Archive for October, 2008

That was some bailout, wasn’t it?

Stocks closed at their lowest levels in 5-1/2 years on Monday, extending a global sell-off as worry about the severity of a global recession and the bleak outlook for profits gripped investors.

Trading was volatile and volume was light, with stocks falling sharply in the last half hour of trading. With just four days left in October, the S&P 500 is on track for its worst month ever in the post-World War Two period.

Not only is the government buying bad mortgages, it appears they will soon be in the market for bad auto loans. Does this mean I can stop paying on my house and my truck, so you all can take over my payments for me?

The U.S. government is considering direct financial assistance to facilitate a possible merger between General Motors Corp (GM.N) and Chrysler LLC, a private sector source familiar with Treasury discussions told Reuters on Monday.

The Treasury Department is weighing aid of at least $5 billion, which could include capital injections and government purchases of bad auto loans, according to the source, a financial policy executive who spoke anonymously because the discussions are private.

If they do this, you know that every business out there is going to want a “bailout”, and cry until the government takes their bad debt as well.

I was reading this article yesterday in the New York Times about Wachovia’s third quarter loss of $23.9 billion.

The Wachovia Corporation announced a $23.9 billion third-quarter loss on Wednesday as it prepared to be taken over by Wells Fargo.

The bank took an $18.7 billion charge to write down the value of good will and wrote off $6.6 billion in credit losses tied largely to its disastrous purchase of Golden West Financial in 2006. And the red ink is unlikely to end soon.

Golden West is the firm that Herbert and Marion Sandler owned. The Sandlers were mocked on Saturday Night Live a couple weeks ago in a skit about the Wall Street bailout.

Just think, if it wasn’t for those two people, Wachovia wouldn’t have been in trouble, and they wouldn’t have had to sell out to Wells Fargo.

Interesting.

Here they go again, another bailout is on the horizon. This makes what? Four, or five?

The US Federal Reserve has offered help to troubled money market mutual funds, as governments announced fresh aid to struggling banks amid signs of thawing credit in the money markets.

In its latest response to recent global financial turmoil, the Federal Reserve announced Tuesday it was putting up up to 540 billion dollars for purchases of highly rated short-term debt, including certificates of deposit and commercial paper, from money market investors.

The market for these assets, which in normal times are considered safe investments offering modest returns, has frozen up in recent weeks as the global financial crisis worsened .

My only question is, where is this money coming from? Apparently it’s not part of any of the other bailouts, so, how does that work?

Oh, I know, you’ll tell me it’s not costing us anything, as the money is being loaned to help in the “shortage”. My experience tells me that anytime the Federal Reserve is involved, it costs us money.

The President announced that the government will be buying stock in U.S. banks. Oh joy. The passage of the $700 bailout bill was the first step toward socialism, and this is the second.

Blackstone Group Chief Executive Stephen Schwarzman said on Tuesday the injection of government cash into U.S. banks, alongside similar measures around the world, could break the back of the credit crisis.

…

“We will be looking today to an absolute sea change in the global financial system in terms of liquidity,” Schwarzman told a packed room at the Super Return private equity conference in Dubai. This could be the action that “breaks the back of the credit crisis,” he said.

He was referring to plans by the U.S. government to inject $250 billion into the nation’s banks, following similar action in Europe, to revive money markets and try to stave off global recession.

Schwarzman said there was now “absolutely no reason” why anyone would have concerns or fears about putting money into the U.S. financial system.

Nationalized banking isn’t going to be the walk in the park they want you to think it is.

I wonder how many steps there are before you reach socialism. Can we manage to turn around before we get there? I think I forgot my toothbrush.

As a Dish Network subscriber, I am quite happy they are finally bringing this case to a close. I am so sick of it, I can’t stand it.

Dish Network Corp and EchoStar Corp will pay $104 million in damages to TiVo Inc after the U.S. Supreme Court on Monday denied Dish’s appeal of a patent infringement case.

The court’s decision not to review an appellate court’s ruling follows years of legal wrangling over TiVo’s “Time Warp” software that allows users to record one television program while watching another via a digital video recorder.

One thing I have noticed, since Dish Network switched to their own “work-around” software, my DVR locks up more, has more errors, and well, just sucks. Coincidence? Probably not.

As you know, on Monday, when the House initially rejected the $700 billion bailout, the stock market tanked 777 points. We were told that Congress had to act to “save” the economy.

With the economy on the brink of meltdown and elections looming, a reluctant Congress abruptly reversed course and approved a historic $700 billion government bailout of the battered financial industry on Friday. President Bush swiftly signed it.

Then what happened? The market dropped 157 points for the day. Oh yeah, I should tell you, the market was up almost 300 points when the House vote took place. So, in essence, the market dropped more than 450 points on the news that a bailout deal had been voted on and was to be signed into law.

Great job. We’re paying a high price for socialism, aren’t we?