacity to object -- have argued that this plan won't work, is deeply unjust, and that far better and more equitable alternatives exist.

Just today, in Pearlstein's own paper, Jonathan G.S. Koppell and William N. Goetzmann of the Yale School of Management argued that a far preferable solution is to have the government pay off all delinquent mortgages -- which would transform the toxic waste into solid instruments and would prevent people from having their homes foreclosed -- the very plan Pearlstein's reader advocated which provoked such snotty scorn. Many other ignorant, ill-informed morons have had the temerity to argue that other proposals were superior to the bailout, including George Soros (recapitalize the banking system) and Actual Economist Brad DeLong (nationalize under-capitalized institutions). One of the leading blogger-opponents of the bailout has been Duncan Black, an Actual Economist with a Ph.D. in Economics from Brown. And Actual Economist Dean Baker wrote earlier this week:

How do we go about getting the banks in order? Almost every economist I know rejects the Paulson approach and argues instead for directly injecting capital into the banks. The taxpayers give them the money and then we own some, or all, of the bank. (That's what Warren Buffet did with Goldman Sachs.)

Pearlstein -- and so many other bailout cheerleaders -- scorns those same concerns as grounded in stupidity and ignorance when they come from the ugly, loudmouth, teeming, insubordinate masses who refuse to obediently bear the massive debt being tossed on their backs.

I may not have a Ph.D. in Economics, but I'm smart enough to recognize the fact that throwing a shitload of money at this problem over the last year has done nothing to fix it and in fact has made the problem much much worse, resulting in the problem we have now. Bush has refused to do anything for homeowners because he says that's rewarding people who made bad decisions, you know, unlike this entire mess of a Wall Street bailout.

It logically follows that throwing shitloads MORE money at the problem is therefore NOT the answer. The problem is the housing depression. Take the money and pay those bad mortgages off. Housing prices will then stabilize. It's cheaper than the bailout as is.

Until housing prices stop falling at the rate of 20% year-over-year, nothing we do to correct to symptoms of the housing depression will help. So, we can either wait until the housing depression levels off and then take action, or, you know, take action to stop the housing depression.

A government agency to buy mortgages and stabilize home prices is the only real solution. The banks don't need nationalization, it's the housing market.

As long as home prices keep falling, the problem will get worse.

Oh Goody

New unemployment claims this week are now the worst since 9/11.

Economists said the report showed the economy was being rattled by forces other than the hurricanes, adding that the numbers were at high levels even when the impact of the storms was filtered out .

"The underlying claims reflect an upward trend in unemployment," said Dana Saporta, economist at Dresdner Kleinwort Securities in New York. "The unemployment rate may settle back to 6 percent temporarily due to the teenagers going back to school from their summer job search."

But "our view is the unemployment rate will peak about 6.7 percent next year," Saporta said.

Steve Goldman, market strategist at Weeden in Greenwich, Connecticut, agreed "the economic picture is going to get worse," but the stock market's 9-percent drop last month showed investors already know that.

6.7%? That's best case government economist stuff? You'll be wishing for 6.7% next year, I think.

Words And Deeds

From Obama's speech on the Senate floor yesterday:

What it means is that if we do not act, it will be harder for Americans to get a mortgage for their home or the loans they need to buy a car or send their children to college. What it means is that businesses won't be able to get the loans they need to open new factories or make payroll for their workers. And if they can't make payroll on Friday, then workers are laid-off on Monday. And then those workers can't pay their bills or pay back their loans to someone else. And it will go and on and on and on, rippling through the entire economy. Thousands of businesses could close. Millions of jobs could be lost. A long and painful recession could follow.

He also said that if we had "two or three or six months" to come up with a better plan, we'd do that. But we have to pass something now.

OK Barry. Guess what? You have two or three or six months at the most before we're back in the same exact situation that you're warning us about now.

And when all that above worst case scenario happens anyway in 2009, and should you happen to be President at the time, we're counting on you to get a real fix passed. It will be much harder to do so and a fix will be needed much more urgently.

I'd get to work on that now if I were you. It will define your Presidency, and it will define America's future.

StupidiNews!

• The wreckage of adventurer Steve Fossett's plane crash may have been located.
• Are pro-war groups paying College Republicans and fraternities as professional protesters?
• The SEC is investigating if rumors spread by traders contributed to Bear Stearns and Lehman's demise.
• America's top general in Afghanistan is warning the war there could get much, much worse.
• Will Sprint's city-wide 4G WiMax wireless broadband make it in Baltimore?

UberBailout Still Sucks

It's still a bad bill, folks.

It's the same bill from Monday with some extra marshmallows (green industry tax breaks, FDIC limit raises) that got rejected Monday.

What's different? Suddenly every press outlet has launched a full-scale attack on the American people for daring to oppose this. In the last 48 we've seen every major news outlet predict dire, unspeakable consequences if this bill is not passed this week, like "not being able to get money at the ATM" or "companies not being able to meet payroll" or "not being able to get a loan for anything."

That's not going to happen. You will not fail to get your paycheck. Your world will not shut down overnight. You will not be thrown out into the set of Max Max Beyond Thunderdome. It's the same play made with the same media assist as the Iraq War.

That's not to say we don't need SOMETHING. There are real problems with our economy as I have explained time and time again. But THIS bill is NOT it. This bill simply will not work. It will dump the problem in the next President's lap in a few months, and give whoever it is a massive problem down the road.

Passing this bill will not fix the credit crisis. Period.

There ARE alternatives out there, like the No BAILOUTS Act from Democratic House members Pete DeFazio, Donna Williams, and Macy Kaptur, which proposes a 5-step plan:

1. Require the Securities and Exchange Commission (SEC) to require an economic value standard to measure the capital of financial institutions.

2. Require the Securities and Exchange Commission to restricting naked short sells permanently.

3. Require the Securities and Exchange Commission to restore the up-tick rule permanently.

4. "Net Worth Certificate Program"

5. Increase the FDIC Insurance limit from $100,000 to $250,000.

At least the Senate did crib some stuff from this act, but other then that Senate bill is full of delicious pork, rule changes, and smoke and mirrors for Wall Street to pull the wool over America's eyes.

We're not going to get a better bill unless we demand one. It's not going to come from the Senate. The House vote has been moved to Friday from what I understand.

We'll see.

[UPDATE] 74-25 passage, all the usual suspects voted for it. How much porkified crapola is in this bill with the intention of making it palatable? Another $110 trillion worth, bringing the total to $810 trillion.

In a historic vote, the Senate approved a massive $700 billion rescue plan for the nation's finance system Wednesday night, but only after tacking on another $110 billion in tax breaks to lure votes from both parties.

A strong bipartisan majority rallied behind the controversial Wall Street bailout package, passing it by 74-25.

The vote sends the measure to an uncertain fate in the House of Representatives, where lawmakers rejected the original version on Monday, 228-205. A new House vote is expected on Friday, and many lawmakers in both parties there remain opposed to it.

If anything, odds are now worse among Republicans.

Many lawmakers voiced disdain for the extra tax breaks the Senate added to the financial-rescue package. They ranged from a one-year fix to prevent the alternative-minimum tax from hitting more taxpayers to extending the research credit for business to allowing rural utilities to issue tax-exempt bonds for use of renewable energy.

Also included were more obscure terms extending tax breaks for motor-sports racing tracks, makers of wooden arrows for children, and the rum excise tax for Puerto Rico and the Virgin Islands.

The tax breaks added to the Senate bill would cost the Treasury an estimated $110 billion over 10 years, according to Congress’ Joint Committee on Taxation.

"It's garbage," said Rep. Devin Nunes, R-Calif. "They’re trying to put more decorations on the Christmas tree, but the problem is the Christmas tree."

"The bailout legislation that the Senate is sending back to the House is a fraternal twin to the one I voted against on Monday _ meet the new bill, same as the old bill," said Rep. Joe Barton, R-Texas, who led efforts to kill the House bill. "I'm kind of an old- fashioned guy, and I think we ought to pay for what we do as a government, but instead we’re talking about adding $1.5 trillion to our national debt and forcing our children to pay the cost."

Dole echoed that sentiment.

"Because of unrelated spending additions, this bill now comes at a cost of over $800 billion, and it is still a government takeover of our economy with no protection for taxpayers. It raises the debt ceiling to $11.3 trillion. It bails out foreign investors before American homeowners struggling to pay their mortgages. And it does nothing to address the root cause of this mess, the housing crisis," Dole said.

Sen. Jim DeMint, R-S.C., echoed many angry constituents.

"It forces innocent taxpayers to bail out government policies and Wall Street mistakes. It asks the American people to take a leap of faith and trust people who have consistently misled them," DeMint said. "Our own government appears to be leading our country into the pit of socialism."

Democratic conservatives too may be far less likely to support it in the House now.

In particular, the additional tax extensions meant to persuade some House Republicans to switch their votes in favor of the bill could cause some fiscally conservative, or "Blue Dog," Democrats to drop their support because the tax cuts are not paid for and will drive up the federal deficit.

Hoyer, the No. 2 Democrat in the House, said he wasn't pleased the tax exemptions were added to the bill and admitted they may result in fewer House Democrats supporting the proposal.

"There's no doubt the tax package is very controversial. The Senate, in my opinion, is adding that on because they think that's the only way they can get it passed," Hoyer told NBC on Wednesday.

This bill is even worse than before. Short of putting the Paulson "No legislative oversight, no judicial recourse" idea back in this I cannot see how this bill can be any worse.

Again, something needs to be passed, but not this bill. This bill is now up to $800 trillion in bullshit that does not solve the core problem, and we're running out of time.