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Live Blogging – INSIDE THE MELTDOWN TONIGHT PBS 9PM, Now!!

[UPDATE] This post will “stick” to the top of the page.

Inside the Meltdown, watch online or on air beginning Tuesday, February 17, 2009. FRONTLINE investigates the causes of the worst economic crisis in 70 years and how the government responded. The film chronicles the inside stories of the Bear Stearns deal, Lehman Brothers’ collapse, the propping up of insurance giant AIG, and the $700 billion bailout. Inside the Meltdown examines what Treasury Secretary Henry Paulson and Federal Reserve Chairman Ben Bernanke didn’t see, couldn’t stop and haven’t been able to fix.

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217 Responses

  1. I read that only two congressmen were interviewed for this program.
    Barney Frank and Chris Dodd.

  2. taggles check your mail

  3. OT but does anyone besides me wonder if Obama plans to spend any time in the White House. He just got back from a weekend in Chicago and now has to fly off to Denver to sign the stimulus bill. Why can’t he stay in DC to sign it?

  4. Please remember to wear your thinking caps. In every presentation there is bias and Frontline is no exception. These will be the facts they’ve decided to present and it is up to the listener to evaluate the veracity of what you hear. Maybe even do some of your own checking of the facts.

  5. Time did a 25 worst people responsible for the meltdown. Bill Clinton and George Bush were on the list, but not one single member of the house or senate.

  6. Time did a 25 worst people responsible for the meltdown

    I wonder when Anglachel will do a post calling Time a bunch of racist Republican ratf**kers.

  7. “Bill Clinton and George Bush were on the list”

    Someone finally asked Bill Clinton to comment on this — I was glad to see his answers:

    I think that the only thing that our administration did or didn’t do that we should have done is to try to set in motion some more formal regulation of the derivatives market. They’re wrong in saying that the elimination of the Glass-Steagall division between banks and investment banks contributed to this. Investment banks were already — banks were already doing an investment business and investment companies were already in the banking business.

    The bill I signed actually at least put some standards there. And if you look at the evidence of the banks that have gotten trouble, the ones that were most directly involved in their — in a diversified portfolio tended to do better.

    Some of the conservatives said that I was responsible because I enforced the Community Reinvestment Act and they said that’s what made all these subprime mortgages being issued. That’s also false. The community banks, the people that loan their money in the community instead of buying these esoteric securities, they’re doing quite well.

    (from CNN American Morning yesterday)

  8. I saw Time’s list and wondered why Reagan wasn’t on there too.

  9. Phil Gramm was on it.

    I think they just threw on a bunch of names in order to be provocative.

    But I have no faith in the media about anything.

  10. The more I read about the stimulus/spending bill and all the hidden, really bad pieces, the more frightened I am. It’s bad enough that we are going to suffer a serious financial meltdown (I’ve lost over 50% of my savings), but we are going to be seriously damaged economically, socially, ideologically by these Democrats in Power. I think they are going to do more damage in 4 years than Reagan or Bush. I can’t believe I feel this way ,but I do.

  11. I don’t think we can move forward as a country until all of us stop thinking in terms of being Democrat or Republican, because neither party represents us anymore. By us I mean middle class america. We need to drop the labels because they are using these labels to their advantage, to divide us. We need to see where we agree and join forces against elected officials regardless of party.

  12. What did I say to set off the moderation gods?

  13. NH, on February 17th, 2009 at 12:58 pm Said:

    What NH said.

    I’m personally sliding from not very hopeful into rather hopeless. I’ve been working very hard the past couple of months, trying to get a small antiques shop up and running. I’ll be trying to sell inventory I brought with me from post-Katrina New Orleans to Central TX, inventory which I’ve paid a fortune to store. I’m working in good faith, putting out my best effort, all the while feeling I’m almost certain to lose more of my dwindling savings. My inventory is too valuable and too hard won to simply dump it in the street. From Katrina to Depression II, whoop tee doo, here I come.

  14. read this if you are planning to watch the meltdown tonight, i like to hear all views, we do know there was a run on the banks, that is what we know.

    http://foxforum.blogs.foxnews.com/2009/02/17/peek_republicans_paulson/

  15. plural, on February 17th, 2009 at 12:48 pm Said:

    ——————–

    Glad he answered on GS as well. It’s a weird time. Not sure I entirely accept Bill’s answer. Citi, Wachovia, Wamu?

    And it will be interesting to see if Frontline challenges Dodd and Frank, two congressmen I’ve always liked. Frank on Frannie, Freddie. Dodd on the weak SEC, unregulated hedge funds. Both on how we’re going to pay for the bailouts, why we’re not addressing housing more aggressively.

    Will Paulson or someone be there to answer for the Bush years. Otherwise it will look like a Democrats only problem, and perception can turn into reality.

    Problem is these Frontline interviews are probably a week old. And thinga are happening in real time. Markets look like they could be down 5% today.

  16. Addendum: I’ll definitely be watching Frontline tonight. It’ll be interesting to see how well their take jibes with CNBC’s ‘House Of Cards’, an excellent report which well researched, very straightforward, free of bias. In other words, the kind of media work rarely seen anymore.

  17. aint this the truth posted by some on fox blog
    ~~~~~~~~~~~~~~~~~

    Its funny how when Hilary was running for office and tried to get a tax freeze on the pumps so that the average hard working person can get to work, Obama’s people were saying’”what’s 27.00 dollars a week going to help the american people?” Now i ask them, What the heck is 8.00 a week going to help the american people? I am a democrat, but i saw this coming once Obama took office. How all the blame was going to be placed on the republican’s lap. I am not the brightest individual in the world but i know when someone is lying to me and know between wright and wrong. The people who voted for Obama are in for a ride of their life.

  18. does anyone know if this frontline investigation mentions or deals with the huge run on the banks in sept 08??

  19. THIS IS TRAGIC, a woman who fled her home in Pakistan…………….truly a sad, horrific plea

    ~~~~~~~~~~~~~~~~~~
    They are killing people, they are beheading people, there is no accounting for what they are doing,” Bibi said.

    Their oppression is also focused on women. The Taliban have destroyed dozens of girls’ schools in the region. Bibi is living in a house in Islamabad with other women who have fled Taliban rule in Swat.

    “For God’s sake, in the West you must realize this: no education for women,” she said. “You are going to destroy an entire generation.”

    She dismissed the government’s peace deal as a concession to the Taliban. But she remains hopeful that she can return to the picturesque Swat Valley with her three children.

    “I want peace more than anyone else,” Bibi said. “It’s my home, it’s where I want my children to go back to, it’s where I want to live.

  20. indigogrrl, on February 17th, 2009 at 1:40 pm Said:
    does anyone know if this frontline investigation mentions or deals with the huge run on the banks in sept 08??
    ————————————-
    I would bet not, as an investigation there might leave tracks to you know who.

  21. carolflowery: Excellent point. I forgot about that one!

  22. Alex Rodriguez is boo hooing about his steroid use. Why do they afford him any airtime for this?

  23. Pat, it’s like taking that shot of whiskey while they remove the bullet with a penknife. Distraction from the pain of everything else.

  24. Paulson is alleged to have stopped a 500billion dollar run on the banks that occurred on Sept 18, 2008 and the run is the reason Obama won the election (remember financial crisis favors the Dems they said) Too bad no one is looking into who started the 500 billion dollar run on the banks. The run occurred over a 2 hour period of time on that date, so it was intentional and a concerted effort.

  25. What is happening in Aphanganistan to women is beyond tragic. What is going to stop these radical muslums from imposing their religion on the rest of us. Nothing. Over time we will have to fight or they are going to take women conditions back to the middle ages.

  26. Geez, I can’t spell.

  27. Isn’t Bill on Larry King tonight?

  28. Yes, “the real Kim”.
    I got an e-mail today from his foundation.

  29. Too bad no one is looking into who started the 500 billion dollar run on the banks. The run occurred over a 2 hour period of time on that date, so it was intentional and a concerted effort.

    ——————–

    A big short trade from one or more of the hedge funds would have set things in motion.

  30. “three Wickets”
    It would probably lead back to Soros for Obama.
    I believe that was a rare honest moment by that congressman.
    As with everything else, unless it runs over & over & over again it’s like it never happened.

  31. In the past, it’s been the media, the fourth estate, that become bloodhounds for accountability stories like this. But these days, who would chase such a story. Every commercial media outlet is owned by somebody, and chances are they are “managed” by somebody else. Our only non-commercial electronic media is PBS, which gets 75% of its funding from the federal government thru CPB. The only path is thru the web, and even there the administration has Google is particular keeping a look out. FISA was and is important. Probably Google’s got a spider on me right now. Hi Eric.. 😀

  32. Getting Ready!

  33. Live blogging it?

  34. I would love to. Looks like Kanjorski was telling the truth.

  35. Katie can you change the reminder to live blogging?

  36. taggles — hey — I just checked my email. Did you need me?

  37. no, all set! how ya been! I’ll send you another. so check.

  38. I’m so sorry. Glad everything is ok

  39. Hi Taggles, It’s updated now.

  40. thanks KB!

  41. moral hazard! free fall!

  42. The family is demanding American Idol so, I’m relying on you guys….

  43. lol, well i ‘m watching it .. Bear sterns just went under and now we’re talking loosey goosey mortgages

  44. they decided to save Bear Stearns because if they went all wall street who did business with them went to.

    Credit Default Swaps
    sub prime mortgage bundling
    toxic waste

    Paulson tells wall street no more bailouts because the gov gave money to make bear stearns attractive to JP morgan to buy.

    JP morgan offers 4/share, paulson tells them, no you will pay $2/share.

  45. next crisis, fannie and freddie.

  46. (from memory) Didn’t that get raised a bit later?

  47. we’re on the crash of fannie and freddie

  48. The narrator is scary and depressing

  49. fannie/freddie held 5Trillion in mortgages.

    Paulson Nationalized Fannie and Freddie.

    Sent huge confidence shockwave. Anyone can fail.

    No company too large to not fail because of housing bubble.

    The next day Lehman Bros.

  50. How can people be this dumb? Easy, remember Hitler, remember electing George Bush Jr. twice, remember believing the news (seems like a million years ago but it wasn’t that long)…

    Nobama and the Democraps have killed this country. We are the walking dead. The only questions are: Is there an afterlife AND are we willing to fight them for it?

    I used to think George Bush Jr. was an embarassing, self-centered fool who was the worst president in the history of the USA. I was wrong. Nobama makes George Bush Jr. look intelligent, concerned, smart-esque, and kind-er.

    I am embarassed to be an American, again.

  51. oh now they have Barney Frank spouting off as if he has been entirely inncoent

  52. Lehman Bros.

    Lehman drunk their own kool aide.

    Pushing envelope on acceptable mortages.

    option arms, interest only mortgages etc.

    Because of Fannie and Freddie, rumors start spreading about Lehman and liquidity dries up.

    Stock price dropping, hits new low. Plummets. Confidence failing.

    Paulson is watching from WH.

    Hank Paulson started showing signs of exhaustion.

    Immense political pressure. Conservative pressure because of Bear Stearns. Barney Frank says he was defending Paulson to Repubs.

    Paulson decides someone has to fall. Decides to let Lehman be the first moral hazard victim.

  53. No one thought Paulson would let it fail.

    If the CEO Faulk wouldn’t sell, Paulson would make him pay with failure.

    Paulson very angry with Faulk.

    Told Faulk to find a buyer.

    Lehman is allowed to fail.

    Wanted to show his buddies on wall street that they would have to do something themselves.

    Summons Wall street Firms to NY Fed.

    Wanted to make sure Wall Street knew there would be no bail out for Lehman.

    And that all need figure out themselves how to save lehmans

    Geithner says someone needs to buy Lehmans, there was no will on Capitol Hill for another bailout.

    Moral Hazard trumped systemic risk.

    Bankruptcy a certainty.

  54. The gov’t refuses to back BoA or Barclay’s purchase of Lehman

  55. Paulson says Markets are fine after Lehman fails, as soon as he says it, wall street crashes.

  56. Everything freezes. No loans. No borrowing money. Crisis, because Lehman went into bankruptcy.

  57. Collapse of Lehman spreads systemic risk to market; in response, credit markets freeze as interbank lending stops.

  58. Now AIG, plunging.

    insurance investments tied to housing market

    toxic assets galore, makes every other problem look small.

    They owed money on CDS because they guaranteed billions that Lehman would never go bankrupt.

    How the F*CK could have they not seen that coming.

    MY GAWD!

  59. Are they going to go beyond a rehash of the past year? Are they saying “depression”? Or do they think all-this is just a short-term blip.

  60. Now AIG has to be saved.

    Gov’t intervention is a small price to pay compared to collapse of AIG.

  61. (hey when the party is going no one wants to stop drinking the punch)

    feds bailout AIG to prevent failure of largest US insurer

  62. I started watching late. Did they cover any of the longer term roots of this crisis or did they just start in 2006 or so?

  63. govt has 80% ownership of AIG.

    Now Wall Street thinks Paulson and Bernanke have lost control and don’t know what they hell they are doing.

    That they are reacting instead of acting.

    Confidence falls.

    Two days after Lehman fell.

    The fear of the next Great Depression.

  64. there’s an implication that Paulson has a thing about Lehman and their CEO and want’s to let them fail because of the bad management decisions and the moral hazard issue

  65. Bernanake wants more gov’t involvement in banking centers. full scale bailout.

    tells paulson they have to go to congress. This is the first bank bail out.

  66. They have Dodd and Frank talking as if he’s been entirely above the fray… what happened to their oversight responsibility? What about their obliviousness to the crisis and even their contribution to the crisis?

  67. The meeting with congressional leadership:

    Paulson telling them that they needed to act or everything would melt down.

    700B taxpayer money to buy toxic mortgage securities that were causing problems for the banks and they needed it for monday.

    Pretty much a blank check.

    Paulson said to buy toxic assets.

    Conservatives in house are in revolt.

    like the bonfire of the vanities in terms of craziness.

  68. Sept. 29 was the vote. Dodd says he didn’t have a good feeling about it.

    Conservatives pull support.

    Bill fails.

    market plunges.

    95 democrats also voted against the first measure.

  69. Dodd and Frank should be sued for oversight malpractice, that’s mho

  70. 777 point dow nosedive is what we got for that.

    Congress starts to feel pressure to pass a bill to buy toxic assets.

    Now Fed wants to do capital injections.

    To boost confidence and free up money.

    Paulson doesn’t like the idea because of nationalism.

    Publicly Bernanke stood by Paulson.

    Six lines of text were put into the bill permitting capital injections.

  71. Finally a revised bill passes.

    Now systemic risk has gone global.

  72. Paulson calls CEO’s of big banks to give them a kick in the pants

  73. by october paulson decides he has no choice and chooses to do capital injections which goes against his grain.

    Sunday Oct. 12. Paulson called nine largest banks and told them to come to his office.

    Sheila Bair was there.

    CEOs sat in alphabetical order across from Paulson and Bernanke

    Paulson told them the entire banking system is in deep trouble.

    Somber meeting.

    Made clear to CEOs this wasn’t a negotiation. They were to get a direct injection of cash and gov’t will take a stake.

    That set off a lively discussion

    some said we don’t want the money. they were told they have to take it.

  74. Was that when they were told that they HAD to take the money?

  75. they were given a one page contract to sign and all had to return it to paulson by the end of the day. All CEOs did.

  76. “he had to overcome an ideological aversion to government taking ownership in financial companies”

    Ummm… shouldn’t most Americans have an aversion to this?

  77. Paulson mr. freemarket is now the biggest interventionist treasury secretary since the Depression.

  78. they have spent 350B to save the banks, they say trillions more will be spent and no one knows if it will work.

  79. woooooooooooooo

  80. Are we ready for the post-game analysis?

  81. yup, post game wrap up

  82. Well I wasn’t asked, but I’ll speak to bias.

    IMHO, there is a bias towards interventionist policy and a presentation of Paulson as paralyzed by stupid ideology of non-intervention. Too little analysis of the early roots of the crisis or the role of the lack of government oversight and prior meddling in the market, which arguably led to market distortions which helped contribute to the market breakdown.

  83. the underlying problems that caused this have not been addressed, it will not correct itself without changes to the system

  84. they never should have let lehman fail. that’s pretty much what I got out of it.

    When they let lehman fail, confidence plunged.

  85. and then put AIG at risk. That is pure incompetence on the part of Bernanke, Paulson and Geithner.

  86. I watched it. All I can say is Jesus, Mary, and Joseph! We are so f*cked! The entire pack of wolves on Wall Street gambled with the slightest percentage against a win and lost.

    Unbelievable!

  87. Did we learn anything we (who’ve been following all this) didn’t already know? Did they get anything surprisingly right? Surprisingly wrong?

  88. elderrj: the deal with market oversight is not to be drive by ideology, there are markets that have problems and need intervention, there are those that are okay and need no intervention or need to be relieved of past intervention … the deal is to intelligently recognize which market is which … if you put an idealist in charge, they’ll not act practically but will respond in a way that creates harm

  89. If they had saved Lehman, the problem might have been able to be contained, and smaller bailout and private buy outs.

  90. katie: this program was a history of events, i’m not sure it offered up anything but that …

  91. The sad fact is that it is not over. They will be back.

  92. taggles: bailing out lehman is an oversimplistic answer to the situation, something was going to create a huge correction, the correction would occur one way or another …and the size would be similar one way or another, it may have slowed things down or put it off, but it would occur one way or another

  93. I was very disappointed in the show. It gave a time line which I didn’t need because I was following the whole disaster in real time last fall.

    It didn’t answer the question I most wanted answered which is why did things fall apart WHEN they did? Why not 3 months later or earlier.

    It helped me see Paulson in a better light, but I still feel that the timing wasn’t accidental; that some
    person(s) pulled the rug out from under Wall Street. The show gave no one clue as to who.

  94. exactly, Joanie … just a time line

  95. dakinikat – I agree. I was just speaking to the bias of the reporting. I don’t think that a Democratic administration would have been more willing to intervene in the markets in that way. Government intervention on that scale in any business is not an republican or democratic “ideology.” It is much more a cultural ideology of the US more broadly.

  96. But, was a “crisis of confidence” inevitable considering the leveraging that was going on — I mean, how long could we go before those “troubled assets” caused serious trouble?

  97. the answer to that question is that the market suddenly discovered the problems with the asset pricing, Joanie … it had to come sooner or later, they saw that the asset pricing was wrong, and that the housing bubble wasn’t based on anything real, just another speculative bubble based on herd mentality …

  98. It was also election season. Factor that in as well.

  99. katie: sooner or later the market discovers that it’s been trading on momentum and that the underlying assets are not what the market has established

  100. I understand the need for correction, but we might not be facing a great depression right now and could have handled this in a more thoughtful manner.

    Paulson cause the confidence problem by allowing the failure of AIG.

    That plays a huge part on the mind of Wall Street, and freezing borrowing etc.

  101. failure of Lehman, correction.

  102. It didn’t answer the question I most wanted answered which is why did things fall apart WHEN they did? Why not 3 months later or earlier.

    Exactly… I hate to be all tin foil hatty, but hmm, it certainly was a critical element in the election of the current fraud inhabiting the white house.

    Also, the crisis came to a head last fall, but the roots run deeper. I was hoping for more analysis of that.

  103. taggles: the amount of the overpricing would always be there, and discovery would always lead to the same result… i’m not sure that any one could’ve done anything different. I’ve always not been caught by bubbles because at some point, when things are going up so quickly, I eventually ask, wtf are these folks smoking? when you’re a trader in the midst of a bull run, it’s hard to see that

  104. elder: yes, but reporters don’t know what they’re talking about, you really don’t see reporters with sophisticated degrees

  105. When they allowed lehman to fail, they did not even take into consideration that would cause AIG to fail and need to be bailed out.

    They thought letting Lehman fail would correct the problem. Their actions exacerbated the problems. All this fear mongering as well has a grave impact on Wall Street, not just the bottom line.

    That is complete incompetence.

  106. dakinikat – you’re right. Reporters just have pretense of qualification. No wonder they love BO so much

  107. “and that the underlying assets are not what the market has established”

    Dakinikat, So it IS more than an issue of confidence or the lack of a bail out for Lehman Brothers.

    And, it seems to me that the timeline idea is weak — it’s still unfolding….. I’d like to know more about what happens to regular people if the economy melts away…..

    What if California has to layoff 1/2 their state employees. What happens to cities that rely on sales tax if people stop buying anything but necessities? How high can unemployment go? And what happens if it gets that bad?

    How many people watching that show haven’t been following this story all along?

  108. the deal is: this is way from over, it’s in the REAL economy now, auto makers, retailers(goodbye perhaps penny’s, sears, and who knows who else?) and a bunch of eateries and maybe even starbux, this is a snowball right now

  109. katiebird: no those are the symptoms, the roots are the extremely low interest rates Greenspan’s Fed put out during and the loosey goosey loans that resulted as part of Dubya’s ownership society. And a complete malpractice of oversight by the SEC and the congressional banking and finance committees. There are very fundamental things here fueling the panic. the panic just is fuel to the original fire.

  110. the head of the IMF has argued that we are already in a depression

  111. Another point….

    the lack of good reporting about the underlying issues is NOT a service to the public. The US has been lurching from one bubble economy to another for more than twenty years. We have eviscerated our manufacturing sector, have financed our personal and public economy on debt

  112. A few things still bother me, Dakinikat. I read your posts on the Confluence and on your own blog. But can you explain how Paulson, the ultimate insider, underestimated how “interconnected” Lehman was? to the extent that he is surprised by the ripple (actually tidal wave) effect when they go under?

    The show went to great lengths to explain his affinity for the concept of moral hazard, but he had to know that Lehman’s failure would be as catastrophic as Bear, Stearns’ failure since Lehman was larger. But he decides to save Bear, Stearns but “sends a message” by letting Lehman fail.

    The show seemed to have as one of its goals the vindication of Paulson and to a lesser extent, Bernanke also.

  113. I posted this downthread but it is so horrifying I had to share it again.

    Walgreens is selling ……

    Chia Pet Chia Obama Special Edition

    It comes in the 2 poses, determined and happy!

    http://tinyurl.com/d6gnxz

    Check out the copy…

    Hail to the CH- CH- CH- CHIEF
    In honoring our 44th US President, the Chia Pet company presents this Special Edition Chia Obama.

    Celebrate the Change right in your own house – Watch it Grow!

    Can you grow one? YES YOU CAN.
    Easy to do… Fun to Grow.
    Full growth 1-2 weeks
    Reuse your Chia indefinitely

    I am going to vomit now.

  114. my f*ing governer jindal is talking about turning our portion down … he’s an idiot!

  115. joanie – I agree

  116. Joanie: I thought they inferred that Paulson was actually eager to see Lehman go down because of previous rivalries, it seemed to me they were suggesting a pissing contest left over from when they were rivals rather plus Paulson’s republican tendency to think that government intervention is always evil. I thought it suggested he made a bad decision. Taggles picked up on the same vibe, I believe.

  117. i think Paulson was late to come to … i thought bernanke seemed more sympathetic

  118. my f*ing governer jindal is talking about turning our portion down … he’s an idiot!
    —————————-
    I thought that was taken care of in the bill or by executive fiat, that if the gov. refused then the legislature could override that decision.

  119. Reporting on economics is dry. Last year the press was much too busy covering Palin’s wardrobe, Obama’s superstar, Hillary and Bill’s next evil move. Too busy lauding and applauding and asking no questions of Mr. Wonderful while this was percolating on a parallel track.

    Perhaps if they could have tied the financial disaster to one or two of these idiots having a blond bimbo mistress with her own page on Facebook the story might have seen more daylight. Meanwhile, economy as we knew it continued to slide into the mud and we were all transfixed by the pillars, the greatest speech evah, the trip to Europe with all the presidential trappings, MO’s latest fashion statement, a missing child, Britney’s comeback, and counting the days until Bush finally bid adieu.

    “Updating” after the fact is always helpful.

  120. Pjane: i hope so, jindal needs to be stuffed in a rocket and shot into space somewhere where he can’t hurt the state, he’s a complete idiot.

  121. Dak, I agree about the pissing contest thing, but I would hope that a man given the grave responsibility in a grave situation would act more maturely. I think his decision to let Lehman fail was more from his free market/Republican ideology.

    I don’t know. I thought the show did a great p.r. job for Paulson because prior to tonight I thought he was an arrogant, pompous bastard.

    P.W. Jindal is just posturing.

  122. typo above: that W should be an S

  123. Joanie: yes i think a part of it was his freemarket ideology, although I thought the show portrayed it to be past rivalry, I have no way to judge that

    and i hope Jindal is posturing, we have WAY to many poor folks down here, and these frickin’ levees need to be built correctly ASAP!

  124. Possible that Paulson was pissy after having to nationalize Fanny and Freddie, he had a knee jerk reaction to make a last stand on moral hazard and non intervention with Lehman. It’s possible that he did not see AIG coming, and that by itself is a pathetic and depressing reality. How could he not.

  125. dakinikat, on February 17th, 2009 at 10:33 pm Said:
    Pjane: i hope so, jindal needs to be stuffed in a rocket
    ——————————–
    He left the bldg for me when I found out about the creationism thingee he’s pushing.

  126. Hi everyone. I thought Paulson came off as a real doofus and apparently letting Lehman go under triggered the whole mess. I don’t know if that’s true or not.

    In other news, CNN is finally reporting on the women who was beheaded by her husband because she wanted a divorce.

  127. To be fair, I don’t think many people could have “seen it coming.” And moral hazard is an important thing to consider.

  128. bostonboomer, on February 17th, 2009 at 10:36 pm Said:
    In other news, CNN is finally reporting on the women who was beheaded by her husband because she wanted a divorce.
    ————————————
    Did they touch on the honor killing side of it or just especially violent family quarrel?

  129. AIG insured Lehman’s risks, how could that have not seen that coming?

    If Lehman goes down, AIG, which is the behomoth in the room, surely fails.

    It was stupid and incompetent on Bernanke, Paulson and Geithner’s part.

    Feeling some confidence in the new treasury secretary, NOT!

  130. Right Elder, but how could he have no idea about the load of bad insurance liability that humongous AIG was holding. If he’s going to let Lehman fail to prove bolster moral hazard, then he should at least have known how much Lehman liability AIG was holding and what kind of reprecussions that could have. He’s an investment banker himself. Just looks like he was losing his mind. The snowball dakinikat describes was already too big.

  131. Did yall see the Trib is calling for Burris to resign?

  132. Resign? With Blago gone who in Chicago is now in charge of “selling” that seat once again?

    And the E verification has been taken out of the stimulus bill even though it was in there right up until the vote.

  133. 3W — good point.

  134. I got the feeling that tonight’s episode shows the degree to which even a show as honored as Front Line is subject to censorship, is beholden to the Villagers to toe a certain line. Even though I learned something from the special, I was disturbed, as others have already noted, that the only congressmen interviewed were Frank and Dodd. And I also read recently that Geithner had a huge hand in Paulson’s decision to let Lehmann go under. It seemed that the episode went to lengths to keep the present Powers That Be from receiving their full measure of criticism.

    But that was just my take on it.

  135. taggles, on February 17th, 2009 at 10:39 pm Said:
    AIG insured Lehman’s risks, how could that have not seen that coming?
    ____________________________
    I don’t remember the figures but at the time of the fall, AIG had like $7 trillion in assets but was cash short.
    My feeling was that they could have tried to convert some of those assets to cash. Or is that naive thinking on my part?

  136. The system failure was inevitable. It was just a matter of when. The election year definitely was a factor. So was it political forces or the markets that timed the BIG collapse for right after the nominating conventions.

  137. taggles, on February 17th, 2009 at 10:39 pm Said:
    AIG insured Lehman’s risks, how could that have not seen that coming?
    ____________________________
    I don’t remember the figures but at the time of the fall, AIG had like $7 trillion in assets and a million and a half or so in debts, maybe less.
    My feeling was that they could have tried to convert some of those assets to cash. Or is that naive thinking on my part?

  138. Joanie: you can never underestimate the power of a pissing contest between skunks … i’ve seen management make power moves that were basically akin to two cats throwing crap out of the box because they didn’t want to share the litter box, you know, you’d think some folks would be more mature,but you never know what motivates them

  139. Felt the same way Inky. It was pretty disappointing.

  140. System failure was inevitable, but why no analysis of the cause of the system failure.

  141. i was surprised by the AIG bailout, I knew Dubya was a beaten man when he signed on to that and all the rest …

  142. It seems that Hillary saw this coming, because she was pushing for her HOLC plan a month or so before everything hit the fan. She also warned about a coming mortgage crisis quite a while ago. I believe McCain was also talking about problems with Fannie and Freddie a year before all this happened. And economists like Roubini have been predicting a meltdown for much longer. It doesn’t make sense to say no one saw it coming.

  143. Not sure about those numbers plainjane31, but whatever anyone was calling assets were bad assets, and since the subprime crash they were illiquid assets as well. That’s why everyone kept writing down (still today) tens of billions on their balance sheets.

  144. they did explain the problem of the toxic assets like credit default swaps, the basic inter marrying of debt within wall street organizations and the sub prime mortgage lending circus.

  145. but elderj, i think you want to know about individual politicians and wall street execs. that was not forthcoming.

    All we heard about was Paulson, bernanke and geithner.

  146. The more I think over the show, the more disappointed I am with it. Here’s reason #2: Paulson sold the $700 billion bailout as a means of buying the toxic assets from the banks. But half the money has been spent and the banks are no less relieved of the toxic assets. It still hasn’t been decided what to do with this nasty paper.

    It is my understanding that the banks held on to the money they got so as to make their balance sheets look better. In other words there weren’t all zeros on one side of the page for these brokeass banks. So didn’t Paulson mislead the Congress and the citizens?or was he hoodwinked by the bankers?

  147. Think the credit default swaps really triggered the final set of dominos. These things are just traded around all the banks like they are just another type of security. Then the music stops when Lehman fails. Because that IS a default. And all these CDSs suddenly become insurance products again, and they have to be payed out. So everybody holding CDSs suddenly owed someone else. And so followed the predictable credit freeze at all the banks. I still find it strange that the hedge funds have not been really dragged into this yet. Could be they were the beneficiaries of a lot of these CDS products when they came due.

  148. joanie, they talked about capital injections which basically gave the gov’t stake in most banks.

    Congress put the language in the legislation on the second vote, even though Paulson did not want it. that is the only reason the 700B bill passed. it failed without that language.

    Paulson then changed his mind and decided that he would use capital injections, vs. toxic asset relief.

  149. Three Wickets, on February 17th, 2009 at 10:53 pm Said:
    Not sure about those numbers plainjane31
    —————————–
    I can’t remember the exact figures now, but at the time someone wrote a big article (Maybe No Quarter) telling that AIG assets were tremendous and their bad debts were relatively small. Only one aspect of their business was in trouble. Maybe I can find that article.

  150. I want to review the beginning of the show. I think the timing had to do with the fact that the bad mortgages were starting to become obvious – they had started to show up bad since the spring. And the connection was made that the investment securities (correct term?) were based on these mortgages that had started to non-perform, ie the investments were not worth much.
    I agree with dak that it was only a matter of time. It was a bubble.
    Hillary wanted to address the mortgage problems a year and a half ago. That would have been a better option, better timed and less expensive I think.

  151. taggles – true, that would have been nice, but also a little more sophisticated analysis of the overall situation, not necessarily a finger pointing exercise. The housing bubble is only part of the economic collapse, and it was driven by certain market distorting factors.

    Millions of Americans bought houses on the expectation that the prices would go up and up. Millions more took out home equity loans to renovate homes and then charged up credit cards to furnish them. The average size of a “starter home” has increased by about 500-750 square feet from the seventies, while families have grown smaller.

    My point is, that the housing situation is a lot more complicated than “Paulson was an idiot, the republicans were crooks, and Bernanke was asleep at the switch”

  152. So didn’t Paulson mislead the Congress and the citizens?or was he hoodwinked by the bankers?

    ——————-

    joanie, he may not have been hoodwinked by the bankers, but he definitely misread it, because he expected the bankers to circulate the money and the free trading market to save itself from the collapse. That clealy did not end up happening.

  153. I wonder if Congress had passed the bill to target toxic assets only, if that would have been better?

    Dakinikat?????

  154. Elder J, I think somebody in a position to exploit things to their advantage recognized the factors you enumerated and deliberately manipulated them. I have a likely suspect in mind, but, until I have more than a hunch, I’ll keep his name to myself.

  155. I agree that the show was basically a time line of what happened. But I thought it did a fair job of that and found it useful for that purpose.

  156. elder, a big part of the larger story (not the complete part) has to do probably with interest rates set by the Fed. dakinikat talks about this in couple of the posts today. It really goes all the way back to Bush I, and probably to Reagan if you consider the trend towards deregulation.

  157. hmmmmm……

    Does the first name start with a B?

    Does the last name start with an O?

  158. it certainly helped me understand credit default swaps and how they divvy up the mortgages to spread the risk.

  159. Jindal could be the next Repub nominee – and our next
    president.
    Or let’s see, who else could they trot out next –
    Romney, the Rudy, Huckebee, or maybe, best of all,
    and it could happen if fraudbama doesn’t solve this
    almost unsolvable problem fast – Jeb Bush.

    I watched Larry King and Bill tonight.
    I’m glad I did. He’s so beautiful to look at – and he seems
    so real and sincere, so caring. Too bad he couldn’t
    criticize our pres. That was the worst part. But he’s so
    excited about the work he’s doing because it’s making the
    world a better place. I see very little ego in him – and only
    ego in our present pres. So sad. But at least I felt
    uplifted and happy for an hour, and after.
    I believe Bill would have gotten us out of this mess.
    He said the big thing is to bring back the value of the assets-
    specifically housing. Banks don’t want to do that. They’re
    still so greedy, and they’d make less money. (Last two
    sentences are my two cents, not his).
    I always felt safe when he was in charge. And he’s
    not allowing them to blame him for the economy.

  160. taggles, Shumer said at one point when they were considering the bad bank option that the price tag could be as high as 4 trillion. They are hoping the market turns before it gets that bad. But it’s looking pretty scary right now.

  161. 9/11 had a lot to do with keeping rates low thru Bush II. The balloon may already have been there, but it became a bubble after 9/11. For those who know NYC, I always wondered why prices in Tribeca were going up up up in the years immediately following the tragedy. Never made sense. It was all part of the speculative bubble.

  162. 3W — the rock bottom interest rates (loose money) policies of the gov’t are like fuel to the fire. Our whole economy is based on consumption, not production. We don’t make or build much of anything anymore, and so the main driver of our economy is buying and selling stuff that other people have made, or buying and selling services — most of which are only tangentially related to any actual need.

  163. Nope, Taggles, the entity I have in mind would be in a position to buy and sell Congress and the president, and other leaders, too, via strategic donations, etc. And, it ain’t Soros, either.

  164. shoot, i was gonna gonna type

    S

    O

    R

    O

    S

    ?

    than I read the end of your comment.

  165. Absolutely elderj. It’s become much more of a traders market, so the financial companies have flourished in the low interest environment. I don’t understand well though why inflation did not kick up during Bush II, to force strong intervention on rates. Because real estate was obviously going up. Maybe oil being affordable until last year. Maybe all the loose money was packed immediately into real estate, so it does not show up on the Consumer Price Index. Not clear here.

  166. What I heard from someone with close friends on Wall St.,
    is that it was common knowledge that they were trading
    worthless securities, leveraging everything, almost like
    a hot potato they were passing around, or a giant
    Ponzi scheme. And everyone on the inside knew it,
    but they were making out like bandits,
    (literally), so they kept doing it.

    I think everyone knew, from Bush, to Paulson, to
    Bernanke, to brokers, traders, but it was too good to
    stop. There was some TV show, I forget where, that showed
    this. Maybe Brancaccio?

    I think many people have been living on credit, or on
    refinancing houses the past few years, and powersTB
    allowed that to happen, to keep the whole thing going
    as long as they could. Obviously, some people knew
    that eventually it would fail.

    Hillary was talking about doing something about mortgages,
    and housing, since before last winter.

  167. There are some hedge fund people I sometimes come across. Ever since the summer of 2007, their favorite phrase was “it’s gonna blow up. it’s gonna blow up. just a question of when.”

  168. It’s kind of like botox. You only have the illusion of youth; you won’t live longer. For some time now our economy has only had the illusion of strength. It was a lot of financial ‘services’, not a lot of real productivity. And a culture infected with the idea of getting a lot for not doing much. The culture in the work world has deteriorated also.

  169. They were selling and trading grade C mortgages,
    ie. not great credit, and passing them off as grade A paper,
    I think mostly overseas markets. These were greater
    risk so they should have been marked down, and then
    if some failed it wouldn’t have been so bad. But they were
    sold for full price, so that was a problem.
    And I think they kept trading them like this, each one
    making money and cheating. Like a giant hot potato you
    want to pass to the next guy.

  170. I got the feeling that tonight’s episode shows the degree to which even a show as honored as Front Line is subject to censorship, is beholden to the Villagers to toe a certain line. Even though I learned something from the special, I was disturbed, as others have already noted, that the only congressmen interviewed were Frank and Dodd. And I also read recently that Geithner had a huge hand in Paulson’s decision to let Lehmann go under. It seemed that the episode went to lengths to keep the present Powers That Be from receiving their full measure of criticism.

    But that was just my take on it.

    No, that wasn’t just your take on it, Inky, it was mine, too. With the possible exception being: the only thing I learned from this timeline with an agenda is that Paulson actually swallowed his free market ideology in the end, and did his job. This makes him more sympathetic.

    Thank goddess for y’all, conflucians. I find my own thoughts on this disappointment of a program reflected above. With an assist from Teddy K, it could have been put together by the editors of Popular Mechanics.

  171. This article by the author of Liar’s Poker, Michael Lewis is a stunning account of what happened:

    The End

    . . . .
    At some point, I gave up waiting for the end. There was no scandal or reversal, I assumed, that could sink the system.

    Then came Meredith Whitney with news. Whitney was an obscure analyst of financial firms for Oppenheimer Securities who, on October 31, 2007, ceased to be obscure. On that day, she predicted that Citigroup had so mismanaged its affairs that it would need to slash its dividend or go bust. It’s never entirely clear on any given day what causes what in the stock market, but it was pretty obvious that on October 31, Meredith Whitney caused the market in financial stocks to crash. By the end of the trading day, a woman whom basically no one had ever heard of had shaved $369 billion off the value of financial firms in the market. Four days later, Citigroup’s C.E.O., Chuck Prince, resigned. In January, Citigroup slashed its dividend.

    From that moment, Whitney became E.F. Hutton: When she spoke, people listened. Her message was clear. If you want to know what these Wall Street firms are really worth, take a hard look at the crappy assets they bought with huge sums of ­borrowed money, and imagine what they’d fetch in a fire sale. The vast assemblages of highly paid people inside the firms were essentially worth nothing. For better than a year now, Whitney has responded to the claims by bankers and brokers that they had put their problems behind them with this write-down or that capital raise with a claim of her own: You’re wrong. You’re still not facing up to how badly you have mismanaged your business.

    And it goes on from there…

  172. So these bankers are struggling with this huge overhang during the summer months. They are also watching the election, asking would a Democrat or Republican be better for their situation. Used to think the bankers would want the Republican. These days, not so sure. They may have thought a Democrat would be more likely to bail them out than a free market Republican. In which case, the conspiracy theory lives on.

  173. People wanted to make what money they could while they could. Even if you know something is wrong, what happens when you try to tell people?

  174. There was a good bit of inflation, but mostly limited to the commodities markets (petrol, grains, etc.)

  175. I hold out hope that people like Whitney and Bair, truthtellers, might be able to save us somehow in some measure. And it’s not because they are women. There just aren’t many people on Wall Street telling the truth right now, or saying all they know. That includes Geithner and Bernanke, imho.

  176. K’bird, thanks a bunch for the Michael Lewis link (I’ve bookmarked it for later). Bet y’all didn’t know that he hails from New Orleans.

  177. speaktruth, yes, I think part of this mess was also about investors believing they could stretch out this pyramid, bubble, ponzi, whatever you want to call it, out to the world. So they kept getting takers from deeper and deeper parts of the global economy, until they ultimately ran out of world.

  178. cinie,

    Buffet? Oprah? Bloomberg?

  179. Kat, no I didn’t know anything about him. He’s a great writer and I’ll be following him from now on though.

  180. and of course the housing market was inflated. I think there has been a lot of hidden inflation. For instance, people buying Starbucks instead of drinking coffee at home, or many more people eating out rather than cooking at home.

  181. Well he always sounded like the gamblin type Kat5.

  182. Well he always sounded like the gamblin type Kat5.

  183. elderj, that helps me. Yes, the overextended credit everywhere, because of the low rates. A credit inflation. Not captured completely by the CPI. All the more reason to raise the low rates and tighten monetary policy. But there was 9/11, then the wars. They should have raised rates by 2004 at least. But Bush was running for re-election. I think Greenspan was still Fed Chair then. We should ask Andrea Mitchell about all this. She’s been scarce lately. Wonder why.

  184. Three Wickets,

    Or maybe they just wanted the Democrat who was
    bought and paid for.

    And maybe the fact that Bair and Whitney are women
    plays a part in their whistle blowing. Just sayin’.

  185. No argument there speaktruth.

  186. Hillary is 44’s new post:

    Bill Clinton had a comprehensive economic plan, stupid. It was the economy, stupid.

    We have noted that an uncoordinated not comprehensive economic plan will amount to a waste of money. We have noted that even if the federal government cuts taxes and increases “investment” spending it won’t matter a whit because the state governments will raise taxes and cut services and so counter whatever measures the federal government initiates.

    Our “notes” have come to pass. California is on the Brink. Kansas, and its Obama enabler Kathleen Sebelius, is a mess. New financial scams, the latest an $8 billion scam, are unearthed with regularity. Neither government nor private observers can place a value on the biggest financial institutions nor value holdings. Yet, Dimocrats and Obama (in the most recent past it was now hypocrticial Republicans) pump trillions into a hole whose depth is not even measured yet.

    Obama signed his Dimocrat enabled flim-flam “stimulus” scam today and the markets gave it the reception the scam deserved – down 298 as Obama scribbled his signature scam.

    As the financial markets reject the Obama scams, in the smokiest of Hopium dens the recognition finally arises that Bill Clinton’s focus on policy was a positive change for Americans.

    Take, for instance, Sirota’s oft-voiced disdain for Clintonism and neo-liberal economics. If your concern is for the economic well-being of the working class, than attacking Clinton is a strange place to start. Under his presidency, real household incomes for the bottom 10th percentile — a pretty good Rawlsian metric for economic well-being — increased by 17.3 percent, the largest increase of any president since the Census Bureau began compiling numbers (.pdf) on this statistic.

    One can certainly raise various critiques of Clinton’s presidency, many of which I’d wholeheartedly agree with, but in broad strokes his economic program would seem to have been a tremendous success, particularly for the working poor. (Although the wealthy certianly also fared well under his presidency; growth in income was remarkably evenly distributed between all income classes under Clinton).

    Too late the Hopium dens stumble from their smoky Clinton hate fog (because now they realize they need Bill and Hill to get their Mess-iah out of the mess).

  187. Let’s see. Andrea Mitchell works for NBC, which also owns and runs CNBC, which can move markets with their coverage. Andrea is also married to Alan Greenspan, the Fed Chair until 2006, a person that CNBC reveres for keeping the market humming by maintaining low rates. Why isn’t the venerable New York Times investigating or interviewing Andrea Mitchell. Because journalism has turned to crap.

  188. Low rates on credit – like the 14 to 30% on credit cards.
    Even could go to 50%. Low rates? I don’t think so.
    The banks got low rates. But not the people.

    But credit was available and relatively easy. I think
    a big reason people were so in debt is because they
    needed it. Wages haven’t gone up since the seventies.
    (Real value). Prices of everything have. How could
    anyone live?

  189. “Kansas, and its Obama enabler Kathleen Sebelius, is a mess.”

    Actually the Kansas situation is just fine. It was really a conflict between the Governor and the Legislature and they worked it out earlier this evening. It had to do with transferring money from one sort of account to another. The Legislature was trying to force the Governor into signing an unrelated bill by refusing to authorize the transfer until she signed it.

    I’m not sure how it was resolved — the reporter just mentioned that the checks are going out.

    I was particularly interested in the story because my very first full time job was in the Kansas Depart. of Revenue filing income tax returns.

  190. 3W – yeah, we should have moved to tighten money, but it was not politically pleasant to contemplate for the republican administration, just like tightening lending standards and increasing oversight of FNMA and FHLMC was not appealing for the Dems.

    Basically we’ve been running the US on a massive credit card for the last twenty years. It started under Clinton, but Bush exacerbated it. Savings has been consistently discouraged (low interest rates, loose money) and downward pressure kept on wages and benefits which has been hidden by the credit economy. The other place we’ve seen inflation is in health care, which has skyrocketed in cost.

  191. DV, I find 44’s analysis far less dimensional than what dakinikat’s been saying ever since I came here in January, probably same as she’s been writing much earlier than that.

  192. Three Wickets – I agree. The language is too loaded. And it makes it hard to separate the facts from the BS.

  193. Maybe credit cards are the worst. They were the major profit center for the commercial banks, because of that point spread that you allude to speaktruth. Over 90% of the revenues that commercial banks collect from their credit card comes from the interest charges on revolving credit. They love accounts that are extended (even as they plan for certain amount of write offs on ultimate defaults). They lose money on accounts that pay on time every month. Credit cards are the ultimate predatory lenders, imo.

  194. One problem I see is that our nation is addicted to debt. Whereas debt used to be seen as a short term emergency thing to tide us through war or especially hard times, it has become a way of life for the government. It has become normal to us that the government owes trillions of dollars that we the taxpayer are on the hook for. And our dealer is our banker as well: China is loaning us the money to buy goods from them. They are as locked in the cycle as we are in some ways, but their society culturally can probably tolerate a bit more loss and hardship than ours.

  195. TALF Term Asset backed securities Loan Facility. That’s where the Fed is going to make the other 1 trillion available to brokers who will back credit card debt, auto loans, commercial mortgages, small business, student loans. They want to use that to create that secondary market for loans that all the local banks are clammering for.

  196. Speaktruth, too obvious, even though this person would be/would have been hiding in plain sight.
    Did you know Paulson worked in Chicago as head of Goldman Sachs for years?
    Who might he have met there?

  197. Make that Goldman Sachs Midwestern division.

  198. Right elderj, our taxes being used to pay for our personal debt, but it will not be enough. The national debt is growing huge, and the Fed and Treasury are hoping the sovereign wealth funds like China will keep investing more. But if we stop buying their products are Walmart and everywhere else, their foreign reserve will not have the capacity to buy our Treasuries. That’s the vicious cycle you mention. In the mid term, what could happen is that countries like China and other exporting nations could be forced to focus their energies on their local markets for domestic consumption. That might make it easier for American industry to get its legs back. But no matter what the producers in this country or abroad are doing, it won’t matter until demand returns to the market, and that won’t happen until the credit problem is fixed, and that probably won’t happen until the US housing situation is fixed. So we always end up back with Hillary. Think she’s two steps ahead of the guys in DC right now. I’m trying to find positive signs, anywhere.

  199. Ooh, that’s interesting Cinie.

  200. There were other big Chicago/New York/Federal Reserve players in and out of Chicago at the time who are integral to this whole mess, too.

  201. Cinie:

    We need a new post – do you wanna do it?

  202. myiq, I’m working on something, but it’ll be a good little while.

  203. Yes, demand needs to turn to the market, but not the artificial demand created by loose credit which drove the last expansion (and the economy did expand under Bush,albeit anemically).

    I fear that the huge borrowing and spending of the “stimulus” package will only exacerbate things by leading to inflation AND higher borrowing costs. Can you say “Stagflation?”

    The bad debt needs to wash out of the system and the overall debt load of the country (both personal and national) needs to lessen. I think the continued half hearted intervention of the gov’t into the system is not helping and is destabilizing the market as investors don’t know what is coming next. Such instability creates a horrible environment for business to grow or be started.

  204. Yeah Cinie, that whole Paulson getting on his knees begging for Tarp from Nancy charade seemed contrived. And of course, Buffet pumped what was it 5 billion into Goldman to keep them chugging. Goldman and the hedge funds, they’ve always been at the top of the pyramid.

  205. Then cross post one of the ones you have already done (please don’t use the one with the creepy picture)

    If you don’t have something I’ll have to use “Zombie Strippers”

  206. I still don’t see how anything can “correct” after bankers loaned worthless paper (0 down mortgages) dollars for overvalued assets (overpriced houses/properties/renovations, etc.) without somebody eating a sh*tload of losses.

  207. Bernanke was asked about stagflation in the hearings last week. He said he’s a dead set on managing inflation, but he needs to focus on the stag part right now. And he plans to do that with the 1 trillion TALF and somehow drumming up another 1 trillion working with Geithner and his private/public investment fund idea to deal with the bad assets. Another 300 billion will be used for more capital injection into the banks who pass the stress test. Remaining 50 billion in the original 700 billion Tarp account will be used for some kind of housing relief. The implementation plan for all this has yet to be clearly defined. So the market keeps falling.

  208. myiq, zombie strippers work, or works, whatever..

  209. there will have to be some painful losses; that cannot be avoided, only absorbed

  210. Okay, new thread, FWIW.

  211. Well Cinie, Meredith Whitney says that value (the helium part) is gone, puff. She’s trying to convince the financial markets to accept that. But it’s still probably not fully priced in, because investors are holding out for the possiblity that Geithner can get the leverage wheels at the banks turning again soon. Every day would seem to matter greatly from here on out.

  212. interbank lending has resumed, but there isn’t much demand in the consumer lending markets. Dumping more and more cash into supersaturated markets isn’t going to do anything helpful and may even hurt.

  213. I just watched the show — words that kept coming up…

    “MORAL HAZARD”

    “CAPITAL INJECTIONS”

    “SYSTEMIC RISK”

    I looked at this — and I see one thing. Pelosi in a room and a lot of backroom deals by what look like unethical, unethical men who are supposed to be in charge.

    Moral Hazard — should have been the key, shouldn’t it — it seems so.

    Now I’m going to read the comments you guys — and I will be glued to what Dakini has to say next. Well, what everyone has to say — but something is very, very wrong with the way these people are doing business, have done business — and plan to do business in the future.

    It’s like that Madoff game, isn’t it?

    Only by the “leaders” of our country.

    Oh and, there is NO CONFIDENCE in any of these guys at all.

    At all.

    Ugh.

    They don’t even care and that is the worst of it.

    They don’t care about the country, at all.

  214. Another list:
    http://www.foxnews.com/story/0,2933,494445,00.html
    “Cream of the Crop Gone Sour: America’s Troubled CEOs”

    I find it interesting that none of them went to U of P’s Wharton School of Business. I have heard it was one of the best and none of these CEOs attended it.

  215. no, we need fiscal stimulus, Taggles, this bill is too small, but it will have some positive impact. and I think injecting capital into the banks was also necessary. This is a complete mess. The problem with the stimulus bill is some of the tax cuts and a lot of where the money is going … it’s not necessarily going to where it would be most effective, but Obama failed by letting congress write the stimulus package, he should’ve had some one on his economics team write. I don’t think he wanted complete ownership of it, however for political reasons.

  216. How long is this post going to be sticky? It has more than 200 comments.

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