Playing Games

So, according to CNBC, the rally today is due to two things. First, the typical dead cat bounce. Second, the SEC is thinking about changing accounting rules so they can inflate the value of certain assets:

The SEC and Financial Accounting Standards Board instead said banks should apply rules that require them to review their assets each quarter and report losses if values have declined, according to a proposal released today. A suspension isn’t being considered, said the people, who declined to be identified because the plan hasn’t been completed.

Congressmen, banking lobbyists and companies including American International Group Inc. have urged the SEC to place a moratorium on fair-value accounting, saying it forces firms to report losses that they never expect to incur. Federal Reserve Chairman Ben S. Bernanke and other proponents say a suspension would erode confidence that firms are owning up to losses.

“In the past couple of weeks, fair-value accounting has been under attack,” JPMorgan Chase & Co. analyst Dane Mott wrote in a report today. “Blaming fair-value accounting for the credit crisis is a lot like going to a doctor for a diagnosis and then blaming him for telling you that you are sick.”

Loosening accounting rules will be a winning strategy, I am sure.

500 Points

I’m not convinced we’re in as much trouble as Wall Street would have us believe. Today, the DOW is up 500 which, to me at least, means that the markets are only 200+ points less confident than they were yesterday. More importantly, the S&P is up 61 points. Go with me here. Also, understand that I have no idea what I am talking about…

I think we’re being played. I think that the bigwigs on Wall Street decided they were going to make as much money on the mortage market as possible. Nothing wrong with that, except for the part that was fraud. Honest people made money too. But what’s going on now is a bunch of people telling us the sky will fall if we don’t act. I don’t believe this. Maybe it should be tougher to get credit. Maybe it should be tougher for businesses who count on short term loans to meet payroll to get those loans. Maybe they should revise their contracts to get more money upfront and not count on loans to meet obligations that should be met just by making money.

This is a major correction, and perhaps we’re due for this. If my 401k has to take a hit, then so be it.

I just don’t believe that this is as serious for everyday people as the powers that be would have us believe. If it is, then more regulation is the answer. Throwing money at it is not. I’m told that I shouldn’t use credit to buy luxuries. Sounds sane. So I don’t.

But what the hell do I know? I just don’t trust anyone. And I don’t know what I’m talking about.

And John McCain is a fuckhead, which is probably the only coherent thought in this post.

Obama Releases Kinder, Gentler Ads

A Mental Health Break…

Country First, My Ass

For days, it has been obvious what the GOP dream scenario was- have the bailout pass, but with predominantly Democratic support, dub it the the Bush/Pelosi/Reid/Obama bailout, and then run against it. This is the plan that Gingrich and Ruffini and the other next generation Republicans have been salivating over. This was their big chance. Oops:

The Republican National Committee’s new advertisement critical of the the Wall Street “bailout” was produced and sent to television stations in key states before the package failed, officials at two stations said.

“Wall Street Squanders our money. And Washington is forced to bail them out with — you guessed it — our money. Can it get any worse?” asks the ad’s narrator, as the words “BAILOUT WITH OUR MONEY” cross the screen. (The answer: Obama’s plans would make it worse.)

The ad, however, seems to assume that it can safely attack a successful plan. And the reason may be the timing: Though it started airing this morning, the spot was released to stations yesterday morning, ad executives at stations in Michigan and Pennsylvania said.

Kae Buck of WLNS in Lansing said her station received the at at 7:55 a.m. Monday. Luanne Russell of Pittsburgh’s WTAE said her station received it at 10:49 Monday morning.

Got it? While the Republican Leadership was shaking hands and allegedly rallying their troops to vote for the plan, they were already cutting ads to bash the Democrats. This is why only Republicans in safe seats and leadership positions voted for it. Yesterday, they went out and blamed Pelosi for injecting partisanship into the process, causing the bill to fail, when actually they wanted it to pass so they could… use it against the Democrats. And they were not even hiding it- this was what many online (again, go read the Next Right morons) had openly said they should do, and the commercials were ready to bash the Democrats for passing the plan.

Except the plan failed. And the Republicans are caught red-handed, and will pay the price should things melt down. Not that half the GOP base or the Republican Study Group care- half of them probably think an economic disaster is an alternate route to the Rapture. Not to mention, think of the side benefits- I mean, after all, if everyone is broke, no one can afford contraception or Demon Rum.

The only thing you can count on in politics these days is the sure-fire bet that when the chips are down, the Republicans always, always always put themselves first. These guys need a solid two decades in the minority.

Let ’em Fail

Time Magazine comes out against the bailout, for the most part:

Do not be fooled. The $700 billion (ultimately $1 trillion or more) bailout is not predominantly for mortgages and homeowners. Instead, the bailout is for mortgage-backed securities. In fact, some versions of these instruments are imaginary derivatives. These claims overlap on the same types of mortgages. Many financial institutions wrote claims over the same mortgages, and these are the majority of claims that have “gone bad.”

At this point, such claims have no bearing on the mortgage or housing crisis; they have bearing only on the holders of these securities themselves. […]

Follow the money. Average Joes and Janes are not the holders of the other side of complicated, over-the-counter derivatives contracts. Rather, hedge funds are the main holders. The bailout will involve a transfer of wealth — from the American people to financial institutions engaging in reckless speculation — that will be the greatest in history.

I am wholly unqualified to make a judgment on the bailout, but I’ll take the editors of Time opinion of these authors over politicians any day. As noted in the comments to an earlier post, the bailout is nothing more than the opening of the world’s largest hedge fund.

Update: Sorry. I thought this was an editorial. The article was actually written by Ari J. Officer, who has a master of science degree in financial mathematics from Stanford University and by Lawrence H. Officer, a professor of economics at the University of Illinois at Chicago.

Heads I Win, Tails You Lose

I missed this yesterday, somehow:

Sen. John McCain (R-Ariz.) and his top aides took credit for building a winning bailout coalition – hours before the vote failed and stocks tanked.

Shortly before the vote, McCain had bragged about his involvement and mocked Sen. Barack Obama for staying on the sidelines.

“I’ve never been afraid of stepping in to solve problems for the American people, and I’m not going to stop now,” McCain told a rally in Columbus, Ohio. “Sen. Obama took a very different approach to the crisis our country faced. At first he didn’t want to get involved. Then he was monitoring the situation.”
McCain, grinning, flashed a sarcastic thumbs up.

“That’s not leadership. That’s watching from the sidelines,” he added to cheers and applause.

John McCain, a few hours later when the bailout failed:

“Sen. Obama and his allies in Congress infused unnecessary partisanship into the process. Now is not the time to fix the blame. It’s time to fix the problem,” McCain said in a hastily called statement to the press here today.

Heads I win! Tails, you lose! And that last quote is actually a twofer, because McCain claims this is no time to be fixing blame… while blaming Obama.

Now, I understand most of us are cynical about politicians, and I understand that politicians are opportunistic, but aren’t they usually a little more subtle than this? I mean, can’t you at least try to not be blatantly full of it?

Or has McCain just given up?

Stop Pitying Her

So says Rebecca Traister:

Sarah Palin is no wilting flower. She is a politician who took the national stage and sneered at the work of community activists. She boldly tries to pass off incuriosity and lassitude as regular-people qualities, thereby doing a disservice to all those Americans who also work two jobs and do not come from families that hand out passports and backpacking trips, yet still manage to pick up a paper and read about their government and seek out experience and knowledge.

When you stage a train wreck of this magnitude — trying to pass one underqualified chick off as another highly qualified chick with the lame hope that no one will notice — well, then, I don’t feel bad for you.

When you treat women as your toys, as gullible and insensate pawns in your Big Fat Presidential Bid — or in Palin’s case, in your Big Fat Chance to Be the First Woman Vice President Thanks to All the Cracks Hillary Put in the Ceiling — I don’t feel bad for you.