Zed? What comes from insomnia.

Paul Krugman’s column this morning lays out the big picture of the unfolding bank crisis. It’s for real; not just your garden variety liquidity crisis, which is what the Fed is set up to handle, but a solvency crisis, which is to say that money has been lost big time, but no one knows for sure which financial intermediaries are holding which proportion of the losses. He conjectures 20 million persons will show negative net worth on their homes once the adjustment in housing prices has worked itself out, and since most American’s net worth is in their homes, that means millions of people will be technically bankrupt. The situation isn’t just serious; it’s catastrophic.

I can’t believe this guy didn’t get a chance to run Iraq for a while too.

Oh, jeez, watch out… There’s still time, you know…. What a horrifying thought.

Greenspan again rejected criticism that his policy actions helped to feed a housing boom that eventually went bust. Critics say Greenspan held interest rates too low for too long after the 2001 recession.

To have prevented such euphoria in housing that fed a bubble in prices, Greenspan said the Fed would have had to jack up interest rates so high that it would have damaged the economy. “That would have broken the back of the economy, and brought the housing boom down,” Greenspan said.

Hello? Earth to Alan, Earth to Alan: You lowered interest rates so much that people who had no business buying one house ended up buying 4 or 5. Forgot the mention that didn’t you, bubby? Better to have had a mild recession back when this whole thing was getting started than to face what we’re, in all likelihood, facing now. Yeah, right, not your fault. It’s Clenis fault.

“That would have broken the back of the economy, and brought the housing boom down,” Greenspan said.

Been there; done that. :-(

Marion & TCU -

Thanks from downstairs!

You’re most welcome! That’s a favorite site of mine, and I’ve gotten lots of really good ideas and recipes from it.

Morning everyone. The snow has been cleared away here in central NY and we’re back to normal. At least, until tomorrow.

Krugman’s blog is full of good stuff too:

Krugman’s blog

The most recent entry has the scoop on who benefited from W’s tax crap. (As if we don’t already know — but he cites source material.)

1987 Crash, 1998 currency crisis, LTCM, dotcom bust, housing / credit crisis–this guy is a genius!

Oh, jeez, watch out… There’s still time, you know…. What a horrifying thought.

The dude’s refusal to shut up since the credit shitpile began to fume makes it seem he’s auditioning for something like that.

Greenspan is the firefighter who commits arson so he can be a hero putting out the fire.

But its all okay because the housing boom was just another front in the war on terra.

A diary at Kos says that Reid is setting us up on the FISA bill. Through some parliamentary shennanigans, the ‘no immunity’ bill will require 60 votes. The ‘immunity’ bill will only require a majority. Or something like that. This trickery is complicated. Read it yourself. What do you all think?
http://www.dailykos.com/story/…..132/421925

Greenspan is the firefighter who commits arson so he can be a hero putting out the fire.

But, when does the hero part start?

Buenos dias!

I’m EPU’ing Marion in Savannah for the oh-so-relevant Krugman column and because maybe someone here wants a cranberry pecan muffin.

Good morning, pups. Let us all give thanks — David Brooks is off today. Mr. Krugman is alone in the Times, and he says anyone who expects the Federal Reserve or anyone else to come up with a plan that makes the current financial crisis just go away will be sorely disappointed. It’s not a happy picture he paints…

http://mgpaquin.wordpress.com/

The coffee, tea and hot chocolate are ready, and I’ve got some cranberry pecan muffins just out of the oven. Have a good Friday.

OT comment but what about FISA!!!

I just heard that Reid is going to screw us over on telecom immunity and I was searching for numbers to call and haven’t found a thing…argh.

Also, I wanted to be sure that Dodd et. al. are going to object (i.e. filibuster) this ratf*ckery…

Here are the numbers Christy posted:

Sen. Harry Reid — (202) 224-3542 FAX 202-224-7327

Senate Judiciary Committee Contact Information:

Every Senate direct dial number can be found here (including links to just about every senator’s web page, which include both DC office contact information and local office numbers as well). You can reach your Senators toll free thanks to these numbers that katymine found:

1 (800) 828 – 0498
1 (800) 614 – 2803
1 (866) 340 – 9281
1 (866) 338 – 1015
1 (877) 851 – 6437

Also, the Senate Judiciary Committee membership and contact information is as follows:

Arlen Specter – Pennsylvania – (202) 224-4254 Fax (202) 228-1229
Joe Biden — Delaware — (202) 224-5042 Fax: 202-224-0139
Orrin G. Hatch – Utah – (202) 224-5251 Fax (202) 224-6331
Patrick J. Leahy (Chairman) – Vermont – (202) 224-4242 Fax (202) 224-3479
Charles E. Grassley – Iowa – (202) 224-3744 Fax (515) 288-5097
Edward M. Kennedy – Massachusetts – (202) 224-4543 Fax (202) 224-2417
Jon Kyl – Arizona – (202) 224-4521 Fax (202) 224-2207
Herbert Kohl – Wisconsin – (202) 224-5653 Fax (202) 224-9787
Jeff Sessions – Alabama – (202) 224-4124 Fax (202) 224-3149
Dianne Feinstein – California – (202) 224-3841 Fax (202) 228-3954
Lindsey Graham – South Carolina – (202) 224-5972 Fax (864) 250-4322
Russell D. Feingold – Wisconsin – (202) 224-5323 Fax (202) 224-2725
John Cornyn – Texas – (202) 224-2934 Fax (972) 239-2110
Charles E. Schumer – New York – (202) 224-6542 Fax (202) 228-3027
Sam Brownback – Kansas – (202) 224-6521 Fax (202) 228-1265
Richard J. Durbin – Illinois – (202) 224-2152 Fax (202) 228-0400
Tom Coburn – Oklahoma – (202) 224-5754 Fax (202) 224-6008
Benjamin Cardin — (202) 224-4524 Fax (202) 224-1651
Sheldon Whitehouse — (202) 224-2921 FAX (202) 228-636

Thank you!!

Alan Colmes on Imus this morning saying he supports Edwards. And makes an excellent overarching marketing point–why should the party that created this mess we’re in [his ref directly to Iraq, but highlights the BushCo pattern] be rewarded with wins in 2008?

To which I’d add re your posting, Attaturk, why should they be rewarded with wins now?

Greenspan: arsonist & firefighter.

I actually have a holiday card from him & one of my reports that he sent back with handwritten corrections.

“”Whatever I did, it’s not my fault.”" LOL! Isn’t that what four year olds say?
Andrea doesn’t need a blow to the head. The botox seems to paralyze inside as well as out. One time I saw her and a bit of her bangs was stuck on her eyelashes and moving every time she blinked and she did her whole spiel like that. I figured she couldn’t feel it to brush it away.
Funny, weird, mummyish, sad, our state owned media.

Glenn Greenwald says this morning that Senator Dodd is on his way back to Washington to honor his filibuster pledge. I just posted on the chrisdodd.com blog that I will make another donation to the Dodd campaign when he takes the floor to filibuster.
I agree with your call to action to pressure Reid not to pull his dirty trick.
However, I would point out to Elliott that we are talking about a floor debate in the entire Senate, so we need to contact anyone who might possibly join the 60 we need to remove retroactive immunity or the 40 we need to join with Senator Dodd in voting against cloture on the flawed bill.

I actually have a holiday card from [Greenspan] & one of my reports that he sent back with handwritten corrections.

The man actually reviewed other economists’ work and returned it with corrections unbidden? He must have had a lot of time on his hands. Did the corrections have any merit in your opinion?

re: fisa – i just left a comment at emptywheel on glenn greenwald excellent (as always) post this morning.

Is the FISA debate going to happen today? If so, everyone better get back to Washington, not just Dodd.

Former Federal Reserve Chairman Alan Greenspan says the odds the U.S. will fall into a recession are “clearly rising” and he believes economic growth is “getting close to stall speed.”…

what KIND of morons they THEY think WE are?

the “odds are rising”

HEY, IDIOT, WE ARE IN A RECESSION, THEY ENITER PLANET KNOWS WE ARE IN A RECESSION, IT’S BEEN GOING ON FOR YEARS

holy crap, where do THESE guys get that kind of brazen NERVE?

the ONLY growth has been among the wealthiest corporations and wealthiest people on the friggin planet

THAT IS NOT GROWTH IDIOT!!!!

from glenn:

There are two key objectives for today: (1) do as much possible to pressure Reid to honor Dodd’s hold and (2) do as much possible to encourage the presidential candidates and others to actively support Dodd’s filibuster, not merely in a cursory way, but through authentic leadership.

We also need to pressure Reid to honor Dodd’s hold. The Intelligence Comm. bill shouldn’t f’n see the light of day. I’m so livid right now. Tried to call Reid but got a full voice mailbox.

Is the FISA debate going to happen today?

looks like the debate will start today. see my comments in emptywheel’s thread (from yesterday and today – i posted there yesterday when i heard reid on the senate floor explain what he intended to do).

if you like, i will post a summary here in a few minutes.

Glenn Greenwald says this morning that Senator Dodd is on his way back to Washington to honor his filibuster pledge. I just posted on the chrisdodd.com blog that I will make another donation to the Dodd campaign when he takes the floor to filibuster.
I agree with your call to action to pressure Reid not to pull his dirty trick.
However, I would point out to Elliott that we are talking about a floor debate in the entire Senate, so we need to contact anyone who might possibly join the 60 we need to remove retroactive immunity or the 40 we need to join with Senator Dodd in voting against cloture on the flawed bill.

Thank you for pointing that out. Senators can be reached using the numbers for the Capitol switchboard from katymine.

The monstrousness of the pursuit of knowledge

Rather than relying on physical descriptions, U.S. forces could scan a suspect’s eyes or check his fingerprints — and instantaneously cross-check it with data stored in West Virginia — before deciding, in Duong’s words, “Do I let him go? Keep him? Or shoot him on the spot?”

Thanks, Selise. Again.

Once we cut thru all the claptrap spinning out of BushCo it will be learned that every single number cited by anyone in their administration has been a Lie. Do you believe numbers coming out of the Labor Dept? Out of the Pentagon? Out of any of these SOBs [sycophants of Bush]?

Folks, America’s been Enronized. The big boys will bail with the Golden Parachutes. While the rest of America get empty Christmas stockings.

No, the correction was a petty quibble about the way I described the data. Technically he was accurate, but it was irrelevant to the argument I was making. It was around 1996 and the subject was productivity, which was of great interest to him at the time, and probably why he read it with such care. Still, I had your same Q: Soesn’t he haove anything better to do with his time?

Yep, I’m foaming at the mouth trying to wait until someone will be in the office to answer the phone. It will be a chore, but I do intend to remain civil while I politely suggest that Senator Reid step down as Majority Leader if he refuses to lead on this important issue.

you’re welcome.

i also posted the info (from reid’s floor statements, for example) here yesterday, but no one seemed interested.

oh good – i see scarecrow is on it… with a post up now. i’ll move to the next thread to see if there is anything i can add.

Once we cut thru all the claptrap spinning out of BushCo it will be learned that every single number cited by anyone in their administration has been a Lie. Do you believe numbers coming out of the Labor Dept?Out of the Pentagon? Out of any of these SOBs [sycophants of Bush]?

Folks, America’s been Enronized. The big boys will bail with the Golden Parachutes. While the rest of America get empty Christmas stockings.

NO!

my bold

Do you believe numbers coming out of the Labor Dept? Out of the Pentagon? Out of any of these SOBs [sycophants of Bush]?

No.

Capitalism uses ponzi schemes to move wealth from the workers and the poor to the non workers who own things.

Getting them to buy on credit… anything provides two types of capitalists wealth. The owners of production and those who “sell money” – credit.

Everyone who buys on credit including their home is participating in the ponzi scheme of moving wealth to the capitalist slackers.

It’s one scheme after the other to get people to try to enter the “make money for nothing” class calling these investments. People want to retire… the middle and upper class do. The poor work till they die. And to retire you need money without work. You save or you invest another way to get money into the capitalist class. Pensions and investments.

WAKE UP.

Folks, America’s been Enronized.

bingo

Everyone who buys on credit including their home is participating in the ponzi scheme of moving wealth to the capitalist slackers.

on this I disagree

there will be inflation that mimics or exceeds the vietnam days

as far as i can see, take as much debt as you can carry at reasonable rate

that rate is going to be lower then inflation in a very short while, buy your assets now, buy your bussinesses now, do not buy stock now though

if you can get a house at depressed price with bargain long term loan, especially if it’s positive income, that’s the way to go

Pensions are great, but they too are a Ponzi scheme. How can a company have enough money to pay its retired workers if that number keep growing? Where will all the money come from? One is to invest it so that it grows and the other is to reduce the number receiving benefits or reduce the benefit or simply eliminate it.

Companies cannot provide decent pensions because they are extracting too much profit and paying management too much. Nothing new about that.

So they go bankrupt, wipe off their obligations are shielded from suits and carry one with a leaner more subservient work force and profits are soon flowing again. Isn’t that the way it works?

Watch the foreign markets. Those folks, I think, “get” the seriousness of what’s happening right now. I have long thought the US market is being manipulated. And thank goodness they never got ahold of people’s Social Security money to “disappear” that with money management fees etc.

I have a sense the economic debacle will assist in ‘bringing down’ this house of cards. But they are desperately trying to prevent that part from happening.

Thank goodness for Krugman! And so many trying to ferret out the truth.

those people that took equity loans at bargain basement rates that are not variable will have an asset boon when inflation takes hold

Perris,

The value of real estate, art, and money are completely illusory.

Enter at your own risk.

And the values of these and other markets are controlled and manipulated by others.

Take art. A totally greed driven market where the value of art is easily manipulated by a speculator bidding up the value of some artist he may own by making an an outrageous bid for a piece and all the others one shoot up in value as their value is PEGGED to the current market. Then dump some of the other pieces at enormous profit and on to the next pump and dump.

Real estate was/is a pump and dump that many players are making out, banks, real estate brokers, lawyers, mortgage lenders, builders, developers, even the tax collectors, schools which depend on assessed value taxes and the list goes on and on.

It’s all ponzi. It’s other name is capitalism.

The value of real estate, art, and money are completely illusory.

Enter at your own risk.

on art, I of course agree

on real estate, not quite

people have to live and the cost of living will have to neccessarily reflect wages

real estate values might burst, I agree, however so long as you are buying at an affordable rate for a house in your income range the price can’t really go lower then that by much…unless there is something that happens to the community to create an exodus

people should not have money right now is what I’m saying, In don’t know what assets to aquire, but cash is not it, I say carry as small a bank account as possible, buy on time at lowest rates as many assets as retain value as possible

hey guys, wapo NAILS IT

If Bush’s strategy is to drag Congress down to his low level of public esteem, he is succeeding brilliantly

BINGO

Congressional Democrats need a Plan B.

Republicans chortle as they block Democratic initiatives — and accuse the majority of being unable to govern. Rank-and-filers are furious that their leaders can’t end the Iraq war. President Bush sits back and vetoes at will.

worse, Democrats are starting to blame each other, with those in the House wondering why their Senate colleagues don’t force Republicans to engage in grueling, old-fashioned filibusters. Instead, the GOP kills bills by coming up with just 41 votes.

Of course if you buy in today’s dollars and at low interest rates and you have the income to support it you might be OK.

I moved out of Manhattan 15 years ago and can’t afford to move back there because of the inflated costs and it’s not just housing. All others costs follow on.

With fixed incomes or incomes that are not growing fast enough you simply slid down the economic hell hole and eat cat food at the end.

Your welcome!

You can perceive of the boom-bust economic cycle as collective manic- depression. By the same token capitalism can be perceived as psychosis in that those who “better themselves” are delusional in that nothing they accomplish keeps them from dying, just like the rest of us. The military-industrial complex needs wars to eliminate inventories that build up over time and when a boom cycle plays out, a war destroys enough stuff to give us something to rebuild. We will not break the cycle until we recognize the source of the disease, and perhaps not even then.

As for values, they are illusory. What makes a house two hundred thousand today and one hundred thousand tomorrow? Same for art, stocks and anything else you might mention. Banks today are writing off billions. Where did these billions come from and more importantly, where did they go? How many more billions can they write off before hitting the bottom of the barrel? What can the Fed do to meet the challenge other than print money? There will be pain, but something better than capitalism may come of it. Or not.

that rate is going to be lower then inflation in a very short while, buy your assets now, buy your bussinesses now, do not buy stock now though

I’ve been saying for at least six months that everybody needs to be in hard assets, not stocks & bonds. So, considering cash will buy less later, it does make sense to buy hard assets now and plan to pay them off with inflated dollars later. But, the banks aren’t dummies, so don’t bet on getting any bargains on borrowed money.

I still don’t suggest anyone should borrow money unless it’s very very necessary. Businesses, on the other hand, is pretty much a risk investment to start with, so they should be more willing & able to ‘invest’ now. Invest in working assets!

Companies cannot provide decent pensions because they are extracting too much profit and paying management too much. Nothing new about that.

So they go bankrupt, wipe off their obligations are shielded from suits and carry one with a leaner more subservient work force and profits are soon flowing again. Isn’t that the way it works?

That’s why I’ve been saying since the 1980s (when a lot of businesses went bust and people lost their retirement funds) that government needs to regulate how much businesses can extract in a time of need. It might even be wise to encourage more non-corp retirement savings — though politicians are loathe to encourage anything but buy buy buy economics.