It’s going to be painful.

But it’s going to be painful anyway.

This is literally the only thing I can think of that will honestly express the will of the general public. It’s the only weapon in our arsenal.

Right now approximately 50% of REVENUE at each of these major banks is going to massive bonuses and billion dollar employee payouts. The executives are looting these institutions, just hollowing them out, stealing from the shareholders with opaque accounting tricks and MASSIVE payouts to themselves in terms of bonuses. Nine banks are going to hand out 90 BILLION dollars in employee compensation and bonuses THIS YEAR ALONE. Giving them more money just lets the game continue a little longer.

The fact that the bailout money was given without any meaningful curbs on employee compensation or bonuses PROVES that Paulson is as corrupt as the rest of them.

For those who do not understand that the Fed has been pretty prudent, all things considered, throughout this catastrophe, recall that Fed swap lines are extended on a short term basis to major solvent central banks.

Those lines are being sterilized. To ask for the Fed to ALSO bring toxic third world central banks on to their balance sheet is a recipe for catastrophe.

Why was Rogoff’s warning about the risk to central bank balance sheets so quickly forgotten?

Paulson is a fool, only interested in making it a better world for Goldman.

The Fed is playing its cards, although they are limited, rather well.

AIG is just one small case in point of how the Fed does things far more competently than the clowns at Treasury.

These words will be soon forgotten among the pitchfork crowd of knee jerk Fed bashers and Ron Paul types.

That does not make them false.

Matt Dubuque

Courtesy of my state’s early voter program, yesterday I voiced my full displeasure at ALL my Congressional incumbents, and from the numbers of early voters (5% of the state total # of voters so far), there’s a LOT of unhappy voters out there…

Sad but true. The kleptocrats will be the last to suffer.

But the really sad thing is that, if this thing unfolds as it did during the 1930s, that will be the “good” outcome. Things could turn out much worse than that.

You could try Armand van Dormael’s detailed history of it, or look at the coverage in the bios of Keynes (Skidelsky, Moggridge), or Markwell on Keynes and International Relations, or Horsefield, or…

There are striking siilarities, as well as obvious differences, with ‘last time’

Bear this in mind, though. We are now entering Year Two of what shapes as a five year financial crisis. In both the 1929 event and in the 1989 event in Japan, it was only several years in that the lies, evasions, old boy choke chains, and politician son the payroll finally buckled under serial insolvency, to put the public somewhat more in control of the process of resolution. The US banks were still lying and stealing with their pens in _1934_ before a more activist Congress finally wrote them a different ticket. We will see something like that now, too, I think. It will take several seasons of hidings on the hustings for Our Public Servants to get on top of this, and to begin curing the hide of the Nine Wide Boys and their ilk rather then tenderly kissing it nighty-night. We have LBO ASBs imploding; another bailout. Commercial Re imploding; another bailout. When T-bills jack up their rates, as they must under any currency realignment, we’ll have a major bond bust; another bailo—Wait! Stop! TIME OUT! . . . Of course, by then, most of that first $125B and probably the second $125B will have been syphoned off in dividends and sweetheart share puts to the Guvmint (wait for it, it’s coming, at least in concept) by present stakeholders, but this may be the price we have to pay for our venal complacency as a citizenry. *blecchhhh*

Don’t bother with pitchforks: Whenever you see a senior banker or public financial official, throw your shoes at them. Greed is NOT good for children and other growing things.

Any government bailout should be accompanied by:

1/ Suspension of dividends
2/ Suspension of bonuses

Everyone notices, of course, that the government’s injection into GS and MS don’t even pay for this year’s bonus pool.

Bank hands over piece of paper that says “Preferred Stock” on the top: “X Billion”, “Pays 5%”.

Treasury hands over piece of paper that says “Treasury Bond” on the top: “X Billion”, “Pays 5%”.

Now, what happens down in the Accounting Departments? Treasury books Bond as a liability, Stock as an asset. No net change to the balance sheet or the budget.

Bank books Stock as a liability, Bond as an asset that goes 100% to regulatory capital, effectively curing the solvency problem caused by the introduction of FASB Rule 157 (mark-to-market) on Nov. 15 2007. No net change to the balance sheet.

This a case of one regulatory agency (Treasury) throwing on a blowout patch to fix a bonehead move by another regulatory agency (FASB). With a little luck, this won’t cost the taxpayer a nickel.

This, by the way, wasn’t a Treasury idea: the Brits came up with it.

Far more worrisome is people with no insurable interest collecting on CDS’s.