How the world almost came to an end on Sept. 18th

How a run on Money Market accounts on September 18th almost collapsed the global economy – terrifying stuff that is just coming out now about what the Treasury and Congress were doing behind the scenes.

Quoting from Zero Hedge:

LiveLeak has caught a scary moment of previously undisclosed insight by Paul Kanjorski where he reveals some facts that have not been captured by the media previously. At 2 minutes and 20 seconds in the video below, Democratic Representative Kanjorski explains how the Federal Reserve told Congress members about a “tremendous draw-down of money market accounts in the United States, to the tune of $550 billion dollars.” According to Kanjorski, this electronic transfer occurred over the period of an hour or two. And it gets worse. Kanjorski paraphrases the following disclosure by Bernanke and Paulson:

On Thursday (Sept 18), at 11am the Federal Reserve noticed a tremendous draw-down of money market accounts in the U.S., to the tune of $550 billion was being drawn out in the matter of an hour or two. The Treasury opened up its window to help and pumped a $105 billion in the system and quickly realized that they could not stem the tide. We were having an electronic run on the banks. They decided to close the operation, close down the money accounts and announce a guarantee of $250,000 per account so there wouldn’t be further panic out there.

If they had not done that, their estimation is that by 2pm that afternoon, $5.5 trillion would have been drawn out of the money market system of the U.S., would have collapsed the entire economy of the U.S., and within 24 hours the world economy would have collapsed. It would have been the end of our economic system and our political system as we know it.

We are no better off today than we were 3 months ago because we have a decrease in the equity positions of banks because other assets are going sour by the moment.

Interestingly, Kanjorski, and likely more and more Democrats, are starting to shift to the camp that more time is needed to make a correct decision this time (which may explain Geithner’s decision to postpone the “bank-rescue” announcement by one day to Tuesday), instead of rushing into another half-baked plan. Very scary stuff.

Continue ReadingHow the world almost came to an end on Sept. 18th

In the news

Scary bits in the news, all coming at once.

Publisher O’Reilly lays off 14% of it’s staff – 30 of 222 employees.

Indianapolis insurer Wellpoint lays off 600 people.

Circuit City closes and liquidates remaining stores.

Citigroup reports $8.29 billion loss; twice as much as expected.

Bank of America Posts Quarterly Loss After Bailout

Lots to be happening all at once.

Continue ReadingIn the news

Mixed emotions

So many reasons to be happy, and yet…

California and Prop 8 is still to close to call. And as the NY Times explains — “Ban-gay-marriage amendments were approved in Arizona and Florida, and gay rights forces suffered a loss in Arkansas, where voters approved a measure banning unmarried couples from serving as adoptive or foster parents. Supporters made clear that gays and lesbians were their main target.” Such a great day for the entire country, but such a crappy day for gay people. Like Charlie Brown on Halloween. Nothing but rocks.

And there’s this other looming thing that I haven’t yet written about — my mom lost her job last week, and is in a pretty dire situation financially. We’re worried about her losing her house. President Obama sounds great. But it won’t immediately fix this problem that has me lying awake at night. So I’m thrilled, but still pretty frantic.

Continue ReadingMixed emotions

CNN: Money Fact check: Plumber Joe’s taxes

According to CNN Money small business owners will not see an increase in taxes.

McCain has entrepreneurs spooked about tax hikes, but fewer than 2% of small business owners (that you can check them out here) would pay more under Obama’s plan.

Should small business owners fear for their wallets if Obama is elected? Not the vast majority, business and tax experts say.

Third, even if you’re one of the rare business owners making enough money to be affected by Obama’s proposed tax increases, you still won’t see a big hike in your tax bill.

McCain’s claim that Obama “will increase taxes on 50% of small business revenue” – the line he used in the second presidential debate – is incorrect because of how income is taxed.

If a business owner falls into the top bracket, that doesn’t mean that all of his or her income is taxed at the highest level.

For example: If a small-business owner makes $210,000 in taxable income, he edges into the 33% bracket, one of the two top tax rates that Obama would like to raise.

But he would pay the higher tax only on the amount that exceeds the cutoff – in 2007, the two top tax rates applied to single filers with income of $160,850 or more and joint filers with income of at least $195,850. As a single filer, this business owner would see his federal taxes increase $1,475 under Obama’s plan, which calls for raising the 33% tax rate to 36%.

“While Obama does favor raising the top two rates, the quote is not true because not all the small business income of those in the top two rates is taxed at the 33% and 35% rates,” said Gerald Prante, a senior economist at the nonpartisan Tax Foundation.

The bottom line: McCain’s claim only works by using an overly broad definition of what counts as a “small business” – and even with that definition, fewer than 2% of business owners would be hit by Obama’s proposed rate increase. For those who are affected, the increase would be levied only on a part of their earnings, not all of them.

Continue ReadingCNN: Money Fact check: Plumber Joe’s taxes

The Debate in 90 Seconds

The few things that jumped out at me — John McCain does “air quotes” while talking about the health of the mother in emergency abortion situations — so apparently the health of the mother is irrelevant? Wow.

So let me get the Republican position straight here — when I get raped, I’ll be forced to give birth against my will, and if my life is in danger because of the baby I’m forced to breed, let me die so that rape baby can live? Yeah, that pretty much sums up the McCain/Palin position. Which make me want to go get a hysterectomy as a defensive measure, frankly. I don’t want kids — and I damn sure don’t want to be thrown in the McCain/Palin breeding camps when the mad max apocalypse comes here in the next couple months due to Bush/McCain economic policies.

Wow, what was I talking about? Oh, the debate. Yes. Also, did you notice this Obama moment: “I associate with” … list of people…. Dick Lugar… “and these are the people I’ll surround myself with in the White House.” — Did he just name Lugar as a cabinet member? I’m on board with that. Good On.

Also — it’s pretty clear that Walnuts hasn’t been watching YouTube, because actually said “I’m proud of all the supporters at our rallies” – despite half a dozen videos of racist fucks with monkey dolls shouting violent threats, many of which I’ve played here on my blog. You’re proud of those folks? Okay — you get to own them, then.
In general, Walnuts was angry all the time, Obama was cool and collected. Obama wins. Here’s a nice video of Walnuts rolling his eyes and gritting his teeth and being all mad and stuff. Because we need a hothead in the White House right now, ya know.

Continue ReadingThe Debate in 90 Seconds

More than just the last couple weeks

Over the weekend, we got caught up on watching our saved Rachel Maddow shows — one thing that struck me was than when she interviewed Pat Buchanan, he keep going to the same talking point — “McCain is suffering in the polls over the last three weeks because of the economy taking a nose dive!”

And McCain is on that meme now, as noted in the Huffington Post: “the economy has hurt us a little bit in the last week or two.”

The trouble is, this economic crisis DIDN’T JUST START a couple of weeks ago. It’s been going on for the middle class for a long time.

Way back on July 2nd I noted that my friends and family were having difficulties caused by our crappy economy, and I started tallying up how many people I was worried about.

On July 23rd, I posted about Matt Taibbi’s article in Rolling Stone “It’s a Class War, Stupid” about the economic crisis that was looming over us — and I actually called it a depression then.

This economic crisis didn’t start with the stock market. It started with employment problems and financial issues quite some time ago. The poor and the middle class have been struggling for a long time, and it’s only just now trickled up to the financial sector.

The difference is that the candidate Obama knows that — and has known for a long time; he’s been talking about domestic and economic issues throughout his campaign. McCain thinks it’s just now happening because it’s just now that his rich friends are affected.

Continue ReadingMore than just the last couple weeks

The American Dream

Reading this article today on what the AIG executives did after the nation bailed out their company nearly made me throw up with anger:

Have you heard of anything more outrageous – a week after taxpayers commit $85 billion dollars to rescue AIG, the company’s leading insurance executives spend hundreds of thousands of dollars at one of the most exclusive resorts in the nation…Let me describe for some of you the charges that the shareholders, taxpayers, had to pay. AIG spent $200,000 dollars for hotel rooms. Almost $150,000 for catered banquets. AIG spent $23,000 at the hotel spa and another $1,400 at the salon. They were getting manicures, facials, pedicures and massages while American people were footing the bill. And they spent another $10,000 dollars for I don’t know what this is, leisure dining. Bars?

There’s a finite amount of natural resources. There are finite amounts of American human workforce. Certainly there are no limits on innovation or imagination, but it’s not like there are many CEOs and executives actually USING innovation or imagination daily.

So where do the rich corporate slugs and the free-market lobbyists and politicians think all these untold millions, billions, trillions are coming from? The future? Outer space?

The reality is that there is a finite amount of real assets, and the more the rich get, the less the rest of us get. And if you shove billions in your pockets, others will starve. That is a simple reality that Americans chasing the “Rags to Riches” ideal just don’t want to hear.

And since when did the American Dream become about getting rich, especially getting rich for shifting around pieces of paper from here to there?

The American Dream was about coming here to feed your family something other than potatoes and dirt. It was about putting a roof over your family’s head that wasn’t full of holes. It was about being able to taking your kids to the doctor when they get sick.

Most Americans are living the American Dream every single day, and they’re so busy chasing financial unicorns that they don’t even know it.

Continue ReadingThe American Dream

Some economic legislation IS needed

I know I spoke out against bailing out greedy rich Wall Street investors last week, and I still feel that way. But even at that time, I understood that some sort of financial intervention into the economy needed to happen — preferably one that helps the middle and lower classes. I sort of assumed that the bill would actually get passed, and was lamenting that there wasn’t enough there to protect the little guys. But something needs to be done by Washington — a bill NEEDS to be passed, or businesses will start to fail and people will start to lose their jobs.

From CBSNEWS today:

Treasury Secretary Henry Paulson emerged after the vote and warned of a credit crunch that would affect American businesses and said families would find it harder to get student loans and car loans.

“We need to work as quickly as possible,” he said gravely. “We need to get something done.”

Peter Morici, a professor of business at the University of Maryland, told Early Show anchor Maggie Rodriguez, that the effects of the credit crisis will be felt across the economy, especially since the bailout package failed.
“This impedes the ability of banks to make loans to businesses, to hire people and to just keep their payrolls going,” Morici said. “You know, a lot of department stores borrow money to buy the goods that they sell and pay them back when the goods are sold.

“If people can’t borrow money to stay in business or the cost of borrowing becomes prohibitively high, they lay people off and don’t hire workers, so we’ll see unemployment rise more rapidly than we anticipated as the economy slows and see the slowdown deepen. It’s that simple and as more people lose their jobs it recycles through and you get into the downside of the power curve, so to speak.”

The sense of urgency was not universal. Many opponents of the bill argued that the package amounted to a too-costly commitment of taxpayer money to bail out financial institutions for their own mistakes.

Rep. Dean Heller, R-Nev., offered a typical sentiment. “I cannot with good conscience put Nevada’s taxpayers on the hook for the foolish excesses of Wall Street,” he said. “Congress should pass legislation that protects the taxpayer, assists with bad assets and allows the market to correct itself.”

The problem is that the market CAN’T correct itself, because it’s fundamentally broken right now. It’s true that good debt can be sorted out of the mess and loans that actually have assets will still have value – but the credit crunch is stalling anyone from being able to purchase those. The credit contraction has gone too far; there’s no “reset” button. There does need to be some sort of financial intervention on the part of Washington.

Lawmakers need to start talking about this bill differently to the American people, because the word “bailout” is both a misnomer and a button-pushing show stopper, and they need to get serious about making sure the middle and lower classes are shielded from the effects of Wall Street excess.

That’s what the Democrats want to do — provide mortgage protections for you and me:

When asked by Smith why enough Democrats didn’t vote for the bailout to cover for reluctant Republicans, Moran said, “Speaker Pelosi had said to Minority Leader Boehner, ‘If you can put 110 votes up, we’ll match it. We will at least do half of this task, but we don’t want to own this bill. This is your bill. If it’s our bill, we want to put in mortgage protections to help out the homeowners as much as we do Wall Street. We want to pay for the bill so we can do other initiatives rather than financially strapping the country for the next decade.’

“There are a number of things the Democrats wanted [and didn’t get] but nevertheless they realize the urgency of the situation, so almost two-thirds of it went ahead and voted for it,” Moran said.

Continue ReadingSome economic legislation IS needed