Is the Banking Crisis Over

Is it possible that the actions of not just only President Obama but those of former President Bush have stemmed the tide of the banking crisis? Scanning the news today it was refreshing to see that Citigroup doesn’t think it will need anymore cash infusion from the government and is looking forward to running in the black from this point forward. Over at Reuters they have this to say from CEO Richard Parsons of Citigroup..

By John Poirier and Diane Bartz
WASHINGTON (Reuters) - Citigroup Inc Chairman Richard Parsons said on Thursday that the bank does not need any more capital injections from the government and expressed confidence that Citi would remain in private hands.

Asked in an interview with Reuters whether Citigroup needed additional government capital injections, Parsons said: "No, I think actually, particularly with the latest conversion... Citi is actually one of the better capitalized banks in the world." - Reuters

Then I look over at Bank of America and they are good to go too! They don’t need no stinking money either. Could this crisis be turning a corner where the big fish will now feed on all the little fish in the banking industry? Bloomberg is reporting that the bank has been profitable since the beginning of the year and has this report…

Bank of America Expects to Post Full-Year 2009 Profit
By Christopher Condon and Sree Vidya Bhaktavatsalam

March 12 (Bloomberg) -- Bank of America Corp., the biggest U.S. bank, expects to make money for the full year after posting a profit for January and February, Chief Executive Officer Kenneth Lewis said.

“We have been profitable for the first two months of the year,” Lewis told reporters after a speech to the Boston College Chief Executives’ Club in Boston today. “We expect to be profitable” in 2009. In his speech, Lewis said the bank may earn $50 billion this year, measured before taxes and provisions, and the company won’t need more federal aid. - Bloomberg

Word to the wise to those of you with some free cash to invest, you might want to look at both of these companies as part of your near future investments. Citi closed at $1.67 today and that price has nowhere to go but up in my honest opinion. Bank of America closed at $5.85 per share today. Or could it be that the strong arm of the Obama administration is scaring the pants off of the big banks with their hands out? Or could it be that they (big banks) don't want the endless gravy trough at the top to end with government intervention? I'm leaning towards a little of both, yes they can turn things around on their own and no they don't want the Federal Reserve telling them how much they can skim off the top in bonuses and mega salaries. Was there truly a banking crisis at all or was it a free for all at the taxpayers expense? Things that make you go hmmm…

One has to look at the stock market as a gambling den, so much money goes in and the same amount of money comes out. It is a matter of perspective of who lost and who won at the end of the day. If $500 bucks went into the poker game, then $500 bucks came out. It's all in who won the game that day or for that matter that year. Belly up to the bar boys and girls, Citigroup and Bank of America are back in play.

Papamoka

State Workers to Feel the Economic Pain

Downsizing is all across the news reports, and all over America is talk about all of the fifty states having a hard time meeting their budget obligations. Governors are cutting corners where they can and still more cuts are needed. It’s the same scenario in privately run businesses as well. If the customer is cutting back and not visiting your business with paid orders then the only thing to do is cut back where you can save the most money the quickest way possible. Survival of the business aka state government service is the end objective.

That means layoffs and if the private sector is suffering that inevitable choice then the public works, government service, and government agencies must do the same. If taxes are not being paid into the state governments to keep up with the payroll of that state then they can’t pay out for services expected by its citizens. But is layoffs the only choice Governors have? I personally do not think so. Over at MSNBC courtesy of the Associated Press they have this thought on it…

Governors seek sacrifices from public workers
Money-saving measures include pay and benefit cuts, truncated workweeks

COLUMBUS, Ohio - Governors across the nation are seeking significant concessions from public employee unions in hopes of helping to balance their teetering budgets during the economic downturn.

From Maryland to California, Ohio to Hawaii, governors have asked or ordered state workers to accept furloughs, salary reductions, truncated workweeks or benefit cuts. They say the concessions are a better alternative to further job losses in the face of record-breaking unemployment.

Unions argue their members shouldn't be singled out and are even more vital in hard times — securing neighborhoods and prisons, educating children and providing social services to growing numbers of citizens. - MSNBC-AP

I’m personally a huge union workers supporter but I am also a realist that sees that the states can not be paying benefits and providing services when the money is just not their to do so. With the credit markets tightened to the point of a stranglehold on businesses, it isn’t like each state can go to the credit markets and float bonds till things pick up in the economy. Wall Street and the markets just do not work that way. States can also not rely on the federal government to support all of them with a total bailout till the point of if and when the economy starts to recover. That thought process is the way to total economic destruction far beyond the Great Depression of the early 1930’s.

Governors in all states need to look to the budgets they currently have and cut wherever is required. They must also negotiate with not just the unions that are the employees of the state but the suppliers of all items including benefits to the state first and foremost. If they have to combine bargaining power with adjacent states to gain far better rates, then so be it. It’s called demanding better terms from your suppliers. Be it health insurance, paper products, light bulbs, paper clips, or even new equipment for law enforcement. If you have ever known someone that has worked in the private sector in purchasing, its called getting the best terms and rates for your company and it is called competition. If one supplier isn’t willing to negotiate, you move on to another, and another till you get the price you need to maintain your business. Some people call it beating up your vendor but I like to call it the art of negotiation. Each participant knows the value of the deal and each person is looking to find the perfect price where both parties are happy. The purchaser is happy and the seller is happy. AKA, its business 101!

Each state in the union pays millions if not billions for gasoline and diesel per year for the fleets of vehicles they own, millions if not billions to heat or cool state run offices all across each state. It doesn’t take a rocket scientist to figure out that the energy suppliers need your base business to survive. Demand competitition from your current suppliers and then seek out alternative sources for the same products. Wind power, solar power, bio-fuels, and the list goes on.

There are still many investors in the market looking for state bonds that make sense. If a bond was floated from Massachusetts or any state just for the sake of paying salaries and maintaining a payroll the state itself could not maintain it would have little interest in the markets on Wall Street. If the same state came out with a bond based on putting 100,000 or 250,000 solar panels on state run offices that would save the state millions of dollars per month once installed that would never have to be paid to an energy utility for the next thirty plus years it would draw huge attention, and not just here in America on Wall Street, but around the world. The beauty of the “Purchasing Negotiation” is that you could demand that each unit purchased will not be paid for till it is installed and generating power. That should work out to a thirty to sixty day payment deal for the manufacturer if they take the initiative to hire qualified people and install each and every single unit on the state buildings. Something that they could and should take the initiative to outsource to mulitple companies across every single state. More jobs, more state tax income.

Those savings even with repayment of the bond could equal thousands of state jobs and services that are needed elsewhere. It is the initial investment that is needed and we have several Solar Power Panel manufacturers right here in the United States of America that could and would benefit with increasing the workforce to meet the demand of high tech jobs at good wages. Schott Solar of California has a manufacturing facility in Billerica, Ma and Evergreen Solar of Marlborough, MA has a facility in the former Fort Devens military base to name just two.

President Obama is on the right track with his renewable energy initiatives in the current bailout package and the states need to look at the thought processes behind renewable energy and apply the thought process in public buildings all over the nation. If solar panels on the roof are paying 10% to 30% of the energy needs then how many jobs does that save in the public sector? Same thought process goes to private businesses as well. Back in the mid 1980’s I worked in a wire and cable manufacturing facility, the building was about 300,000 square feet full of equipment that was all powered by the local electric utility. The monthly bill at the time for the power was over $30,000 dollars. Then you had to figure the cost to heat such a large facility by gas per month and the bill was even larger than the electric in the winter months.

Even with the current drop of the cost of oil, the largest bill for any business other than raw materials is the energy cost. Cut that cost down by going with multiple renewable energy systems and the probability that you never pay an electric bill or gas bill ever again is within reach! How many jobs is that bill paid to the electric or gas, oil, propane company worth every month to any business or a greater point, how much does that allow you to pass those savings onto your customer and get the business you could never touch before? Our economy is built on competition and innovation, we need to look at the innovations not just in the private sector but in each of our state governments.

Each of our states need to be creative budgetary wise and think long term when it comes to their energy needs. Payroll is not the biggest cost they have but it is the easiest to cut. Demand more long term economic thought process from your state Governor and Legislators!

Papamoka

Shutdown and Breakdown in Detroit

Video Link Courtesy of MSNBC

Visit msnbc.com for Breaking News, World News, and News about the Economy

Uttt OHHHH! The Big Three automakers are shutting down plants and that is not a good thing. Detroit is closing up shop because cars are not moving off the lots in the dealerships all across America. Trust me, this is not going to be an American made auto manufacturer phenomenon. Chrysler is shutting down all of its plants for thirty days and Ford is looking at similar options. GM is planning major shutdowns at plants as well and the ripple effect is not going to be good for the world economy. Over at Market Watch they have this to say and I have my own opinion on it afterward…

Chrysler to shut assembly lines for at least a month

Rival Ford takes similar steps, extending shutdown times at most plants

By Shawn Langlois, MarketWatch
Last update: 6:57 p.m. EST Dec. 17, 2008

SAN FRANCISCO (MarketWatch) -- Chrysler LLC, struggling to keep afloat as it awaits word on a federal lifeline, said Wednesday it will idle all of its 30 plants for at least a month in an effort to bring output closer in line with plunging demand for new cars and trucks.

The privately held carmaker said it will shut its assembly lines at the end of Friday's shift and keep them closed through at least Jan. 19, extending a holiday shutdown that was already put in place. Under the current union contract, idled workers still receive most of their benefits and wages during the production stoppage.

Separately, Ford Motor Co. announced that it will shut down most of its North American assembly plants for an extra week in January, according to the Associated Press.
Automakers typically close their factories for a couple of weeks over the two weeks during holidays and often, as in Ford's case, target specific plants for even longer idle periods to keep a lid on inventory during times of slack demand. Yet Chrysler's move to idle its entire operation for at least a month reflects just how dire the situation is in Detroit.

"This is definitely out of the ordinary," Edmunds.com analyst Jesse Toprak said. "I've never seen this kind of shutdown for this long, and if you read the language Chrysler used in the release, they're leaving the door open for another extension."

Toprak added that the company will probably take a hard look at its December sales results, which he expects to be down 45% from a year ago, and decide whether to keep blue-collar workers from assembly lines even longer. - Market Watch (Link not working?)

It doesn’t matter anymore what side of the issue you stand on when it comes to the bailout for Detroit and its automakers. The Congress has spoken and the auto industry in America was told to go screw itself. That is a double edged sword so to speak.

Granted the UAW contracts will still pay many of the idled workers almost the same pay for a short shutdown but they can’t get paid forever if the companies end up folding. All of the investment capital that the Big Three used as leverage for long term loans was based on the price per share and all of them are in the toilet as far as share price goes. Wall Street can not and will not offer capital to these companies because the collateral in shares is just not there anymore. The Congress and the Republican members made that a reality by not backing the industry simply because they could. Rather than looking at the bigger picture, Republicans in the Congress looked to see who was in their own back yard and all they could see was Toyota, Honda and the list goes on of foreign owned plants here in the United States. Good for them, they covered their own political ass. Or did they?

While those same Republican leaders were looking out the back step they didn’t see their neighbor Joe that drives twenty minutes to a little mom and pop owned machine shop that just makes screws that go to Detroit. Those screws are installed by the thousands every day by Detroit workers in American made cars. All the little screws do is hold one little piece in a pick up or mid size car down so that another piece of the truck or car can be installed over it with those same little screws holding that part down. Those little tiny machined screws have paid all the wages and healthcare benefits for the five or six people running the actual machines that made them for decades. Not to mention mom and pop put a couple of kids through good schools, then good colleges, and then had those kids buy homes in the local area. Those five or six machine operators buy groceries locally, buy homes or renovate existing homes at the local hardware or home improvement center. They pay local and state taxes that pay for schools, roads, police and fire. They spend their hard earned paychecks where they live and other people benefit from their hard earned wages making little tiny screws that ship to Detroit.

Mom and pop have to close up shop for a while because Detroit is shutting down for a spell. Pick an industry and expand the scenario however you like. There is that old saying about a butterfly beating its wings in China and it gives birth to a hurricane thousands of miles away. Bingo!

There was a reason why the government of long ago would never let Chrysler go bankrupt. It reached to far and wide into the capillaries of the American economy. Lee Iacocca rebuilt Chrysler from the ground up because he had the means to do so courtesy of an American government backed loan. He didn’t do it alone and yet they all made it work out in the end. But now it is okay to let ALL THREE automakers fail? This lack of interest by or government is totally on the Republican Party and they are more than welcome to own it. I can literally see the history books thirty years from now on the new generation of Hoover that started the second economic collapse of America and the world.

This is the never ending ripple effect and when the small business manufacturing owners start closing the doors because Detroit is no longer in business then it is in fact a DEPRESSION! Somebody please call your Congressional representative and give them an earful!

Papamoka

Washington to Detroit Loan Deal Done

It’s finally going to be a done deal for the Big Three in Detroit to get some bailout money to save millions of Automaker jobs. Believe it or not it was a loan deal worked out by the White House and Speaker of the House Nancy Pelosi! I’m still in shock that President Bush cleared his house shopping schedule to find a compromise deal with the Speaker of the House. Over at CBS News they have this to say on it…

CBS News correspondent Kimberly Dozier reports that significant progress came Friday night, when Democrats from both the House and Senate agreed to bail out the struggling General Motors, Chrysler and Ford with federal funds.

Several officials say the White House and congressional Democrats have agreed on $15 billion in loans, which is less than half of what the car chiefs were seeking.

They say the breakthrough came after House Speaker Nancy Pelosi bowed to a demand by President Bush that any aid come from a fund that had been intended to help Detroit produce more fuel-efficient cars.

Pelosi said the House would consider legislation next week to provide "short-term and limited assistance" to the U.S. auto industry. - CBS News

I have to say that I knew that this deal was going to come sooner or later. Matter of fact anyone that follows the automotive industry knew it too. GM, Ford, and Chrysler were going to get a bailout loan, it was just a question as to how much each would actually get that was an unknown fact. The federal government could not let the big three fail or go into bankruptcy because of the ripple effect it would eventually expose. You know that $700 billion they have in bailout cash for the banking industry, that bailout cash would have been just a drop in the bucket if Ford, GM, and Chrysler filed for bankruptcy.

I propose the following hypothetical scenario. All three automakers file bankruptcy protection. If you are a supplier to any of them then you do not get paid for any outstanding invoices and thus you can not keep paying your suppliers for continuing orders so your company is forced to file bankruptcy. Suppliers feel the pinch hard and can not pay their suppliers for raw materials so they are forced to file bankruptcy. And the cycle continues down the food chain. The layoffs from all of the suppliers to the Big Three would dwarf all of the layoffs from the Big Three. Lastly, not all of the suppliers are in Detroit.

I think it is fair to say that this bailout will save more jobs than the $700 billion in bailout cash that the banks received a free pass on. I believe it was the Steel Workers President that summed this controversy up best; “If you shower before work you get a bailout, if you shower after working all day, you don’t.”

In the long haul objective, steps are being taken in the right direction to put the brakes on the economies collapse. Baby steps, but they are still steps.

Papamoka

White Collar Job’s Only Bailout

Yesterday the U.S. Government bailed out another white collar giant in the banking industry. Citi Bank, the largest of banks in the nation received a blank check from Washington without any questions asked. This most recent of bailouts is all okay with the higher than thou Congress simply because the people cashing the blank check all wear white collars. White collar jobs are good, blue collar jobs bad.

The Steel Workers President put it best, it’s okay to bailout someone that takes a shower before work but if you take one after working all day you get thrown out.

Rachel Maddow has this interesting view on this very same subject…

Video Link



I think I might have just found the answer to the automotive industry bailout problem. Don’t tell anyone in Washington but GM, Ford, and Chrysler should change their mailing address to Wall Street in New York city. Better yet, they should all start offering brokerage accounts and free toasters with every car purchase. Even better and this would be a slam dunk, change the corporate names to GM Bank, Ford Bank and Chrysler Bank. Then they could get the same blank check as Citi Bank!

Blue collar union jobs bad, white collar big bank jobs good? Makes sense so far in the scheme of things that Washington and our pontificating Congress uses for an excuse not to bailout the big three automakers. While they claim that the big three have put themselves in the position they are all in, how did Wall Street and all the banks robbing the treasury blind get where they are?

Papamoka

GM, Ford, and Chrysler Bailout is a MUST!

How is it that our government has no problem stuffing $80 Billion dollars down the throat of AIG executives as they party it up but has a problem with offering a loan to a manufacturing industry inter connected with hundreds if not thousands of other manufacturing jobs and industries all across America. Manufacturing jobs that pay the rent, pay the mortgage, make a couple of car payments and the list goes on that are all connected directly or indirectly to GM, Ford, and Chrysler.

The big three are not asking for a handout without repayment. Matter of fact they are willing to pay back all of it if they are given the chance to survive this downturn in the economy. The current leadership in the Congress and the minority party need to get this done and quickly. Over at MSNBC they have this to say on how quickly they are acting on this…

Senate to take up auto bailout bill on Monday
$25 billion bill offers aid for struggling automakers; Republicans opposed

msnbc.com news services
updated 42 minutes ago

WASHINGTON - The Senate plans to take up a $25 billion bill on Monday to bail out distressed domestic auto companies, but it is unclear whether proponents can muster the necessary support.

Majority Leader Harry Reid, D-Nev., said Friday he “plans to press forward” with emergency aid to automakers and a plan to extend unemployment insurance even though Republican backing is far from assured.

Reid plans to begin debate and hopes the Senate will conduct procedural votes early in the week.

Snip a bolt…

Still, powerful senators like Richard Shelby, R-Ala., appear willing to let the U.S. automakers collapse. Shelby said in a statement recently that the problems facing the Big Three are the product of their noncompetitive structure and not the current economic downturn.

Alabama is home to vehicle manufacturing plants operated by Honda, Hyundai and Mercedes, as well as a Toyota engine plant. - MSNBC

Dick Shelby is a moron and a fool! While he is in the great state of Alabama with all of those foreign owned auto manufacturers hounding him to not let this bailout happen I’m pretty sure his campaign for re-election coffers are filling with serious donations from Japan, Korea, and Germany. After all, the bottom line of Honda, Hyundai, Mercedes, and Toyota are in fact sending the profits overseas. Way to go you ass Shelby for being a paid for spokesman for a foreign national corporate monopoly in your own state. Ten bucks says he does not even own an American made car! Any takers? How about an American made flag? How can he claim to be an American worker supporter when he just chucked the bird to more than one and ten amongst us and that includes the proud people of Alabama that don't work for his top four best friend foreign national corporations.

Dick Shelby wants to tell all of you folks that work in electronics manufacturing products that eventually end up in a GM car, a Ford car, and a Chrysler car to go screw yourself. Same thing goes with all of you people in the plastics industry that supplies the big three with molded parts, same thing goes for the huge wire and cable manufacturing market in America. All of you folks that make American made tires that the big three are buying, get a paper route and go bag groceries. Do you work in a textile mill that supplies Detroit with fabric for new cars? You just got the middle finger from Dick Shelby too! Steel workers in the foundries spread out from Pennsylvania and beyond should start filling out applications for non existent jobs in an economy that is in collapse. It isn’t Dick Shelby’s problem that you people working in his home state happen to rely on the big three automakers for your weekly paycheck. Dick Shelby says the big three should shutter the doors and with that shuttering so goes many small businesses that supplied the big three all across America. He’s an economics idiot and a moron that has no clue as to how reliant his own state is on supplying the big three American Auto Makers with parts and components to build a Chevy, a Ford, and a Dodge Ram truck!

I feel better, I vented. But I think other folks are just a little bit more interested in this conversation. Chris Matthews has this on the big three bailout with an interview with Senator Debbie Stabenow of Michigan and Representative Jeb Hensarling of Texas…

Video Link



I think we need to add Jeb Hensarling to the list of morons and idiots when it comes to economics. Jeb wants to wave the flag of creation of thousands of new small business jobs with the same money that this bailout loan is proposing but if the big three collapse then Jeb Hensarling just committed genocide on thousands of other small businesses in his home state of Texas. What about all of their jobs at descent paying wages Jeb? Maybe they can get more than minimum wage working for your re-election campaign?

This bailout is not even close to the blank check written to Secretary Paulson to spend as he pleases. While some say that it is the big three auto makers own fault for the environment they now find themselves in I would have to beg the same argument for AIG and the blank check for Wall Street. Should there be concessions to this loan from the big three, hell yes! If the UAW (United Auto Workers) is already taking a big piece of the heat off of all three auto makers by cutting wages in half in new contracts in order to save jobs. The CEO’s, Direcetors, and management of all three can eat the same humble pie. The fact still remains that the auto industry is directly connected to one in ten jobs in America and if they collapse we are not talking about just three million jobs as Chris Matthews pointed out. We are talking thirty million jobs or more with the pressure wave of panic that will ensue when each of the big three declare bankruptcy, skip out on the debt owed to vendors and pretty much start the wave of layoffs all across America. It does not take a genius to understand how the manufacturing environment works and how so many industries are linked together not just by choice. We need more than just common sense when it comes to knowing the weakest link at the top of the food chain in our industrial society. General Motors, Ford, and Chrysler are asking for a loan that they will repay over time. The language of the Paulson Bailout plan is financial industry specific.

Congress and President Bush need to act quickly to save American jobs! This legislation can not wait two months to fester in the auto industry and all the sub manufacturing companies across America that service the big three in Detroit. Bail them out but use common sense in doing so.

Papamoka

*****Buzz Tracker has linked in... Thank you!

Oracle of Omaha on the Bailout

Remember when the world used to look to Alan Greenspan whenever the economy in this country was on shaky ground? Then Greenspan would go before the Congress or make a statement from his office and his wise words calmed the markets just because he was Alan Greenspan?

Nowadays, the voice to look to for stabilization is none other than Warren Buffet aka the Oracle of Omaha and Berkshire Hathaway fame.

Here is what the Oracle of Omaha has to say on the bailout over at CNBC and MSNBC…

Video Link



Hang tight, Warren Buffet has a little bit more experience than Greenspan ever thought possible when it comes to the financial markets and the economy.

Papamoka

McCain Is Not Bipartisan

All of the drama that John McCain put into “Suspending his Campaign” to rush back to our nations capitol some 22 hours later was all window dressing. McCain literally claimed that he was going back to the capitol and the Senate to work across party lines to fix the Wall Street disaster. That would be working with the Senate and House of Reps controlled by Democrats right? Umm, only one problem with that thought process from the Senator from Arizona, the closest he got to talking to a Democrat was dinner with Senator Joe Lieberman (I) whom has slapped all Democrats politically in the face in Connecticut. Over at Think Progress they have this to say about McCain being Bipartisan.

McCain Calls For Bipartisan Cooperation On Financial Bailout, But Refuses To Talk With Democrats

On Wednesday afternoon, John McCain claimed to want to put partisanship aside to focus his attention on the financial crisis. “We must meet as Americans, not as Democrats or Republicans, and we must meet until this crisis is resolved,” he said. Yesterday, McCain’s top aide Mark Salter stressed that McCain was “calling members on both sides.”

But throughout his short involvement in the negotiations over the past few days, McCain has talked almost exclusively with Republicans. - Think Progress

Since Senator McCain has been absent for over 160 plus days in the Senate, not voted on one bill since he took the campaign trail, not been seriously privy to inside politics he probably needed to just do some catching up with his close buds. Knowing that both houses of Congress and the President were working on a compromise deal with the financial bailout package, he had no say in the matter and his input was not required. Ergo, “Suspending his Campaign” to work out a Bipartisan deal was just a political stunt.

One thing John McCain has proven in this latest political debacle is this, in the greatest financial crisis this nation has faced since the days of FDR, he not only did not talk to anyone in the opposition political party but he out right ignored them. What does that tell the people that would vote for him to be President? It tells me that voting for McCain is voting for four more years of one political party refusing to talk to the other side of the aisle.

It all proves that John McCain has no intention of ever being Bipartisan if elected President. Welcome to George Bush 3.0!

Papamoka

McCain wants to Postpone Debate, Obama Says No Way, and Bush Address the Nation.

What a week this will be for the History Books......

McCain announced today that he will suspend his campaign and take the road back to Washington to speak with President Bush on what to do next. He suggested for Obama to do the same, asking to move the national debate that is scheduled for this coming Friday until the issues of the $700,000,000,000.00 (It helps to see how many “0’s” there are) bailout is solved.

He believes that by this weekend the bill will be passed and they can move on their merry way with a debate. I am sorry, but I want the debate, there are enough hot headed people in Washington working on this right now. I want a debate that stresses what Obama and McCain would do if they were sitting in Bush’s seat right now, because one of them will be in a few short months.

I understand why McCain is asking for all this, because in moments of pure desperation a person will say and do whatever it takes to get what they want. His aim in the White House, seriously this is his only chance. He sees the reactions to his past comments on “de-regulation” of investment and insurance companies; he will do all in his power to regain the trust of the people.

Obama has rejected the request to postpone the debate stating "It's my belief that this is exactly the time when the American people need to hear from the person who, in approximately 40 days, will be responsible for dealing with this mess,” and "It's going to be part of the president's job to deal with more than one thing at once." Obama will be preparing for the debate while consulting with bailout negotiators and Henry Paulson.

McCain needs to understand the American people as a whole are not ok with this bill to give their tax dollars to big corporate business. So he can either go along with this to appease his party or he can stick up for the people. The people of the United States need to hear this debate, and we have been waiting for this debate.

Tonight we will hear George W. Bush in what could be his final address to the nation before leaving office in January. I hope he states that more than Big Business will benefit from this $700,000,000,000.00 bail out and not just one man Mr. Henry Paulson will be accountable for the distribution of the funds. Finally, I hope he apologizes for keeping de-regulation a common
business practice.

Ms Crystal

John McCain, Rick Davis, Freddie Mac Connections

Why didn’t I get the memo that the Three Stooges had reunited again? Apparently, the new version of the Stooges is all about the money trail that has lead this nation down the road to a very expensive bailout. What a freakin’ knee slapper that is! Then again maybe this isn't so funny, Rachel Maddow of MSNBC has this informative interview on the facts behind this McCain/Davis scandal...

Video Link



It seems that Rick Davis, the campaign manager for John McCain has some skeletons in his closet over at Freddie Mac. Follow the money and you find the source of the problem. Over at the New York Times they have let the horse out of the barn on Freddie Mac still paying Rick Davis (Lobbyist) former firm $15,000 per month for doing… Nothing?

McCain Aide’s Firm Was Paid by Freddie Mac

By JACKIE CALMES and DAVID D. KIRKPATRICK
Published: September 23, 2008

WASHINGTON — One of the giant mortgage companies at the heart of the credit crisis paid $15,000 a month from the end of 2005 through last month to a firm owned by Senator John McCain’s campaign manager, according to two people with direct knowledge of the arrangement.

The disclosure undercuts a remark by Mr. McCain on Sunday night that the campaign manager, Rick Davis, had had no involvement with the company for the last several years.

Mr. Davis’s firm received the payments from the company, Freddie Mac, until it was taken over by the government this month along with Fannie Mae, the other big mortgage lender whose deteriorating finances helped precipitate the cascading problems on Wall Street, the two people said.

They said they did not recall Mr. Davis’s doing much substantive work for the company in return for the money, other than to speak to a political action committee of high-ranking employees in October 2006 on the approaching midterm Congressional elections. They said Mr. Davis’s firm, Davis Manafort, had been kept on the payroll because of his close ties to Mr. McCain, the Republican presidential nominee, who by 2006 was widely expected to run again for the White House.

-SNIP-

From 2000 to the end of 2005, Mr. Davis received nearly $2 million as president of the coalition, the Homeownership Alliance, which the companies created to help them oppose new regulations and protect their status as federally chartered companies with implicit government backing. That status let them borrow cheaply, helping to fuel rapid growth but also their increased purchases of the risky mortgage securities that proved to be their downfall. - New York Times

Obviously the McCain campaign is going to deny these accusations and rightfully so. If Davis goes down then so does McCain. So what do they do from here? Let’s play “Where’s Waldo?” Davis is ducking out of campaign appearances and scheduled events for the time being. I wonder why? Over at the Chicago Sun Times they have the starting point to not place your guess…

WASHINGTON--John McCain campaign manager Rick Davis--under the spotlight because of his work for mortgage giants Fannie Mae and Freddie Mac--is skipping a Wednesday lunch with reporters sponsored by the Christian Science Monitor.

On Tuesday, word came that McCain political director Mike DuHaime will substitute for Davis because he is "heading out on the trail" today. - Chicago Sun Times

It’s beginning to look more and more like the McCain for President campaign has a self destruct button. First they trot out the mother of all liars Sarah Palin with her bridge to nowhere and endless “Thanks, but no thanks” stump speech, now they have Rick Davis, McCain’s campaign manager, dodging the press over his connections to Freddie Mac?

One of the things in Presidential politics is the association of guilt even if it isn’t true. George Bush and Karl Rove perfected it in 2000 and 2004! Rick Davis may not have worked for his lobbying firm for a couple of years but he still receives dividends from the performance of that firm. So yes, he does have financial gains from the Freddie Mac contract.

One of the bigger questions in this whole mess is the fact that Freddie Mac blindly paid Davis former firm $15,000 per month for access to John McCain as a candidate for President because of Davis. If $15, 000 per month is the going rate to buy a candidate for President then I’m sure that we are in fact in an economic depression. I’m thinking that President Bush and V.P. Cheney’s lobbyist were paid at a much higher rate per month. No bid contracts for Iraq just don’t miraculously appear on just one certain companies doorstep for nothing! Frankly, maybe we need to do a bailout for lobbyist too! Poor bastards…

Papamoka

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$700 Billion Bailout Questions?
The Last Bush Rape of America
An Economic Patriot Act

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The Last Bush Rape of America

Make no doubt about it, George Bush and the policies he has followed have set the American economy up to be raped. He put a tube top on Wall Street, added some stiletto heals to the regulations and set America up to be raped! President Bush was not alone in this set up, he had help from the king of deregulation in the Senate from John McCain. McCain fought hard to deregulate the banking industry and he won. And because he won, $700 Billion dollars is about to head to Wall Street to save all the CEO’s and top executives with golden parachutes as they pack up and leave the mess on your doorstep. The rape is over, the baby is here now and orphaned by the people that created it and left for you to raise. The rape still happened!

Over at Brave New Films they have this speech from Obama on the blank check bailout…

Video Link



American’s need to wake up and face a wrong for what it is. If your child is abused by a stranger do you look the other way because the stranger was from your political party? Start looking at America as your child and you would be surprised how fast people start caring about the blatant abuse in our government. John McCain helped to create this beast and now that beast has plopped a huge bill on your door for more money out of your pockets.

America used to have a huge Conservative movement but they are silent during this crisis! Why? The truth is that the people that were supposed to be their champions just sold them all out. While the President and McCain were playing with our nations banking industry, the executives of those freed institutions ran wild and free till the money ran out. Now it is going to cost every man, woman and child in America $2300 bucks for the poor judgment that Senator McCain and President Bush showed over the past eight years. Having five children in my family, the wife and I own $16,100 dollars of the Bush/McCain error in judgment.

What Wall Street firm should I make the check out too. According to the terms of the Paulson bailout I should just sign the check and mail it to the U.S. Treasury. They’ll fill in the amount and the rest of the details later. By the way, the plan Paulson has proposed has a little feature that makes him, his entire department omnipotent and free from any oversight or court of law on how they spend the $700 Billion dollars. Are you okay with that?

Papamoka

$700 Billion Bailout Questions!

I don’t find myself agreeing with Michelle Malkin that often so pardon me while I try to swallow a little bile while writing this post. After you read what she has to say you just might find yourself agreeing with her too!

Both parties in Washington are about to screw us over on an unprecedented scale. They are threatening us with fiscal apocalypse if we don’t fork over $700 billion to Treasury Secretary Henry Paulson and allow him to dole it out to whomever he chooses in whatever amount he chooses — without public input or recourse. They are rushing like mad to cram this Mother of All Bailouts down our throats in the next 72-96 hours. And right there in the text of the proposal is this naked power grab: “Decisions by the Secretary pursuant to the authority of this Act are non-reviewable and committed to agency discretion, and may not be reviewed by any court of law or any administrative agency.” - Michelle Malkin

There is no way the Congress or the President should agree to this plan presented by Secretary Paulson for many reasons. The number one reason is that IT IS A BLANK CHECK! “Can not be reviewed by any court of law” is not the way we want to go on this crisis. Below is a copy of the entire plan with highlighted sections in red that are very questionable. I found the document over at the New York Times…

LEGISLATIVE PROPOSAL FOR TREASURY AUTHORITY
TO PURCHASE MORTGAGE-RELATED ASSETS
Section 1. Short Title.
This Act may be cited as ____________________.
Sec. 2. Purchases of Mortgage-Related Assets.
(a) Authority to Purchase.--The Secretary is authorized to purchase, and to make and fund commitments to purchase, on such terms and conditions as determined by the Secretary, mortgage-related assets from any financial institution having its headquarters in the United States.
(b) Necessary Actions.--The Secretary is authorized to take such actions as the Secretary deems necessary to carry out the authorities in this Act, including, without limitation:
(1) appointing such employees as may be required to carry out the authorities in this Act and defining their duties;
(2) entering into contracts, including contracts for services authorized by section 3109 of title 5, United States Code, without regard to any other provision of law regarding public contracts;
(3) designating financial institutions as financial agents of the Government, and they shall perform all such reasonable duties related to this Act as financial agents of the Government as may be required of them;
(4) establishing vehicles that are authorized, subject to supervision by the Secretary, to purchase mortgage-related assets and issue obligations; and
(5) issuing such regulations and other guidance as may be necessary or appropriate to define terms or carry out the authorities of this Act.
Sec. 3. Considerations.
In exercising the authorities granted in this Act, the Secretary shall take into consideration means for--
(1) providing stability or preventing disruption to the financial markets or banking system; and
(2) protecting the taxpayer.
Sec. 4. Reports to Congress.
Within three months of the first exercise of the authority granted in section 2(a), and semiannually thereafter, the Secretary shall report to the Committees on the Budget, Financial Services, and Ways and Means of the House of Representatives and the Committees on the Budget, Finance, and Banking, Housing, and Urban Affairs of the Senate with respect to the authorities exercised under this Act and the considerations required by section 3.
Sec. 5. Rights; Management; Sale of Mortgage-Related Assets.
(a) Exercise of Rights.--The Secretary may, at any time, exercise any rights received in connection with mortgage-related assets purchased under this Act.
(b) Management of Mortgage-Related Assets.--The Secretary shall have authority to manage mortgage-related assets purchased under this Act, including revenues and portfolio risks therefrom.
(c) Sale of Mortgage-Related Assets.--The Secretary may, at any time, upon terms and conditions and at prices determined by the Secretary, sell, or enter into securities loans, repurchase transactions or other financial transactions in regard to, any mortgage-related asset purchased under this Act.
(d) Application of Sunset to Mortgage-Related Assets.--The authority of the Secretary to hold any mortgage-related asset purchased under this Act before the termination date in section 9, or to purchase or fund the purchase of a mortgage-related asset under a commitment entered into before the termination date in section 9, is not subject to the provisions of section 9.
Sec. 6. Maximum Amount of Authorized Purchases.
The Secretary’s authority to purchase mortgage-related assets under this Act shall be limited to $700,000,000,000 outstanding at any one time
Sec. 7. Funding.
For the purpose of the authorities granted in this Act, and for the costs of administering those authorities, the Secretary may use the proceeds of the sale of any securities issued under chapter 31 of title 31, United States Code, and the purposes for which securities may be issued under chapter 31 of title 31, United States Code, are extended to include actions authorized by this Act, including the payment of administrative expenses. Any funds expended for actions authorized by this Act, including the payment of administrative expenses, shall be deemed appropriated at the time of such expenditure.
Sec. 8. Review.
Decisions by the Secretary pursuant to the authority of this Act are non-reviewable and committed to agency discretion, and may not be reviewed by any court of law or any administrative agency.
Sec. 9. Termination of Authority.
The authorities under this Act, with the exception of authorities granted in sections 2(b)(5), 5 and 7, shall terminate two years from the date of enactment of this Act.
Sec. 10. Increase in Statutory Limit on the Public Debt.
Subsection (b) of section 3101 of title 31, United States Code, is amended by striking out the dollar limitation contained in such subsection and inserting in lieu thereof $11,315,000,000,000.
Sec. 11. Credit Reform.
The costs of purchases of mortgage-related assets made under section 2(a) of this Act shall be determined as provided under the Federal Credit Reform Act of 1990, as applicable.
Sec. 12. Definitions.
For purposes of this section, the following definitions shall apply:
(1) Mortgage-Related Assets.--The term “mortgage-related assets” means residential or commercial mortgages and any securities, obligations, or other instruments that are based on or related to such mortgages, that in each case was originated or issued on or before September 17, 2008.
(2) Secretary.--The term “Secretary” means the Secretary of the Treasury.
(3) United States.--The term “United States” means the States, territories, and possessions of the United States and the District of Columbia.

What do you think?

Papamoka