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Chinese regulators tell their banks to stop interbank lending to US banks. As previously noted, my economic/high finance comprehension is in the paleolithic, but I don’t like the sound of that. Or this. FDIC may need $150 billion bailout as local bank failures mount. Bailout news, comment roundup follows, some of it even optimistic:
NYT: deal near.
WPost: Pelosi, We’ll bring out the bill soon. (She means the legislation, not your dunnage. Which, of course … never mind.)
WSJ: Momentum gained amid push for tough controls.
Andy Kessler at WSJ: Paulson Plan will make $$$ for taxpayers.
In 1992, hedge-fund manager George Soros made $1 billion betting against the British pound. In 2007, John Paulson’s Credit Opportunities fund correctly bet against subprime mortgages, clearing $15 billion for the year and $3.7 billion for him. Warren Buffett is now hoping to make big money on Goldman Sachs.
But these are small-time deals. My analysis suggests that Treasury Secretary Henry Paulson (a former investment banker, no less, not a trader) may pull off the mother of all trades, which could net a trillion dollars and maybe as much as $2.2 trillion — yes, with a “t” — for the United States Treasury.
Debra Saunders at SF Chron via RCP: Playing Chicken with the Economy.
I am no fan of this bailout package. Treasury Secretary Hank Paulson failed to inspire confidence when he opposed a limit to the pay and bonuses of the geniuses who drove their funds into the red. At $700 billion, the package is obscenely expensive. Worse, as the Washington Times reported, both the administration and Democrats had agreed to add consumer loans, possibly even credit-card debt, to the mix.
No wonder polls show that voters are to cool to the Bush bailout. If, however, McCain can broker a more fiscally responsible plan — read one with a price tag about half of the original’s size or less, and with a cap on executive pay — he just might be able to broker a deal that can pass muster.
… If a bailout package passes and the market rallies, McCain will be a hero. If there is no package and the market falters, Obama won’t look so hot. If there is no package and the market does not falter, Obama wins — as do American taxpayers. It is a breathtaking game of chicken — on which the U.S. economy may or may not ride. Be it noted that in the thick of battle, Obama’s idea of leadership was to refuse to postpone the scheduled Friday night debate. Until he could not say no, Obama’s idea of leadership was to stay out of Washington, instead issuing a “joint statement” with McCain on what they’d like see in the package other leaders negotiate.
Investor’s Business Daily: It’s a rescue, not a bailout.
Watching the same politicians who created this mess grill Mssrs. Paulson and Bernanke yesterday about what they intend to do about it was almost surreal.
Where, for example, does Chris Dodd, chairman of the Senate Banking Committee and the leading recipient of Fannie Mae campaign cash, get off acting so self-righteously when he and his panel were asked to move quickly on the administration’s $700 billion rescue plan?
“I understand speed is important,” Dodd huffed, “but I’m far more interested in whether we get this right.”
Get this right? Who is he kidding?
By now, everyone in the U.S. and beyond should know that if Connecticut’s senior senator and his Democratic colleagues had “gotten it right” from the start, and if they’d fixed the problem when they had the chance, there wouldn’t be a need for the crisis hearings he’s now conducting.
Hubris and hypocrisy aside, it’s important to recognize the legislation for what it is — a rescue, not a bailout, of the financial system. Taxpayers will not be left “holding the bag.” The government will buy these mortgage securities at 20 or 30 cents on the dollar and eventually sell them at higher prices.
Malkin: An Inconvenient Truth.
Many critics of the Mother of All Bailouts have finally caught on to how the minoirty grievance-mongering rackethelped fuel the subprime debacle.
The easy, obvious part is criticizing Jimmy Carter and Jesse Jackson and ACORN.
But as I’ve reported, it was the Bush administration that presided over hundreds of millions of dollars in grants to left-wing housing entitlement zealots.
More cringe-inducing inconvenient truths about Bush’s responsibility here.
Read it and weep.
Surber: The president panics, we’ll pay.
President Bush gave a speech last night that reminded me that he has an MBA from Harvard. That is not meant as a compliment.
Bush speech deconstruction, with hurtful swats, ensues.
Hot Air: Did McCain answer a 3 a.m. call?
CBS News reports that John McCain suspended his campaign as a response to a call from Henry Paulson to rescue the bailout plan, which would have headed for defeat without his leadership.
…
This makes quite a bit of sense for those of us who have followed the trek of this bill on Capitol Hill. Republicans had rebelled against the idea of a bailout, mainly on principle, not wanting to use taxpayer money to subsidize market stupidity. McCain, being the party leader now, needed to provide leadership and also to work a bill into something that would be more palatable for Republicans in Congress to support, even with reluctance.
It also puts an interesting light on his offer to Barack Obama to return with him to Washington. Having been told of Paulson’s request, McCain decided to return — but then offered to have Obama return with him in order to make it an election-neutral decision.
Nods to Drudge, RCP, Memeorandum on the roundup.
Posted by Jules Crittenden at 12:00 pm on Thursday, September 25, 2008
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