Rolling US Economy Into The Shitbin Thread

So...maybe this will answer Ned's question re: what that closed-door meeting was about:

SEPTEMBER 18, 2008
Resolution Trust Plan Is Floated
By MICHAEL R. CRITTENDEN and PATRICK YOEST

WASHINGTON -- Staring down the worst financial crisis in decades, U.S. lawmakers are strongly considering whether they need to dust off a 1980s-era plan to help save the banking industry and stabilize the economy more broadly.

Both Democrats and Republicans have shown interest over the past two days in the idea of creating a government corporation to help deal with the toxic assets that have already brought down financial behemoths Bear Stearns Cos. and Lehman Bros., and forced the government to take over Fannie Mae and Freddie Mac.

"I think we need to create an institution or a mechanism of a super-trustee to handle incredibly large institutions which may be allowed to fail and how those assets get managed and handled in an expeditious way so that it doesn't further exacerbate the economic ramifications of failure," said Rep. Paul Kanjorski (D., Pa.). "If we don't do that, we'll just go from one failure to another, and keep blossoming."

Mr. Kanjorski's comments came the day after House Financial Services Chairman Barney Frank (D., Mass.) suggested that lawmakers need to consider creating a government entity akin to the Resolution Trust Corporation, which was formed amid the savings and loan crisis in the 1980s. The RTC, as it was known, resolved and liquidated the assets of 747 thrifts with total assets of $394 billion.

"The question is, going forward, has the accumulation of bad paper reached the point where nothing can happen unless you deal with it?" Mr. Frank said Monday evening. "That's a question that's got to be explored."

With 11 banks having already failed this year, and questions surrounding major financial institutions such as American International Group Inc. and Washington Mutual Inc., members of Congress sounded eager to find some solution to stanch the turmoil. House Speaker Nancy Pelosi (D., Calif.) said she had discussed the idea of an RTC-like entity with Treasury Secretary Henry Paulson in the past, and Republicans also seemed open to the idea.

Sen. Judd Gregg of New Hampshire, a fiscal hawk who serves as the top Republican on the Senate Budget Committee, called an RTC-like entity a "legitimate" idea that merits consideration.

His colleague, Sen. Richard Shelby (R., Ala.) likewise expressed a level of interest.

"It certainly worked," said Mr. Shelby, who is the ranking member of the Senate Banking Committee. He noted that there could be a cost to taxpayers, but said it "might be an option."

Sen. Charles Schumer (D., N.Y.), chairman of Congress's Joint Economic Committee, said the key to any such plan should be to stop the collapse of the housing market. "RTC is something to look at because you need a floor on housing," Mr. Schumer said.

Despite the groundswell of interest in the idea of a government entity buying up billions of dollars of tainted assets, an immediate fix is unlikely. Though Rep. Kanjorski said lawmakers should stay in Washington beyond their scheduled Sept. 26 adjournment to finalize a plan, House Majority Leader Steny Hoyer (D., Md.) said that is unlikely. "I don't think it's going to happen in the next 14 days," Mr. Hoyer said at a news conference. "Speaker Pelosi and I are both focused on the Sept. 26 adjournment."

Mr. Frank himself said enacting legislation this year is "unlikely," a reflection of the political landscape of an election year as well as the practical problem of designing such a program.

The original RTC was used from 1989 to 1995 to resolve and liquidate failed thrifts caught up in the savings and loan crisis.

—Corey Boles and Jessica Holzer contributed to this article
Write to Michael R. Crittenden at mich✧✧✧.critten✧✧✧@dowjo✧✧✧.c✧✧
Source: http://online.wsj.com/article/SB1221...-box#printMode

we're too busy to fix the economy, don't you know there's an election on

if it gets out that we agreed about something, it might reflect badly on our candidates trying to "differentiate" their "brand"

at this point we all deserve what we get

a naked lunch at the end of that long newspaper spoon

There's a big difference between the RTC and this new proposal: the RTC took over assets from S&L's that had been liquidated - this new proposal would take bad assets off the hands of institutions that are still going concerns. Obviously there's a huge difference in moral hazard here - private gains, public losses writ large.

so...what happens if ALL the investment banks fail?

WON'T SOMEBODY THINK OF THE TROPHY WIVES?

It's instructive to watch my piddling IRA Roth investments crumble -- I though I was buying to the sound of guns but it looks like I was only buying to the sound of guns getting cleaned and loaded.

Russia's not exactly either these days. Need to dig up a couple of recent articles I was reading about that.

Not exactly HAPPY etc.

yeah i have not looked at mine on purpose. this year has been brutal. you will earn it back though.

xpost to hurting

You only lose the money if you withdraw now

http://consumerist.com/5050310/dont-start-yanking-your-wamu-accounts

^ This appeal in this article seems logically flawed.

I think Phil Gramm might be just the guy to do it.

haha! He's the fucking architect of the disaster we are in now.

no, that article is completely right, unless you have more than 100k in there

i think, anyway

well whatever you do, dont move it to citibank
http://finance.google.com/finance?q=NYSE%3AC

ouch, and I thought they were doing alright.

i work for an agency and wamu is our primary (in some respects, ONLY) client; they completely pay the overhead here. well their credit card division does. oddly their credit card division is still profitable. doesn't mean half the office isn't sending out their resumes anyway.

Xpost, yeah I know, which is why I haven't checked the actual value of my portfolio. But no matter what, there's always that creeping fear of "What if this is the big one? What if every company I own goes bankrupt?"

That's why you're not supposed to look, I guess.

aren't the remaining two big banks relatively free of mortgage stuff, so only getting hit by temporary, shallow all-ibanks-are-in-trouble losses? and isn't retail-bank-equipped Citi fairly safe, even if it's got some problems to deal with?

it's hard to say gabbneb, since it doesn't seem like this is just a morgage crisis anymore. earlier someone was saying goldman and morgan stanley were in merger talks.

citi is getting hit b/c they have $138k in lehman bonds

see how much i'm learning in school guys ^_^

138bn

or because people think they have $138 billion, xp

http://money.cnn.com/news/newsfeeds/articles/apwire/09235743f9eb618fcbc1e721444cd77b.htm

actually guys I'm responsible because my comment yesterday set off a flurry of mean-spirited unamerican shorting

not that i have anything invested in this question or anything

x-post -- You horrible man.

Forget shorting, I say it's time we start pantsing these motherfuckers

douchebags require swirlies

http://www.nytimes.com/interactive/2008/09/15/business/20080916-treemap-graphic.html

mouse-over fun!!

aren't the remaining two big banks relatively free of mortgage stuff, so only getting hit by temporary, shallow all-ibanks-are-in-trouble losses?

The problems have spread beyond mortgage stuff. Liquidation of Lehman assets and ensuing fallout will depress prices of a wide range of assets of the types held by Morgan Stanley and Goldman. Combine that with the very high leverage ratios that these institutions still have, and you have a recipe for trouble.

lol "mortgage stuff"

I would like to point out that I have been otm in this thread

re Tom's comments about yr parents laughing at your newly downgraded lifestyles, as your ILX Grandpa I would be laughing now if I wasn't rent-poor.

the girls call me AIG cuz I'm too big to fail

that's good

many rappers are now actively seeking words to rhyme with "mortagages", "derivatives", and "bailouts"

Morbius you live in NYC.

Nas: Wall street hustlas sellin collateralized mortgages
ghetto children be feedin on meager porridges

Sample: Isn't it ironic... dontcha think?

can you go back to worrying about your retirement plz

my competition gets cranky as stone-throwin' primitives
but they albums dropped just like lehman bros derivatives

thank you goodnight

suggest ban, xxxp

this works better

my competition gets cranky as stone-throwin' primitives
droppin' off the charts like lehman bro's derivatives

ban me now before I rhyme again

<img src="http://upload.wikimedia.org/wikipedia/en/f/f8/Young_Jeezy_-_The_Recession.jpg";>

tom, what grade level are you again?

http://upload.wikimedia.org/wikipedia/en/f/f8/Young_Jeezy_-_The_Recession.jpg

Goldman down 24%
Gold up 10%

http://finance.google.com/finance?q=gs+gld

no, that article is completely right, unless you have more than 100k in there

― akm, Wednesday, September 17, 2008 12:36 PM (1 hour ago) Bookmark Suggest Ban Permalink

What is my incentive for them to not fail vs. getting my money out and them failing? Also doesn't the FDIC not have enough cash to cover a WaMu failure and would have to wait for the gov to give them more? Fucking christ, you believe in FDIC?