How broad, how flexible?

In the statement of the plunge protection team, TARP does not appear under the heading Liquidity, the purported reason for its design and passage, the plumbing problem to which it was sold as an (urgent!) solution. Instead it gets its own heading:

Strengthening Financial Institutions

Ah.

Strengthening Financial Institutions

The Treasury Department will move rapidly to implement the new authorities in EESA to help strengthen financial institutions that are struggling with troubled assets and/or need to raise capital. It will be done in a transparent and methodical fashion. In the coming days, Treasury will work with the Federal Reserve and other financial regulators to develop strategies that deploy these tools to maximize their effectiveness in strengthening the financial system while protecting the taxpayers' interests.

The new legislation adds broad, flexible authorities to allow Treasury to buy troubled assets and provide guarantees, and address capital raising. The new legislation also enables Treasury to directly strengthen the balance sheet of individual institutions. These authorities allow Treasury to act to remove some of the uncertainty regarding financial strength, and provide financial institutions with greater operating flexibility and enhance their ability to raise additional capital in the private marketplace.

So they got this legislation - hurry up before the frozen feces asteroid hits us!!!!!!!! - which prevented Congress from recapitalising the banking system or addressing the crisis in any constructive fashion (the Fed is going around the banking system entirely to keep favoured industry exploiting on schedule through the drought that allows the tarp to come into being: "In some ways what the legislation does is help facilitate consolidation" in the financial market), now they sit down and figure out what they can do with it, how to get around any obstacles in it while waiting for some banks to fail for GSax and Morgan Stanley to acquire for farthings found under their sofa cushions, some further discovery in 'toxic' asset related lawsuits, some political developments, some European taxpayer bailouts, some public forgetting....

Back in February 2007

"What you have at the SEC is people rotating from jobs where you make $180,000 a year into jobs where you make over a million," Aguirre tells the Guardian in an interview, on what he sees as a mutually back-scratching relationship between the regulator and Wall Street. "It's very friendly - it's a club. I'm here, I'm inside, now I'm outside, now I'm inside again.

"When the SEC starts playing favourites and they decide not to go after Wall Street elite and focus on small fry, then they're not focusing on the players that really impact the capital markets. It's not the penny stock dealers that could trigger a credit crisis in this country."

Aguirre's testimony. And here. (The "state attorney general" referred to by Aguirre is Spitzer and this.)

Iced

Iceland In Trouble. (Oh, they were commie unAmerican antiAmericans anyway so who cares.)

A Recap, PT. 1

The structured investment vehicle. Rated.

Some rules waived.

Then.

One year ago.

(The whole thing was illegal, btw)

And pointless.

A shell game.

And.

Then because.

(Financial institution shakedown impending.)

Then this thing.

Ibracadabra

Palinism Is Contagious

Senator Boxer "replies":

Thank you for contacting me regarding the financial rescue legislation (H.R.1424). I appreciate hearing from you on this critical issue.

The fundamentals of our economy have been shaken, and Americans are deeply concerned. When Secretary Paulson and Chairman Bernanke placed an urgent phone call a few weeks ago to Congress to say we needed emergency action to prevent a major financial meltdown, I expected they would come forward with a plan that was targeted and reasonable, with appropriate oversight and taxpayer protections.

Unfortunately, what they brought us was a $700 billion blank check, which they asked us to sign with no questions asked. This plan contained no oversight, no taxpayer equity, and no control over CEO pay. I strongly opposed this proposal - and thanks to your phone calls, e-mails, and letters, Congress stopped it in its tracks.

The Senate made major improvements designed to strengthen our economy and protect our taxpayers. Instead of a blank check, the Senate plan included significant Congressional oversight, equity for taxpayers, curbs on executive compensation, an increase in FDIC insurance protection for bank depositors, middle-class tax relief, and job-creating tax incentives for renewable energy. The bill passed the Senate by an overwhelmingly bipartisan vote of 74-25 and the House by a vote of 263-171.

These were very important changes. But let me be honest: There were still aspects of this package that I didn't like. I preferred the government acquiring more equity instead of toxic assets. I wanted the package to be put forward in smaller installments and to include more checks and balances to make sure it would work.

For me, the deciding factor in my Yes vote was information I received from the State of California. I was told by the Treasurer's office that without access to credit, which is the goal of this legislation, California wouldn't be able to sell voter-approved highway, school, and water bonds that are desperately needed for our economy and the creation of good-paying new jobs. In addition, I was told by the Governor's office, that without action, our state might be forced to withhold funds for law enforcement, schools, and other needed services. This would bring our state to its knees and many middle-class families would be in deep trouble. Small businesses are beginning to tell me they cannot get lines of credit to meet payroll, as well.

Rest assured, I will continue to speak out forcefully about the failures that led us to this place and keep working with my colleagues to strengthen confidence in our markets, protect the American taxpayers, and enact regulatory reform to ensure that we don't end up in this mess again.

Again, thank you for writing to me about this very important matter. Even though you may feel frustrated with the outcome of the legislation that passed, your voice absolutely resulted in the enactment of a better bill. Feel free to contact me again about any issue of importance to you.

Barbara Boxer
United States Senator

Another Effect

Beyond short attention span, the impression that the real world is divided like television into different channels and episodes, so that synthesis of information to form an understanding of the real world is hampered. (Indeed synthesising elements from the different discrete stories the media packages is derided as paranoid. You have to be psychotic to notice that currently unfolding events required the removal in advance of Spitzer from the New York State Governor's mansion just as the Enron caper end game required the removal of Davis from California's.) When asked on Democracy Now about the the case against Paul Kagame, and the assassination of the Presidents of Rwanda and Burundi which ignited the genocide, a US courtier intellectual responded with an almost comically overt insistence on this fragmentation; I don't think that's part of the same story. We can be sure not only that events in DR Congo, Iraq, California, Albany and Bolivia have nothing to do with those on Wall Street and in the City of London, but that separately reported events on Wall Street and in the City of London have nothing to do with one another.

So the $9 billion that Governor Grey Davis was in the process of recovering for California from Enron: the extraordinary recall vote and the conspiracy to place the high name recognition Schwarzenegger in his place to forgive Enron's fraud and plunder, is not figuring as part of the story of California's current problems, even though the figures are so close.

An Effect of Television

The impression that we see them and they don’t see us. So the legislators can say they were deceived by the Bush administration about Iraq, even though the public informed them, loudly and unequivocally. The impression they are sealed in a glass bubble, a virtual world different from ours. The perpetual irony of television, watching over the shoulder of the heroine as she enters the dark alley where danger awaits, deaf to our screams, somehow has carried over onto the public’s relation to politics, faintly, irrationally, so that now Congress can claim they did not understand the Bush bailout, although it was explained in all the daily papers and on the internet and by their constituents when they called and emailed; they had to deliberately avoid having any hearings, to avoid inviting economists, to avoid letting even members of the financial industry give opinions on the Congressional record, inside the reality tv scenario where it cannot but become part of the story, part of what they can be held accountable for knowing. They exist in the isolated pseudoworld of a television show which penetrates our living rooms while not being penetrated in return – a television show unaware of us, except to display occasionally a self-consciousness of being watched from another plane of existence.

It's Hard Work

NYTIMES:

Even after working feverishly over the last two weeks, the Treasury will not buy its first distressed asset from a bank for roughly six weeks, and almost certainly not until after the Nov. 4 elections.

Treasury officials do not plan to manage the mortgage assets on their own. Instead, they will outsource nearly all of the work to professionals, who will oversee huge portfolios of bonds and other securities for a management fee.


...The government will hire only a bare-bones internal staff of about two dozen people with expertise in asset management, accounting and legal issues, according to administration officials, and will outsource the bulk of the program to 5 to 10 asset management firms.

...The selected asset management firms will receive a chunk of the $250 billion that Congress is allowing the Treasury to spend in the first phase of the bailout. Those firms will receive fees that are likely to be lower than the industry standard of 1 percent of assets, or $1 for every $100 under management.

Administration officials said they would try to drive down fees with a competitive bidding process. But with $700 billion to disburse, the plan could still generate tens of billions of dollars in fees if the firms negotiate anywhere close to their standard fees.

The main mechanism for buying these assets will be reverse auctions, using the same principles that govern auctions of electricity or the wireless spectrum. In this case, the government will issue an offer to buy a class of assets — for example, subprime mortgage-backed securities — with the final price being determined by how many banks are willing to sell.

...The Treasury officials said they were still writing a policy on conflicts of interest as well as guidelines on compensation.

As if the mechanics were not daunting enough, Treasury officials need to make wrenching decisions that will determine the bailout’s winners and losers. With so much money on the line, lobbyists for interest groups are already besieging the government to decide in their favor.

The prospect of pitching in during a national crisis has drawn unsolicited offers from prominent asset managers, like William H. Gross, the managing director of Pimco, who offered his services free.

In setting up the program, Mr. Paulson has relied on a cadre of former Goldman Sachs executives: Edward C. Forst, a former co-head of Goldman’s investment management business who is on leave from his job as executive vice president at Harvard; Kendrick R. Wilson III, formerly chairman of Goldman’s financial institutions groups; and Dan Jester, who was deputy chief financial officer at Goldman.


...The bailout legislation itself highlights the contradictory goals that the Treasury will face when it goes on its buying spree. Among the goals it is supposed to consider are “protecting taxpayers,” “preventing disruption to financial markets” and “the need to help families keep their homes.”

Democratic lawmakers insisted that the Treasury use its authority to help restructure many subprime mortgages so that at least some troubled homeowners could avoid foreclosure.

But the Treasury’s auction plan will make that difficult. More than 90 percent of all subprime mortgages are part of giant pools, or trusts, which sell mortgage-backed securities to investors around the world.

Before the government would be able to modify any mortgage that was in a trust, securities experts said, it would have to acquire agreement from 100 percent of the bondholders. But a senior Treasury official said the government would probably want to buy no more than half of the securities tied to a trust, which would hamper winning agreement from all investors.

Jigsaw

We had a former head of the FDIC tell a group of congressmen yesterday that the Bush administration has been going around the last few weeks, actually, so tightening up on the practices of banks that they’re forcing them to have bigger reserves, which in a way would, you know, kind of create—help to create the kind of tight money policies that we’re saying we’re trying to alleviate with this bill. So, you know, there needs to be a deeper look at this. It seems to me there’s a possibility that this crisis has a little bit of manufacture to it.

- Kucinich

Suspending mark-to-market accounting, in essence, suspends reality.

-Beth Brooke, global vice chair at Ernst & Young LLP, WSJ, Sept 30, 2008

Some "public opinion" from the finance geek sites:

The bailout, I mean rescue plan, can be seen as nothing less than a new Ponzi scheme. It works like this:

Fed as only lender, in an attempt to keep the financial system from imploding;

TARP needed to keep Fed balance sheet intact so that it can continue as only lender;

Treasury will need to significantly increase the amount of Ts (public money) auctioned to fund TARP;

Panic serves to encourage T. buyers, especially for bills;

This represents a liquidity trap: TARP recipients of Ts will hoard cash to buy Ts: rinse and repeat.

This results in drying up of lending to corporations/crowding out private capital - no new credit lines;

The Fed becomes a holder of private capital, the later of which is now frozen to protect that capital from deteriorating, The rollover scheme will restrict even more lending in the private sphere for purposes of keeping the financial sphere on life support, but with the consequence of furthering the deterioration of the 'real' economy.

---

My thoughts exactly, Don. Plus the durations target the drawdown precisely on the capital we need most. We're desperately short of 3 month working capital, and here comes Paulson to take $700 BB of what we've got left away and dump it in the mortgage industry. I don't think you could devise a worse plan. We might be better off if he *did* steal it.

¨
===========================

So, financial predators and parasites, having cannibalized the actual productive economy of the US over the past 30 years, now have no choice but to cannibalize each other.

It points out the fundamental need to free the republic from the stranglehold that finance capital has held the country in for the past generation, starting with the bankruptcy of NYC in 1975, aka The Banker's Coup. It was this event that presaged the dominance of the neoliberal regime and serial credit crises to come. Now, as a result of their infinite greed and arrogance, we will see a Final Offensive of structural readjustment, privatization - already announced in Thursday's New York Times, in an article buried in the back of the Metro section announcing that Governor Patterson is exploring the sale of state assests - and widespread immiseration.

While Marx's prescriptive powers left much to be desired, his powers of description - namely, the inherent tendency of capitalism to generate crisis - remain prescient.

===================

Having listened to all 42 minutes of the late night Treasury briefing of investment banks on Sunday, there is no doubt in my mind that this legislation represents the sort of federal largesse for Goldman Sachs, Morgan Stanley, Citibank and JPMorgan Chase that the Iraq war provided for Halliburton and Blackwater.

The most cynical moment in the call is when the Treasury official confirms, ”our preference would be to help the healthy banks become even healthier” rather than helping troubled banks or illiquid banks.

America is now a centrally planned economy where the Treasury will determine which firms survive and prosper through allocation of scarce capital to an undercapitalised financial sector.

Clearly what is going on here has nothing to do with kick starting the credit markets or stabilising the equity markets or restoring depositor confidence in banks. (Treasury official: “No provision in the legislation that mandates re-lending.”) What is going on here is a blatant attempt to provide government funds to a select cadre of firms (not all banks) which are chosen to be the survivors feasting off the carcasses of their less fortunate and less well-connected brethren as the downturn intensifies in the years to come.

The crash in equities will still happen. The debt deflation of the economy leading to mass commercial and consumer credit defaults will still happen. The collapse of many national, regional and local financial institutions will still happen. The bankruptcy of many municipalities and shortfalls in state budgets will still happen.

This bill is about engineering survivor bias to friends of the Bush administration so that they profit disproportionately from the collapse of these markets using the funds provided by the taxpayer via the unreviewable and unconditional authority of the Secretary of the Treasury.

Long and Short Fuses

Bloomberg:

In a separate bankruptcy case, Lehman Brothers Holdings Inc. creditors said they ``believe'' that JPMorgan, the investment bank's main lender and clearing agent, caused the liquidity crisis that led to Lehman's collapse.

Creditors want to investigate:

Creditors of Lehman Brothers have asked a judge to allow an investigation into whether JPMorgan Chase & Co. had a role in weakening Lehman as it headed toward bankruptcy.

The committee filed the request in court documents late Thursday.

The creditors committee believes Lehman Brothers Holdings Inc. had more than $17 billion in cash and securities held at JPMorgan before its Chapter 11 filing but that JPMorgan froze the assets Sept. 12, three days before Lehman filed for court protection. Its case is the biggest in U.S. history.

"The creditor's committee believes that as a result of JPMC's actions, LBHI suffered an immediate liquidity crisis that could have been averted by any number of events, none of which transpired," lawyers for creditors wrote in court papers.

"In freezing LBHI's assets, JPMC was purportedly holding all of LBHI's assets as a potential offset against any claims," lawyers said. JPMorgan provided billions in clearing advances _ short-term loans investment banks use to clear trades on a daily basis _ to Lehman in the days around its Chapter 11 filing.

Jim Chanos said Bank of America cut the line to Merrill Lynch in advance of swallowing them.

The SEC has announced its "longs only" boost will expire on the 8th; the expected extension to the 17th called off.

On Victorious Friday, Goldman Sachs cheered the troops with the promise of a "significantly deeper" recession than was previously expected.

Treasury Conference Call

Q: Glenn Schorr, UBS: How do you incentivize if you cant come to clearing price that isn't too punitive?
A: Our objective is not to get everyone to participate so...we won't be paying too much...I can envision a firm taking a loss, because we're giving them cash that they can redeploy. We're soliciting ideas from all over the place.

Q: Guy Moszkowski, Merrill Lynch: Is your goal with the pricing mechanism to inject as much liquidity and capital or is it to force recognition of losses and consolidation so we can see who will survive and who will die.
A: Hard to say either of those extremes. It's a balancing act.

Some guy from Treasury says he wants people to focus on legislation, not implementation. One of his colleagues says he thinks that's a "very good idea."

Q: Mike Mayo, Deutsche Bank: Do banks have the option to purchase insurance or sell assets or does the option remain solely with the treasury once banks decided to participate?
A: Yes banks have the option to choose what program to participate in.
Q: Will insurance premiums be stretched out?
A: We don't know
Q: Will the Treasury still get equity stake in companies that chose insurance? Can the Treasury decide whether or not to let companies participate?
A. The Treasury will consider "long-term viability" of the firm. For the most part, we want to help the healthy banks get healthier as opposed to healing the failing banks.

Q: Mike Holt, Boston Company: when will the treasury start purchasing these assets? Wednesday? A couple weeks?
A: A few weeks, several weeks, once Congress passes bill
Q: But some people will fail before that?
A: We understand.

A Lot Worse Than We Thought

How Dumb Are We Americans?

Well, not so dumb, if the comments sections of newswebsites are an indication. Much less dumb than the official journalist bloggers are or pretend to be. But the twitterers are a little more dumb; this is explained I supposed by the youthful demographics. Twitterers appear to be most concerned about the casting side of the question, grave matters such as hair plugs, who looks at the camera best, winking, what's "boring" and what's ridiculous but entertaining. The hottest topics seem to be the pronunciation "nucular" and, amazingly, that there is no such word as "Bosniak", a fact of which many twitterers are firmly convinced and about which they can work up some remarkable dudgeon.

Market Theatrics

Remember the last dip in the public markets, which due to plunge protection was not allowed to become an honest to god correction and which was abruptly halted and reversed by 9/11, was called a "stealth bear" market. A slow slide, the focus NASDAQ. Now the NYSE's suffering and torture is displayed on television, its image a trader or two on the floor staring aghast at something horrible - falling digits - whose position we the viewer of this photo are assigned. We are collapsing, these kindly bystanders are watching us collapse! Help us!Help!

But the public markets can be yanked about like a marionette on strings. (It must be the herd!You all saw the Dark Knight didn't you? You know what the selfish capricious ignorant herd is like!)

On Sept 19, NASDAQ filed for a little practically automatic rule change with the SEC, shuffling around the Portal Alliance (some of the members vanished recently but still appear in the filing) which anticipates its long promised offerings of Portal debt securities alongside its already flourishing Portal equity securities to the superrich private equity buyers of 144as. It's just kind of funny to read it today, with the headline names, it's a bit like picking up a tabloid:

The Nasdaq member firms expected to enter into agreements with Nasdaq either directly or through affiliated or successor entities are: Banc of America Securities LLC; Citigroup Global Markets Inc.; Credit Suisse Securities (USA) LLC; Deutsche Bank Securities Inc.; Goldman, Sachs & Co.; J.P. Morgan Securities Inc.;
Lehman Brothers Inc.; Merrill Lynch, Pierce, Fenner & Smith Incorporated; Morgan Stanley & Co. Incorporated; UBS Securities LLC; and Wachovia Capital Markets, LLC.

From Forbes back in January:

Not ready to take your company public? Take it semipublic. Do a Rule 144a offering. The Securities & Exchange Commission rule allows companies to raise capital while dispensing with such formalities as registering with the SEC, filing financials or following accounting standards. The securities can be sold only to sophisticated investors, to wit, hedge funds and investment advisers with at least $100 million under management. Issuers are also exempt from the nitpicking requirements of Sarbanes-Oxley.

Although most of the $2 trillion in Rule 144a securities outstanding represents debt, the equity portion is nonetheless big enough to eclipse the public market in recent issuance. Through the first nine months of 2007 companies raised $300 billion in 144a equity, compared with $215 billion for public markets, reports Dealogic. Often these deals were for private offerings in companies that are already public. But within the 144a category is a subset that goes by PIPO (for "pre-initial public offering"): These are privately offered shares in companies that are not yet public. In the two years before Sarbox went live in 2002, there were only two PIPO deals. Since then there have been 83, raising an average $282 million.

Not being public doesn't prevent a company from having its shares traded. In the coming months the semipublic sector will be getting an assist from Nasdaq, whose Portal Alliance database provides price information to buyers and sellers of 144a shares.

Individuals should keep a sharp eye on this market--not to buy in but to avoid being whacked by the tail end. Dealogic says that 20 of the 85 PIPOs have led to public offerings, which then tend to perform poorly. During the first 12 months after going public the average PIPO did 21.5% worse than a simultaneous investment in the s&p 500, while new issues as a whole beat the markets by 7.2%.

Example: the $1.6 billion (sales) Aventine Renewable Energy. Formerly the biofuel operations of Williams Cos. (nyse: WMB - news - people ), Aventine was picked off by a private equity arm of Morgan Stanley (nyse: MS - news - people ) for $75 million in 2003. It then issued $160 million of debt to pay its investors a $107 million dividend. In late 2005 Morgan sold the company to 144a equity buyers through a PIPO for $275 million, quintupling its investment in two and a half years. Pushed by investors hoping to flip at a profit, Aventine filed to go public soon after Morgan's exit, and raised $390 million in its mid-2006 offering. Great for PIPO investors, who recouped a 42% return (before banking fees) in six months. Not so great for individual investors: Aventine's shares recently dropped to $10, 74% below their close on its first day of trading. Analysts see earnings falling 63% in 2007 and another 71% in 2008.

Stockholm Syndrome

Krugman writes:

On Olbermann a few minutes ago (that basement classroom with the heavy paper over the windows and camera sure has come in handy lately!) a phrase popped out of my mouth: “Stockholm Syndrome”, with regard to the bailout rescue.

...I think that Congressional leaders know that it’s a bad bill, but feel compelled to defend it, because they’re (rightly) scared of the financial consequences of a second rejection. And to some extent economists like myself are in the same position; I think I called it the “hold your nose caucus.”

So am I for the bill? Yuk, phooey, I guess so. And I’m very angry at Paulson for putting us in this position.

But as he admits, he knows the financial consequences of a second rejection will be another one day stockmarket tantrum, and the financial consequences of passing the bill will be far worse and longer term and are coming anyway. It's like he's incapable of really identifying the source and nature of the fear. Which is all about the Bush regime and its clique. Because really there are numerous reasonable things the US government could do to alleviate the global financial crisis and many more things it could do to alleviate the problems of the real economy. But everyone knows there's an intent to defraud the public, and says it obliquely, but then lapses into this irrationality of the spectacle, that is to say: well we know what they will do with this legislation is not the stated intent, but they will take advantage of loopholes and flimsiness of the bill to engage in a racket to strengthen a small group of financiers; if they do that, it will be disastrous. But - (shifting invisibly to the spectacle now) - we know if they were to proceed with the plan as advertised, as we are with fausse naivété to pretend now to believe, and buy up lots of illiquid but valuable assets from all those who have been promised such relief, then it may have some small effect but we can't be sure, but the belief that it might means passing the bill is also uplifting theatre to affect the sentiment of financiers, while rejecting it at this point, after dangling the goodies in front of their noses, is, as theatre, a downer. So we must pass the bill even though we know they won't use it to enact the advertised plan which may be "better than doing nothing" but will assuredly use it either a)to do nothing or b)to enact the scam which is certainly worse than doing nothing.

To say that the numerous reasonable programmes of socialism for the rich, capitalism for the majority, which were always expected of the State, and undertaken on large scales as recently as the S and L bailout, are now "politically impossible" is to covertly acknowledge there is a radical aggressive agenda here the nature of which we dare not even contemplate, and to admit we are at the mercy of a lawless, ruthless, armed, wholly unscrupulous ruling class of whom we are in very serious terror. This would fit in with the other meme of "third worldisation" of the exceptional US of A, where things like this are not supposed to happen; where the influential educated indoctrinated elites of the lower bourgeoisie are not supposed to be terrified of displeasing the most powerful bloc of the ruling class when performing their usual function of reproducing the status quo.

This Meme

Bush should be nominated for honorary membership in the American Communist Party. - Zizek

Uch.

Anway. The anger is good. To know how fierce it is is good. To see it flare in this particular instance and at this target is educational. But it's so easily deflected. The White House forgot to say whose evil unworthy babies they were going to kill with this money. Or so, in anger, says Chalmers Johnson. Because he too is angry, at those who are angry now about this but not angry about greater sums used in mass murder and destruction. (They are as angry about that, it's just hundreds of millions of people are difficult to coordinate and organise, and that anger hasn't been focussed temporally by a reality tv miniseries, as this has.)

I wonder if the White House had tried to sell the bailout precisely as punishment of the profligate population, taking action to punish the evildoers who defrauded investors with bogus loan applications, who cheat and chisel and are parasites on hardworking Americans, if that would have been more successful. Chalmers Johnson probably would think it might have been. And it might have been.

A bloc of the ruling class is trying to pull an inside straight. What if the population could in fact force the Congress to refuse to do anything? Henwood looks on this with horror, which is only surprising for a few seconds. We have to save the status quo or we are all thrown on the mercy of the jackals, even the privileged. But really, we know, we should refuse to do anything. The worst case scenario - global financial "meltdown" - is probably the best to be hoped for. If only we could, we should force the Congress to say: no. Not our problem. Don't bother bringing it up again, we don't care. Do your worst. This is your Katrina you (have the barbarity to) say. Well - sink or swim!

What would happen then? Either: the ruling class would solve their financial crisis, if they can, which they probably can, or Bush would declare martial law and the roundups to the KBR detention facilities would begin (if they have not already). Or so the Bush regime has very brazenly assured us all. Everyone has it in the back of the mind, if not the front. Everyone believes it's a possibility, even that the opportunity is hoped for. They would not hesitate to kill us all. Painfully. Anthrax. Radiation poisoning. If nothing else, this latest crisis shows us pretty starkly how very effectively terrorised we are.



This meme - this is communism! - has a lot to do with that.

"Foreclosure Alley"

What's Assumed

The point of the bailout is to buy assets that are illiquid but not worthless. But regular banks hold assets like that all the time. They're called "loans." -James K. Galbraith

To its ruling class supporters, the bailout bill must appear simply a promise to insulate a portion of the rich from the effects of unprecedented crushing and immiseration of the population, underway already but about to be greatly accelerated.

Doug Henwood, though speaking of the "ripening of the contradictions" of capitalism, is typical here: the American left seems to find itself in the position of determining to save capitalism from the leading capitalists and hoping only for the usual modest opportunities arising from these contradictions. "Scary stuff" is the inescapable theme in the US, where all the pieces are in place to change the game and enforce the new rules militarily. Scary stuff indeed.