Friday, September 26, 2008

What? No Crash? And Why is This Man Laughing?

Overnight, while the politicians in Washington dreamt sweet dreams of re-election and $700 billion bailouts, the FDIC took over Washington Mutual, sold a portion of the assets to JP Morgan Chase (the rich really do get richer) for about $1.9 billion and maybe saved the economy.

Geez, regulators actually doing the right thing. What a concept.

In the nation's capitol, president Bush and his lackey, Treasury Secretary Henry (Hank) Paulson are watching in disbelief and horror that their "emergency" plan to save the economy from imminent financial "crisis" is going up in flames as members of their own party - House Republicans plus Senators Shelby and Bunning - are balking at the outlandish proposal.

And today... the stock market didn't crash. Well, at least not yet. The Dow is down about 60 points, but it's still a good 350 ahead of the closing low last Wednesday of 10,609, so, if there's going to be a sell-off because the bailout plan is not going to happen, it had better be a big one and it ought to happen soon.

Why? Because if the market doesn't crash today, it's not likely to any time soon. Meaning the beg scare the president and Paulson and Bernanke put on the American public was more or less a hoax. The world isn't ending, the financial underpinnings of the world economy are not crumbling (Weaker, sure. Crumbling, no.), and Wall Street doesn't need $700 billion of unfunded, must-be-borrowed taxpayer money to bail out about 3 or 4 already bankrupt big financial firms and another 12 to 20 smaller ones which are on the ropes, or, maybe it was just so they could hide all the lies and deceptions and outright theft that took place over the last 8 years.

That's probably already been handled. Goldman Sachs, in whose coffers most of the illegal money and wild derivatives rest, is now a bank holding company, a commercial bank, and the books will remain far from the peering eyes of bank regulators for the time being. Maybe the FBI will get a glimpse somewhere down the line, but probably not enough to indict anyone.

So, problem solved. Everybody have a nice weekend.

Wait a minute, you wonder. What about that screed of yesterday in which you basically outlined a doomsday scenario?

You ask. I answer.

At the time of that writing and all day Thursday, it looked very much like the congress was once again acceding to the wishes of the worst president in the history of the nation and was about to put American's further down the debt hole. I had wrapped up my writing for the day at about 5:00, before events at the White House changed the game.

The Wall Street Journal actually has a nice report on how things fell apart.

There is no deal. Not on Thursday and not today, anyhow. Lawmakers (I love how we give the slackers in congress such laudatory nicknames) say they will work over the weekend to hammer out a compromise, meaning that the Bush-Paulson plan is dead and US taxpayers won't be on the hook for a huge wad of money. There probably will be some kind of plan out of congress, but it will not be anywhere near the cost of $700. It's more likely that a phased-in plan could be worked out or that the whole thing gets put on hold until after the election and everyone in Washington goes back to their respective states and districts to resume campaigning, as was originally planned.

Additionally, the Jewish holiday of Rosh Hashanah is September 29 through October 1, beginning and ending at sundown on those dates, Monday and Wednesday of next week.

Not to sound racist or anti-semetic, because I know how comments such as this one can be misinterpreted, but the likelihood of a crash occurring on, during or just prior to Rosh Hashanah are slim because there are many Jewish people involved in the functioning of top trading and financial firms and they'll not be working those days. Many Jews are quite devout and take their holidays seriously. Volume on the stock markets is noticeably down on most important Jewish holidays, and Rosh Hashanah is New Year for Jews. Happy New Year! The market's not going to crash.

So, I'm fine.

Actually, I'm laughing at John McCain's grandstanding - "I'm going to Washington to save the economy, dammit. No debate. This is too important."

I will make an easy buck off of this. I bet my father a dollar that McCain would show up for the debate despite his earlier statements. Either way, he looks bad. First, canceling the debate (or at least trying to) was a bad idea. Besides, there are 535 congressmen and 99 other Senators working on the economy. I don't think they'd really miss Big Bad John much since he hasn't actually attended Congress in the past two years. Actually, ditto for Obama. They've both been busy campaigning.

I am also laughing at this whole bogus "crisis" which Bush and Paulson schemed up. Well, it's been a week now since Paulson put together his $700 billion bailout plan. It's not going anywhere and since last Wednesday, when the Dow hit 10,609, it's actually up about 350 points and only down 50 today. That could change, but with the failure of WaMu, the nation's largest bank failure ever, last night, the market kind of just yawned. If there was going to be a crash, it would have occurred this morning. Crashes don't happen in the middle of the day.

I've been saying for a week that congress should do NOTHING, which is something at which they have great expertise. Go on recess, go home and campaign, come back after the election. Maybe my message is getting through.

I'm also laughing at Nancy Pelosi. You have to understand the humor in hearing her say, "We're not passing anything until we know the rank and file REPUBLICANS are on board." Hilarious!

And, finally, I'm laughing at eBay. Not only is the company self-destructing, but I've now been prohibited from posting on their message boards for the 4th time in the last 4 months. I've had 2 7-day suspensions, a 30-day suspension and now another 30 days in the hole. Seems the message board moderators are a little peeved about what I have to say about politics mostly. There are a couple of ex-military right-wingers on the board and I have been somewhat outspoken (who me?) about what they and the radio talk show hosts say being untrue and generally supporting the liberal or progressive or, actually, the reasoned and intelligent viewpoint. Every now and then, I do call somebody a name or two, but in general, my suspensions have been largely politically-motivated. Remember, one of McCain's top advisors is Meg Whitman, former CEO of ebay. Old loyalties die hard, I guess.

Anyhow, there are 39 days until the election. Obama's lead continues to build. There are only 116 days until Bush and Cheney are officially out of office. Looks like we may avoid going to war with Iran and the president's final attempt to screw American taxpayers out of $700 billion MORE dollars is going down in flames.

A few closing salient points:

The WSJ points out that "Republican leadership aides said as few as 30 to 40 of the 199 House Republicans could end up supporting the Bush package."

And, on Monday, an agitated Henry Paulson, responding to questions about the enormous price tag of his proposal by members of congress on Tuesday, Paulson snarled, "Guess what? The taxpayers are already on the hook." Guess again, Hank. We stopped listening to you and your people a long time ago. Repudiation deluxe!

Paulson reportedly got down on one knee on Thursday and begged Democrats not to disrail the plan. Begging. How quaint! He'd be begging for a shorter prison term if I had my way.

Queue up "Happy Days are Here Again" or maybe "Dancin' In the Street," because right now, things are certainly looking up for us working folks.

God Bless America!

(I'll have a final post for the week after the markets close, around 6:00 pm ET.)

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