New York to Regulate Credit Default Swaps - NYTimes.com

More truth revealed about the true nature of the crisis - not just tied to bad loans, but to bad derivative and credit default swap plays by the very big institutions... This problem was not caused by main street, but by wall street.

New York to Regulate Credit Default Swaps - NYTimes.com: "In an interview Monday, Mr. Paterson added that credit-default swaps were “the real problem with A.I.G.”

“When we peeled back the onion, we found out that A.I.G. had so many credit-default swaps that we couldn’t calculate how much money they probably had wasted,” he said.

Last week, Mr. Paterson’s administration allowed A.I.G. to borrow $20 billion from its own subsidiaries to help bolster its capital, not long before the federal government announced an $85 billion bailout. The credit crisis is expected to weigh heavily on New York, which derives a fifth of its tax revenue from Wall Street.

Officials at the Federal Reserve and the Treasury Department had no immediate comment on the governor’s plan, or on his call for federal regulation. Ben S. Bernanke, the Federal Reserve chairman, is scheduled to testify before Congress on Tuesday, and credit-default swaps are likely to be on the agenda.

The governor said the state’s insurance department would begin regulating credit-default swaps as insurance products in cases where the buyer of the swap also owns the underlying bond it is meant to back.

In those cases, only licensed insurers will be able to issue credit-default swaps. New guidelines will also increase minimum capital requirements and the reserves that"

Ron Paul has nothing good to say about the Wall Street bailout plan | Top of the Ticket | Los Angeles Times

If only Paul had won the election...

Ron Paul has nothing good to say about the Wall Street bailout plan | Top of the Ticket | Los Angeles Times: "WOLF BLITZER ('Late Edition' host): What do you say to the president who wants you and your fellow Republicans and Democrats to quickly pass this $700 billion bailout package?

PAUL: Well, I think that's a mistake because we don't have the money. But that doesn't mean you have to do nothing. I mean, we could reform the system. We could return to sound money. We could balance our budget. We could change our foreign policy. We could take care of our people at home. We could lower taxes.

There's a lot of things that we can do. But the worst thing that we can do is perpetuate the bad policies that gave us this trouble in the first place, and that is that we no longer, over the last quite a few decades, believed in free-market capitalism. Capital is supposed to come from savings. We're supposed to work hard and save."

$800 Billion for RTC 2.0 - Then What? - Seeking Alpha

$800 Billion for RTC 2.0 - Then What? - Seeking Alpha:

I say you are so right on - I have been drawing the Japan connection for some months now. We are repeating history - and have not learned from it. So disappointing.


"The government, in fact, may inhibit the repair process if it endlessly delays the attainment of the clearing price within the economy. This is what happened in Japan, and why many have made the Japanese analogies to America today.

In fact, one could make a cogent argument that we are in this mess because the government never allowed market prices to clear after the collapse of the Tech Bubble. By inflating our way out of the tech collapse, we avoided taking the medicine we needed to clear out the excesses in the economy. The secondary and tertiary after-effects of these policies created an even bigger asset bubble and more daunting problems in the economy, which almost certainly would not have happened had the Federal Reserve not kept interest rates so low and the government not run enormous deficits. It is easy to be an arm-chair critic in hindsight, but by not taking our medicine, we merely delayed the inevitable and made the problem worse.

Similarly, If RTC II delays the attainment of the clearing prices within the mortgage and housing markets, economic growth will be slow at best and possibly delay and damage the economy at worst."

Ron Paul blasts the Bailouts

A drug addict getting a fix - prolonging the addiction to easy money.

http://www.cnn.com/video/#/video/politics/2008/09/19/ron.paul.bailouts.cnn

MUST READ: Important News

OK - the secret is out of the bag - the secret behind the collapse is not HOUSING, but the DERIVATIVE market: read this one!!!

OpEdNews » It's the Derivatives, Stupid! Why Fannie, Freddie and AIG Had to Be Bailed Out: "What had to be saved at all costs was not housing or the dollar but the financial derivatives industry; and the precipice from which it had to be saved was an 'event of default' that could have collapsed a quadrillion dollar derivatives bubble, a collapse that could take the entire global banking system down with it."

Send the phony paper money companies down the toilet.

Would a Resolution Trust Corp.-type solution work? - Los Angeles Times:

"Today's troubled securities are much more complex than the S&L assets, with valuations that may not yet have reached bedrock.

'They're very hard to account for and their value is still a moving target,' said Michael Greenberger, a law professor at the University of Maryland and a former official at the Commodity Futures Trading Commission. 'Creating a bureaucracy that takes paper that has no value and tries to sell it is just going to look like more smoke and mirrors.'

Because the assets are not already in government hands, as was the case with the RTC's portfolio, the new agency would have to acquire them from their troubled owners, presumably at a discount price. This would probably force the sellers to record the sale as a loss -- exactly the outcome that many banks and investment houses have tried to avoid. Any overvaluation by the government buyer would mean a potential loss for taxpayers, which would be politically explosive."

Not on my back you don't!!!

Buffett's time bomb goes off on Wall Street | U.S. | Reuters

Buffett's time bomb goes off on Wall Street | U.S. | Reuters: "credit default swaps are turning a bad situation into a catastrophe"

I always thought these were a bad thing. They can't easily be understood and are just asking for trouble.

"This is the derivative nightmare that everyone has been warning about," says Peter Schiff, the president of Euro Pacific Capital at the author of "Crash Proof: How to Profit From the Coming Economic Collapse."

"They booked all these derivatives assuming bad things would never happen. It was like writing fire insurance, assuming no one is ever going to have a fire, only now they're turning around and watching as the whole town burns down."

USA becomes USSR: The Times of India

USA becomes USSR: $85bn bailout for AIG-Intl Business-Business-The Times of India: "WASHINGTON: Another week, another bailout. The United States of America (USA), for long the world’s capitalist preacher and role model, is taking on the characteristics of a United States Socialist Republic (USSR), following Washington’s $85bn takeover of American Insurance Group."

Nationalization is the stepping stone to a fascist government that has control over all your life.

Boo Hoo - they're shorting us...

Short them I say - all they have is paper $$ - they are part of the biggest lairs club ever, emperor with no clothes.

FT.com / In depth - Morgan Stanley in talks with Wachovia: "John Mack, Morgan Stanley’s chief executive, was said to be livid at the plunge in the share price. He contacted Hank Paulson, Teasury secretary, and Christopher Cox, Securities and Exchange Commission chairman, accusing short sellers of targeting Morgan Stanley and urging them to take action.

The SEC on Wednesday night said it would subpoena hedge fund managers who had traded in 19 financial institutions and require managers with holdings of $100m or more in certain securities to report their short positions every day.

In a memo, Mr Mack said: “There is no rational basis for the movement in our stock or credit default spreads...We’re in the midst of a market controlled by fear and rumours and short sellers are driving out stock down.”"

FT.com / In depth - America will need a $1,000bn bail-out

FT.com / In depth - America will need a $1,000bn bail-out: "America will need a $1,000bn bail-out

By Kenneth Rogoff

Published: September 17 2008 19:06 | Last updated: September 17 2008 19:06

One of the most extraordinary features of the past month is the extent to which the dollar has remained immune to a once-in-a-lifetime financial crisis. If the US were an emerging market country, its exchange rate would be plummeting and interest rates on government debt would be soaring. Instead, the dollar has actually strengthened modestly, while interest rates on three- month US Treasury Bills have now reached 54-year lows. It is almost as if the more the US messes up, the more the world loves it."

More to come.

FT.com / In depth - Panic grips credit markets

FT.com / In depth - Panic grips credit markets: "All thought of profit was abandoned as traders piled in to the safety of short-term Treasuries, with the yield on three-month bills falling as low as 0.02 per cent – rates that characterised the “lost decade” in Japan. The last time US Treasuries were this low was January 1941."

I called the match to the Japan slump. Time to pay the piper...

Fed will lend money for stocks.

Bloomberg.com: Worldwide: "The Federal Reserve also said it will be willing to lend money in return for a wider array of collateral including stocks."

What? The fed lending money for Stocks - are you kidding me - outrageous!!! OK, I've got some stocks that I would like some $$ for. Oh, the stocks are now worthless - hhmmm, what to do? Taxpayer bale out.

So it's gone from treasuries, to mortgage bonds to stocks...

No Golden Parachute

Ousted Fannie, Freddie CEOs Could Still See Big Paydays - washingtonpost.com


Tell them "NO" - no golden parachutes for the executives that helped lead these institutions to government bailout.

The severance packages could be worth as much as $14.9 million for Richard F. Syron, the former Freddie Mac chairman and chief executive, and as much as $9.8 million for Daniel H. Mudd, the former Fannie Mae chief executive, said David M. Schmidt, a senior consultant for the executive pay consultancy James F. Reda & Associates.

Please - Open the Debates!

Why should the PDC (Presidential Debate Commission) be allowed to choose who the USA see in the debates? This is a partisan entity.

Wiki:
The Commission on Presidential Debates (CPD) was established in 1987 by the Democratic and Republican parties to establish the way that debates between candidates for President of the United States are run. The Commission is a non-profit, 501(c)(3) entity as defined by Federal US tax laws, funded entirely by corporate contributions.

The Commission is headed by Frank Fahrenkopf, a former head of the Republican National Committee, and Paul Kirk, a former head of Democratic National Committee.

http://en.wikipedia.org/wiki/Commission_on_Presidential_Debates

Do you ever think we will see real change if this is the group that decides who has access to the media.

Look at what happened with Jesse V when he got in the debates - he went from 10% to winning.

OPEN THE DEBATES!!!