What happened to Fannie Mae / Freddie Mac / AIG was more a direct result of easy money low interest FED policy than anything else. Factoring in inflation our interest rates have been either %0 or even negative. See my article about the Rolling Liquidity Bubble.

We had 3 rapid succession booms. Internet / Real Estate / Oil. How does one explain this? unDemocrats have a neurotic hatred of oil so there’s probably a surfeit of regulation in that area. Yet oil boomed and is still relatively high at 100 US dollar per barrel.

What explains events? I think its effective 0% interest rates. When interest rates are too low people can afford to go lightly into them without the due diligence of intense worry. Money got slung around in excess. Momentum patterns set up in internet, housing and then oil. When the speculators see a momentum pattern if they have sufficient liquidity they buy in and reinforce that pattern. When you have excessive money supply a momentum pattern is bound to set up somewhere as people search for a way to increase their wealth. People have survival instincts. They do this naturally! You want people to be suicidal ???

Speculators speculate. That is what they do. Oh yes and you too are a speculator if you have ever bought anything for any reason. Thus it makes no sense to point fingers and say "Dirty low down speculators". It only makes you look like an IQ challenged liberal. It makes no sense to point your fingers at Barnie Frank and the unDemocrats. unDemocrats do what unDemocrats do and that is skim off the casino like the mobsters they are. There is only one form of regulation that prevents these speculative momentum patterns: Meaningful interest rates ! You want to stop the skimmers? Shut down the casino with meaningful interest rates. No politician is going to go for that option. It has to be forced upon them. The 70’s only gave way to the 80’s after interest rates shot up and put the game to an end. You can be assured that the current era of easy money will only end after the same sort of sequence.

Thus we play with fire if the terms of any of these gargantuan bailouts are too easy. Unfortunately Its not realistic for me to ask that the offending entities be left to go out of business as no one asks my opinion. If it were up to me their assets would be auctioned off to people with money. The people with money right now are the last men standing. They avoided the mistakes. Who better to entrust? The government? Please. That’s crazy talk.

In the mean time we are hamstringing our financial sensing apparatus by banning short selling. Most stock holders do not study companies intently. They buy the stock on the advice of someone they know. The options traders do us great favors by studying intently these companies. For if you are an options trader and do not do your homework you soon have a new profession.

But buying mortgages isn't an expenditure, it's an investment. If the government takes over existing mortgages, it has a right to receive payments made on them. That's not the same thing as paying for health care or similar expenses that have no promise of giving you a return on your money.

"Am I saying that the government shouldn't push through the bailout? No. It's pretty clear we were headed for economic disaster of historic proportions if we let the market collapse."

Yeah, it's really all about the money, Cadet, not our Constitution nor the sovereignty of the American taxpayer. Correction, taxslave.

We are like hens in a barnyard squaking for more corn. More corn! More corn! BaaaaaDaaaaak!

But only if we lay more eggs.

In case you're looking for a write-up of the current proposal being sent to Congress:

Treasury's Financial-Bailout Proposal to Congress

Of particular note is Section 8 of the proposal:

Sec. 8. Review.

Decisions by the Secretary pursuant to the authority of this Act are non-reviewable and committed to agency discretion, and may not be reviewed by any court of law or any administrative agency."

So, will this thing go through Congress with no debate?

Apparently, there are no limits to power - until the 'consent of the governed' is withdrawn. I, for one, withdraw my consent.

Heh - you know what would have made all those pictures better (apologies to Dr. Hibbert): Fire! And lots of it!
On the other hand, this is an unusually Democratic whine with this being a conservative humor website. What gives?

Now, if you'll excuse me, I need to Iron Some Shirts for work (which from my perspective has not been affected by this so called crisis) and watch NASCAR.

This is a terrible mess. But right now the only thing to to is pass the plan. If Congress decides to tinker and adjust for tiny advantage the panic will return.

The leaders of Congress should make a definitive statement before markets open.

Panic may return anyway. But it would be idiotic to make it certain. Given our Congress they probably will.

It is no means certain that the Democrats in Congress don't prefer the worst possible problems for the next six weeks.

Next, the way out is to set up another RTC and run it about the same way. A RTC cannot go broke. That gives it time to steadily and sensibly sell off assets and close its own doors.

A RTC will lose money. But that cannot be avoided now. In my heart I would prefer we also kill many politicians but that won't happen.

I figure the big O will, post-election, pardon his residential fixer and get Rezko busy managing all this new government-subsidized low cost housing. That way he gets electoral ammunition AND a major retirement income.

No money down, no required maintenance, no downside! Add to that, no media scrutiny, immunity to uncomfortable questions about profit motive or unsavory associations. This will be a sweet gig.

It says something about sexual intercourse in that Chinese sentence... I think Cadet Happy has a crush.

The obvious answer is to use what's left of our oil and treasure to go empire building. Small, worthless countries (pretty much everybody but the USA) have the choice of either being steamrolled and having all their resources seized, OR they can pay fat, fat, tribute to us in gold and/or oil to forestall us steamrolling them and seizing their resources.

I'll leave it to Frank to work out the details. He's good at that stuff.

In 2005 John McCain was on the floor of the Senate denouncing the bait and switch going on at Fanny-Mac and within the financial community, which was by the way spearheaded by top demoncrats as a way to gather more votes from those without the where with all to purchase a house.

There is NO constitutional amendment that gives people a right to buy a house. NO where does it say "Life, liberty and the pursuit of a house you can't possibly afford." Sorry, Nanny and Dingy Harry it just isn't in there.

Think of it this way -- thanks to the bailout of AIG, the US taxpayer is now the primary sponsor of Manchester United.

In another up note, I read that Bush sent Paulson in to explain the economy to the dems. Apparently, when he told them the economy is actually related to those pesky math classes they skipped on the way to the PhD in liberal arts, I heard they wet their pants collectively and offered to give him whatever he wanted. I've been wondering what they said to make the dems offer a no strings attached package? Maybe he explained the whole addition/subtraction thing to them?

I'd like to take this opportunity to nominate Frank J. for Secretary of the Treasury.

I would like to nominate Mickey Mouse as Speaker of the House. Since he doesn't talk much he'd be an improvement over the current speaker,and much better looking.

I'd also like to nominate goofy as Senate Majority Leader. He can't be worse than "Dingy Harry". At least he'd be amusing.