Brother can you spare 7 trillion dimes…?

So it seems that our enlightened leadership in the Administration, having pissed away what the accountants will eventually calculate as over $1 trillion on a war against those who attacked us on 9/11 – I mean, a war against those who had weapons of mass destruction that they were 45 minutes away from using on us – I mean, oh, never mind.

Now they want to bail out the clowns who were dumb enough to, in their frenzy to seek ludicrous profits through lending money to anyone with a pulse, get themselves leveraged to the hilt with dubious levels of debt.  We’re bailing out an industry that demanded deregulation, which they got.

How did responsible taxpayers get stuck with this fucking nonsense?!?!?

Now the “Plan” to save us from a financial meltdown – whatever that means – is to turn on the printing presses, allow the major banks that managed to dodge the bullet until now (too bad Lehman, you were SO close) to unload their toxic debt to the US taxpayer and come out unscathed while we pony up ANOTHER $700 billion.

And what about those approximately $30 BILLION in bonuses paid out to Wall Street in 2007? Are they going to return those? Hell no.

So, for those of you expecting to get funding for your pet projects (e.g., Space Based Solar Power), I suggest one of the following two strategies:

1) Rush to the White House and get them (and their co-conspirators in Congress) to write you that $100 billion check you need to get your program underway while they are still acting like drunk sailors on shore leave, OR

2) Kiss your pet project goodbye and find something else to focus on, because the US government is going broke.

BTW, don’t be surprised when our grandkids decide they hate our generation(s) for saddling them with trillions in dollars of debt for things they had nothing to do with.  What a legacy.

13 thoughts on “Brother can you spare 7 trillion dimes…?

  1. No joke about the bailout. It’s quite frustrating.

    Of course, even without a major financial meltdown like this, any plan that involves requiring Uncle Sugar (or anyone else for that manner) to pony up a couple of Dirksens was completely unrealistic to start with.


  2. But, Jon, as your firm just received a not-coveted-but-always-deserved Walking Eagle, even plans that do NOT involve Uncle Sugar can have failings. ;^)

  3. Jon,

    What is even more alarming is the plan they are trying to ramrod through Congress allows NO oversight of Paulson and virtually unfettered action on his part, and otally sticks it to the taxpayer (you and me) even though we get no upside in the performance of the banks.

    Back in the late 80s when Resolution Trust Corp was set up to deal with the S&L crisis, at least then the process made some sense – the government first protected the depositors, seized the faulty S&Ls and unwound their assets in an orderly fashion. This time they just buy worthless assets from the banks and make the shareholders/bondholders happy.

    How is that good for us again?

  4. Shubber: I heard about the ban on short-selling financials while driving to work, and when I got there said to a colleague with experience in brokerage IT, “Let’s see how long it takes for end runs around that to show up.”

    He replied “Felix Salmon already pointed out an easy one, and I’ll bet he wasn’t the first.” We stopped counting by 9:30 am.

    Water continued to flow downhill, and my coffee to cool spontaneously, throughout this episode. Who knew?

  5. I labeled VSE “dead man walking” shortly after its announcement in winter 2004, because even then the fiscal context and prospects were reminding me all too much of those of 1968-1973.

    Having had occasion lately to explain again and again that “No, children, ‘stagflation’ is not a brand-new coinage,” I’m amused to see that the space blogosphere’s epic debates over Ares, DIRECT etc. have continued unabated through this week.

  6. Monte, third world countries (which the US will become soon enough) do not have lunar programs. The chattering masses just haven’t come to terms with that yet.

  7. “Third world”? That’s harsh. Look at the foundations of national greatness: Mario Batali’s wine lists are better than anything in Moscow, and our oligarchs still have superior tailoring.

    Once the silly little Caucasus brouhaha is sorted out, the path is clear. Gazprom, Halliburton, and CENTCOM — a menage a trois made in heaven.

  8. What is truly amazing is that the folks who hold the purse strings for the clean up, Congress, are doing zero to extract concessions in return for ladling such debt onto the backs of my generation.

    Of course, once you hear the numbers that are being used to terrify our Congresscritters, whose pants are around their ankles and they can’t run, and how the system has been gamed, you’d blanch as well.

    Because of the special treatment that derivatives get in bankruptcy thanks to the shenanigans of our sold-out government employees, in the event that AIG went bankrupt a credit-event would be triggered that would have set in motion the netting of over $60Tn in CDS transactions. Since derivatives get first dibs at the assets, ahead of debt and equity, the phrase financial diarrhea would not be inappropriate. The risks are less that AIG would be able to perform on its side of the netting equation, but that all of the counterparties would be able to perform on theirs. Nothing would be left for the folks who had financed the company with debt, nor those who had bought into the equity. Lehman was just carrying a lot of bong tar on their books.

    Derivatives are, in effect, a preferential claim on a company in bankruptcy. Until you start reading about that in the media, you’re not getting the full story.

  9. This is just great Theater. Our country is able to print as much money as it wants and I get to sit back and enjoy the freak show. To quote a comedian “Even the worst of the worst like Enron’s Jeffrey Skilling are saying “Wow, that was greedy, I wish I’d thought of it”.

    Man, the Feds have to bail out so many of the U.S. economy stalwarts; The Airlines, the Banks, and the Auto
    companies are next!

    I’ve been thinking that this type of completely FUBAR’d system of goverment we have has to be given a name. After this latest Catastrophe I’m not going to call our system “Democracy”, nor “Capitalism”, not even “Free Enterprise.

    I’m forever from now on call our system of Government “Twisted Sister” as we do everything bass ackwards and we do it UGLY in the process.

  10. Re the negligible $25B: the other day, while sluicing down the banks, the Fed overshot and had to do a quick $20B repurchase to bring the effective rate back to the 2% benchmark.

    In ordinary times that would have led to mid-level heads rolling and pundits tugging at their beards. This week, it hardly drew attention: “hey, somebody grab a mop and clean up that little liquidity spill, OK?”

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