Apparently Dodd and Pelosi decided not to take the offer of “protection” from recessions as it was. At least a bit of pushback…

Paul:
I was in a CA. WaMu branch last week helping a client empty their safe deposit box. I pulled out all of the cash two months ago. The teller counter was covered with flyers announcing 5% yield, one year, CD’s. I think your 7%/six month estimate might be a little low.
Earl

Indeed. It’s starting to remind me of that scene in Blazing Saddles when Sheriff Bart rode into town to find all the townspeople’s’ guns angrily pointed at his head. Reduce…

As in the movie, Paulson’s responding to the crowd by pointing a gun at his own head, swearing that if anyone makes a move against this bailout plan he’ll shoot the economy, while shrieking “Do what he say! Do what he say!” out of the corner of his mouth on all the Sunday talk shows.
Via politico
plschwartz

In this day of super-quick-sand descent, 09-21-08, a day of infamy beyond any other, a trivial question comes to mind. What will the bail-out-ees pull out of their “you know what’s” and offer up to Hank’s TARP. My guess is all of their, “off balance sheet” toxic waste that has been heretofore “legally” hidden from public view much less considered to be important by what we used to call “regulators”.

My guess is that this amount will be in the $1.5 trillion range, if we’re lucky, before we even get to the $850 billion, again “if we’re lucky”, that Hank-en-Gang are estimating to be “on balance sheet”. And please, don’t even go down the rat hole about “how can you offer up something that you don’t even own.” The rule now is “There are no rules” much less that old fashion thing called “Laws”.

Earl
On the Beach, and getting ready to swim to Japan.

It is more “shakedowns-for-gansters 101″ of course.

I can imagine Bernanke and Paulson going to visit Dodd and Pelosi and opening

“Nice plush office you keep here, senators. Wouldn’t it be terrible if some mob came here to smash it all because you didn’t hire us for “protection” against recession? It is going to cost you only 700 billions of other people’s money.”

Then Pelosi and Dodd look scared, bark “Yes, Yes”, and the next day Bernanke says “Oh well, we could have asked for more” and Paulson replies “we still can do that”.

Second meeting: “you know senators, your party’s nice election campaign. Wouldn’t it be a very sad accident if it went horribly wrong? Well, it turns out that if you want our “protection” you got to add also add some little extras…”.

then it moved into a general foreign component, after all they have an effect on the US too, and a far broader potential selection of paper assets.»

That means that the Congress rolled over and barked “yes, yes”.

The tactic is part of negotiation-for-gangsters 101: first you hit them with an outrageous request, and if they say yes, then you ask for more, because that means that you did not ask enough and they are desperate.

It should be obvious that once again this is a bait and switch. MS and GS are no longer investment banks, folks, they are regular banks (the switch). Now you can feel confident that they and the financials are sound (the bait). Simply put, Paulson has known all along how bad the financial crises really is, and is once again misleading everyone. He is delaying until he can dump it on a new administration and fade to background, just like Greenspan.