$700 Billion Dollars: Dr. Evil would be aghast

How can one deny that the U.S. Economy is in a shambles now? How did John McCain get to be nominee of his party with his lack of understanding of basic market fundamentals? Why did this all happen? At my other blog - Bringin' Gas and Dialin' 9 - I posted about this Perfect Storm in mid-July but only one person responded to the charge, a Brit with wit.
The idea of us going into a Great Depression was bantered about on March 14, 2008 as the fall of Bear Stearnes took place. That almost seems trivial as Lehman Brothers, IndyMac Bank and others visited Davey Jones.

But is $700 Billion to Wall Street really the answer? Dr. Evil would blush amid scornful reminders of his idiotic plan: "I will launch a 'Death ray' aimed at Wall Streeters, to sooth my pain...Nice pussy" (Petting his cat.)

It was interesting to watch Hillary Clinton on Today, whose husband signed the law that made this collapse possible (with Phil Gramm's urging), call this "The Perfect Storm." No shit. You suddenly are a writer using wit to score points amid this fiasco you call a market?

Frankly, if $700 Billion is available, I would suggest the following distribution:

1. Wall Street has access to a $100 Billion credit window. Only if they do the following:

a) the 50 largest banks in the world (if such a number exists) sit down daily between 1PM and midnight in New York (or via satellite) and discuss the bad debt they generated. They argue and discuss the whole problem everyday for as long as it takes to figure out whose got what, what can be salvaged and where does regulation of these exotic financial instruments go from here. I expect, no, require 2-3 weeks worth of hard work out of these $2,500 suits wearers.

b) set up reasonable terms with people making $50,000 per year and have a mortgage. Cut back their cut and tell their stockholders it is this or, "the government will let us collapse."

2. $200 Billion in infrastructure investments. Roads, Schools, Electrical power, storm walls and things that people need immediately done in their areas. This isn't rocket science, we know where the poor people are and what they are not getting.

3. 150 Billion in investments in energy and high-technology solutions to pressing environmental and energy crisis. The cars we drive are terrible on gas. Fix them. The analysis on global warming and farming concerns lack. Get'er done.

4. $100 Billion to people that can not get student loans, car loans, home improvements or other needed upgrades. 2% interest rates per annum. Guaranteed qualification for it. Must make under $50,000 per year.

5. $150 Billion in job retooling of America. The country needs more than fast food, retail outlets and government teets to suck on. It needs an industrial, technological might that kept us near or at the top.

6. Foreign aid. (Of the $700 Billion, 21 Billion should go to overseas development in Africa and other struggling countries. Somehow, I think we can get people to join the Peace Corps or other worthwhile endeavors if we pay the way for them to work on pressing issues.)

That's my plan. Wall Street doesn't get nickels for nothing.

Cross Post: McCain’s judgment in economics is inherently flawed

As the markets spin out of control, with wild swings based on calamitous events such as Countrywide, MBIA, Ambac, Bear Stearnes, Fannie Mae, Freddie Mac, IndyMac, Lehman Brothers, Merrill Lynch and AIG, why do many insist that Bush’s administration, or his party’s nominee, John McCain, have gotten anything right at all?

John McCain’s former top economic advisor, ex-U.S. Senator Phil Gramm of Texas, had a primary hand in the Gramm-Leach-Bliley Act of 1999 that eliminated the firewall protections made by the Glass-Steagall Act of 1933 between investment, commercial banking, and insurance services during the Great Depression when so many banks failed. As a result of this deregulation, we are now seeing the enormous problems of integrated services spread like a plague throughout the market as many of these financial players mixed investments and savings and high-risk loans together and across various business entities.

McCain’s economic proclamations and company kept should be an albatross around his neck. You cannot expect change from a man that hires people that called Americans, “a nation of whiners,” during an economic crisis of their making. Meaning: Phil Gramm had his hand in your misery and now blames you for it.

Phil Gramm continues to be major cog in McCain’s campaign.

How is that change we can believe in?

Late Addition: (WaMu, another bank, is headed for sale....Yahoo Business)
A quote from the link:

But TPG agreed to waive the clause after concluding WaMu needs all the help
it can get.
"It became clear that it would be in the best interests of
Washington Mutual and our investors to waive the ... provisions," Fort
Worth, Texas-based TPG said in a statement. "Our goal is to maximize the
bank's flexibility in this difficult market environment."
The efforts to
find a buyer, though, were being complicated by uncertainty about the magnitude
of losses still lurking in Washington Mutual's home loan portfolio.
"No
one knows what's in their books," said a person briefed on the talks
between regulators and banks, speaking Wednesday on the condition of anonymity
because of the sensitivity of the matter.

Citing unidentified sources, the New York Post said the potential
buyers include JPMorgan Chase & Co. and HSBC Holdings PLC., as well as Wells
Fargo. The banks all declined to comment.

Nice to see the whole financial system is in scared rabbit mode. Hopping up and down the road, looking for a way out while a Mack truck bears down on their position.

It won't be long now people. Look out below minimum wage workers. Get prepared for calamity you lower-middle class (under $50,000) per year people. Cut back considerably you upper middle class wannabes. The Rich: you'll go to your pile of bricks, lock you doors and come out when the getting is good again.

Good Luck All!