Dafydd, I don't know if they'll listen to me... But it seems to me that what Palin needs to do is score as quite knowledgeable in one or two areas. Her goal should not be to look as smart as the rest of us. She should pick one or two topics on which to look smarter.

I would think that energy is a natural choice. Whenever Biden says that "we can't drill our way out of this one", she should respond, "That's a big mistake. Here are some facts and figures and timelines..." and actually give them, briefly. Same with nuclear energy. Then she could perhaps point to a place on McCain website where the original sources are fully available. Let the critics fight with the sources instead of with her necessarily brief words. Let the public learn something real about the subject.

Do the same on a second issue, corruption in Congress and earmarks might be a good choice, and she will look very good, and Biden will look like the second-stringer. If she does that, I don't think it would bother anyone if she isn't expert on some other issues. People don't mind a beginner; they do want to see that she's capable of really getting things down good.

I also think she should challenge Biden to a second debate.

Funny how the HR get blamed for the bill's defeat when 95 Democrats voted against it. Shows you how totally and completely screwed up our country is. The media controls the story line and they are all in for Obama.

Great analysis as usual, Dafydd. If I didn't know better I'd say that Sarah Palin's stuttering interview with Couric was planned in order to make her performance tonight even more stunning. It was a great debate overall for both candidates. All else being equal, though, I find it had to see how the average voter could think Biden won. The lowered expectations made it a home run for Palin.

PS: The first couple DOOM books were pretty good too.

Here's a suggestion for something I think should be in the Bailout:

The "We broke it, we bought it" amendment.

Where as the US Government, through law and policy has encouraged individuals to take out home loans they can not afford, and encouraged or compelled banks to issue such loans, we find that we have a responsibility to mitigate the harm of such acts and prevent future widespread recurrance.

The US Department of Treasury shall investigate the underlying causes of our current crisis, and present to Congress a list of individual recommendations within 90 days from the date this act enters law. Both Houses of Congress shall in turn give the recommendations, either in toto or individually, a vote to approve as law within 180 days from the date this act enters law.

Tehdinj:

Huh, I thought numbers 3 and 4 were the best of the bunch.

Dafydd

If this bill passes I am voting a straight Democratic ticket and will revel in watching the Republicans get creamed in this elections. It is Republicans' responsibility to protect us from government expanding and free spending socialists. Instead our moronic President and Republican congressmen have gone along with this massive government gift.

This bill is an outright $700 billion payment to the banks in return for nothing. Those of you who think that we will get our money back or make a profit have absolutely no clue about economics or financial markets. This bill will have no effect on our economy. We are absolutely screwed because we have spent ten years of credit in the last five years, you can't magically make that excess disappear.

Not one Congressman has said this is a good bill. They only say they have to pass it because action is needed. That is retarded. They are passing this bill because Americans have absolutely no economic sense and can be fooled into believing anything.

Americans are too stupid to understand that passing this bill because their IRA went down is meaningless. So rather than lose 20% of your IRA, Americans would rather take no loss on the IRA but have it lose 20% of its value because of inflation.

This bill is going to add $85 billion a year to our interest expenses. Treasury yields have jump dramatically because of this while for all those crying about the market going down have not even noticed that all the bank stocks are trading up. Why? Because investors know that the only thing that can be helped by this bailout are the ones stealing the money, banks.

Well, Dafydd, you got your wish on both points: Palin did fine, and the bill passed. Now we'll see what happens.

MikeR:

Well, Dafydd, you got your wish on both points: Palin did fine, and the bill passed. Now we'll see what happens.

Yep. Now we'll see who was right: The people who warned that trillions of dollars of securities that could not even be valued, let alone sold, because of stupid government interference could bring down our economy; and that we could only get the credit rolling again by more intelligent government intervention to undo the damage caused by the stupid regulation; and that this particular package will work to unfreeze the credit market...

Or the guy who says that "Americans are too stupid to understand" that "we are absolutely screwed" because "Americans have absolutely no economic sense and can be fooled into believing anything."

I find it telling that this same fellow announces, in a fit of adolescent rage, that if the bill passes -- which would mean strong support from both parties (with Democrats more supportive than Republicans) -- he will "vote a straight Democratic ticket [the side he would have us believe he opposes] and will revel in watching the Republicans get creamed."

Well, you're either with us, or you're with the liberals; and it's clear that he has already choosen his side.

I think we'll have a good idea which side is correct and whether this is working before the election.

Dafydd

I am very sick and tired of balming Republicans for problems.
Pelosi bait-and-switched this to force Republicans to once again step up for crappy bipartisan pap, and then, with Pelosi playing Lucy jerking football away, have Republicans get creamed by her jerk-back.
McCain is behind be cause he has declined- and Palin declined last night- to stick it to democrats on FNMA and FMAC.
The extent to which democrats get away with lying about their role in destroying our wonderful mortgage banking system is the extent to which they win.
If McCain successfully executes the plan of telling the truth about democrats, we win. We keep seats in the Senate and the House. Maybe even gain.
People are ready to be ticked off at someone and to vote out the ones they are mad at.
The all in play, if McCain is still really playing to win, is to stick it hard to the dhimmies now through the election.
No more bipartisanship. No more gracious enabling.
Tell the truth about democrats and let the chips fall where they may.
Republicans either play to win, or we continue to get played.

DrMalaka,
You are being misled about the bill.
The Treasury is not 'getting nothing' in this.
And if you think that having even more democrats in power to do to defense, health, education, taxes, litigation reform, the environment, and civil rights, what they did to the mortgage industry is great for America, I have a bridge to sell you.
the democrats ahve become the American equivalent of PRI in Mexico: corrupt, ruthless, self serving, arrogant, and in control of the press.
If you think voting straight democrat to punish the Republicans for not over coming the full court press of the democrats to corrupt- and cover up the corruption- of FNMA and FMAC even as they profited from it, I owuld suggest you are not thinking clearly.
I hope you will take time to think a bit clearer on this.
You do not fire the police becuase they failed to stop the burglary. You help them.
McCain has been warning of exactly this kind of meltdown since 2003.
why are you mad at him?
why would you reward the thieves?
Obama, Dodd, Frank, Reid are the thieves.
Do not rewad them.

If this bill passes I am voting a straight Democratic ticket and will revel in watching the Republicans get creamed in this elections. It is Republicans' responsibility to protect us from government expanding and free spending socialists. Instead our moronic President and Republican congressmen have gone along with this massive government gift

So you are going to vote for the Party that gave the Bill that upsets you the MOST support?

ROTFLAMO and you expect anyone to take your rant rationaly? Did someone take your lollipop away just before you posted that?

Hunter:

If McCain successfully executes the plan of telling the truth about democrats, we win. We keep seats in the Senate and the House. Maybe even gain....

The all in play, if McCain is still really playing to win, is to stick it hard to the dhimmies now through the election.

I respectfully disagree; this is in fact the briar patch into which the Democrats are hoping McCain-Palin pitches them.

"Blaming the other guy" is the Democrat forte; we're never going to win that poo-flinging contest during an election. The time to do that is after we win, when the elite media will no longer have such an overwhelming incentive to cover everything up for just a few more weeks, printing whopper after whopper instead about how this entire mess was caused by eight years of the Bush-McCain administration.

What we need to do now is not charge onto the Democrats' playing field -- but rather, force them to come play on ours. And we do that exactly the way Palin started doing in the debate: By insisting that the situation is so urgent that there's no time to look back to the past and point fingers; must instead look to the future and find a solution.

Solutions... that is the Democrats' Achilles suit.

John McCain -- heck, any Republican -- has a whole series of steps that form a "plan" that would have a tremendous impact on the economic situation. Just a few, some of which have already been done:

• Permanently eliminate the "mark to market" rule (it's temporarily disabled at the moment);
• Fully privatize Fannie Mae and Freddie Mac -- over time (not precipitously), so that banks and other lenders know that they're personally on the hook for any subprime mortgages they write or buy;
• Shift the help we give low-income families away from offering them cheapo mortgages to helping them build up their credit and savings to qualifiy for prime mortgages;
• Enact a slow but steady and predictable process of tightening up reserve requirements (on a published, multi-year timetable);
• Take strong steps towards eventual energy independence.

If we want to argue with Democrats on an issue, let's fight with them over the idea that "we can't drill our way out of a shortage of domestic oil" and that "we have only 3% of the world's energy reserves."

In fact, it would be more correct to say, "Democrats will only allow us to produce 3% of the world's energy -- when in fact we could produce ten times that amount, if they would just let us drill, baby, drill!"

That is a fight we would win!

• Take steps to strengthen the dollar;
• Reduce taxes and government spending;
• Root out the Democratic culture of corruption in Congress that has propped up FNMA and FMAC lo these many years -- but phrased in a forward-looking "reform Congressional fundraising, lobbying, and earmarks" way, not a backwards-looking "Democrats caused all these problems" way.

There are lots of other planks in the Economy Platform we could push and push hard... and that would be tremendously more effective in the next 32 days than getting into a head-butting contest with a billy goat.

Dafydd

Dafydd,
Telling the truth is not a blame game.
If you cannot sum up in very few factual words, you are not going to get your truth out.
If you do not get the truth out, you will let the liars falsely blame you and win.
Your analysis and solution is too wordy from a marketing perspective.
Obama, Dodd, Frank and other democrats at the least were unethical, and likely criminal.
That is truth, not blame.

So, are we supposed to let Pelosi off the hook for her Black Monday travesty?

Let's see, the Speaker of the House returns from a much needed five week vacation, rams through an energy legislation bill that does nothing to promote energy independence from foreign countrys or provide hundreds of thousands of American jobs-----then on BLACK MONDAY (Sept 29th, 2008) she manages to cost this nations real market value over a TRILLION DOLLARS by playing political games when she march's around the floor of the House telling her Democrat drones to vote NO on legislation that will rescue our financial institutions. (Pelosi's pre-vote speech didn't help much either) In a span of just over two weeks this woman has done more economic damage to this nation than Osama Bin Laden could have accomplished in his lifetime. This is the "new direction" congress this nation voted into power in 2006.

Pelosi took this first vote to the floor knowing full well it would NOT pass. In most cases this would be considered political suicide, but the media and most of this nation gives her a pass on the most costly blunder in history.

First and foremost, I am a life long Republican and it kills me to do this. It is my personal acceptance that we as a country are done if we continue down the current road, regardless of party. I still will probably vote for Barr for President because to pull the lever for someone as stupid as Obama is almost impossible.

The stock market spoke Friday afternoon and it ran over the government. As history so obviously has made clear, government intervention will not work and will be run over by the market. Just wait until next week when everyone knows the short selling ban on financials will be lifted on Thursday. Did you guys know that IBM and GM are financials that can't be shorted?

I must not have been clear enough about why I want to vote Democratic. The reason is that there is only one party in this country with two subsets. We have the liberals who are the Republicans, and the socialist/fascist who are the Democrats. We need a viable capitalist/free market party.

All the comments here are making economic decisions based on partisan beliefs. Well the answer is that the Democrats will send us into the abyss in 20 years and the Republicans will take 25. What's the difference. Our only chance to to cause a political revolution once the Democrats take over and make things so much worse.

Dafydd, yes, I am enrages about this bill and it came out in my comment, but that does not change the fact that supporting the Republicans because they are not Democrats will just keep making this worse. The point is moot anyway, without some big surprise McCain is toast and so are Republicans in congress. Bye bye. Did 2006 not teach you a lesson, enough people are tired of Republicans spending money to try to curry favor with the media and voting blocks like the AARP which will never vote for them.

The Republican party is a farce, they must be destroyed so that they re-emerge as a viable alternative to the socialists. Just like when Republicans came back in '94 with Newt.

The Republicans had a responsibility to stop this $700 billion gift to the bankers who got us in this mess and they cowered to the Democrats and the media. They did not do their job of protecting this country and for that they must be fired. Democrats did their job, which is to increase the size of government and restrict our freedoms.

Hunter, I am not being misled about this bill, you are. And it is insulting that you would say that, as I doubt you have spent 1/100th of the time I have researching this. Suffice to say that you don't have the first understanding about the assets in play here.

Until you fully understand what a CDO is and how it is priced these politicians will continue to abuse you into believing what you do. Have you any idea what a CDO is? What about a CDS? An SIV? Not what they stand for, what they actually do as legal instruments. How is your background in credit markets, foreign currency, interest rates, money supply? You understand how all those things work together? Do you think Freidman and Keynes are enough to explain the situation or do you want to rely a bit on the Austrian economic beliefs?

The Fed injected over half a trillion dollars of liquidity into the system the last two weeks, how did that work? Did lending open up? Credit markets? Liquidity is not the problem, credit is. There is no credit in the system, we used the next five years of credit already.

The Fed used all its bullets (about $800 billion from its balance sheet) and it did nothing. Now all they have are a few more interest rate cuts and we can mimic Japan's death spiral from the exact same thing, almost identical. Japan did what we are doing and 20 years later they still have not recovered.

There is only one way to get rid of losses and that is to take them and recapitalize. There is nothing we can do to stop the credit contraction, nothing. GS and MS have a 30-1 leverage ration. They have to get down to 10-1. How? By deleveraging. They need to sell 2/3 of their assets or double their capital. And this has to happen while the assets on their books are decreasing in value. Any decrease in this value is a direct decrease to capital so the ratio actually increases if they take a loss on any of these assets.

Dafydd, stop repeating foolish mark to market claims that you hear on television from both parties lying to you and the talking heads in the media. Do you fully appreciate how this works. If these assets were currently marked to market then the banks would not be in business, their capital would be negative. Every bank in our system is insolvent, period, no argument from anyone who understand what is going on. That is why nothing is marked to market right now, it would show the insolvency.

You talk mark to market but do you know how banks categorize their assets? Do you know the difference between Level 1, 2 or 3? All these assets are on their books as Level 3 assets which are not marked to market, they are priced at what the banks want to price them. You talk the talk but have no clue that Lehman had CDOs on their books at 70 cents when Merrill sold almost identical CDOs at 5 cents. Is that what you call mark to market?

Regardless of what the government does banks will not lend. Regardless of your wrongheaded mark to market thesis, banks will not trust what are on other banks' books. If bank A has rigged its books what makes you think they will lend to bank B because banks B's book looks good. Bank A knows that they both have the same crap on their books. And why will a bank lend for a home loan when they know housing is going down. And why would a bank take a risk making a loan now that we just gave the Fed authority to pay interest on the reserve funds banks keep at the Fed?

Stop making macro economic decisions based on politics when you know both parties are not only lying to you but the people who are telling you this have absolutely no economic training. These are mostly moron lawyers and you are taking your economics advice from them. Oh, Paulson is better, he only was CEO of Goldman when they created this mess. He must have the answer then.

Dafydd, I offered in another comment and will do it again. If you like I can write up a much clearer comment on the economics of all of this, the assets involved, the global economic implications, the bank balance sheets.....

Since when did this become the Republican way of doing things? We have always been the party that acted with its head, not its heart. Now we refuse to take the time to fully understand the issues we are spending trillions of dollars trying to figure out.

WAKE UP GUYS! I am not your enemy, I am one of you and want to see this country governed by the free market, federalist principals our Founding Fathers created. I offer my knowledge of the situation not to argue with you but rather to start us moving in the right direction again.

DrMalaka:

First and foremost, I am a life long Republican and it kills me to do this.

Then don't do it.

Dafydd

The Fed injected over half a trillion dollars of liquidity into the system the last two weeks, how did that work? Did lending open up? Credit markets? Liquidity is not the problem, credit is. There is no credit in the system, we used the next five years of credit already.

DrMalaka,

For some one who seems to have a grasp of economics, why can't you figure out that CREDIT EXTENSION is the direct reason this nation is in this mess. From the crash in '29, thru the S&L scandals, and now today, the un-regulated over-extension of credit has again become the poison pill that eats away at real capital and assets. The current financial system is again fractured by the premise that we must survive on credit, (and the great social experiment of putting unqualified buyers into homes that they simply could not afford---I'm still working on this article to post soon). Solvency and liquidity will only return when responsible credit practices are regulated, and I hate unfettered government regulation in either direction that kills free market investments.

WAKE UP GUYS! I am not your enemy, I am one of you and want to see this country governed by the free market, federalist principals our Founding Fathers created. I offer my knowledge of the situation not to argue with you but rather to start us moving in the right direction again.

I totally agree with this quote Doc, but voting for Barr or Obama is not acceptable in my book.

Barack Obama will only advocate this "social extention" of credit, just has the liberal machine in Washington for the past twenty + years.

We can hope that John McCain and Sarah Palin have the fortitude to put a stop to this madness.

P.S. (I reserve the right to revise and extend)

Rovin:

I am absolutely with you. I do not think credit is good. I don't even own a credit card. That does not change the fact that we have used way too much of it. The American populace is a joke. This make believe standard of living is built on credit and foreign money has supplied it in vast quantities and cheap, so we used it like morons.

However, credit is good with relation to business. Companies need short term credit (commercial paper) to finance their ongoing business. Retail stores borrow money in Oct to purchase inventory for Christmas season. This credit is not available right now.

At no point did I argue that it was good that we put unqualified people in overpriced houses they could not afford. That is the problem However, it does not change the fact that the money has been used, spent and lost. That is where we find ourselves today.

But we do need the credit markets to clear up so that normal business can be conducted. This bailout does nothing to solve this. There is actually nothing we can do to stop it.

Which leads to my argument that Republicans are supposed to stand up to this waste of taxpayer money and extension of the government. They did not do that. I don't expect more from Democrats, they are fascists that want to merge the government with the banks, but Republicans are not. I see these two parties as basically identical because when push comes to shove Republicans behave the same way. Voting for them is rewarding them. Nothing will change.

I look at things from a long term view. Economics is long term, politics is short term. So I will vote long term, and the best result is to have a party that believes what we do. Right now there is no party that represents our views. Let the losers in this country that vote for democrats get what they want. We are screwed over the next four years anyway, so let the Democrats take this hit. Perhaps that will make the Republicans wake up and find new leadership and values that represent what we believe in. Give them a four year time out in the corner to think about what they have done.

The change we need in this country is radical, not the difference between Republicans and Democrats. That is two different shades of the same color. We are doomed if this country does not make massive changes, address the unfunded liabilities of $50 trillion. Stop paying Medicare and Medicare drug programs for people who did not contribute to them.

What I am starting to feel from the Republican base is that we suffer from the same cognitive dissonance that the left does. Anything our party does is fine, we will vote for them and it is the right thing. Well I don't subscribe to this. We were chucked out of office in 2006 because we failed to live up to our beliefs, and what have we learned. Nothing.

If the stock market continues a non upward bear run, people will be fuming, so Democrat Controlled Congress will feel the sting of an electorate stampede, no matter the demographic breakdowns so loved by Leftists. People will see on their ballot DemOcrat Farney Brank for congressman on the left, and a republican challenger on the right. DemOcrat Chris Dodd for Senator on the left, a republican challenger on the right. Even though they, of course, don't live in those districts. Who do you think they will vote against, who will they vote for?

Gas prices, were hotter than august in, well ...august. But now that issue has fallen back in the queue. Its still there, but portfolios are very personal, and their shrinkage, lets call it, means voters are putting up some familiar photos on their dartboard, and are more than ready to show Pelosi just where she can stick that gavel. Ditto Harry Weed.

Voting for Bob Barr is not going to give you much beyond some short-lived satisfaction once you leave the voting booth. And trust me. You'll have to leave that booth and face reality. I can throw my vote away just as easy by staying home. But I'll be there, and when Obama goes back to being just another bag man for Chicago in the Senate, I'll be the one laughing because I kept my cool in the face of a media onslaught of sloppy wet kisses for "The One", idiot poll "results", "Exit Polls", and Democrat sour grapes.

Arise, and come abide with us.

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