BendBubble2: Why The Bailout Is 100% Doomed, In Under 1,000 Words.

Sunday, October 5, 2008

Why The Bailout Is 100% Doomed, In Under 1,000 Words.

The bailout legislation passed Friday is doomed to failure. It CANNOT succeed.

Why?

First, it is too little, too late. $700BB is only about 3.5% of the total housing stock of around $20TT.

Second, banks will have learned their lesson, and NOT lend to shaky credits. Or they will. And we will start this thing over, but there will be no accompanying price bubble. People will begin defaulting almost immediately because prices are falling.

What the bailout actually does is ensure The Worst Of All Economic Worlds: STAGFLATION.

The Cause Was A Price Bubble. The Cure Is Popping It. That's All.

This bailout is like "bailing out" the hamburger market that has recently gone to $30/lb. But now, it's FALLING, and it's at $20/lb! OH NO! Let's BAIL IT OUT! Let's get it back to $30/lb.!

Nonsense, of course. Goods that go to unsustainable prices must simply fall back to prices in line with incomes & substitutes. That means home must be in line with local incomes and must provide a comparable return as rentals. At the peak, Bend homes were priced at negative returns FOREVER. At the peak, 92% of all Bend homes were unaffordable to families making 120% of the median family income.

Prediction: Obama wins, and he will oversee The Worst economic malaise since the Great Depression. Question is, will he be a Carter or an FDR?

There is No Question, The Bailout Is Doomed. We will all begin to realize THAT in the coming weeks & months. There is ONLY ONE CURE: Home prices falling to parity with incomes. That's all. All else prolongs and intensifies the pain.

We are in a death spiral of bad loans, default, and foreclosure, a cycle that will repeat itself until we hit bottom. So, in addition to local incomes & rental return parity, people must Get Loans to buy houses, and that will NOT HAPPEN until it looks like housing has hit bottom AND is headed up. Believe me, Banks Will Not Loan Money At The Bottom. Only after a few years of stable to rising prices will they lend.

THAT Final Nail In The Housing Coffin is why home prices are headed LOWER than they were before this thing got started. That's why Bend could easily hit $120K medians AND STAY THERE FOR YEARS.

Prediction: Banks will HORDE this cash. The Gov't will ultimately have to INSURE HOME LOANS to get lending going again. But all this will be after a wave of foreclosures & continuing PLUMMETING of prices.

452 comments:

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Anonymous said...: Trooper-Gate MOVE-OVER, its now going to get Weirder, ... TONY-REZKO to become states witness against Obama-MOB in Chicago, ...

****

Obama fundraiser, convicted of fraud, spills beansCHICAGO (AP) _ Jailed political fundraiser Antoin "Tony" Rezko, the Chicago real estate developer who helped launch Barack Obama on his political career, is whispering secrets to federal prosecutors about corruption in Illinois and the political fallout could be explosive. Democratic Gov. Rod Blagojevich, whose administration faces multiple federal investigations over how it handed out jobs and money with advice from Rezko, is considered the most vulnerable.; October 11, 2008 at 2:52 PM
Anonymous said...: October 10, 2008 at 17:26:56

Should Henry 'The Fox' Paulson Guard the Henhouse?

Treasury Secretary Henry Paulson cry's "Give me your money; give me your money," he cried. "You might need a new house, but my buddies and I need new yachts." Passersby, reading the sign "Henry ‘The Fox' Paulson' in the People's Henhouse," heartily agreed.

Congress thought otherwise, entrusting Paulson -- the former CEO of Goldman Sachs -- with $700 billion of the people's money. On October 3, Speaker Nancy Pelosi, smiling ear to ear, congratulated Congress for passing a bill that gave Secretary Paulson unprecedented control over our nation's economic future. An hour later, President Bush and Secretary Paulson appeared on the steps of the Treasury Department signing the bill.

"This bailout bill does not deal with the absurdity of the fox guarding the henhouse," Senator Bernie Sanders decried on the Senate floor. But during the post-bailout hearings held by the House Oversight Committee, Congressman Dennis Kucinich was the lone voice raising questions about Paulson's performance and his obvious conflict of interest.

Kucinich asked the witnesses from AIG and Lehman Brothers why one company -- AIG -- was bailed out by the Treasury Secretary while Lehman Brothers was allowed to go under. AIG owed Goldman Sachs $20 billion, so their bailout meant that Paulson's buddies at Goldman Sachs would get repaid in full. Goldman Sachs also gained a competitive advantage from the bankruptcy of its rival Lehman Brothers. One would think that this maneuver alone, which happened BEFORE the $700 billion taxpayer bailout, would have immediately raised hackles in Congress and disqualified Paulson as economic czar.

To see the absurdity of Paulson in charge of the crisis, Congress need only have looked at Paulson's past. On the very day that Congress passed the bailout, The New York Times published a shocking story about how the SEC was lobbied in 2004 by the nation's five largest investment banks to change a regulation that limited the amount of debt they could take on. The exemption unshackled billions of dollars held in reserve as a cushion against losses on their investments, and led to the unraveling of the financial sector. Among the five banks leading the charge to change the rule was Goldman Sachs, which was headed by Henry Paulson. Translation: Paulson was one of the architects of the crisis!

Paulson also benefited personally from the casino economy he helped engineer. After creating billions of dollars in bizarre financial products that are now nearly worthless, he left Goldman Sachs with a personal fortune of over $700 million.

"It is remarkable that Congress would be willing to give Secretary Paulson such enormous power in running this bailout given his advocacy of rule changes that played such an important role in this financial disaster, and the extent to which he personally profited from these changes," said Dean Baker, an economist who was one of the first in the country to sound the alarm that the housing bubble was about to burst. "This would be like giving the bank robber who cleaned out the vaults the opportunity to set the bank's finances in order -- and letting him keep the loot."

Paulson's job performance as Treasury Secretary since July 2006 should be enough to have him fired, as Paulson fiddled while our economy slowly burned. When sub-prime mortgage losses set off a domino effect in mid-2007, Paulson insisted that troubles in the mortgage market were not likely to spread throughout the economy. In a Jim Lehrer interview in May 2007, he stated, "We're fortunate that we have a diverse, healthy economy" and insisted the housing problem was contained. A year later, he told the Wall Street Journal, "The worst is likely to be behind us," and stated on CNBC: "Our long-term fundamentals in this economy are strong, and this is a strong, competitive economy." As Cong. DeFazio stated, "This guy has been consistently wrong and out of touch or he's been lying to Congress and the American people about how sound our fundamentals are."

When in September we found ourselves in the midst of a full-blown crisis, Paulson's response was to blackmail Congress. With the proverbial gun to their heads, members of Congress were asked to hand Paulson $700 billion -- immediately -- on the basis of a three-page proposal and with no oversight, no Congressional or Judicial review and no accountability! Where did that $700 billion figure come from? "It's not based on any particular data point," a Treasury spokeswoman told Forbes.com. "We just wanted to choose a really large number." Cong. Brad Sherman called Paulson's proposed legislation an "awe-striking, mind-boggling power grab" designed with only Wall Street in mind.

Instead of tossing out Paulson and his plan in favor of a solution for Main Street, Congress passed a bill giving Paulson enormous power to decide which companies will be bailed out and which will go under. "A plan that relies on the former chairman of Goldman Sachs disbursing hundreds of billions of dollars to Wall Street is a terrible concept and inevitably will lead to crony capitalism and the appearance of -- if not the actual existence of -- corruption," said Newt Gingrich, who called on President Bush to fire Paulson.
The people's ire over the Wall Street bailout almost derailed the entire plan, but the bankers prevailed. Paulson's plan, however, has not calmed the markets and shouldn't mute the public outcry. Join us in demanding that the Fox stop raiding the henhouse. Join us in insisting that Paulson must go! (go to www.paulsonmustgo).; October 11, 2008 at 2:58 PM
Anonymous said...: OR-BOMB-EO fiddles with PAULSON while ROME BURNS, but ONLY THE FAR-FUCKING RIGHT EGGHEADS are asking the right questions, ... go figure.

***

Street Sweeping

Getting the American economy back on solid ground will require new financial regulations. Goldman Sachs alums aren’t the men for the job.

By Eamonn Fingleton

As bewildered Americans survey the wreckage of their nation’s once vaunted financial system, they could do worse than reacquaint themselves with one of Wall Street’s oldest and most revealing parables.

The story goes that an out-of-town customer dropped by to talk to his broker and afterwards was ushered around Lower Manhattan’s yacht-filled docks.

“Here is Mr. Morgan’s yacht,” his guide pointed out. “This is Mr. Bache’s, and over there is Mr. Drexel’s.”

“Where are the customers’ yachts?” the visitor naïvely asked.

The story is at least a century old and its punch line long ago figured as the title of a hilarious tell-all book by a Wall Street insider. But if we substitute executive jets for yachts, the message remains as true today as ever: Wall Street is run for the benefit of Wall Street.

This goes a long way toward explaining the origins of the current crisis. The subprime bubble was pumped up by a massive blast of “don’t worry, be happy” sales talk. Powerfully incentivized salespeople who pushed so much toxic debt on to unwitting investors were making far too much money in the short run to worry about the long-term havoc they were creating for everyone else, not least stockholders in their own firms.

The parable also illuminates the mindset guiding the bailout effort. Both Treasury Secretary Henry Paulson and his key adviser, Neel Kashkari, formerly held top jobs at Goldman Sachs, and it seems clear that their highly controversial and, to economic historians, bafflingly unorthodox bailout plan serves Wall Street’s interests—particularly those of their former employer—far more than the American public’s.

The amazing aptitude of Wall Street insiders to feather their own nests at the taxpayers’ expense should be a crucial concern as legislators try to craft a stable and productive future for the American financial system. A key question is how Wall Street’s greed can be reined in. In truth, there is no substitute for regulation.

This isn’t a view that will find immediate favor with conservative readers. But it is being espoused by no less a plutocrat than Michael Bloomberg, the former Wall Street insider who has recently morphed into a budget-cutting mayor of New York. More significantly, it has been vociferously championed by Paul Craig Roberts, the chief architect of President Ronald Reagan’s economic program.

Before we consider in detail the case for a return to regulation, let’s first understand how we have come to this pass.

Think of it this way: there is a hierarchy of lenders and sublenders that begins with, say, a saver in Germany who puts money on deposit in a Berlin bank. This deposit, along with countless others, is used to buy highly complex U.S. mortgage-backed securities peddled by an American investment banker in Frankfurt. These securities are a claim on thousands of mortgages advanced to homeowners in the United States by various American mortgage lenders. In an ideal world, all the American borrowers remain happily solvent and make their repayments on time. Out of these repayments the German bank will receive a regular flow of interest followed eventually by the return of its capital—after various middlemen have taken juicy cuts, not least the American investment banker, who has already taken a nice commission upfront.

As long as home prices continue to rise, the system works. That’s the theory. But in reality, a natural real estate correction—along with rampant corruption—combined to produce devastating effects.

In the search for someone to blame, predatory lenders are obvious culprits. As the subprime mortgage industry grew, so did the tendency to seek out weak borrowers, particularly elderly people with valuable homes but little income. In one case reported to the Senate Special Committee on Aging, an elderly couple living on Social Security in Brooklyn was sucked into a financial quagmire after a salesman promised he could have their windows repaired for payments of $43 a month over 15 years—a grand total of less than $8,000. Six years later, they had paid tens of thousands of dollars in fees, accumulated $88,000 in new debt, and been served with foreclosure papers.

Situations like this meant fat income for the predatory lender, with the added bonus of exorbitant rake-offs when he foreclosed on the unfortunate borrower. The whole plot was funded by an expected rise in home values.

And for a time, prices soared—124 percent between 1997 and 2006. Lured by teaser rates and convinced that they could either refinance later or flip for big gains, average Americans got in the game. As of March 2007, the value of subprimes was estimated at $1.3 trillion of the $12 trillion total U.S. mortgage market—a significant proportion, to be sure. But not all lenders were trawling for defaults; money was cheap and the market was hot.

Far from putting on the brakes, government revved the engine. President Bush advanced his notion of the “ownership society” as integral to national identity: “the idea of people owning a home is part of the American Dream.” Legislation like the Home Mortgage Disclosure Act and the Community Reinvestment Act facilitated risky lending. The Federal Reserve contributed to the problem as well. “The Fed’s loose money policies under Alan Greenspan encouraged the technology bubble” of the 1990s, notes sociology professor Walden Bello, a leading critic of globalization. “When it collapsed, Greenspan, to try to counter a long recession, cut the prime rate to a 45-year low of one percent in June 2003 and kept it there for over a year. This had the effect of encouraging another bubble—in real estate.”

Finally the bubble burst, as bubbles always do, and it’s been a rough ride back to reality. Last year, 1.3 million properties went into foreclosure, 43 percent of them funded by subprime loans. Borrowers had taken out mortgages representing nearly 100 percent of their homes’ value. In a rapidly depreciating market, these mortgages went deeply underwater, and now the whole scheme has come to a halt.

Hence the calls from almost all quarters, even some of the most unexpected, for new regulation and intervention in the economy. But not every emergency measure that has been put forward is sound. Indeed, the policies advocated by President Bush and his Treasury secretary may only lead to further problems.

Henry Paulson’s strategy seems not so much strange as perverse. His intention is to buy stricken institutions’ bad loans on a highly cumbersome case-by-case basis. As many observers, not least Washington economist Dean Baker and New York Times columnist Paul Krugman, have pointed out, this inherently opaque process will open the door to all sorts of mischief. It is easy to imagine perfectly solvent institutions sticking the U.S. taxpayer with dud loans at hugely inflated prices.

To say the least, this is not how financial bailouts are generally structured. The traditional practice—not just in the United States but around the world—has been to steer clear of buying a stricken bank’s assets and instead to operate on the other side of the balance sheet by buying its “paper.” That is, to buy either newly issued bonds or stocks. In the 1930s, for instance, the federal government bought large amounts of preferred stock issued by insolvent banks. That meant not only that it received good dividends while work-outs proceeded, but ranked ahead of ordinary stockholders in the event of a bankruptcy. Such an approach leaves to individual banks the question of how they should deal with their underwater loans—a policy congruent with the best traditions of market freedom. It is not only inherently elegant and transparent, but positions the taxpayer to profit if, as frequently happens, a financial institution shakes off its problems faster than expected. In the 1930s, this approach proved a resounding success not only in restoring stability but in eventually generating large profits for the federal government.

But that isn’t Paulson’s approach. Perhaps the most startling aspect of his strategy is that the Treasury secretary seems determined to marginalize the Federal Deposit Insurance Corporation. Yet as economic analyst Pat Choate points out, the FDIC is purpose-built to handle rescues of this sort. Not only does it enjoy enormous institutional memory from past rescues—not least mopping up after countless savings and loan collapses in the 1980s—but it has a staff of 4,000 to mobilize at a moment’s notice.

The FDIC’s potential to play a pivotal role has been underlined by William Isaac, who chaired the institution between 1981 and 1985. On his figures, the FDIC’s handling of the savings and loan bailout proved so effective that the net cost to taxpayers was reduced to a mere $2 billion from an original estimate of $100 billion.

The FDIC’s cause has been espoused by one of the House conservatives who opposed the Paulson bailout plan, John Shadegg (son of Steve Shadegg, who organized the Draft Goldwater campaign of 1964), as well as by such Democratic Paulson-bashers as Reps. Marcy Kaptur, Peter DeFazio, and Donna Edwards.

Why has Paulson been so determined to stand-down the FDIC? Choate, author of Dangerous Business, a devastating new book on the downside of globalism, offers a telling explanation: although the FDIC enjoys full powers to address the problems of American creditors, foreign creditors are a different matter. In previous financial bailouts this mattered little, as foreign capital played a minimal role. Things are different now.

The hugely increased role of foreign capital catches Paulson and his lieutenant Neel Kashkari on the horns of a terrible dilemma. On the one hand, as true Wall Streeters, they are probably inclined to curry favor with their many foreign financial friends. They have made big money from such connections in the past and no doubt look forward to doing so after returning to Wall Street. On the other hand, they realize that any overt effort to help foreign fat cats at a time of severe strain for millions of ordinary Americans would mean pouring tanker-loads of gasoline on an already white-hot political inferno. Given that foreign indebtedness is rightly associated with America’s ever worsening trade imbalances—and by extension with American industrial decline—it is hardly viewed kindly in the heartland.

Paulson’s wiggle room is further constrained by the fact that he is known to be close to the Chinese establishment. He has palled around with former Chinese president Jiang Zemin—they even worked together on an environmental project. He holds a highly symbolic sinecure at Tsinghua, one of China’s top universities.

If a conflicted Paulson is motivated to hide how much of the $700 billion fund is destined for foreign creditors, his original “zero-accountability” bailout plan was perfect for the task. The revised version does incorporate an element of accountability, but, as Choate points out, plenty of loopholes exist to end-run any real disclosure.

Another notable example of Paulson’s conflicts concerns the rescue of American International Group. As reported by Gretchen Morgenson of the New York Times, Goldman Sachs was AIG’s largest trading partner. An AIG bankruptcy would have blown a hole of perhaps as much as $20 billion in Goldman’s balance sheet—significant even by masters-of-the-universe standards. Although the insurer’s rescue was conducted by the Federal Reserve Board, not the Treasury, Paulson’s views were probably not immaterial to the outcome. Moreover, Lloyd Blankfein, Paulson’s successor at Goldman, was reportedly in the room as the AIG bailout was negotiated.

Under the circumstances, it is hard to see why Paulson did not long ago resign as Treasury chief. Even if he had not suffered so clearly from conflicts of interest, his failure to take timely action long ago was itself sufficient reason for him to fall on his sword. After all, it was not as if the crisis came as a complete surprise. As far back as 2002, the inflating bubble was presciently identified by Dean Baker, as well as by Warren Buffett. Yale economist Robert Shiller and financier Jim Rogers were among others who saw the disaster coming, and the Basel-based Bank of International Settlements gave Paulson a particularly blunt warning in the summer of 2007.

Paulson’s tough-it-out demeanor seems in character, however, when viewed in the context of the Bush administration’s appalling record on predatory lending. In the face of strong pressure from state attorneys general and other officials in 49 states in the first half of this decade, the administration chose not just to sweep shocking evidence under the carpet but actively took the predators’ side against their critics. The scandal was highlighted in a Feb. 14 op-ed by Eliot Spitzer, who charged that America’s financial markets would be “threatened” if predatory lending was left unchecked. (In the view of many observers, it was not a coincidence that less than a month later federal investigators leaked evidence of a sex scandal that forced the New York governor’s resignation.)

The Bush administration aside, almost everyone else in the American policymaking and intellectual establishment is coming round to the idea that financial deregulation has gone too far. Finance simply cannot be left to its own notoriously conflicted devices. Not only does it play a central role in any economy—think of it as a central nervous system—but it is an industry in which unique temptations are at work—perverse incentives that, in the absence of wise and effective oversight, constantly foster exploitative practices, instability, and all too often, as is abundantly clear from recent events, outright self-destruction.

Of course, many commentators on the Right condemn regulation as incompatible with conservative tradition. But a glance at history reveals that this is not necessarily the case. The move to regulate finance in Britain, for instance, has been often led by the Tories, who during Robert Peel’s term as prime minister passed the Companies Act of 1844 and went on under Harold Macmillan to pass the Prevention of Frauds (Investment) Act in 1958. In the United States, the Sherman Act of 1890, the first U.S. legislation to rein in monopolies, was pushed through by Republican Sen. John Sherman and signed into law by fellow Republican Benjamin Harrison. The McFadden Act of 1927, which curbed the right of banks to do business across state lines, similarly reflected Republican concerns.

True, the Glass-Steagall Act of 1933 was authored by two Democrats, Sen. Carter Glass and Rep. Henry Steagall. But neither was a Naderite radical. These Democrats of the Old South—hailing from Virginia and Alabama respectively—were stout conservatives. Their legislation not only created the FDIC, but built a famous firewall between commercial banks and brokerage houses by banning the former from underwriting securities. This firewall, finally dismantled in 1999, was intended to avoid certain notorious conflicts that had often left the public shortchanged in the Roaring Twenties.

In this regard it is interesting to reread the American conservative movement’s favorite economist, Milton Friedman. It was Friedman more than any other thinker who inspired the rightward shift in American economic thinking that began in the latter half of the 1970s. Few economists have been more often cited by the U.S. banking and brokerage lobby in pressing for ever greater deregulation.

But while Friedman was an outspoken critic of regulation in most other aspects of the economy, he was largely silent on financial regulation. The subject is notable for its complete absence from his influential 1980 book Free to Choose. Writing with his wife Rose, he railed against many other forms of regulation, not least the Interstate Commerce Commission, the Food and Drug Administration, and the Environmental Protection Agency. Yet the book made no mention of the Glass-Steagall Act or the other financial regulations introduced in the 1930s—this despite the fact that banks were already promoting the cause of financial deregulation at the time of the book’s publication. This is more remarkable for the fact that Friedman was probably the world’s foremost authority on the 1929 Wall Street crash and the Great Depression.

More generally, the evidence of American history strongly suggests that judicious financial regulation can be a powerful force for good. It is surely not an accident that beginning in the latter half of the 1930s, the United States enjoyed a respite of nearly 50 years in which there was not a single serious banking crisis and no serious stock-market setbacks except those triggered by the oil shocks of the 1970s. This period coincided exactly with America’s era of tightest financial regulation. It is notable, moreover, that for most of the period the United States enjoyed a unique combination of fast growth at home and unquestioned economic leadership abroad. With the exception of a few radically libertarian economists, no one questioned the basic case for regulation. During the Eisenhower years it was taken for granted by Republicans and Democrats alike that though regulatory restraints could be a nuisance at times, the positives overall greatly outweighed the negatives. The same went for the Reagan administration, which, as Paul Craig Roberts recently pointed out, “most certainly did not deregulate the financial system.” Roberts went on to name the Clinton and George W. Bush administrations as the instigators of the radical deregulation being widely blamed for the current crisis. (An earlier piece of deregulation was passed during Jimmy Carter’s term.)

Prior to the 1930s, American finance had for more than a century been repeatedly shaken to its core by crises that occurred at approximately 20-year intervals. The half-century of remarkable banking stability that began in the late ’30s was broken only when an oil patch scandal brought down Continental Illinois in 1984. Since then, the crises have come thick and fast. The late 1980s and early 1990s saw a wave of savings and loan collapses, followed in 1998 by the spectacular implosion of Long-Term Capital Management. In all these disasters and several lesser ones, deregulation provided executives with the financial rope with which they hanged themselves. The current subprime crisis is the clearest case yet in which regulation of the sort that ruled midcentury American finance could have minimized the trauma.

Regulation has received bad press in recent decades—often deservedly so. There is a difference, however, between good regulation and bad. Good regulation in this context requires minimalism and transparency. Instead of regulators involving themselves in the minutiae of every financial transaction, they should confine themselves mainly to setting prudential guidelines to keep firms generally within safe limits and to building appropriate firewalls to stop financial conflagrations from sweeping through the entire system. That said, regulators should have extensive powers to evaluate and, where necessary, ban what are euphemistically known as “new products.” As the present crisis amply demonstrates, such products generally serve only one real purpose: to enable Wall Street to confuse—and frankly short-change—its customers.

Why is regulation so necessary? A key problem is the notoriously asymmetrical nature of financial knowledge. Put another way, your broker knows more than you do. If he wants to do well for you, that is fine. But few securities salespersons become rich that way, and they have often preferred to prey on their customers’ ignorance. Usually this is done subtly, at least where Wall Street’s more reputable firms are concerned, and in recent years the tool of choice has been the invention of ever more esoteric “new products” that just happen to be ever more difficult to price accurately.

Writing in the Financial Times in 2004, economic commentator John Kay itemized some of the self-evidently absurd new products then being touted in financial markets: “Why would anyone want to buy a bond whose return is proportional to the square of the current interest rate? Why would someone in search of high income buy a security that offers it, but also offers a risk of large capital loss if one of three stock market indices should fall more than 25 percent below its initial level?” He added, “The only people well-equipped to assess the value of these instruments are the people who are selling them.”

For thinking conservatives the question is this: if easily analyzed, plain-vanilla financial products were good enough for the Eisenhower era, what has changed in the interim to suggest that today’s highly complex products serve society better? In truth, Wall Street’s perennially self-serving mindset and its periodic crises are two sides of the same coin. It is time to end the failed experiment with radical deregulation.; October 11, 2008 at 3:03 PM
Anonymous said...: Derivatives are NORMALLY a zero-sum game. But with counter-party risk are they still? I really am not sure.

To me, it seems that with counter-party risk, there can be a whole bunch of losers who didn't even know they were playing the game. I'm thinking of people who are losing their jobs and their savings without having been direct parties to the contracts involved.

Sure, there will be a few winners. There always are.; October 11, 2008 at 3:05 PM
Anonymous said...: Believe in 'conspiracy theory', shove this up your pussy.

***

Paulson’s tough-it-out demeanor seems in character, however, when viewed in the context of the Bush administration’s appalling record on predatory lending. In the face of strong pressure from state attorneys general and other officials in 49 states in the first half of this decade, the administration chose not just to sweep shocking evidence under the carpet but actively took the predators’ side against their critics. The scandal was highlighted in a Feb. 14 op-ed by Eliot Spitzer, who charged that America’s financial markets would be “threatened” if predatory lending was left unchecked. (In the view of many observers, it was not a coincidence that less than a month later federal investigators leaked evidence of a sex scandal that forced the New York governor’s resignation.); October 11, 2008 at 3:08 PM
Bewert said...: My vote for the best job in the world: driving the M5 V10 Ring Taxi

http://www.youtube.com/watch?v=2BeDKf6F-FE&feature=related

Sabine Schmitz at full gas, from a following Porsche GT. The bullet bike trying desparately to stay in front of her from about 8:00 is wild.; October 11, 2008 at 3:10 PM
Anonymous said...: I think Buster is right that Buffett has been positioning himself to be the big winner. This is where he laps Carlos Slim an Bill Gates.

These guys ALWAYS see things from their own perspective (naturally) and because they are famous and rich and influential and fabulous, people do tend to do what they say.

Buffett's always handy when something bad happens to a big corporation. Because he really can help situations, he is paid dearly for the help. That's good for him.; October 11, 2008 at 3:10 PM
Anonymous said...: Derivatives are NORMALLY a zero-sum game. But with counter-party risk are they still? I really am not sure.

*

BULL FUCKING SHIT, boy today your becoming MORE like the BIG PUSSY himself.

First of all drop the 'derivative' talk, which means nothing its a generic term. We're TALKING 'credit swap defaults'.

They insurance policy's and a ton of PEOPLE bet that LEHMAN would NEVER go down, and sold policy's of protection, next week we'll find out who owes what part of the $600BILLION total. LEHMAN traded friday for 8 cents on the dollar, the 92 cents going to be made up by those who sold the CSD's.

In a 'closed world' where ONLY banks, insurance, and investment firms bought these 'insurance policys' as hedges it would be a zero-sum. The trouble is they were sold like a fucking football game, or more apt they were sold like options, where a seller of an option, almost always takes HOME the money, and the BUYER of an option always loses what he put down. A ton of people SOLD insurance on the premise that LEHMAN could not go down.

Of course under PAULSON they we were picking winners and losers, AIG safe, LEHMAN out! WAMU out! Anybody that fucking Knew simply bought a policy, and all those who sold policy's get fucked.

This week we'll find out who got fucked, but the important thing is all those in KNEW ahead of time that LEHMAN was going down, cuz PAULSON wasn't going to bail them out MADE BILLIONS.

ZERO SUM GAME MY ASS.; October 11, 2008 at 3:15 PM
Anonymous said...: The world derivative market is about $200 Trillion.

The Credit-Swap-Default market is about $80 Trillion.

Given LEHMAN results of 8 cents on the dollar, it can be assumed that over time $70 Trillion or more will change hands, of course this is non-sense cuz their isn't enough money.

The coming weeks and months your going to see a slow bleeding of everything.; October 11, 2008 at 3:17 PM
Anonymous said...: Why I don't like the term 'derivative'.

It's like 'electronics'. Electronics is a popular engineering notion of electricity.

In the phenomenon of 'electronics' there is many phenomenon, such as capacitance, inductance, magnetism, resistance,... Sure they're ALL electronics, but they're all different in understanding phenomenon. It took 100's of years to connect the phenomenon to one common principal, that of the movement and state of electrons.

The common generic term 'derivatives' is like physics or electricity, or electronics, they're generic terms for a field.

But specifically, 'credit-swap-defaults' are an insurance policy. Sure they get sliced and diced, and tranched, and are sold within the scope of derivatives, and yes you can call them derivatives, but that generic label doesn't tell you anything.

The PUSSY just wants to say 'electronics', like that fucking means something, and it does NOT. Specifically, you don't understand physics or electronics, unless you understand ALL the phenomenon.

There is NO Maxwells equations for derivatives.

The total derivative market is 100's of trillions of dollars.

The market of credit-swap-defaults is about $80 Trillion.

Eventually ALL the derivatives will implode, but credit-swap-defaults are what is owed today ( lehman ), and they're what need to be understood today.

Derivatives will start imploding next year. Today its insurance claims that are due, "CREDIT SWAP DEFAULTS".; October 11, 2008 at 3:26 PM
Anonymous said...: I think Buster is right that Buffett has been positioning himself to be the big winner. This is where he laps Carlos Slim an Bill Gates.

*

But the scary thing is OR-BOMB-EO says that BUFFETTTT is going to run the government for him.

OR-BOMB-EO is a BUFFETTTTT bitch.

This is NOT a good thing, destroying the country so that BUFFFETTTT can be emperor of the world.; October 11, 2008 at 3:29 PM
Bewert said...: Re:
This is NOT a good thing, destroying the country so that BUFFFETTTT can be emperor of the world.

Buffett is a strong advocate of paying your taxes in full. That is a good thing.; October 11, 2008 at 3:38 PM
Bewert said...: Re: The common generic term 'derivatives' is like physics or electricity, or electronics, they're generic terms for a field.

But specifically, 'credit-swap-defaults' are an insurance policy. Sure they get sliced and diced, and tranched, and are sold within the scope of derivatives, and yes you can call them derivatives, but that generic label doesn't tell you anything.

The PUSSY just wants to say 'electronics', like that fucking means something, and it does NOT. Specifically, you don't understand physics or electronics, unless you understand ALL the phenomenon.

...

Buster, what I've been trying to say is that CDS's are the number one problem right now. You and I agree on that. The rest will come.

You're "mistake" is that, yes, there is no Maxwell equation. It's not simple physics. It has a sometimes irrational human element involved.

Especially when many humans take out "insurance" on the exact same event. It's like 100 of your acquaintances taking out life insurance on you, back and forth between each other, without telling anyone else about their moves.

And now they don't know who is going to owe who when you croak.; October 11, 2008 at 3:44 PM
Bewert said...: Re: In a 'closed world' where ONLY banks, insurance, and investment firms bought these 'insurance policys' as hedges it would be a zero-sum.

Buster, it was a closed world--closed to anyone that didn't have $5M in assets. That rules out most.

The hedge fund fuckers are the ones that should really take it in the ass. The guys that have been building ever larger estates in Darien and on Long Island. The fuckers fought for tax breaks on their billion dollar gains, and are now yelling for momma when they take it in the ass.

They deserve a really fucking good reaming. They haven't done a fucking thing to contribute to production, just to greed.; October 11, 2008 at 3:48 PM
Bewert said...: Re: Someone said that Iceland had been a hedge fund masquerading as a country.

Timmy, quote of the day. About 300 smart guys were going to make them rich. For awhile, anyway.; October 11, 2008 at 4:02 PM
Bewert said...: Re: Berkshire Hawthaway Seeks to be Classified as Bank

That is complete and utter BS. Got a link?

As for your following little boy comment: Fuck You. Grow up. Get a pair.; October 11, 2008 at 4:11 PM
Bewert said...: Re: The pain & suffering has not even started.

Finally, something that makes sense from Buster.

Re: Trooper-Gate MOVE-OVER, its now going to get Weirder, ... TONY-REZKO to become states witness against Obama-MOB in Chicago, ...

Obviously you don't get out enough to see the latest Enquirer article on an Obama "mentor"...

The real dirt is just beginning.; October 11, 2008 at 4:14 PM
Anonymous said...: >>Buffett is a strong advocate of paying your taxes in full. That is a good thing.

Buffett can talk happy talk about taxes and estate taxes and it doesn't mean a thing because all his money is in BRKA and he doesn't want to leave money to his kids anyway. In other words, it's easy for him to be pro-taxes because he wouldn't notice it if marginal taxes were raised.

Taxes aimed at the rich inevitably hit the middle class, because the money of rich people is incorporated in businesses and trusts.

For someone "pro-taxes," Buffett sure is busy telling shareholders exactly how he's saving them on taxes by not selling his holdings in companies that have appreciated while BRKA has held them, even if they are long in the tooth an the money could be deployed better elsewhere.

What dividend does BRK.A pay out? Zero, because it's taxable. The guy spends plenty of time making sure taxes don't hit BRK.A or its shareholders, but he talks about paying taxes like it's a good thing when the marginal rates don't even affect him!

For him to say he's in favor of paying your taxes in full is about as informative as a fish saying that if it were a mammal it'd be all in favor of breathing air. It's meaningless.

I LIKE Buffett, but Bruce, you sound like you've been reading his PR, not BRK.A's financials.; October 11, 2008 at 4:16 PM
Bewert said...: Re: To see the absurdity of Paulson in charge of the crisis, Congress need only have looked at Paulson's past. On the very day that Congress passed the bailout, The New York Times published a shocking story about how the SEC was lobbied in 2004 by the nation's five largest investment banks to change a regulation that limited the amount of debt they could take on. The exemption unshackled billions of dollars held in reserve as a cushion against losses on their investments, and led to the unraveling of the financial sector.

My unending point exactly: they conintually claimed they were big boys with big balls, making the big bucks.

And now they are wet pussies, on bended knee before Pelosi.

They just fucking need to eat their words, their BS, their "trades" and "investments". The sooner the better.

The rest of the world will get along.; October 11, 2008 at 4:19 PM
Anonymous said...: Buffett has something like $60 billion dollars in BRKA. Imagine that he started paying even a 1% annual dividend. That'd be an income of 600 million dollars just for him.

He'd have to pay out big to the gov't, wouldn't he?

No, he doesn't do that. But he does send a certain amount over to the Gates Foundation every year. A worthy thing to do, certainly, but yet ANOTHER way he keeps from paying taxes.; October 11, 2008 at 4:31 PM
Anonymous said...: HEY OR-BOMB-EO Bitches, can you handle the truth??

From ‘The Great Crash: 1929’ by John Kenneth Galbraith

“Senator Couzens: “Did Goldman Sachs organize the Goldman Sachs Trading Corp. ?”

Mr. Sachs: “Yes, sir.”

Senator Couzens: “And sold its stock to the public ?”

Mr. Sachs: “Yes, sir.”

Senator Couzens: “At what price ?”

Mr. Sachs: “At $104. The stock was split 2-for-1.”

Senator Couzens: “And what is the price of the stock now ?”

Mr. Sachs: “Approximately $1 ¾.””

- From Senate hearings in 1932, and cited in ‘The Great Crash’.

Perhaps the biggest mistake Goldman Sachs (GS) ever made – other than launching its eponymous investment trust in 1929 – was its decision to go public in 1999. That enabled the former partnership to retain employees otherwise then being enticed by the prospect of dotcom riches, by means of share options and restricted stock. But it also turned a tightly focused private partnership into a public company.; October 11, 2008 at 4:34 PM
Anonymous said...: No, he doesn't do that. But he does send a certain amount over to the Gates Foundation every year. A worthy thing to do, certainly, but yet ANOTHER way he keeps from paying taxes.
*

Where HBM is apologist for Hollern, and the PUSSY is apologist for OBAMA, TT is now our official BUFFFETTTTT apologist.

He's still a fucking a crook, just smart enough to make his stock holder rich, and thus every goes along, like todays story about 'monkeys' from HBM, someday BUFFETTTT will leave all you parasitical kleptocrats with a town full of monkeys.; October 11, 2008 at 4:36 PM
Anonymous said...: >>Buffett is a strong advocate of paying your taxes in full. That is a good thing.

*

BUFFFETTTTT is the biggest SHIT EATER in the USA, he has been getting people to sell him their monkeys for 40+ years, and someday he'll fucking disappear and the streets of the USA will be running with monkeys.

All good ponzi schemes require the early players to have made BIG money, it requires a personable salesmen to sell to future buyers. BRK.A(B) will go down as the greatest ponzi scheme in economic history. Like the south-sea-bubble people will be talking about it for a millenium.; October 11, 2008 at 4:41 PM
Anonymous said...: This is NOT a good thing, destroying the country so that BUFFFETTTT can be emperor of the world.

Buffett is a strong advocate of paying your taxes in full. That is a good thing. - bp

*

Timmy is right, its irrelevant what the emperor says, he pays no taxes. If you understood our tax system you would know that.; October 11, 2008 at 4:45 PM
Anonymous said...: >>TT is now our official BUFFFETTTTT apologist.

WTF? I just spent a half dozen messages to Bruce explaining how Buffett NEVER goes against his self-interest.; October 11, 2008 at 4:45 PM
Anonymous said...: Obviously you don't get out enough to see the latest Enquirer article on an Obama "mentor"...

*

Well its the truth PUSSY, OR-BOMB-EO got his political education from REV-WRIGHT, and his seed-money from Rezko.; October 11, 2008 at 4:47 PM
Bewert said...: Re: Taxes aimed at the rich inevitably hit the middle class, because the money of rich people is incorporated in businesses and trusts.

Huh?

Re: For him to say he's in favor of paying your taxes in full is about as informative as a fish saying that if it were a mammal it'd be all in favor of breathing air. It's meaningless.

Here is the link to annual letters from '77 on: http://www.berkshirehathaway.com/letters/letters.html

He talks about paying taxes in several of them. About how BH's taxes are a measurable portion of the whole. More than once.

Butter, a little hint of the Obama push for you're post tomorrow:

http://i185.photobucket.com/albums/x280/icebergslim1047/october%202008/phliadelphia-52ndandLocust5.jpg

McIdiot wishes he could inspire people this much.

I just hope the inspiration is for real populist goals.; October 11, 2008 at 4:49 PM
Anonymous said...: The fact that REZKO has turned 'states witness', and is going to dump all on OR-BOMB-EO, ... is fascinating, ...

REZKO is like a mob-boss, and for him to plea-bargain on Chicago's whole mob seen, and how it relates to the OREO is made for TV.

It certainly takes PALIN off the radar. She seems to be fighting back full, this bitch has nine-lives.; October 11, 2008 at 4:49 PM
Anonymous said...: Re: For him to say he's in favor of paying your taxes in full is about as informative as a fish saying that if it were a mammal it'd be all in favor of breathing air. It's meaningless.

*

Yes, I understand what your saying TT, what is fascinating is because BUFFFETTT is the mentor of the week of OR-BOMB-EO, the PUSSY has to come to his defense.

BUFFEEETTTTTTT has always been full of shit, which is why OR-BOMB-EO is in love with him, OREO says "HEY THIS BITCH HAS BEEN PLAYING THE CROWD FOR 40+ YEARS", "I WANT HIS MOJO".; October 11, 2008 at 4:53 PM
Bewert said...: Re:
BUFFFETTTTT is the biggest SHIT EATER in the USA

Buster, do you have a valid reason for your Buffett hate?

He started with actuarial programs none of us understand and now regularly invests/buys great family businesses after the founder dies.

Is that evil?; October 11, 2008 at 4:54 PM
Bewert said...: Re: Timmy is right, its irrelevant what the emperor says, he pays no taxes. If you understood our tax system you would know that.

Buster, you are simply a dumb fuck. Buffett, who still lives in Omaha, pays his and his companies taxes.

We all understand that you do not...; October 11, 2008 at 5:02 PM
Anonymous said...: Yes, Bruce he pays the taxes he owes, but he is careful not to create taxable events for himself or shareholders. I'm not saying it's bad. I'm just saying he's playing the game.

Now tell me Buffett's plan for how to get the rich to pay more in taxes.; October 11, 2008 at 5:16 PM
Anonymous said...: I notice that Warren's annual salary for 2006 was $100,000. Why would he need to take out any more? He can fly his fractional share jets around for free.

He is notorious for not wanted to cash out his BRK shares. Hell, he hardly ever even wants to use them for acquisitions.

If his marginal rates doubled, it would be a rounding error on his wealth.

So, yes, it's easy to say he supports higher taxes on the wealthy. He's so wealthy he would not notice a difference in his life style even if the gov't took half his WEALTH aay every year.

I simply would not listen to what he says about personal taxes. He doesn't really have a vested interest in that any more.

And as for corporate taxes, he does everything he can to avoid them, and he spells that out in his letters. Nothing shady that a wealth manager comes up with, but if you read the letters you'll see that he's avoiding taxable events. (Mostly because of double-taxation. It's better for you personally to trigger capital gains than it is for you to be a shareholder of Berkshire and have it trigger capital gains.)); October 11, 2008 at 5:43 PM
Anonymous said...: Buffett's point that the very wealthy can afford to pay more taxes is well taken.

I propose that anyone who holds more than $1 billion of a single stock be taxed the excess amount abve $1 billion each April 15.; October 11, 2008 at 6:21 PM
Anonymous said...: Yes, Bruce he pays the taxes he owes, but he is careful not to create taxable events for himself or shareholders. I'm not saying it's bad. I'm just saying he's playing the game.

*

Yes, so lets no he pay's joint tax being married on $100k, which means he doesn't even trigger alt-min tax.

He has no capital gains, cuz he sells nothing, he's one of the richest men in the world, and basically pays NO TAX.

What part of this doesn't the pussy understand?

See I understand the tax system, and as TIMMY say's he's doing NOTHING ILLEGAL, its NOT illegal to avoid taxation using the legal loop-holes.

It's just dishonest rhetoric to talk about 'rich' paying tax, when in fact he's never paid much tax if any. Because of his 'gifts' to the GATES foundation, those probably in effect mean that he doesn't even pay any tax on the $100k/yr income.

It's not hard in our society to avoid taxation, you just have to have a very good accountant.

But all this is besides the point, BUFFEETTTTTT is a crook, and made his money by stealing and robbing in the insurance racket, and has never paid any fucking tax, and yet the pussy's of the world including OR-BOMB-EO suck his fucking dick, go figure, ... Ask a REAL liberal like Defazio why OR-BOMB-EO type white niggers suck BUFFEEEEETTT cock??; October 11, 2008 at 6:47 PM
Anonymous said...: I propose that anyone who holds more than $1 billion of a single stock be taxed the excess amount abve $1 billion each April 15.

*

They used to have this, it was called 'wealth tax', but the rich got rid of it, and created the 'income tax', now ONLY the middle class pays taxes.

Welcome to AmeriKKKa.; October 11, 2008 at 6:49 PM
Anonymous said...: BUFFFETTTTT is the biggest SHIT EATER in the USA

Buster, do you have a valid reason for your Buffett hate?

*

If got off your lazy ass and read what I have posted for the past 2+ years here, you would know that I have continually BASHED BUFFETTTTTT, and before YOUR FUCKING OR_BOMB_EO came on the fucking picture.

What MORE do I have to say PUSSY BUFFEEEEEET is a fraud and a crook, he created the modern insurance racket, where claims are denied, and premium is collected and 'invested' in the stock market, which today is why everyone will BK, cuz nobody can pay a claim, cuz the money is gone.

Well NOT exactly, it all ended up in BUFEEEEEET's account, and by holding the OR=BOMB_EO DICK, BUFFET will ensure that OR-BOMB-EO protects his money.

When this is all over and the world realizes how BUFFEET has fucked them, and is the last man standing, and OR-BOMB-EO appoints BUFFEEET to be the finance czar of the world, then BUFFEEEEEEET can tell the entire world to BUY his stock and BRK.A will go to $100M.; October 11, 2008 at 6:53 PM
Anonymous said...: So, yes, it's easy to say he supports higher taxes on the wealthy. He's so wealthy he would not notice a difference in his life style even if the gov't took half his WEALTH aay every year.

*

Hell YES he supports taxes,

1.) He PAYS NONE

2.) ALL taxes collected are used to purchase his stock pool, .e.g. his fucking holdings.

What part of this doesn't the PUSSY understand???

BUFFEEETE is the richest man in the world, cuz he pays no taxes, and everyones elses taxes are used to purchase the stocks he owns.

All the stocks that PAULSON intends to BUY on monday ARE OWNED BY BUFEEEEEEET, bufett is the biggest fucking lobbyist around for these government buyout of publicly held stock.

NOBODY else can buy this shit, buffeeeete didn't get rich counting on PUSSY's.; October 11, 2008 at 6:59 PM
Anonymous said...: For instance on BUFEETRE he likes to say his MENTOR is graham, but BULL FUCKING SHEEEEEET.

Graham hated stock pools, and ALL BRK.A is a fucking highly leveraged stock pool.

EVERYTHING that GRAHAM despised about the stock market, is exactly what BUFETEET does, so yes BUFEREREER is a student of GRAHAM but in the Machiavellian sense.; October 11, 2008 at 7:01 PM
Anonymous said...: Sarah Palin look-alike paid $3000 for porn film shoot

Bend, California ( The Bulletin )
October 12, 2008 |

American Bruce Ewert of Bend, California has shot an adult movie with a porn star who resembles U.S. Republican vice presidential candidate Sarah Palin.

His spokesman David Carrillo confirmed the production of the flick by Ewerts 'Little Boy' Video, but refused to reveal the film’s title, reports the New York Daily News.

Ewert's producers had posted an ad on Craigslist in Bend just days after the Republican convention.

“Looking for a Sarah Palin look-alike for an adult film to be shot in the next 10 days,” the ad said.

The advertisement also said that that the actress to play the part would be given 3,000 dollars.

Alaska Governor Palin’s spokesman was unavailable for comment. (ANI); October 11, 2008 at 9:10 PM
Anonymous said...: “Now California is ready to collapse. And who was Ahnold’s big financial guru? Warren Buffet. Who is a major stockholder in Wells Fargo [about to outbid Citigroup for Wachovia]? Warren Buffet. Who bought heavily into a bailed-out AIG? Warren Buffet. [Parenthetically AIG has already used $61 billion of its 85 billion Fed loan]. Who bought out Constellation Energy? Warren Buffet.

“The big guys are starting to show their cards. That means this is it. . . .” Ruppert concludes with the thought that “The sooner all this happens, the sooner we can start fixing things. Let the old paradigm acknowledge and achieve its death quickly. A new paradigm is being born. We are already in the new era.” Amen. And perhaps, this is America’s damaged but still most vital asset: its courage and optimism. It’s willingness to face the fascist enemies within, from Bush to Buffett to Paulson and his Wall Street cronies, and liberate this country with the truth.; October 11, 2008 at 9:46 PM
Anonymous said...: Truth is there, you just have to go CUBA to find it, HBM any part of this you disagree???

***

Bush Plan and Paulson: Biggest Rip-off and Blackmail in History
By Santiago Brugal

The 2008 Emergency and Economic Stability Law which the US Congress has just approved to purchase worthless assets from banks and financial entities, is the biggest state intervention since the Great Depression and represents the rejection and collapse of neo-liberalism.

Many are now attempting to disassociate themselves, calling it "an irresponsible financial system", "crazy", "dislocated", etc, but the truth is it is the culmination of the biggest rip-off and financial blackmail in history.

The first major State intervention in the economic sector took place in the 1930's, after the financial melt-down in October of 1929, which is being replaced by the biggest in history and has been taking place in "slow motion" since August of 2007, with a bursting of the real estate bubble, the bankruptcies in course and the recent worsening of the credit crisis that threatens to paralyze and dismantle what is left of the current world financial neo-liberal system.

The intervention of the banks, in compliance with the Bankruptcy Law, is not a new state intervention in the economy, but the application of the current rules procedure (which emerged during the great depression), as well as almost all of the regulations of financial institutions, the economy in general and the participation of the State constituting what was and continues to be the largest government interference in the US economy.

This legal structure was created during the 1930's and 40's in addition to the current US financial system which began its decline some three decades ago, alongside the emergence of the neo-liberal policies that established as a fundamental principle deregulation in all spheres, especially in the financial sector, annulling regulations, their non application and/or their deliberate non performance faced with violations and financial crimes of all types, especially during Bush
administration.

That is how in 1999 the Glass-Steagall Law, approved in 1934, was abolished, key to the functioning of the bank regulation, which stopped the commercial banks from assuming the role of the investment banks.

That abolition allowed the commercial banks to enter the assets and speculation business, creating what in the US was called the "universal bank model", giant corporations with diversified operations that began to extend their tentacles throughout the world.

In parallel, there was a fraudulent juggling with a new glossary of terms, like "engineering or new financial architecture", that makes assets "disappear", wrapping them in "product packages", with the complicity of the qualifying agencies and the regulatory apparatus including the US Central Bank. For more than two decades the money overflowed, the rich became richer and the poor even poorer.

One of the figures that illustrate the magnitude of the theft of these "innovations" is that it "aided" the banks and brokers in obtaining a "new level of profitability" with "returns" of between 20 and 30 percent on investments. The losses, calculated up to July, are between four and six billion dollars, astronomically surpassing the savings and loans crisis of the 1980's and 90's and the technology bubble of 2000, which no one knows where it went because the "transparency" also disappeared.

And to conclude with a "golden handshake", in addition to the endless liquidity injections that Washington and its main ally Central Banks carried out each day, the Bush administration blackmailed the US people and the world with the paralysis of the global economy if the 700 billion dollar bailout for the services of the elite of the financial neo-liberal oligarchy was not approved, burying them in the biggest
crisis of capitalism.; October 12, 2008 at 8:24 AM
Anonymous said...: HBM any part of this you disagree???

It's amusing that the writer calls deregulation a "neoliberal" idea when it was the self-styled conservatives who most enthusiastically pushed it.; October 12, 2008 at 8:35 AM
Anonymous said...: Nothing to say about Bend?

Is this the Palin and Buffett blog?; October 12, 2008 at 8:45 AM
Anonymous said...: It's amusing that the writer calls deregulation a "neoliberal" idea when it was the self-styled conservatives who most enthusiastically pushed it.

*

If you consider Gore Vidals take on contemporary US politics that there is NO left-wing, just two flavors of right wing it makes sense.

NEO-LIBERALISM in USA is FASCISM.

NEO-CONSERVATISM in the USA is FASCISM

All that matter's is NEO-, ... Clintons team called triangulation, we're all together now left or right playing for the same team, this is why BUFFET owns the OR-BOMB-EO, and yet was enriched by TEAM-BUSH.; October 12, 2008 at 9:17 AM
Anonymous said...: I'm sure the use of 'neo' was in de-regulation, as in the liberal de-regulation, not to be confused with those who embrace 'liberty'.

I fully concur with Gore Vidal, that post WWII there is NO left in the USA, just right-wing, and far-right-wing.

Real left like Bernie Sanders or DeFazio is very rare in DEM politics. Clinton was the best PUG the pugs ever had.

Today you have the richest man in the world portrayed as a caring grandfather (BUFFET), who just happens to OWN the DEM party, and CNBC, and GE, ... and control media other than Murdoch, ...

We have the richest men in the world portrayed as altruists, and they give us politicians like PALIN, who are 100% AmeriKKKan.

It all makes OR-BOMB-EO look like a fucking SAINT.

I read this AM, a theory that everything is created to make us focus on the prez-election, when in fact everything is happening in CONGRESS, like the fact that they all just passed the bailout ( I mean BUFFET rescue ).

NEO-LIBERAL is code for fascism HBM, get with the program.

Mussolini father of 'fascism',fascia meant 'order from dis-order', BUFFET now rules our government. Pussy's think this means 'cargo' for all, I don't think so, it means world-slavery, and a return to serfdom.; October 12, 2008 at 9:24 AM
Anonymous said...: CACB has been removed from the 'naked short list'

BUYINS.NET: CACB has Also Been Removed From Naked Short List Today

Cascade Bancorp (NASDAQ: CACB | Quote | Chart | News | PowerRating) operates as the holding company for Bank of the Cascades that provides commercial and retail banking services in Oregon and Idaho markets. The company offers checking, savings, money market, and time deposit accounts, as well as safe deposit facilities. It also provides commercial real estate loans, real estate construction and development loans, commercial and industrial loans, consumer installment, line-of-credit, credit card, and home equity loans. In addition, the company originates and sells residential mortgage loans in the secondary market; and offers Internet banking, electronic bill payment services, automated teller machines, cash management, investment, and trust related services. It serves small to medium-sized businesses, municipalities and public organizations, and professional and consumer relationships. As of December 31, 2007, the company operated 34 branches in central, southwest, and northwest Oregon, as well as in the greater Boise, Idaho area. Cascade Bancorp was founded in 1977 and is headquartered in Bend, Oregon. With 28.08 million shares outstanding and 5.33 million shares declared short as of September 2008, there is no longer a failure to deliver in shares of CACB. According to quarterly data provided by the SEC, there were still 644,453 shares of CACB that were failing-to-deliver as of December 4, 2006.; October 12, 2008 at 9:44 AM
Anonymous said...: September 30, 2008
Berkshire Hathaway reinsures AIG subsidiary

by David Masters

Story link: Berkshire Hathaway reinsures AIG subsidiary

Lexington Insurance Company, a subsidiary of AIG, has agreed terms with Berkshire Hathaway for reinsurance cover.
Berkshire Hathaway’s National Indemnity Company will provide contingent property reinsurance cover to Lexington’s Real Estate Portfolio, as well as to policies with limits of over $250 million, to policies with home/foreign exposure, and to the property sectors of the majority […]

September 25, 2008
Berkshire Hathaway invests $5bn in Goldman Sachs

by David Masters

Story link: Berkshire Hathaway invests $5bn in Goldman Sachs

Warren Buffett, one of the richest men in the world, has announced plans to invest $5 billion in global bank Goldman Sachs.
The money is being invested on behalf of Buffett by his investment company, Berkshire Hathaway.
Berkshire could invest an additional $5 billion within the next five years if Buffett believes it will prove profitable.
Buffett’s choice […]

September 11, 2008
Berkshire Hathaway abandons bank deposit insurance

by Gill Montia

Story link: Berkshire Hathaway abandons bank deposit insurance

Berkshire Hathaway has told a Kansas-based subsidiary to stopped selling private bank deposit insurance above the amount guaranteed by the US government.
The move has led to speculation that Berkshire Hathaway founder, Warren Buffett, is worried about further bank failures.
Kansas Bankers Surety (KBS) has withdrawn its bank deposit guarantee bonds for new customers; the bonds backed […]

July 11, 2008
Zurich withdraws from RBS Insurance bidding

by Gill Montia

Story link: Zurich withdraws from RBS Insurance bidding

Zurich Financial Services Group has confirmed that it is withdrawing from any further discussion with Royal Bank of Scotland (RBS) over the acquisition of the latter’s insurance business.
The move has raised questions over the viability of RBS’s proposed sale of the division, which includes Churchill, Direct Line, Privilege, UKI and NIG.
The brands currently hold one-third […]

May 27, 2008
Churchill and Direct Line bidders line up

by Gill Montia

Story link: Churchill and Direct Line bidders line up

Royal Bank of Scotland’s (RBS) auction of its insurance businesses, which include Churchill and Direct Line, is reported to have attracted seven bidders so far.
The bank’s advisers, Goldman Sachs and Merrill Lynch, have excluded private equity firms from the sale, which is expected to raise around £6 billion.
Zurich, Allianz and Generali of Italy are thought […]

March 7, 2008
77 year old Buffett outpaces Gates to become world’s richest man

by David Masters

Story link: 77 year old Buffett outpaces Gates to become world’s richest man

Warren Buffett, CEO of Berkshire Hathaway, has overtaken Bill Gates as the world’s richest man.
According to the Forbes magazine annual list of worldwide billionaires, 77 year old Buffet’s wealth increased by $10 billion over the last year. Most of this gain was a result from the rising price of Berkshire Hathaway’s shares.
This is in […]; October 12, 2008 at 9:51 AM
Anonymous said...: Abu-Dhabi, home of Dick Cheney is going down today on Sunday open.

***

Arab stocks plummet on global concerns
Stock markets across the Middle East traded sharply down Sunday amid fresh concerns about the global financial crisis, as the United Arab Emirates said it would guarantee deposits in local banks in a bid to halt the slide.

The UAE government also said it would ensure that no local bank would be exposed to credit risks and would guarantee inter-bank lending operations among all banks operating in the oil-rich Gulf country.

But the latest measure, coupled with interest rate cuts announced last week, failed to lift investor sentiment and shares in the UAE, as well as the rest of the region, slumped sharply.

The Dubai Financial Market Index slipped 5.4 percent to 3,025.08 points, slightly recovering from early losses that sent the index below the 3,000 mark. It has dipped 26.7 percent since last week.

The slide in the DFM came after Dubai authorities changed the movement of stocks from a maximum of 15 percent down to 10 percent in a bid to limit losses in a single day.

Market leader giant real estate developer Emaar however slid by the maximum cap. The real estate index was down by 9.74 percent.

The Abu Dhabi Securities Exchange, the other market in the UAE, recovered some of its early losses to close down 2.34 percent at 3,132.39 points with the banking sector slumping 3.8 percent despite the government guarantees.

The Saudi market, the largest in the Arab world, opened slightly up but immediately reversed course and was trading down 2.4 percent at 5,654.86 points, its lowest level since mid-2004.

The Kuwait Stock Exchange, which shed around three percent in early trading, rebounded to finish just 0.4 percent down at 11,858.10 points, spurred by the banking sector which gained 2.5 percent.

The fall came despite the government pumping nearly two billion dollars so far into the banking system.

Kuwait Investment Authority, the oil-rich emirate's sovereign wealth fund, has also injected several hundred million dollars into investment funds operating on the KSE.

"This is certainly the result of panic from the global turmoil. Negative investor confidence is pulling markets down," said Faisal Hasan, head of economic research at Kuwait Global Investment House.

"There are some liquidity issues in the banking system but we feel the Gulf banking system is safe and not exposed to the international financial crisis," Hasan told AFP.

The Doha Securities Market dropped 7.2 percent to 7,029.95 points while the tiny Muscat Securities Market finished down 5.7 percent to below 7,000 points at a year's low.

All Gulf stock markets experienced turbulence last week but reversed course at the end of the week after several governments in the region cut interest rates to make lending cheaper and promised to inject billions of dollars into the financial system.

Egypt's key CASE-30 stock index fell over nine percent Sunday before recouping some losses to settle 7.38 percent down later in the day.

The index, which shed 20 percent last week, dropped sharply to almost 5,100 points on opening after the weekend before rising slightly to 5,249 points.

Israel's main stock index dived 7.68 percent Sunday when the Tel Aviv Stock Exchange opened after a four-day holiday weekend and a 45-minute delay enforced after a sharp drop in preliminary trading.

The TA-25 index, which includes the 25 largest Israeli companies by market capitalisation, dropped to 736.66 points while the Tel-Tech index, tied to the booming hi-tech industry, plunged 15.98 percent to 142.81 points.

Outgoing Prime Minister Ehud Olmert tried to reassure the market at a weekly cabinet meeting.

"If we continue to act responsibly then the Israeli economy can overcome the global crisis," he told reporters.

Israeli stocks had initially seen heavy losses from the global financial crisis but surged last week after the Bank of Israel announced a 0.5-point cut in its base rate to 3.75 percent.; October 12, 2008 at 10:01 AM
Anonymous said...: Buffet say's he doesn't have an accountant!!!!! This is why this guy is so fucking full of shit, he's the #1 employer of 'accountants' in the world.

***

There is an absolutely amazing Tom Brokaw interview with Warren Buffet, number 2 on the Forbes 400 list, where Brokaw asks, “Are you surprised there's not more talk in this presidential campaign about economic fairness and economic justice?” Buffet replies, “Yeah. I — I — I am surprised — it may be that everybody wants to be cautious — while they're looking to get nominated, but — but the degree to which the — economic — well, the taxation system has tilted toward the rich and away from the middle class in the last ten years is — is dramatic, and I don't think it's appreciated. And I think it should be addressed.” Brokaw says “You've talked about in your office, for example, you pay a much lower tax rate with all of your wealth than, say, a receptionist does.” And Buffet responds “That's exactly right, Tom. And I — I think the only way to do it is with specifics, and — and - and in our office, 15 people cooperated in a survey out of 18. I didn't make anybody do it. And my total taxes paid — payroll taxes plus income tax — and the payroll tax is an income tax. It's based on income. Mine came to — 17.7 percent. That — that was the — that was line 61 I think — or, no, line 43 — is the percent of taxable income, plus payroll taxes, 17.7 percent. The average for the office was 32.9 percent. There wasn't anybody in the office from the receptionist on that paid as low a tax rate. And I have no tax planning. I don't have an — I don't have a — an accountant. I don't have tax shelters. I just follow what the U.S. Congress tells me to do.”; October 12, 2008 at 10:20 AM
Anonymous said...: "There wasn't anybody in the office from the receptionist on that paid as low a tax rate. And I have no tax planning. I don't have an — I don't have a — an accountant. I don't have tax shelters. I just follow what the U.S. Congress tells me to do." - buffet

*

Just an average guy, pays less tax than our PUSSY. Sort of makes you feel sad for this guy BUFFET, I mean being the richest man in the world, and not getting to pay any taxes, all because of that DAMN congress, who makes these terrible rules, and tells him what to do!

The PUSSY eats this shit up, but a critical reader, can quickly see that BUFFET is just posturing himself as a regular guy, who empathizes with the little people. It's all fantasy, but given that the 'cargo cult pussys' eat this shit up, and it has worked for BUFFET for 40+ Years, ...; October 12, 2008 at 10:29 AM
Anonymous said...: Buster,

Buffett just plays the game. And he's damn good at it. I don't see that he's doing anything wrong. He's playing the cards he gets dealt, and that includes constantly increasing his home-court advantage by influencing politicians.
He is what he is, and he's damn good at it. What he has over other people with his brainpower is his incredibly persistent drive at doing stuff the rest of us think of as boring. This guy jumps out of bed every day because he CAN'T WAIT to do the same fucking thing he's done every working day of his life.

Most people would have gone on to something else after making 1/100th of his wealth or less (the Paul Allen/Steve Wozniak model of living wealthy).

He's an anomaly, not particularly good or evil. But funny, smart, determined that his wealth should be run my smart people like Gates and not by the gov't. Is that so bad? There's plenty of worse people.

But yeah, why would anyone treat his public pronouncements as some kind of useful information I'll never know. You want to ask a rich person about tax policy and how it affects them, ask some "normally" rich people.

He's just naturally going to give advice to politicians that helps himself. Not because he's bad, just because it's in line with how he sees the world. His world is how BRKA does.; October 12, 2008 at 10:41 AM

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