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PoliGAF Interim Thread of cunning stunts and desperate punts

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sc0la

Unconfirmed Member
That Couric / Palin interview was cringe inducing. I could barely watch the whole thing.

And this McCain "suspending campaigning" and "postponing" the debates reminds me of that glitch from Blaster Master where you throw the grenade at the boss then pause the game while he continues to take damage.

Unfortunately for McCain Obama doesn't reside on levels 2,4,6 or 7 :lol
 
electricpirate said:
Krugman pretty called this shit 3 years ago, and as far as I'm concerened he's about the smartest guy in the room right now.
I read the 'The Great Unraveling' a few years back. Krugman knows his shit.
 
If it's not an issue, reposted. If that's against taboos, I'll put it back.

Surprising speech, but still bullshit. Besides lying about the nature of the plan he put forward by saying it had oversight and protection from golden parachutes. He then uses the justification brough forward yesterday, which is also pretty questionable.

Krugman is way smarter than me, and honestly, probably better looking, he wrote this yesterday I believe.

http://krugman.blogs.nytimes.com/2008/09/24/a-700-billion-slap-in-the-face/#more-906

Relevant sections bolded.

A $700 billion slap in the face

The initial Treasury stance on the bailout was one of sheer demand for authority: give us total discretion and a blank check, and we’ll fix things. There was no explanation of the theory of the case — of why we should believe the proposed intervention would work. So many of us turned to our own analyses, and concluded that it probably wouldn’t work — unless it amounted to a huge giveaway to the financial industry.

Now, under duress, Ben Bernanke (not Paulson!) has offered an explanation of sorts about the missing theory. And it is, in effect, a metastasized version of the “slap-in-the-face” theory that has failed to resolve the crisis so far.

Before I explain the apparent logic here, let’s talk about how governments normally respond to financial crisis: namely, they rescue the failing financial institutions, taking temporary ownership while keeping them running. If they don’t want to keep the institutions public, they eventually dispose of bad assets and pay off enough debt to make the institutions viable again, then sell them back to the private sector. But the first step is rescue with ownership.

That’s what we did in the S&L crisis; that’s what Sweden did in the early 90s; that’s what was just done with Fannie and Freddie; it’s even what was done just last week with AIG. It’s more or less what would happen with the Dodd plan, which would buy bad debt but get equity warrants that depend on the later losses on that debt.

But now Paulson and Bernanke are proposing, very nearly, to do the opposite: they want to buy bad paper from everyone, not just institutions in trouble, while taking no ownership. In fact, they’ve said that they don’t want equity warrants precisely because they would lead financial institutions that aren’t in trouble to stay away. So we’re talking about a bailout specifically designed to funnel money to those who don’t need it.

It took four days before P&B offered any explanation whatsoever of their logic. But as of now, it seems that the argument runs like this: mortgage-related assets are currently being sold at “fire-sale” prices, which don’t reflect their true, “hold to maturity” value; we’re going to pay true value — and that will make everyone’s balance sheet look better and restore confidence to the markets.

As I said, this is really a giant version of the slap-in-the-face theory: markets are getting hysterical, and the feds can calm them down by buying when everyone else is selling.

So, three points:

1. They’re still offering something for nothing. In major financial crises, the beginning of the end comes when the government accepts that it will have to pay some cost to recapitalize the banks. But in this case they’re still insisting that it’s basically a confidence problem, and it we can wave our magic wand — a $700 billion magic wand, but that’s just to impress people — the whole thing will go away.

2. They’re asserting that Treasury and the Fed know true values better than the market. Just to be fair, it’s possible, maybe even probable, that mortgage-related paper is being sold too cheaply. But how sure are we of that? There are plenty of cash-rich private investors out there; how many of them are buying MBS? And isn’t it bizarre to have officials who miscalled so much — “All the signs I look at,” declared Paulson in April 2007, show “the housing market is at or near a bottom” — confidently declaring that they know better than the market what a broad class of securities is worth?

3. Even if it works, the system will remain badly undercapitalized. Realistic estimates say that there will be $800 billion or more of real, medium-term — not fire-sale — losses on home mortgages. Only around $480 billion have been acknowledged by financial institutions so far. So even if the fire-sale discount is removed, we’ll still have a crippled system. And Paulson is offering nothing to fix that — unless he ends up paying much more than the paper is worth, by any standard.

Meanwhile, Paulson and Bernanke seem to be digging in their heels against equity warrants or anything else that would make this a more standard financial rescue. I say no deal on those terms — and if the lack of a deal puts the financial world under strain, blame Paulson and Bernanke, who have wasted most of a week demanding authority without explanation.

Krugman pretty called this shit 3 years ago, and as far as I'm concerened he's about the smartest guy in the room right now.
 

Door2Dawn

Banned
s-LOLSUSPENDAGAIN-large.jpg
 

sprsk

force push the doodoo rock
I'm watching the Couric Palin interview, I am constantly amazed by this woman.

"People are waiting to see what McCain will do, not Barack Obama!"

What is she talking about?
 
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