The Dismal Science

The always reliable "arps" passes along a link to a lexicon of modern economic terms.

Credit default swap: Halfway between an insurance policy and a racetrack wager, this is a way that mortgage lenders made themselves feel safe giving loans to people about whom they otherwise knew nothing. No job? No documentation? No problem. We have a credit default swap.

She does not, however, define panic.

Backdoor Bailout, Part II

Today's NYT.
Money quote (heh):

Treasury officials said they hoped to make the first capital infusions within the next two weeks. That would be earlier than any government purchases of unwanted mortgage-backed securities. One reason for Mr. Paulson’s rapid reconsideration was that global financial markets have been going downhill faster than anyone had seen before.

Smart people on Charlie Rose last night, including Steve Pearson at the WaPo, said months, so I'm thinking faster is better. And cheaper.

Sooner Than I Thought

From AP:

Treasury Secretary Henry Paulson said Friday that the Bush administration will move ahead with a plan to buy stock in financial institutions.

At Last, A Cure For Palin

Wm. F. Buckley's Son

endorses Obama. (And, like his father, he overwrites.)

Action Item: Hate Speech

has escalated at McCain/Palin rallies in the last several days. Talking Points Memo has a new video about it and an organization called Progressive Future has a petition.

The Future

according to some guy I never heard of, but who comes highly recommended.

Beginning in the 1970s, libertarians and neoliberals promised that deregulation would produce a borderless utopia for small enterprises and entrepreneurs. Instead, the result of free market fundamentalism is a global financial collapse that may produce an America with bigger government, more paternalism, and a financial and corporate oligopoly....

...The effects of the greatest financial crisis since the Depression are only now beginning to be felt. By the time the crisis has run its course, a decade or more from now, the U.S. will be a radically different place...

...For example, universal health care may come in the worst possible way, by forcing or coaxing employers to provide health care coverage for all workers. These and other employer mandates and benefits would increase the cost of hiring--and, as in some European countries, the result might be structural unemployment, alienation, and crime.

Breaking!!!!

I can barely keep up with it all today, but gin helps.
1--The Alaska Supreme Court refused to postpone tomorrow's report on Troopergate.
2--Obama is buying 30 minutes of prime time on CBS and in talks with other networks for the same thing. Pretty unusual and very expensive.
3--The market is tanking. You don't need a link for this, just turn on your radio or TV.
4--Republicans are trying to game the election, challenging ACORN, a somewhat dicey voter registration organization, in multiple states. Plus, the NYT reports Secs. of State in several states are illegally purging voter rolls, with the result that new registrations are only balancing the deletions. Hmmm.

They Call It Recapitalization

and suddenly it's news, a week after the bailout bill passed the House with none to little attention paid to the provision.
I can't help it, once a reporter, always a reporter. How did this provision escape the attention of everybody but NPR and Justin Fox's blogs? Is there some sort of unwritten agreement to keep the plan to nationalize the counry's banks — socialism, folks —under the radar as long as possible?
This is from an AP story I can no longer find:

An administration official, who spoke late Tuesday on condition of anonymity because no decision has been made, said the $700 billion rescue package passed by Congress last week allows the Treasury Department to inject fresh capital into financial institutions and get ownership shares in return.
Treasury Secretary Henry Paulson told reporters that Treasury was moving quickly to implement the $700 billion rescue effort and he specifically mentioned reviewing ways to bolster the capital of banks.
"We will use all the tools we've been given to maximum effectiveness, including strengthening the capitalization of financial institutions of every size," Paulson said at a Wednesday news conference.
His statements came on the heels of Britain's move to pour cash into troubled banks in exchange for stakes in them — a partial nationalization.

This is from the NYT, which Fox notes has just noticed:

Having tried without success to unlock frozen credit markets, the Treasury Department is considering taking ownership stakes in many United States banks to try to restore confidence in the financial system, according to government officials.

Josh Marshall at Talking Points Memo says Krugman and Brad DeLong have written about the provision, but, again, it's on blogs, not as regular reporting in mainstream news. This is so strange, but no longer surprising, that the mainstream press is behind the bloggers and always catching up because they are basically stenographers at this point.

UPDATE: Things are moving very quickly. WSJ today quotes White House as saying this approach is not "imminent" but then hours later we have the Saturday meeting of finance ministers announced. My prediction, they'll start doing it over the weekend or at the latest on Monday.

UPDATE II: So, how did recapitalization get into the bill. Apparently, the "back door" is not in the language of the bill itself, which Treasury resisted changing. But in floor discussion, which signals legislative intent in case anyone wants to take it to court.
Fascinating, I've been totally hooked on this mystery since Saturday and now it's coming out. Justin Fox sort of explained it yesterday, and today Roubini has it.

Finally

Somebody notices that Paulson has the authority to nationalize the banks — stock injection — and that he may actually be planning on doing it.
From Krugman:

Update:Starting already? Justin Fox catches something in Paulson’s press conference today:

Did anybody else notice that when Hank Paulson was describing in his press conference today what the Emergency Economic Stabilization Act enables Treasury to do, the first thing he listed was “to inject capital into financial institutions”?

That wasn’t how Treasury initially advertised its Troubled Asset Relief Program. It was sold as a way to get the market for mortgage securities moving (or, to use the jargon, liquid). Lots of academic economists objected that liquidity wasn’t the problem, it was insolvency. What Treasury needed to do was recapitalize financial institutions and take equity stakes in return.

…

None of the people asking questions at the press conference really seemed to pick up on this, of course (&%%$# Washington journalists!). Along with Paulson’s affirmation that the FDIC was going to use its “systemic risk” powers to protect depositors and unsecured creditors “as appropriate,” I take it as one more sign that we’re headed toward a Swedish solution of our banking crisis—recapitalization and temporary nationalization of much of the banking system.

Fox claims he first reported this Sept. 28, but that was before the bill was approved. I still say the guys at NPR had it first.

OK, I owe one to Justin Fox at Time and now need to add him to my daily reads because he actually responded to me twice. So, here he's getting the timing on the whole real bailout plan. Will this see the light of day outside of the 'sphere. Your guess is as good as mine. I'm saying I smell stealth operation here.

P.S. I had been reading Time mag since I was 9 years old but swore off when they hired Mr. Smirky, Mark Halperin, and pooh-poohed the AG scandal. Maybe Fox will turn me around.

Credit Market Loosening?

Should I be worried?

Sarah. Again.

Well, I am trying to hold to a standard of "only new information."
Commenter over at Romenesko re: a McCain spokeswoman wondering why the librul media esp. women, hate Palin.
Radically female body language
Posted by Paul Spinrad 10/8/2008 1:43:16 PM

In humans and other species, tilting the head to one side is a gesture of submissiveness practiced only by females and non-dominant males. For h... In humans and other species, tilting the head to one side is a gesture of submissiveness practiced only by females and non-dominant males. For humans, the gesture is disarming and friendly, but not commanding.

Sarah Palin is the first national-level politician of either gender I have seen who uses this gesture. She also winks, and does other typical female body language things. Pelosi doesn't do them, Merkel doesn't, Golda Meir didn't, etc.-- they all "read" like men when they are/were addressing the public.

For this reason, the way Palin reads visually is radically traditionally female, on a sub-verbal level, and maybe that's what people are processing right now.

Laff O' Teh Day

Elliott!

Donna Brazile's Passion

is all over the 'sphere today.

Landslide

I told you so. A long time ago. But this is the first time Sully has said it.

So, It Comes Down To The Shirt He Wore

I have no opinion on the debate. Obama won. Period.
But Nora Ephron is more astute.

McCain came close to making a mistake, and there will be a big deal made over his referring to Obama as "that one" because it was patronizing and revealing. But in the end that moment will seem like yet another misguided attempt at the sort of casual joke McCain fails to make work most of the time. If I were married to him, an unlikely scenario, we would probably have fought in the car on the way home tonight, because I told him a million times not to try to be funny, but he never listens to me.
And if I were married to Obama, another unlikely scenario but a far more attractive one, I would be driving home having a hard time not thinking about the curtains.

Computer Basics

I like my Mac laptop. It's intuitive, and I inherited my bias because it's the system my former employer chose. We received no training, relying upon each other to learn what we needed to more or less do our jobs. So there's a lot of stuff I still don't know. Of course, I could take the online training or even sign up for the in-person lessons. They're relatively cheap. But I probably won't.
If you're interested in picking up a few new tricks, MS or Mac, go here.

Sarah Palin: Post Turtle

This is still circulating in the 'sphere so I pass it along:

"While suturing a cut on the hand of a 75 year old rancher, who's hand was caught in the gate while working cattle, the doctor struck up a conversation with the old man. Eventually the topic got around to Sarah Palin and her bid.
The old rancher said, 'Well, ya know, Palin is a 'Post Turtle''.
Not being familiar with the term, the doctor asked him what a 'post turtle' was.
The old rancher said, 'When you're driving down a country road you come across a fence post with a turtle balanced on top, that's a 'post turtle'.
The old rancher saw the puzzled look on the doctor's face so he continued to explain. 'You know she didn't get up there by herself, she doesn't belong up there, she doesn't know what to do while she's up there, and you just wonder what kind of dummy put her up there to begin with'."

Wow

Steve Clemons has a nakedly emotional reaction to a new book by woman I never heard of, Helene Cooper, who spent her childhood as the privileged daughter of former American slaves in Liberia and became the diplomatic reporte for the New York Times. It's the sort of thing we can barely imagine in this insular culture of 21st century America.

Tina!