Over To You, Beijing, Riyadh, Kuwait And UAE (Updated)

Fine, who’s going to pay for it? We’re still skeptical the U.S. can sucker punch them yet again for a cash infusion. Particularly now since the Warlord’s tenure puts an exclamation point on “The Unipolar Power Has No Clothes” across all measures of influence, perceptions of power and status (even Scalia is not entertaining abroad).

International observers from Frankfurt to Tokyo observe that the U.S. on its own no longer can afford to pay for projects of this scale. Not anymore. Not without outside help.

Curmudgeon in the comments here noted a good point — T-bills paradoxically are more attractive now with the collapse of commercial paper. And at least verbiage from the Bank of Japan today confirms that they are holding so much in U.S. assets that they too are *in the short term* compelled to intervene and lend actual dollars. If Tokyo is in this position, one can only imagine the conversations in Beijing. Where the skepticism comes is after the short term measures are taken.

Save the Wall Streeters, Save the World (apologies NBC)

Whatever entity the Paulson Posse ™ creates (New Thing) will have to dispose of staggeringly huge, assumed toxic instruments or eat them. We remain in agreement with sentiments in Frankfurt and elsewhere that at this point, the U.S. simply no longer is in a position to do so on its own. Optimistic structural concepts for New Thing are thinking about tapping ‘only’ $250 billion in private money (which is unlikely if it couldn’t or wouldn’t save AIG or Lehman) or foreign sovereign funds. If only it were ‘only’.

We’re amused (in a sardonic way) to see how the campaigns flail about on this issue. McCain’s flip flops are already the stuff of immediate talking head legend. So too to see the Left rapturously pointing to the Boy King’s tete-a-tete avec Larry Summers, Bob Rubin and others who led the charge in the late 1990s to repeal the Depression Era’s Glass Steagall Act. As you know, dear reader, had the law remained intact, with its provision to separate banks, investment banks, etc. much of this cross-sector mutual pull down would not be happening. Observant commentators also note “Mr. Andrea Mitchell’s” finger prints, too. (Love that moniker).

Still, it’s nice to see that the Chairman of the Senate Banking Committee is taking notice:

As Senator Christopher J. Dodd, Democrat of Connecticut and chairman of the Banking, Housing and Urban Affairs Committee, put it Friday morning on the ABC program “Good Morning America,” the congressional leaders were told “that we’re literally maybe days away from a complete meltdown of our financial system, with all the implications here at home and globally.”

Mr. Schumer added, “History was sort of hanging over it, like this was a moment.”

When Mr. Schumer described the meeting as “somber,” Mr. Dodd cut in. “Somber doesn’t begin to justify the words,” he said. “We have never heard language like this.”

‘Somber’. They used to say the most dangerous place in Washington, D.C. was between Chuck Schumer and a microphone. Thank goodness Dodd heeded Dan Rather’s old sign off and showed ‘courage’ to step into that very harrowing gap.


And for your amusement, herewith a pen given to the Stiftung by the General Counsel of a major AIG component company — after we signed a joint venture agreement. (Assisted by a famous lawyer known to everyone from his White House Monica Lewinsky days).

It’s actually much nicer than a Bic. Not sure how many $85 billion will save. Maybe we will see if we can make a piece of toast with the AIG logo. And add the pen, too, for eBay . . .

How The Mighty Have . . .


  1. Comment says

    “The Unipolar Power Has No Clothes”

    How about the symbolism of huckster James (Dow 36,000) D. Glassmen being in charge of our propaganda operation in the Mid East?

  2. Comment says

    Political criticism is our enemies’ best friend.
    ~Bernard Kerik
    Newsday, Oct 20, 2003

  3. Anon says

    This Factcheck dis re-affirms our belief that this Spanish ad was Obama’s best. The goo goo arguments are all contestable hand wringing stuff from people who still believe that McCain is secretly still in favor of immigration. As far as taking Limbaugh out of context? So what? Rush does it all the time to others – This is the kind of switchblade ad the Obama team needs more of:

  4. says

    There’s some talk that Paulson’s $700 billion slush fund gift to the investment banking community has been engineered to prevent China et el from converting its stack of US$ into ownership of the financial sector. China et el gets stuck with a bunch of worthless government debt that can be inflated away at will rather than control over semi-productive firms. The American people are left holding the bag.

    Wile E. Coyote will keep treading air for a little while longer (consider Krugman, circa 2006) while more wealth is siphoned into the pockets of the American aristocracy.

  5. Anon says

    SNL is back to being awful – The opening McCain skit was an embarassing attempt at media class self-justification to explain how McCain got to be so un-mavericky lately.

    Alas, no mention of one of McCain’s achilles heels – the squalid “Reform Institue” – his taxpayer subsidized policy pig-pen.


  6. Comment says

    Lehman bros must beel a bit jilted – but it’s a phony jilt like when Bear Steans and people like Joe Kernan on cnbc seemed to thinking they would h ave survived if the discount window had been open earlier.

  7. Comment says

    Comment was suggesting the RTC approach from the beginning – the idea of buying up the bad debt and holding onto it and selling it off at auspicious times later on when some underlying value would emerge.

    Alas, we became suspicious as soon as our idea became Bush’s idea.

  8. Comment says

    The language does seem overwrought – almost like the way Congressmen and Senators talked when they came out of secret briefings from Colin Powell warning them about Saddam’s wmd and aluminum tubes.

  9. sglover says

    “When Mr. Schumer described the meeting as “somber,” Mr. Dodd cut in. “Somber doesn’t begin to justify the words,” he said. “We have never heard language like this.””

    I don’t pretend to know what’s **really** going on here. I can’t even tell if Glass-Steagal really is a culprit, or not. (Although — who the hell does know, really? Including the “geniuses” deputized to “fix” things.) But…. The Schumer quote, and the sweaty jabbering from all our “leaders”, gives me a bad, bad case of deja vu: The same bought weasels who signed off on the “Patriot” Act and our glorious adventure in Iraq are in “crisis” mode again.

    That alone tells me that NOTHING good can come of these “solutions”.

  10. Comment says

    Larry King has that woman Stephanie Miller – daughter of Bill Miller – on as a pro Obama advocate – He has her on quite a bit – Tonight she is up against some pretty bad Republicans – one young wing nut who said McCain showed leadership this week because he was reactive to news events (yeah, he said that). But overall she is pretty awful. Yet, she is what passes for radio talent in Dem land.

  11. Dr Leo Strauss says

    Hunter that is brilliant !

    Wow, what a healthy laugh. Nailed it better than Fey with Palin.

    Thanks for that.

  12. Comment says

    We recall the walls of Glass Steagle began to tumble when JP Morgan got permission to do some underwriting. This was a 4-5 years before Summers and Rubin blew the horn and the walls came a tumblin; down.

  13. Comment says

    Larry Summers & Co are gonna try and pull of a financial version of Ike saying; I will go to Korea (w Barack)

    But since everyone is messy in the pig pen – it’s all tactical.

  14. Comment says

    re Glass-Steagel – Yes, we recall that Clinton’s pal Sandy broke the Glass-Steagle glass and formed Citigroup before the law changed and created a too big to fail fait accompli. Then Bob Rubin said ‘let’s all er grownups and change this old law’

  15. Comment says

    Did you happen to notice that Ann-Marie Slaughter was quoted in that SCOTIS article in the NY Times?

    Why? What the **** does she know?

  16. says

    In the short term, financing shouldn’t be a problem. There’s such a huge demand for treasuries at the moment that they’re trading at very near zero percent interest. Paradoxically, the collapse of commercial paper has made US government debt even more attractive.

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