First National Bank Of Straw Men

This here? This is a stupid, stupid argument.

The government's "stress-test" of the nation's largest banks could end up discouraging lending as banks hoard cash to appear healthier to regulators, banking analysts say.

The reason: most banks want to avoid taking more government money because of the onerous restrictions the government places on the funds. As a result, they are likely to become even more conservative with their money and pull back on lending—defeating a major goal of the bank bailout in the first place.

Which is a bit like saying "more difficult college exams are bad for the beer industry because having to study more leaves less time for binge drinking."

Assholes. Why would we want to encourage accountability among banks when they made bad decisions and lost hundreds of billions by betting trillions in IOUs on those decisions? We can't have that, it'll discourage banks to lend. You know what would solve the problem? Requiring banks that take CAP money to f'cking lend some of that money out to consumers and businesses.

But...no. We can't do that. Too hard on the poor little banks.

In Which Zandar Answers Your Burning Questions

David Paul Kuhn asks:

Has the GOP lost enough to change?

Nope! When you're losing, DOUBLE DOWN FOR VICTORY!

Zandar's Thought Of The Day

So, there's this:(h/t Atrios)

A dispute among House Democrats stalled legislation Thursday to let bankruptcy judges reduce the principal and interest rate on mortgages for debt-strapped homeowners.

The measure, backed by President Barack Obama, is the most controversial part of a broader housing package that had been expected to pass the House this week.

It hit a snag after a group of moderates expressed concerns in a closed-door meeting of House Democrats about how the bill would affect homeowners who are still struggling to make their mortgage payments.

The banking industry has lobbied hard against the measure, mounting a successful multimillion-dollar effort last year to kill it.

My question is actually pretty simple:

Exactly with what money is anybody in the banking industry using to lobby any-f'ckin-body against this badly needed measure? You're telling me there are Democrats out there blocking this legislation because it's going to be too hard on the industry we're giving trillions of dollars to?

Obama needs to put an end to this noise damn fast.

Dear America:

"What the devil does this Obama person think he is doing? Where does he get off thinking he can fix the United States Government? How dare he try to reform health care or education or energy policy? Just who does he think he is, anyway? It's...it's just not bipartisan!"

--Dean David Broder, High Chief Of The Village

A Heartwarming Story

...if by "heartwarming" you mean "setting crosses on fire".

Don Black says he despises Barack Obama. And he says he believes illegal aliens undermine the economic fabric of our country.

Black, a 55-year-old former Ku Klux Klan Grand Wizard, isn't the only person who holds such firm beliefs, according to the Southern Poverty Law Center, which today released its annual hate group report.

The center's report, "The Year in Hate," found the number of hate groups grew by 54 percent since 2000. The study identified 926 hate groups -- defined as groups with beliefs or practices that attack or malign an entire class of people -- active in 2008. That's a 4 percent jump, adding 38 more than the year before.

What makes this year's report different is that hate groups have found two more things to be angry about -- the nation's first African-American president and an economy that is hemorrhaging jobs. For the past decade, Latino immigration has fueled the growth of hate groups.

"We fear these conditions will favor the growth of these groups in the future," said Mark Potok, director of the Southern Poverty Law Center's Intelligence Project. "In the long arch of history, we are definitely moving forward, but these kinds of events can produce backlashes."

Black claims the number of registered members and readers on his white nationalist Web site surged to unprecedented levels in recent months.

On the day after Obama's historic election, more than 2,000 people joined his Web site, a remarkable increase from the approximately 80 new members a day he was getting, Black said. His Web site, which was started in 1995, is one of the oldest and largest hate group sites. The site received so many hits that it crashed after election results were announced. The site boasts 110,000 registered members today, Black said.

"People who had been a little more complacent and kind of upset became more motivated to do something," said Black, who also said he joined his first hate group at age 15.

Hate groups loose in the country? Obama motivating racists to possibly take drastic actions? People looking for an easy scapegoat to blame?

Now who would want to foment crazy stuff like that?

Al Versus Norm, Part 312

Norm Coleman is still losing the recount, so now he wants a do-over.

The talk from the Coleman campaign about how the Minnesota election results are unreliable, and that a do-over election could be an option, has now gone beyond just Norm Coleman's lawyers -- it's now coming from the mouth of Norm himself.

Coleman did an interview with Sirius conservative talk-radio host Andrew Wilkow, and discussed the campaign's argument that the court's current strict standards for allowing in previously-rejected ballots must by extension render illegal a whole lot of ballots accepted and counted on Election Night, when local election officials used lax standards:

"What does the court do?" Norm asked rhetorically. "Yeah, you know some folks are now talking about simply saying run it again, just run it again."

"Have another statewide election?" Wilkow asked.

Coleman responded: "You know the St. Paul Pioneer Press is...one of the second largest papers in the state, last week [they] said we're never going to figure this out, just run it again. So you start hearing that. Ultimately the court has to make a determination, can they confirm, can they certify who got the most legally cast votes?"

Remember, when a Democrat is losing a recount, it must be settled as soon as possible in favor of the Republican to avoid "disenfranchising the people" because the "voting process worked".

But if a Republican is losing a recount, we have to have to have a re-vote because the "voting process is fundamentally flawed".

Bobby The Page, Or Kenneth The Governor?

There is win. There is awesome. And then there is this. (h/t TPM)


Dead. On. Jindal. I love it.

Powered By Wishful Thinking

Anyone else sense something wrong with this?

U.S. bank stocks rebounded on Wednesday as investors took comfort that the federal stress test being applied to the largest lenders may be lenient enough to avoid forcing banks to seek additional bailouts.

I mean am I just nuts, or is the article saying that the reason bank stocks are rocketing up is that Wall Street honestly believes that the bank stress test is in fact a complete and total mountain of bullshit that will allow banks to continue to pretend they are still solvent when they are not?

If It's Thursday...

...it must be time for a new 26-year high for unemployment claims. A whopping 2/3 of a million this week, 667,000 new claims, and the total number of people drawing benefits easily broke the five million mark (5.112 mil).

Go go Gadget stimulus bill! (please.)

[UPDATE] Sales of new homes fell to an all time low, the worst levels since the government started keeping track in 1963. That's scary enough. There are so many unsold homes on the market that housing prices will simply continue to fall even further...and America knows it.

The inventory of homes available for sale in January was at 342,000, the lowest in over five years. However, because of the weak January sales pace, the supply of homes available for sale is now at 13.3 month's worth, a record high.

And why should anyone buy now when you know the house will be cheaper later? Would you buy now if you know the price of the home your looking at will be several thousand dollars cheaper in a couple months? You would be insane to do so.

Right now we're looking at an almost permanent housing price death spiral, and there's just no bottom to the mess...which means there's no bottom to the economy in sight.

Picking A Fight On Torture

While the President may not have time...or the inclination...to go after those who tortured in the name of America, the Senate has plans of its own to investigate.

The Senate is quietly preparing plans to investigate allegations of torture under President George W. Bush, according to comments published Wednesday by Senate Judiciary Chairman Pat Leahy (D-VT) and Sen. Sheldon Whitehouse (D-RI).

The Senate Judiciary Committee could announce a hearing to consider various plans to probe allegations of torture as early as today, according to Salon's Mark Benjamin, citing Committee Chairman Pat Leahy and members of his staff.

Leahy's office told Raw Story Wednesday morning that a press release would be sent out shortly.

Sen. Whitehouse said he’s “convinced” the investigation will move forward.

“Stay on this,” he told Benjamin. “This is going to be big.”

Whitehouse, Senator from Rhode Island, is “spearheading” the efforts, and as a member of both the Judiciary and Intelligence Committees, “is privy to information about interrogations he can’t yet share,” the magazine noted.

We've already seen Obama take a pass on the worst offenses of the Bushies due to having to deal with this entire crumbling economy thing, but that's still no excuse. So, it looks like the work Obama can't or won't do on bringing these bastards to justice will have to be taken up by Congress.

Obama will at least have the decency to stay out of the way,. I'm hoping. New tag: Unfinished Bush Business.

StupidiNews!

• President Obama unveils his budget proposal today to close corporate tax loopholes and scrap some weapons programs.
• Iran first nuclear power plant could go online within months.
• Obama's CAP plan may not have a cap on money given to the nation's 19 largest banks.
• The UK plans to insure toxic assets in British banks to the tune of 500 billion pounds.
• A study shows podcasts may be better for university students than lectures.

Timmy's Free Cash Emporium

Timmy's boys released the details on the CAP (Capital Assistance Plan) for the banks today (h/t CalculatedRisk). The first thing on the list?

Capital provided under the CAP will be in the form of a preferred security that is convertible into common equity at a 10 percent discount to the price prevailing prior to February 9th.

Which is, you know, the date both BoA and Citi were trading at their relative peaks over the last month.

Which is, also, about 40% above what they were yesterday. Both stocks up up up after trading in the basement all morning.

That's a nice touch, Timmy.

[UPDATE] Bank stocks exploding across the board. My favorite part of the story?

The option to convert the preferred shares into common shares is a change in the rescue program designed to give financial markets greater confidence.

Common shares absorb losses before preferred shares do, which means that under a stock-conversion plan taxpayers would be on the hook if banks keep writing down billions of dollars' worth of rotten assets, such as dodgy mortgages, as many analysts expect they will.

Like I said, bend over. You just bought a financial system, and if these banks go under, we all get wiped out.

We're Losing, Double Down

Republicans: Still the party of compounding massive losses by continuing to do the same actions that got them into the mess to begin with. GOP Rule #1: When you're losing, double down on the Stupid.

Between to Monday’s Fiscal Responsibility Summit and Tuesday’s presidential address to Congress, the White House’s economic message shifted to new territory: health care.

“To my fellow budget hawks in this room and in the rest of the country, let me be very clear,” said Peter Orszag, the director of the Office of Management and Budget, at the financial summit. “Health care reform is entitlement reform. The path of fiscal responsibility must run directly through health care.”

The sudden shift took Republicans off guard. They had girded for a health care battle, but not on these terms. House Republicans have responded with a change of subject: they have proposed a “spending freeze,” a controversial idea among economists during an economic downturn. Their immediate target is the $410 omnibus spending bill that packs together nine bills, containing spending that ranges from NASA to national parks, that did not get a vote in the last Congress. It’s a double-down bet on spending austerity and opposition to “wasteful spending” as the message that can bring the party victory in the 2010 mid-term elections.

“We’re advocating that Congress freeze all federal spending immediately,” said Rep. Mike Pence (R-Ind.), the chairman of the House Republican Conference, during a Tuesday luncheon at the conservative Heritage Foundation. “People out there are hurting, and they understand what you do when times are tough. You make hard choices. Today House Republicans are urging the Democrats to do the same. We think it’s time that the Democrats put our money where their mouth is.”

Everyone! All together now...

We'd like to thank you: Herber Hoover
For really showing us the way
We'd like to thank you: Herbert Hoover
You made us what we are today

Prosperity was 'round the corner
The cozy cottage built for two
In this blue heaven
That you
Gave us
Yes!

We're turning blue!
They offered us Al Smith and Hoover
We paid attention and we chose
Not only did we pay attention
We paid through the nose.

In ev'ry pt he said "a chicken"
But Herbert Hoover he forgot
Not only don't we have the chicken
We ain't got the pot!

House Republicans would like to remind you when in a recessionary scenario where the government is the consumer of last resort of in an economy based on consumer consumption, the obvious answer is clearly A GOVERNMENT SPENDING FREEZE. You know, like when your heart has stopped, the obvious answer is to shoot the EMT trying to save your life because he might give you germs when he touches you.

Yes, I'm sure a large, large sector of the American voters will be going "man if only we spent less during the recession the company would give us our old jobs back."

Jesus hell these people are idiots.

Wall Street Stupidibubble(tm)

So, like I said, 92% of America liked Obama's speech according to CNN. So what's the headlines coming off of Wall Street today?

"Stocks fall as Obama fails to deliver details"

Stupidibubble(tm).

The Great Plan N Debate

Last night on Lehrer, The Kroog took on former FDIC Bill Isaac on the Plan N debate. Highlights:

KRUGMAN: And let me just say one important thing, that we do -- you know, we nationalize two banks a week. The Federal Deposit Insurance Corporation takes over temporarily two banks a week on average because of problems with the banks. This is not something that is qualitatively different from what we do all the time. It would be quantitatively different, because we don't take over trillion-dollar banks every week, but these are -- you know, this is something we do, do all the time.

Which is the point. The banks are insolvent. If they weren't insolvent, they wouldn't need hundreds of billions of dollars and trillions in loan guarantees. It's self-evident, guys. We're throwing more money at the banks than the banks themselves are worth. That means their asses are broke. On the other hand, we have people saying silly things like this, from former FDIC chairman Bill Issac:

ISAAC: And they're terribly complex. I don't know who would run them. I don't know who's going to buy them once the government decides to divest them. And they're definitely going to shrink, if they are nationalized. The markets won't support them.

And so you're talking about shrinking maybe two-thirds of the banking system in half? That's exactly the wrong medicine in the economy we're in today. We need our banks to grow; we need our banks to start lending money. And that's not going to happen if we nationalize them.

And the other thing, Judy, I would tell you is we're not going to be able to stop at a bank or two. The SEC is still not regulating the short-sellers, and they're going to attack one bank, until they score some kind of a victory and get the stock down to zero, and then they're going to attack the next one and the next one and the next one.

The banks won't grow if we nationalize them. They have lost 95%, 97%, 99% of their market value, but the fear is they won't grow if nationalized? They've taken terrible losses from bad, bad investments made with assets they didn't actually have.

He's right about the markets not supporting the banks however. When all is said and done, there will be a lot fewer banks out there in America and the world. A lot of the financial sector itself will have to go, and those jobs aren't coming back. Branches are going to close, banks are going to get swallowed up, assets sold to larger companies and debts...well now, that's the real problem, isn't it?

Somebody has to pay for these debts, trillions of dollars in deleveraging mess here. Somebody's picking up the tab for these bank debts. No matter who does, the debts are going to crush the economy.