Category: Video

Geithner’s New Plan: Same Old, Same Old, Failure

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So, we now have a definitive leak of the features of Geithner’s plan to help the financial system, and it’s the same old, same old: The problem is not that the banks are insolvent, or that their assets are worthless piles of crap, it’s that the markets are just undervaluing them.

The basic provisions:

  • An auction of the big sh#@pile, which is a bad thing, because it only serves to expand taxpayer exposure.
  • The FDIC will lend about 85% of the money to buy this.
    • These FDIC loans will be non-recourse loans, which means that if those assets bought with that particular loan would be used to repay. Any further losses would be eaten by the taxpayer.
  • The Treasury will match, “the private money that each of the firms [4-5 investment firms hired by the Treasury, meaning Goldman and the rest of the usual suspects] puts up on a dollar-for-dollar basis with government money,” which means that the 15% that they have to buy to get the assets is now 7½%
  • The Treasury/Federal Reserve TALF lending program will be used to further expand lending to buy this toxic waste.

This is what Geithner has been pushing for a long time, some sort of program to overvalue assets at taxpayer expense, all while, “firmly against imposing any restrictions on pay for companies investing money in the rescue effort rather than receiving money from it,” except, of course, any participants in this are receiving federal money because of the subsidies.

Dean Baker notes that the that unlike Timothy “Eddie Haskell” Geithner and Lawrence “Shoggoth” Summers and their Evil Minions™, the current market values of the securities are probably accurate, because real estate prices remain 20% above the historical trend, and if houses fall another 20%, these mortgage backed securities now selling for 30¢ on the dollar, which are the very top tranches, would be near a dime on the dollar.

Paul Krugman correctly calls it, “an open invitation to play heads I win, tails the taxpayers lose,” policy, and Calculated Risk and Yves Smith are similarly disparaging, though John Cole is the one who best nails the situation:

The Illness- reckless and irresponsible betting led to huge losses
The Diagnosis- Insufficient gambling.
The Cure- a Trillion dollar stack of chips provided by the house.
The Prognosis- We are so screwed.”

Seriously, tag team of Geithner/Summers may very well be worse for the economy than Hank Paulson.

For your amusement, here is Rep Brad Sherman (D-CA) opening up a can of whup ass on the CNBC Wall Street apologists

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Boeing Unveils LO F-15

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It appears that Boeing is looking to extend the life of the F-15 Eagle with a technological update (also here and here) called the Silent Eagle.

The two most obvious changes are creating weapons bays in the conformal fuel tanks and the canted tails, though it is also reported that there is a fair amount of radar absorbent material (RAM) added, including a frangable gun cover that hearkens back to how armorers treated the guns in WWII.

There are apparently no radar blockers in the inlets, even though Boeing has extensive experience with them in the F/A-18 E/F, because of potential export issues.

This implies that Boeing has decided (correctly IMHO) that they have no chance of selling these to the USAF, who have eyes for nothing for the F-22 and F-35.

They are suggesting a $100m unit price, though it is not made clear in any of the articles as to whether this is unit price, or fly-away cost.

The implication is that $100m will be cheaper than the F-35 JSF, and perhaps this is less an exercise to sell more F-15s than it is to sell more F/A-18E/Fs by implying that the JSF will break 9 figures in cost.

If they are implying this, they are probably right. The JSF shows a lot of signs of cost escalation and schedule slippage.

Powerpoint courtesy of The DEW Line, video of missile actuator courtesy of Boeing.

When You Are In a Hole, Stop Digging

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You would think that after Jon Stewart’s merciless beatdown of him, and of CNBC, Jim Cramer would have the sense to know that he’d been beaten, and not get into a pissing contest with a comedian and what may be the best, and smartest, writing staff on TV.

But, you’d be wrong, and Mr. Cramer continues to call out John Stewart.

So Stewart, and and His Minions™ on the Daily Show respond.

So Cramer dressed himself up as a fish…..And jumped in a barrel……And handed Jon Stewart a gun.

This is shooting fish in a barrel.

Any questions?

Limbaugh blasts Steele, the GOP – Jonathan Martin – POLITICO.com

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Last night, I commented on efforts by the Democratic Party to tie Limbaugh to the Republican Party.

I thought that it was a good move, and now it appears that republicans are doing their level best to reinforce that meme.

Michael Steele makes some fairly innocuous comments about Limbaugh not being a leader of the Republican Party, just an entertainer (vid), and then goes on a rant against Michael Steele, suggesting that people should not give to the RNC, and a few hours later, we have a Steele giving yet another Stalin show trial Mea Culpa.

Tim Kaine was on it like white on rice

‘I was briefly encouraged by the courageous comments made my counterpart in the Republican Party over the weekend challenging Rush Limbaugh as the leader of the Republican Party and referring to his show as ‘incendiary’ and ‘ugly.’ However, Chairman Steele’s reversal this evening and his apology to Limbaugh proves the unfortunate point that Limbaugh is the leading force behind the Republican Party, its politics and its obstruction of President Obama’s agenda in Washington. Just this weekend, Rush Limbaugh repeated his claim that he is rooting for the President to fail. The last time Rush Limbaugh said he wanted the President to fail, virtually every single Republican in Congress followed his lead and voted against the President’s plan to create or save 3.5 million jobs.

….

Like shooting fish in a barrel.