Got your passport, Nicole?

Passport to where? . . . we are now global persona non gratis. Its time to head to Washington with torches in hand. Dr Frankenstein is really pissing me off.

Actually, this is great for you. The current problem is causing the dollar to rise against the Euro. It should make your meals a little cheaper.

This is really, freakin' scary. It really is. All I can do is to offer a bit of momentary comic relief (in the time that the markets fall another 100 points, Obama will probably have added that many photos to his Flickr site). Should we take up a collection to buy Hillary Clinton her own Flickr pro account? All three of the leading Democratic presidential candidates now have Flickr accounts. Of the three, Hillary is the only one who does not have a pro account as of this writing. In fact, she doesn't seem to have an official campaign Flickr site at all. More at Letter from Here.

I hope I don't hurt myself patting myself on the back, but my friends will tell you I predicted this mess over two years ago. I'm sure as hell I'm not the only one, but you could see it coming with so many people buying so much home for so much money using loans they could not afford and really shouldn't have been able to get. It was just a matter of time until these god awful overpriced homes were going to hit a brick wall. I feel sorry for some of the people who got caught in this mortgage trap. I have no sympathy for the mortgage companies who, knowing the borrowers couldn't afford the loans, gave them to them anyway. There was greed running wild all over the place. Now it's time to pay the piper and it's ugly.

On CNBC they kept saying the housing bubble popping was not going to have a major effect on the market. Finally now they are admitting that it sure will and has.

During the time these crazy mortgages were being approved, bush was crowing about the number of people who owned their own homes. Didn't anyone in DC notice the imbalance in income and the cost of those homes? If they didn't, they should have.

I can say without hesitation that y'all should listen closely to bonddad when making financial decisions... he knows his economics shit very well.

Econatheist, who is "bondad"?

I was never taught economics of any sort in school. I took a class in coll.

Site Monitor: He's the blogger that Nicole linked in the post.

Thanks again, Mr. CEO President!

I wanted to buy some gold. Not to make money but to protect my savings. I figure if the dollar is going down in value, gold will keep its value. But, geeze, who do you trust in this day and age to buy from? They could sell me slugs painted gold and I wouldn't know the difference. Anybody out there know anything about gold?

I have never seen so much BS (and billions) thrown about in order to buy some time as I have in the last couple days. What we just witnessed was a plume of smoke on Mt. Saint Helens.

Nothing that an upper class tax cut won't fix.

I'm sure tax cuts for big corps will fix everything.

:) and it's almost happy hour. Usually the happiest hour of the day

Steps to fix the mortgage industry shit before it takes us all down.

1. Identify those who are having trouble paying their mortgages and find a way to get money into their hands. I'm not talking about a handout. If they have lost their jobs, find work for them. If they need more work, help make it happen. Find a way to keep their family together, especially if they might wind up on the streets while their house sitting empty on the market.

2. Get some of these banks to rewrite their crappy mortgages to make them more reasonable. Having people who can barely afford a mortgage paying the highest rates is bizarro world financing. Okay, okay. They made the deal....but we have a vested interest in keeping them off the street and in that home. Otherwise your house value plummets and you might be in the same boat.

So whether your a 'compassionate conservative' like GW or a 'extreme liberal' like Hilary Clinton, you better pitch in to solve this. The greedy people are about to take us all down.

Exclusive footage of George W. Bush calming the stock markets and dealing with the real estate bubble.

-GSD

To put it in perspective, the $95 bn of liquidity injected by the European Central Bank this week was the largest operation in its nine-year history, exceeding by nearly 40% the amount it injected on September 12, 2001 following the tragic events of 9/11.

Comically, Bush attempted to reassure investors on Wednesday, August 7 that the markets -- and overall economy -- were fine, urging them (with inadvertent chutzpah) to conduct a "rational analysis" of the situation. The following day, the Dow fell another 387 points.

Capt. Bat Guano @ 16:

I sure hope the rich don't suffer.

Of course not! The Fed dumped billions (our billions) into the money supply so that the market actually pulled a gain out of its ass for the week. Some crisis huh? This buys some time for the million-dollar-bonus crowd to gather in the Hamptons this weekend and figure out a way to unload their now-rotten investments on the unsuspecting.

But how does all that stuff affect Paris Hilton, Lindsey Lohan, or American Idol?

And thus we see the result of "Reaganomics". As George Herbert Walker Bush said so many years ago, it is voodoo economics and now it has come in to crash on us all.

Banks in trouble, print more money, which is then worth even less than it was to begin with.

Is there any news out there about what kind of exposure 401k's have to this meltdown? Are our investments there at risk because of the various dealings of the fund corps?

Inca Garcilaso de la Vega @ 31:

To put it in perspective, the $95 bn of liquidity injected by the European Central Bank this week was the largest operation in its nine-year history, exceeding by nearly 40% the amount it injected on September 12, 2001 following the tragic events of 9/11.

Comically, Bush attempted to reassure investors on Wednesday, August 7 that the markets -- and overall economy -- were fine, urging them (with inadvertent chutzpah) to conduct a "rational analysis" of the situation. The following day, the Dow fell another 387 points.

"Comically, Bush attempted to reassure investors on Wednesday, August 7 that the markets — and overall economy — were fine, urging them (with inadvertent chutzpah) to conduct a “rational analysis” of the situation. The following day, the Dow fell another 387 points."

Bush also insured Americans their were WMDs in Iraq along with a long list of other lies that are near impossible to remember. Nobody outside of the Kool Aid drinking 25 percenters that still support him believe anything he says.

canardtahiti @ 40:

OMG, Nicole!!! It's going to take my SICK DAUGHTER TWENTY WEEKS to RENEW her USA passport?? She urgently needs to come to france for health care....and she thought it would take about a month to renew her expired passport. Please, tell me that renewals are faster than NEW PASSPORTS!!??? please...

She can pay for expediting...but there's no guarantee. The Passport Agency appears to operate on an emergency basis only. My recommendation is that your daughter speak to the Constituent Services administrator for her congressperson. That's what we did and the only reason we did get our passports after 20 weeks.

Bit NOLA @ 39:

Is there any news out there about what kind of exposure 401k's have to this meltdown? Are our investments there at risk because of the various dealings of the fund corps?

It’s going to take some time to weed through this mess, thanks to the lax rules of some ‘derivatives’. But some AAA-securities-only funds are sure to be downgraded because fund management didn’t do their due diligence and weed out the bad apples from the good. Look for a boatload of class action lawsuits over this. Of course, a lot of good that does the average investor; the lawyers make off with most of the pie in those situations.

Ruthless People @ 36:

That's right. Banks are in the lending business not the real estate business. The will work with the homeowner insofar as not to own a house, then kill their credit rating. A win/win for them.

I doubt that the banks can give the potential foreclosures a sweetheart deal. If they do, then they'll have to give that same rate to everyone or get sued. Even if the banks could, people will then divest from those lending institutions because they'll not be offering competitive interest on savings accounts.

There will be plenty of people with enough money to come in and pick up the foreclosures. Get ready to be a renter from now on.

So what happens to the people who get foreclosed and end up owing large sums of money? There's no more bankruptcy to wipe the slate clean.

There are all sorts of crazy financial matters going on right now. Check out this one in the New York Times about banks selling their debt to other companies but providing the loans to pay for the debt buyers purchase.

http://dealbook.blogs.nytimes.com/2007/08/10/the-buyout-loan-merry-go-ro...

Thanks Gort.

Bound to be a scam on the 401k one day. How could they just ignore all that cash, ready for the taking? They own the board and every piece on it.

Second City CEO @ 49:

There are all sorts of crazy financial matters going on right now. Check out this one in the New York Times about banks selling their debt to other companies but providing the loans to pay for the debt buyers purchase.

http://dealbook.blogs.nytimes.com/2007/08/10/the-buyout-loan-merry-go-round/

I saw that earlier, and it is crazy. Talk about the "company store'. Makes Pullman look like a saint.

I like the economyincrisis.org site that Thom Hatrmann mentions. We're in deep s---

I'm off to dinner. Good evening everyone and have a good weekend.

dennis @ 48: thanks for the link. Also, Paul Krugman of The Times has been consistently warning readers of the strong likelihood of a meltdown in the real estate market.

Nicole Belle @ 2:

The Passport Agency is in crisis mode. When I asked one of them if I could blame Bush for it, she said "Yes, you can. We warned the White House that we were not equipped to handle their changes and they completely disregarded our supervisors." Out of the mouths of civil servants...

i'm sure lots of the passport people on the ground take a lot of flack for delays but i'm willing to bet that they didn't get extra money to fund the 'new and improved passport program'.

kind of like no child left behind.

Bush meltdown, the Iraqi meltdown, the housing/global stock market meltdown and the Cub’s meltdown… we have front-row seats to a train wreck.

Jo @ 17:

I wanted to buy some gold. Not to make money but to protect my savings. I figure if the dollar is going down in value, gold will keep its value. But, geeze, who do you trust in this day and age to buy from? They could sell me slugs painted gold and I wouldn’t know the difference. Anybody out there know anything about gold?
___

Buying gold is a wise idea. In the olden days, during wars people would flee to the neighboring countries and would barter by paying them gold. It helped most of my ancestors. Guess what? Those rascals got rich in the bargain.

Artificially inflating markets as well as people spending borrowed money than investing can hurt the economy.

Hey, You're all missing the point.

Dick Cheney has been able to "pack enough wealth" in from the run up in his Halliburton stock due to Iraqi-Clusterf*ck-Ola, he's probably immune to a crash in the market?

Dick, Lynn, the daughters, the new "Mutant Grandkid"....

They got enough money to fund the bunker on Martha's vineyard and pay the private Militia from Blackwater to hold off the "Max Max" crowd that is going to be milling around when the financial apocalypse happens?

Laid in a 20 year supply of fresh blood for dick, they're all set!

No worries, mate!

Don't look behind the curtain.

Wakeup @ 69:

Don't look behind the curtain.

is that where the maggot supply for old lady bush is located?

Got my passport. Both of them. Dual citizenship, priceless!!!

All of the blather on bubblevision is exactly that with regard to international finance. The Federal Reserve acted as nothing more than a cheap shill in trying to pump up the credit markets by offering loans in the form of mortgages to those who they knew couldn't afford them. We are now confronted with the higest number of bankruptcies and forclosures in American history.
The key element that has not been discussed is why there is no longer any liquidity and the answer is really very simple. The rest of the world and most importantly the Chines said, enough is enough. As a part of various trade agreements over the years, the Chinese agreed to by the majority of our Treasury paper in the form of bundled mortgages and other debt obligations if the US would internally destroy its industrial base by sending our jobs overseas to them. The deal worked out pretty well for both sides, but the Chinese knew that sooner or later this game would have to end because the money being printed by the fed wasn't worth the paper it was printed on. This has been the story that Americans just seem to not understand.
Inflation plain and simple is caused when any soverign country debases its currency by printing more of it with nothing to back it. Look it up for yourselves and educate yourself to what is coming because it won't be pretty.
Now ask yourselves why would the Chinese do something that would hurt themselves in the process? The answer as I have stated here several times in the past can be found at www.worldreports.org.
There was a plan called the Reagan/Mitterand Protocol that should have gone into effect years ago, but the greedy won out and have now brought us to the precipice of insolvency. Again, you can check the figures yourself. The United States has gone from the worlds largest creditor nation to the worlds largest debtor nation in the span of the 6 1/2 years that the Bush administration has been in office. No longer do the Chinese buy our debt, because they were screwed by Bush and Paulson regarding the Wanta matter.
It was the Chinese that put up the 4.5 trillion to be paid Wanta to settle a long standing disagreement over the protocol. In fact that money was paid by them over a year ago. After renegging on the agreement, the Chinese said enough and shut off the money tap.
So do a little math. If the Chinese aren't spending and recycling those dollars they get paid for goods and are not buying our Treasury debt, where are all of these dollars required to keep the system afloat going to come from?
Why do you think they call Ben Bernanke " Helicopter Ben"? It's because he has the power of the printing press. In just the last two days, the Federal reserve just created 35 billion dollars out of thin air. This may offer the impression that they are coming to the worlds rescue, but it is nothing other than window dressing for the financial disaster that is to come.
I can tell you this from several European banking sources. The Federal reserve is on life support and many would be surprised of it lasts through the month of September. If you want to protect yoursleves, get out of anything paper. That means dollars, stocks or anything else that any government can create on a printing press. You should at this time be buying something in the form of an assett that is real, and the only real money that mankind has known for over five thousand years is gold an silver.
When you own these metals they are no one else's liability. You own them outright. Governments can't reproduse it ( at least not yet ). It has to be mined and pulled out of the earth, not created by turning on the power of a printing press. Nixon screwed us back in 1971 when he broke the link between the dollar and gold and its been downhill ever since.
The best thing that could happen to the US is to close down the Federal Reserve, absorbe its debt obligations into the Treasury and go back to a precious metals standard. After all, our Consitution doesn't call for a central bank like the Federal Reserve which is nothing but a cartel of private banks that lends money to our government at interest. The Constitution calls for coin in gold and silver and such was the case up until FDR confiscated all gold held by Americans in 1933.
Go an watch or rewatch From Freedom To Fascism again to learn the finer points, but as things stand now, the Chinese are calling the shots. Everything else is just hype and spin coming out of a bought and paid for manipulated press.

strawberry @ 18:

Nicole Belle @ 2:

I do, Strawberry. And not without daily phone calls to the State Department, Congress critter, and every other bureaucrat I could find. The promised 10-12 week processing time took closer to 20 weeks and probably would not have come through had not I not been a bulldog about getting them.

The Passport Agency is in crisis mode. When I asked one of them if I could blame Bush for it, she said "Yes, you can. We warned the White House that we were not equipped to handle their changes and they completely disregarded our supervisors." Out of the mouths of civil servants...

I don't know why, but the passport situation really solidifies all the fear I have regarding Bushco. It sounds so stupid, but my argument is, if something as simple as PASSPORTS! becomes so effed up...oh God, and we should trust these boneheads with say social security, infrastructure, health care, attacking other countries...IT'S A FRIGGIN' PASSPORT! How hard can it be? Wait don't answer that. I'm watched the stock market tank again today and all Bushco could do was stand back and throw money at it. Ya know, I'm really trying hard to cut back on the Bombay and tonics...

it took me less than 5 weeks to get mine......oh I guess I should mention ...mines a British Passport
....

Regarless, the economy is going GREAT!

listening to the coverage on PBS, you'd think all politicians in this country think all the American people are blithering idiots. First bandks lower the rates, lend money to people who can't afford the loans, raise the rates and then scream that they couldn't foresee they were going to lose money, so the government has to bail them out. Just another Republican Ponzi scheme.

E Ryno @ 3:

Passport to where? . . . we are now global persona non grata. Its time to head to Washington with torches in hand. Dr Frankenstein is really pissing me off.

Torches hell. A couple of rogue divisions with grenade launchers would do it. Colin Powell, your nation awaits you in its hour of need.

myiq2xu @ 15:

Thanks again, Mr. CEO President!

I remember that. Republicans bragged about how Bush has an MBA and is going to run the government like a well oiled business. I wonder how that turned out? And his previous businesses?

This is why my goal in life is to own my home outright. That way I can tell these politicians who are going to tank this place where they can go.

"New Order Ushers in A World of Instability"

The US govt does not GOVERN in this vital area as well, as in many others. The 'little people' have been conned much worse by the US govt (unregulated markets up to the neck in speculation) than any glib brokers. The 'flex rate ' mortgages were created to suck up every single $$$ and fry it in speculative manipulations, to cover up money/stocks 'laundering' sanctioned by the US government. .. Where do you think the $$ came from to provide hundreds of billions of dollars in corporate takeover loans !???
The mortgage problem is a smokescreen.

Most if this 'value' does NOT exist - it ALL is one BIG SCAM, our National Bush-Ponzi Scheme. This is from WaPo today - I hope Sitemonitor will permit this to be available here for all posters.

."".. the new financial order is not all it is cracked up to be.

....it is many of the same firms -- Goldman Sachs, Bear Stearns, Deutsche Bank, Citicorp -- that have also underwritten hundreds of billions of dollars in corporate takeover loans that, suddenly, they cannot sell as they had planned. ..

...has also created opportunities for potentially destabilizing speculation ..

..often it is the trading on derivatives markets that now drives the trading on "real" markets, rather than the other way around...

http://www.washingtonpost.com/wp-dyn/content/article/2007/08/09/AR200708...

New Order Ushers in A World of Instability

By Steven Pearlstein
Friday, August 10, 2007; D01

Hint to White House economic team: You might not want to have had the president repeat that numbskull prediction about a "soft landing" for housing at precisely the moment central banks were pumping $150 billion into the financial system to
prevent a market meltdown over anxieties about mortgage-backed securities. Brings back memories of "Mission Accomplished."

Seriously, folks, we all need to get used to days like yesterday because there are going to be a lot more of them. In a world in which trillions of dollars have been bet on the premise that low interest rates and record-low default rates would continue forever, "repricing of risk," as the administration likes to call it, is not some minor technical event. It's more like a tectonic shift going on beneath the surface of the economy

Think about it. In the space of just several months, we've moved from an environment in which fly-by-night brokers were peddling low-interest mortgages to bad credit risks with no documentation and no money down, to one in which the largest banks are raising rates and tightening terms for their best borrowers.

In the space of several weeks, we've moved from an environment in which 25 percent of corporate takeovers could be financed with the junkiest of C-rate bonds, to a world in which the market for C-bonds has completely evaporated.

In just the past few days, problems in the U.S. housing and mortgage markets have come to pose serious challenges for Australian hedge funds, French insurers and mid-market German banks.

And in the course of several hours, a financial system that was seemingly awash in liquidity suddenly didn't have enough.

As it all unfolds, we are learning several painful truths about the new global financial system, which until recently was widely lauded for its ability to price and spread financial risk to investors willing to accept it.

One lesson is that the sophisticated strategies employed by bank and investment funds to "hedge" risk may not be as reliable as had been thought.

In recent years, for example, banks and hedge funds created elaborate investment strategies built around the presumption that Bond A would always go up when the price of Bond B went down, effectively limiting potential losses. But in recent weeks, many such strategies began to go awry as markets for mortgage securities dried up and fund managers began selling whatever they could to raise cash to pay lenders. As a result, Bond A and Bond B began moving in the same direction, creating losses on both.

Another popular way for sophisticated investors to hedge their bets is to buy insurance against the possibility that a particular company or set of mortgage holders will default on their loans. But in some cases, this insurance policy, known as a credit swap, has been issued by hedge funds that themselves had taken on similar risks. If things go bad, a hedge fund may not have the money to uphold its side of the insurance bargain.

It is in the nature of the new financial order that it's hard to figure out exactly what everyone's role is. All the borrowers are lenders and all the lenders turn out to be borrowers, so nobody -- including regulators -- can quite figure out where the ultimate risks really lie.

Yesterday's turmoil, for example, started when BNP Paribas, France's largest bank, announced that it was halting withdrawals from three of its hedge funds. So is BNP Paribas a bank or a hedge fund? Well, it's both.

The bank part has surely made lots of loans to hedge funds, including its own. And the BNP hedge funds surely used those loans to buy other loans and bonds, perhaps even those originated by BNP's bank or underwritten by BNP's investment bank.

These complex and synergic relationships have created a system that is more stable in the face of a mild economic downturn, a string of bankruptcies, or the failure of a hedge fund or two. But as Tim Geithner, the president of the New York Fed has
warned, when the financial system comes under extreme stress, those same complex relationships could have just the opposite effect, creating a "domino effect" that increases the risk of a system-wide failure. That fear was very
much present in the markets yesterday.

One concern is that rather than spreading risk among millions of investors, the current system has reconcentrated risk on the books of a dozen global broker-dealers who lend most of the money to fund managers so they can buy all those credit instruments. And it is many of the same firms -- Goldman Sachs, Bear Stearns, Deutsche Bank, Citicorp -- that have also underwritten hundreds of billions of dollars in corporate takeover loans that, suddenly, they cannot sell as they had
planned. It's no coincidence that the shares of such firms have taken a beating in the past few months as rumors swirl around Wall Street that one or another is facing major losses.

We may be discovering, in fact, that the new financial order is not all it is cracked up to be.

Although it has provided ingenious new mechanisms to finance the legitimate needs of businesses and householders and new ways for investors to hedge risks, it has also created opportunities for potentially destabilizing speculation.

It is now common for the aggregate value of "derivative" instruments to be many times the volume of the stocks, bonds or commodities on which they are supposedly based. And often it is the trading on derivatives markets that now drives
the trading on "real" markets, rather than the other way around.

Australian analyst Satyajit Das makes the point that the main achievement of the new financial architecture has not been to spread risk so much as it has been to expand risk by vastly increasing the amount of borrowed money. Making loans to buy bonds secured by packages of other loans makes for big fees and exciting work for bankers. But as Das predicted last year in his book, "Traders, Guns & Money" -- and as we all iscovered yesterday -- if the supply of credit suddenly dries up anywhere in the system, the elaborate new structure they've created can come crashing down on
itself.

Steven Pearlstein can be reached atpearlsteins@washpost.com.

ERyno@24 you said,
"Nothing was lost in the stock market this week except maybe the illusion that it ever existed at all.

Play with your kids . . . have relationships . . . play some Frisbee with friends. Then you’ll have something . . . cause non of us are going to get out of this life thing alive."

Gorgeous. Giddy. Frightening emptiness.

An itsy aside re home loans to those who couldn't afford them. Why not mention what it is those loans actually bought in terms of actual value. What home in 1980 was accessible to an average working family is now the equivalent of purchasing a ratty clunker of a 3br ranch 50's style for the price of a 10-br 4bath mansion with land.

So much for our perspective about real time, real money and real value.

World-wide credit fears, at last something we can give boosh credit for.

I'm scared. Somebody hold me.