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If money isn’t loosened up, this sucker could go down,” President Bush declared Thursday as he watched the $700 billion bailout package fall apart before his eyes, according to one person in the room.

In the Roosevelt Room after the session, the Treasury secretary, Henry M. Paulson Jr. literally bent down on one knee as he pleaded with Nancy Pelosi, the House Speaker, not to “blow it up” by withdrawing her party’s support for the package over what Ms. Pelosi derided as a Republican betrayal.

“I didn’t know you were Catholic,” Ms. Pelosi said, a wry reference to Mr. Paulson’s kneeling, according to someone who observed the exchange. She went on: “It’s not me blowing this up, it’s the Republicans.”

Mr. Paulson sighed. “I know. I know.”

Gangsters in Suits

And so a day which commenced with such optimism, as Our Great Leader met with the leaders of Congress, including the two candidates to take his office, trying to jam through a let’s-have-a-fascist-state “deal” to salvage Wall Street, came to tatters apparently, thanks to none other than stalwart Republicans, who, for a big change, are having none of this big government “socialist” stuff.  Mainly in this election season all ears are to the rumbles of the voters, who have it seems made clear that bailing out the red-tie gangster seen above (former Goldman Sachs CEO wallowing in a mere 718 million in pay-offs from them, of course but a tiny bit of the $65 BILLION which Wall Street has issued to its own in “bonuses” in the past 3 years [talk about a heist!]) is not exactly on their wish-list.  How this will play out we wait to see in the coming days and weeks: will the Republicans, to whom most if not all the responsibility for this scenario belongs, find themselves totally snookered if the economy completely crashes between now and Nov 4, blamed for not making a deal, for making the mess, for who knows what?   Or will somehow the blame-game shift to the Democrats who in my view seem all too eager to embrace this Wall Street bail-out, masked though it might be with a few caveats about golden parachutes and CEO pay levels, and letting The People share ownership of these ravaged companies whose balance sheets are evidently in the negative world (such a deal guys !)

Anyway at the very least we can say it does make for scintillating reading as this wobbly repeat of history plays out not as tragedy (that’s coming later) but as farce.

Meantime back at the ranch:

Government Seizes WaMu and Sells Some Assets

Now admittedly against the backdrop of the days events this might slip by, a minor blip.  But it isn’t, it’s just another sign that “the system” is hollow.  WaMu, otherwise known as Washington Mutual, is the biggest Savings & Loan in the country (remember the Keating Five, one of whom is running for President now & that S&L collapse) with (allegedly) 307 billion in assets, though apparently whatever those are they are so um intangible, that Uncle Sam seized it, and promptly sold it to JPMorgan.  Hmmm.  The government seizes an outfit alleged worth almost half the humongous deal its trying to foist on the taxpayer, and sells the alleged assets to JPMorgan, one of the ever diminishing major banks left on its feet.

Washington Mutual is by far the biggest bank failure in history, eclipsing the 1984 failure of Continental Illinois National Bank and Trust in Chicago, an event that presaged the savings and loan crisis. IndyMac, which was seized by regulators in July, was a tenth the size of WaMu.

Actually this is worse than it sounds, but for detail see this.

And meanwhile, back at the ranch:

China banks told to halt lending to US banks

Uh oh.

George, there’s some brush that needs cleaning, and Air Force One is waiting.  Better go now before the impeachment hearings start…..

And then this item:

During testimony before the House Budget Committee, Peter R. Orszag — Congress’s top bookkeeper — said the bailout could expose the way companies are stowing toxic assets on their books, leading to greater problems.

“Ironically, the intervention could even trigger additional failures of large institutions, because some institutions may be carrying troubled assets on their books at inflated values,” Orszag said in his testimony. “Establishing clearer prices might reveal those institutions to be insolvent.”

What a great logic, though I guess one to expect from a Congressional office – gee guys, we don’t want to look too hard because, well, then people might see that there’s no there there, like Gertrude said about Oakland.  And if the people (whom you serve) knew the god awful truth, it’d make things a lot worse because things are a lot worse.  So let’s keep it under wraps.

Or how America ended, not with a bang, but a whimper…


  1. Bail out didn’t pass. More Republicans voted against it that Democrats. And we’re still standing. Not wearing sackcloth and ashes yet.

    While our attention was diverted by this con, er, scheme, er, proposal, the Senate granted the Defense Dept, overwhelmingly, I might add, a $612.5 billion defense spending bill for fiscal 2009, including $70 billion for operations in Iraq and Afghanistan. Man, we are loaded, eh?

  2. even though great(er) depression 2 is now upon us this seems to be “good” news. At least it mitigates the frightening possibility of hyperinflation. Or at least slows down it’s coming. I’m thinking we dodged a bullet, but we are still very wounded. Perhaps whoever proceeds Bush will now be forced to reign in all that military spending. As things get rough at home it’s gonna be hard to justify spending all that to chase a middle eastern boogey man. ehh, maybe not.

    Monday September 29th is a historic day. The day the ponzi scheme that was the American economy for decades was finally exposed.

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