Update on the chief looter and how the full trough (well he just wanted a large number) is still NOT making the market happy.  We knew it wouldn’t. Global fears snowball, Dow falls.

Paulson, the man who declared “the worst is likely to be behind us” in May 2008 – and then got down on his knees in front of Nancy Pelosi to pass a Mother of All Bailouts plan whose dollar figure was plucked from thin air. (“It’s not based on any particular data point,” a Treasury spokeswoman told Forbes.com. “We just wanted to choose a really large number.”)

Since when does Congress hold the belief that it can control the market?  On Moday, there was a 777 point drop and it happened after that vote.  They can not direct the Dow Jones Industrial average to go up or down based on how they vote.  Speculation that if they got the bailout, it would somehow infuse the market?  The market would have gone the other way had it not been for this interference.  Congress has ZERO control over capitalistic markets. They only control taxes. They can take more or less taxes.

Congress thinks they are more far more powerful than they truly are.  Today, we see more hands reaching out for more bailout.  There will come a time when you can no longer squeeze water out of the turnip.  Take heed.

Transcript interview Newt and Sustern

From the WSJ on the failure to pass the bailout:

Monday’s crash and burn of the Paulson plan on Capitol Hill reveals a Washington elite that has earned every bit of the disdain that Americans have for it. This crowd can’t even make sausage.The 228-205 defeat reflects badly on all concerned, starting with the Democrats who run the House. The majority party is responsible for assembling a majority vote, and Speaker Nancy Pelosi failed in that fundamental task.

If Mr. Paulson wants to be a statesman, he could offer a Plan B that avoids giving Treasury such a big blank check. Instead, he could propose more public capital for the Federal Deposit Insurance Corp., which would do more of the creative financial plumbing it has done over the last week. (See here.) This will have to happen next year anyway, and the FDIC has long experience protecting taxpayers for public capital injections through preferred stock and warrants.

At the same time, the Secretary could salvage his own proposal by promising that while Treasury would start the purchase of toxic securities from banks, he would quickly (within weeks) turn the process over to a new and separate resolution agency. Congress could make this part of the legislation. This would remove Mr. Paulson as the political lightning rod he has become, and also give the rescue process the political insulation it needs. Such an agency could also work closely with the FDIC to protect taxpayers.

Mr. Paulson should not receive a blank check.

(NYT) Article is quite revealing.

Although it was not widely known, Goldman, a Wall Street stalwart that had seemed immune to its rivals’ woes, was A.I.G.’s largest trading partner, according to six people close to the insurer who requested anonymity because of confidentiality agreements. A collapse of the insurer threatened to leave a hole of as much as $20 billion in Goldman’s side, several of these people said.

Correction: September 30, 2008
Because of an editing error, an article on Sunday about the financial problems of American International Group referred incorrectly to the timing and participants at meetings at the New York Federal Reserve between Saturday, Sept. 13, and Monday, Sept. 15. Although there were indeed meetings that weekend, there was also a separate meeting on Monday to discuss financial aid for A.I.G. Lloyd C. Blankfein, the chief executive of Goldman Sachs, was the only Wall Street chief executive who attended the Monday meeting, not the only chief executive who attended weekend meetings. Also, Henry M. Paulson Jr., the Treasury secretary, did not lead or attend the Monday meeting. (Both Mr. Blankfein and Mr. Paulson did attend the weekend meetings.)

Secretary Paulson MUST GO.  This is a LOOTING scandal that has yet to reach the average person.  If you want this bill to pass, Mr. Paulson MUST GO PERIOD.

Appearances are that you have allowed this man to loot the Treasury.  And you want him to have full control of the $700 billion without and restrictions?  This is a very BAD situation that must be changed.

Timeline Two Weeks Ago NY Federal Reserve:

  • Only one Wall Street executive was in the war room, and he was from Goldman Sachs (GS), the firm Paulson headed up before becoming Treasury Secretary.
  • Lehman, with whom GS did not have an overly large trading position, was allowed to go under.
  • AIG, with whom GS did have a large position, was handed an $85 billion handout.

The revolving door between Wall Street and the Treasury Department is too laden with conflicts of interest to be considered a good idea.  It smells.  If the Daily Kos can figure this one out with their simple analogy, Paulson is to Goldman Sachs as Cheney is to Halliburton, should transparency concern us at all?

More on where that figure came from: http://michellemalkin.com/2008/09/29/crap-sandwich-crap-numbers/