Europe To Paulson: You're On Your Own
By Cernig Monday Sep 22, 2008 8:45am
Remember how over the weekend Hank Paulson was on all the bobblehead shows saying that the bailout should extend to foreign firms trading in the US and how he was going to put together a Coalition Of The Bankrupt with other major nations for his bailout plans?
Europe's not interested in buying toxic debt from sinking companies.
Ulrich Wilhelm, spokesman for Angela Merkel, the German chancellor, said there was no need for “a measure along the lines of what has been decided in the US”. Peer Steinbrück, the German finance minister, also made clear after a telephone conference with his contemporaries in the G7 group of leading nations that Berlin did not need to set up a rescue package.
...The French government also said it did not plan to set up a toxic asset fund or contribute to the US scheme. British officials said they had already instigated a special liquidity scheme, but like France and Germany they did not intend to pursue a toxic asset fund.
The European Commission made clear it was not planning any emergency measures.
That's a wee bit of a problem for Paulson's plan, and signals exactly how much confidence European governments have in it. And the reason they have so little confidence in Hanks plan is simple - it won't solve the underlying problem which is that too many banks have sailed too close to the wind and are now insolvent. Solving that problem would require recapitalizing those banks and getting credit flows unfrozen again - which would cost yet more untold hundreds of billions and would again reward bad actors for their sins but at least would help people other than the fat-cats at those major banks.
Without such a recapitalization, though, the light at the end of the tunnel is still the oncoming train of recession.
Speaking at the Reuters 2008 Restructuring Summit, Andrew Feltus, senior portfolio manager of an $8 billion high-yield fund at Pioneer Investments in Boston, said the remaining banks will dominate the market, which is "good for them, not good for the borrowers and not good for the overall economy."
...According to bankruptcy data and management company AACER, in the eight months to August there were just over 40,000 U.S. commercial bankruptcy filings, compared with 43,000 for all of 2007 and 30,000 for all of 2006.
"The rest of 2008 will remain robust for bankruptcies, as will 2009," said AACER president Mike Bickford. "The generally poor availability of credit has definitely begun to have an impact on commercial borrowers."
...In a survey released on Monday, but compiled in August, the U.S. National Small Business Association said 67 percent of respondents said their business had been affected by the credit crunch, up from 55 percent in February.
NSBA head Todd McCracken said the survey was particularly troubling because, unlike the February poll, it only included NSBA members "who tend to be larger and well established."
"We had expected they would have less severe problems than we saw in February," he said.
"But instead they face more difficulty getting credit. And there's no sign of a turnaround. It's rather alarming."
Originally posted in slightly different form at Newshoggers
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We're screwed.
Unilateralism comes home to roost. What did this administration expect after cramming it up everyone's ass for 7-1/2 years?
Or they could realize that they have no reason to act if Hank bails out their banks for them. Seriously why should the US taxpayers bailout UBS? Seems to me like it is just Phil Gramm whining for it to happen.
Europe to George W. Bush - DROP DEAD
Gee, ya think maybe...just maybe...the imbecile shouldn't have pissed off the entire globe.
Payback is a bitch....ain't it.
If these titans of the free market (Paulson, Bush & Co.) had any faith in the free market they'd utilize its principles. Why not make the terms of any bailout extremely burdensome, to both the company and to the senior executives, and then let the companies decide whether they'll accept any bailout or not? That way at least their would be a breakdown between companies that really feel they have no choice, and companies that rather forgo draconian federal requirements and think they can make it on their own.
Its insane that the default option is to just buy all the bad assets.
If the Chairmen,Vice Chairmen and senior staff, of these Wall street investment banks, would return the huge bonuses they have been getting for the last 4 years , there might be a different response from other countries.
"Toxic assets"?
This situation is so embarrassing. Bush has shown America's asscheeks to the rest of the world.
Another Wall St. Shake-Up: Investment Firms Bought Out by 1-800-Mattress
bert @ 1:
Why do I keep seeing The Joker burning his pile of cash?
And we know what a wonderful diplomat John McTemperTantrum is.
If America thinks that things couldn't get worse, just put McFruitLoops in the White House.
kablooie @ 7:
And their not even gonna lube us.
Liberal AND Proud @ 11:
Its ok, America's ass is perma lubed with conservative spit.
Listening to CSpan now.
Although not likely a good choice for President, the man often finds just the right words to state the obvious.
Why it happened
They are getting ready to add more of what created the problem in the first place.
At this point I'm thinking "Bring It On!" (recession that is)
It may be tough in the short term but in the long term it will work itself out.
If we bail out these fat cats (especially with a blank check), it's just the opposite; in the short term we may be better off but in the long term we are going to be much worse off.
Bring it on!
Heinlein was right; the Religious Right would climb in bed with Big Business and the two groups would take over the US, isolate the country from the rest of the planet, and plunge it into a New Dark Ages. Get ready for the Interregnum...
DAMMIT!!!! They cut away!
Don Davis @ 8:
Only problem with this plan is that the tooth fairy will rob you during the night, and leave you with McCane's yellowed dents instead of your cash.
Elect McSame He's the reform candidate!........ Cough Cough
Instead of a bailout, we should have a pullout -- of troops from Iraq and Afghanistan -- and put the money being spent every day on bullets instead into shovels and hammers, and get the hell to work rebuilding the infrastructure of the country. We can't even deal with a damn hurricane.
Regime building isn't worth the hassle if it bankrupts the entire populace (oh, except for select fatcats of course) leave everybody the hell alone and fix our shit!
Swords into plowshares time! Plant some turnip greens or collard greens, because you can't eat money!
Thank you for this opportunity to relieve critical buildup of spleen-pressure.
This would be a good time for the Europeans paid us back for the billions we spent on the Marshal Plan. Also it's about time they start paying their own defense bill! If they have a problem with the Russians that's their problem not ours!
The end of American Exceptionalism is nearing.....
But it won't be the end of the world.
watch your congress carefully this week, america.
watch as even "constitutional knight-in-shining-armor" chris dudd gets played like a cheap fiddle.
watch as "enabler of the house" nancy peloser runs around like a chicken with it's head cut off.
and somebody better put steny hoyer under 24/7 surveillance on suspicion of negotiating with economic terrorists. wasn't this $#!+ supposed to be covered in the "patriot act"?
Methinks Europe misunderestimistood the Bushies...Hank wants to give our money to China, corporations grounded in Chinese finance. You know..the China that we owe a few trillion/American dollars to.
Cash for Trash.
Would you even buy even ONE used car from these people?
And now you say you are going to pony up a Trillion Bucks.
Goodbye money hello POVERTY TRAIN!!!!
The feds are good to banks, not so much to working people. It's clear what I need to do. I think I'll become a bank holding company.
How about using the credit of the American people, if there is such a thing anymore, to set up an entire new lending institution. Then set the corrupt and bankrupt companies adrift on a board.
I don't really understand this bail out plan. Businesses sometimes fail. People sometimes lose money. You run a bad business or make a bad investment; you go belly up. Someone else comes along with a little better ideas and takes your place. This is capitalism. Why the hell are these people wanting me to cover their bad investments? Do I look like an insurance company?
I see the G7 countries are no more interested in bailing out the Wall Street Cash-for-Trash thieves than the American taxpayer.
i used to think we were going to come limping out of the bush administration but we were going to survive.
i'm not so sure anymore.
how long until the election?
how long do you have to live?
seriously, shit is about to that proverbial fan. (yes, i know there is no proverb about fans)
sammy1 @ 14:
You don't need to shout "bring it on". It's out of our control. Despite what Milton Friedman believes, the business cycle cannot be wished away and there is no such thing as a permanently growing economy. It is fundamentally impossible. Now, lump that in with perhaps the most ignorant business and political decisions ever seen since the 1920s, and you have our current situation.
Cash is now king, as it always is downturns. If you have it, use it wisely...and BARGAIN for whatever goods and services you purchase.
Once we flush the last remaining turds of "supply side" economics down into the cesspool of history, where it rightfully belongs...THEN we can turn our attention to REAL economics. Keynesian economics. It saved this country before...it will do it again.
1) Tax cuts for MIDDLE Americans...put money in the hands of REAL consumers...who buy goods and services that people NEED...not want.
2) Infrastructure programs. Put America back to work. Hire American workers and pay them to rebuild highways, tunnels and bridges. Upgrade the highway and rail system. Americans will use that money to pay for food and clothing for their families and boost the economy.
3) Tax businesses who export jobs, factories, etc. Cut taxes for businesses that hire American workers and build factories HERE. We have the best workers in the world HERE. It's time we used our best assets, instead of throwing them away.
4) Increase taxes on dividends. Companies should keep money IN their businesses and reinvest in new technology.
5) Increase the capital gains taxes and inheritance taxes. The rich have profited mightily from this country, its time they gave something back.
6) Increase education grants to poor and middle income families. Invest money where it counts...in our kids.
7) Tax government loans and grants to big business...not small business...BIG business. ANY business that is $250 million or bigger that is sucking on the government teat, should pay for it.
8) Cut military spending, increase oversight on the military industrial complex. Put the money to work where it is needed. If our economy isn't sound...the country is not safe.
I was listening to all the news and commentaries this morning about this latest 'crisis' to befall our sadly broken country and it occurred to me, as far as AIG is concerned and it's suppose to be so important to the world economy...how come other countries aren't to it's rescue?? The term 'controlled collapse' keeps coming to mind. L&B at #4...yup I think that says it all, and yup, yup...paybacks are a bitch.
Has anyone tried the Rosetta Stone course in Mandarin? I think we're gonna need it. Too bad Palin can't see China from her house.
i called my congressman and told his staffer to vote NO NO NO to any bailout for irresposible corporations damn the consequences. he laughed softly and said 'you're not alone'.
.
From a democracy, to a kleptocracy, brought to you from the "MBA president". And to think, there's still 4 more month's left of this disastrous administration. I shudder to think what else they have in store for us (Iran).
This bailout is a fraud on the american people. Paulson is out of there in 4 months... he"ll prop up his buddies with your money and we wont hear from him again.
Well hell! I was watching the hearings on one of the cable news shows and they cut it off to cover bush's yakking at the United Nations. As if what he has to yammer about is more important than the financial future of our country. I tried going to c-span3 but they want me to install something and I have no idea what it is they want me to install. Damn! I used to be able to watch live broadcasts there with no problem.
First I lose my banner on my blog site and then this. This is not going to be a good day as it has sucked so far.
Liberal AND Proud @ 30:
It is time to bury these frauds and their pathetic political party of thieves, embezzlers, liars and cheats FOREVER.
Hmmm... Maybe it wasn't such a great idea for Bush, Cheney, Rumsfeld etc. to be crapping all over "the old Europe", dismissing them as worthless allies, making lame sarcastic jokes etc.
Though I'm sure that our "new Europe" pals like Latvia, Estonia, Georgia, Poland, etc.... will be stepping up to the plate with lots of financial cooperation.
pissed off patricia @ 36:
Geez. It's gonna take weeks to get the smell of sulphur out of the UN building.
Maybe we could get a loan from Iraq. Last I heard they were flush with money. I mean, would that be ironic or what?
ppcli @ 38:
I'm sure that in the interest of diplomacy...the imbecile will spend time on tv announcing that we can call them "French Fries" again.
Liberal AND Proud @ 39:
I mean at this point, does anyone give a rat's ass about what he has to say?
Does the imbecile have the balls NOW to take a parting shot like..."good bye from the world's biggest polluter".
Maybe he should say..."Good bye from the worlds biggest fraud or cheat or liar or incompetent or deadbeat".
"Without such a recapitalization, though, the light at the end of the tunnel is still the oncoming train of
recessiondepression."I think that's about right.....
The U.S. is the equivalent of a gambling junkie in debt to a loan shark. We keep borrowing just enough money at higher and higher interest rates just to keep us alive and prolong the inevitable. Eventually the loan shark will grow tired of the daily small payments and smash our kneecaps or fit us for cement golashes. It's time to own up to this nightmare, take our medicine. The longer we carry on this charade, the harder ass kickin we are going to take.
Amitola @ 44:
George Bush is like that black hatted villian in the old silent films...tying the U.S. to the railroad tracks.
all i have to say is "owned"
Fucking Cons!! They've really put us in it this time. I knew they were going to make us a third world country but I thought it would take a decade or two.
And yet, they are running neck and neck in most races around the country. WTF is wrong with Americans??!! I'll answer my own question. They're a bunch of brain-dead zombies!!
How many of us have heard more than one person say "I don't really pay attention to politics. But OMG, did you watch American Idol last?" Fucking idiots!!
Don't get me started on all on the women who have decided vote their genitalia or the 12 million unregistered black voters or the racist "working class folks" who don't want to vote for a black man!!
Has anyone noticed that the Democratic party keeps stabbed in the back by the people it defends the most?
Sorry. I'm just venting.
Seems to me that bush wants to completely secure his place in history as the very worst president ever. I think he can stop trying now. The verdict is in and he wins.
Symon @ 45:
This is what happens when you have a dry drunk in the White House, a megalomaniac as VP, a horse show manager in charge of domestic disasters, a casino owner as the head of the treasury, a polluter in charge of the EPA, basically a Christian Scientist as the head of the FDA, and other assorted incompetents, frauds, borderline clinical idiots and criminals sprinkled throughout your Administration.
I don't blame Europe one bit. I know if I was a European of any stripe I wouldn't support the USA.
That said, what are the current odds that Rush, Hannity, and their ilk use this to bash Europe somehow?
Freddy Knuckles @ 48:
Don't apologize, venting is what keeps us sane. I went into a rant last week when some smiling lady looked into the camera and said that she supported Palin because "she is one of us". In other words all the lady needed to sway her vote was a woman who was a mother. That's it, she's one of us.
pissed off patricia @ 49:
When the History Channel starts replaying his speeches...they should include a laugh track.
Bitter Bud Hussein @ 51:
Who gives a shit what those mental midgets think. If I were them, I'd start going to church regularly. They are going to need the rest of their lives to atone for their sins.
Well maybe the "Hole in the Wall Street Gang" can have a Going Out OF Business Sale and sell some of those high end office fixtures??? Bush can contribute his memoirs it is a short story on a single page. "How to screw over the World and Pay for it with the people carrying the debt!"
If we nationalize the debt can we also nationalize the homes and assets of the bank managers?
PO'd Patricia, cnn.com has a live feed.
Liberal AND Proud @ 50:
Judging by Dumbya's appearance lately, I don't think that he's a dry drunk anymore.
Poor widdle baby pwesident; everybody picks on him...
Now if only the Democrats in Congress will act like the Europeans towards Paulson's absurd proposal, that would regain some respect back from other countries. Also, can we take away whatever George Bush is entitled to for serving our country as President? I mean he did run it to the ground as well. I don't think he deserves another penny from us either.
Good Luck
Get your imaginations, creativity, will power, and determination tuned up.
Nick @ 47:
I would be very careful if I were George Bush and his minions, especially those morons on FOX.
Piss off the Chinese and all they need to do is simply "call in" all the money they've lent us.
They can bring us to our knees in a heartbeat.
Mick Piobr @ 57:
Oh. So you think he's snorting again?
Let it hit, the sooner the better.
Here we witness the precursor to the failure of our fiat based economy...and the article states that if it doesn't work we may head into a recession. HA! Get your heads out of your asses. The warning signs of the great depression were FAR rosier than where we are today. Wake up!
Hurry up and pass my bogus bailout before Europe has a chance to tell the world that I am full of sh*t. Well Henry, the cat is out of the bag now.
Will the Clinton clip from Letterman be posted?
If not, why not?
Jerseyan @ 56:
Do you have a link? When I go there and click on live, I get a blank black screen.
Heh, in the spirit of patriotism...perhaps Bush and McCain should be offering up their wives services to the highest Asian bidder.
The American people are being asked to sacrifice. I think it's only fair that Laura and Cindy take one for the team too.
L.A. Confidential @ 59:
Yep.
And while you're at it clean your gun...
pissed off patricia @ 65:
LOLOL! No..it's fine. It's just a graphic showing everything George Bush knows about geopolitics!
pissed off patricia @ 65:
Sorry, my video screen has no link I can give you. Is there anyone here who can help? I'm not terribly computer savvy.
Actually i think the europeans are waiting to see how things turn out. They have modest means of fighting this and they would be foolish to commit their rescources now, before the extent is known.
I really hate to say this, but we all have to 'fess up and admit that a lot of this is the result of us not really having the conviction to raise holy hell over the past 6-8 years. We knew it was coming, didn't we. While we may have signed some email petitions and laughed with Stewart and Colbert and cheered Olberman on, we allowed ourselves to be shouted down in one-on-one situations and never took serious steps to reclaim some sanity in our government.
It is not a matter of traditional Republican/Democrat battles, either. This is a classic case of the emergence of a strong enough "aristocracy" tied to each other by wealth, background, and assorted "clubs" that have dictated terms to benefit each other at the expense of the rest of us. They have bought everything from the courts to the financial regulators to the media. We even allowed the mantra of "the fundamentals of the economy are strong" to continue for years after we knew damn well it was not true.
Congress had better get off its collective butt and install some serious oversight and penalties on this arrogant bunch, otherwise they will just rearrange the chairs on the Titanic and order themselves another cosmopolitan.
To all those conservative jack asses who seem think that it doesn't matter what the world thinks of the U.S. .... THIS is why it matters.
Filthy Harry @ 12:
and do these nut case right wingers think it's going to get any better under Deregulator now faux regulator John McCain
Oh that's right they don't think
Liberal AND Proud @ 61:
I dunno 'bout that; but his face looks very flushed and haggard. Alchohol dilates surface blood vessels and causes that flushed look.
A few of the photos of Dipshit that were taken at the olympics show him looking positively boozey - not to mention the falling-down-drunk video sequence.
If you haven't seen that one, it's probably easy to find googling something like Bush drunk olympics or some such.
It's in one of them tubes.
They are talking about spending between 1 and 2 trillion dollars.
Nobody is going to loan the Feds that much cash.
The Rich are not going to accept a tax hike that bug.
The government has no option but to print between 1 and 2 trillion dollars.
Welcome to the land of hyper-inflation.
This is just a plan by the Bushies to undermine and ruin the Obama Presidency. The Bushies think this is their ticket back to power in 4 years.
Well, it looks like we are truly on our own here. We certainly can't blame the Europeans. Bush has burned every bridge. Any leader who put faith in him crashed and burned. Blair in the UK and Howard of Austrailia.
upchuck @ 76:
I think that the Repimps were hoping that they could get out of the hotseat before the shit hit the fan.
But... but, we saved them in World War II. They owe us!
OK trolls, tell us all how this is clinton's fault. You motherfuckers have RUINED the country in a few short years. Racist, homophobic losers, one and all, tell us how it is anything other than the fault of the clowns who voted for this waste of man milk TWICE. Did you think all the fuck-ups in the first term were a fluke? DAMN!
If I were a CEO, I'd be looking over my shoulder.
One of the many things I don't get about this meltdown/bailout situation is this:
Bush says congress must act FAST. Why? Why shouldn't we take our time, figure out what happened, who did it and proceed in a thoughtful manner. That would be the job of congress, but I fear they will totally cave in the interest of "doing something". The whole thing has a "Saddam's got WMD - we must go to war NOW!" feel to it.
Mick@78, You are right. Bush and Co. wanted to be long gone, but Karma has a way of kicking ass. This is just a scheme for the rich to raid the tax payers one more time. Why the urgency? The Middle Class has been bleeding for over a year, and now they give a shit? Give me a break.
Actually if you do a bit of reading you may learn that some foreign companies, banks and insuracnce companies, are looking over the US corporate landscape, looking for aquisitions.
The foxes are circling the chicken coop. Foxes feed off of hens. That's the way life is.
pissed off patricia @ 36:
CNN (whatever..) is streaming FULL HEARINGS right now. Just click on the stream banner at the top of cnn page - smooth going in FireFox. If it asks you to install a plug-in, say yes - does NOT screw your computer setups as C-Span does.
"Recession?"
I've started referring to the current crisis as "Great Depression II -- Bush/McCain Boogaloo."
Billy Bob @ 81:
That's exactly what it is. One word: FEAR.
Clearly, it worked before. Give them credit for having learned something.
bert @ 1:
Yep. This sums it up perfectly.
Cernig @ 0:
You misspelled depression.