Rep. Defazio of Oregon said on today's show he was suspicious of FDIC probably getting orders from W. administration, and it's making it worse, where even AAA's are not getting credit.

He said we have these exotic financial instruments of mass destruction created by Paulson (bundling mortgage securities) and they are like ticking time bombs. William Issac (Keating 5 S&L crisis FDIC guy) says 75% of sub-primes are really performing, but being made to look worthless (FDIC manipulation). That means banks can't lend money and credit is freezing up.

(Paulson solution: Give me 700B and go away. His dream is to throw the money at top and hope for trickle down, unfreezing credit, helping housing and main street and cronies make out like bandits.)

Issac says no (use market to market accounting):
Don't spend money - change the rules by unlocking credit by a simple change in the way they value their assets. Send in bank reviewers to look at net worth certificates and subordinated debt.

The question, problem, or sticking point has always seemed to me has always been about the worth of these assets. Finally I understand it, after I hear Issac solution.

Oh, and Paulson's nightmare could turn out to be a self-fulfilling prophecy if we don't watch out.

Defazio has his head on straight. Of the Oregon delegation, his house is the most modest - a boat he bought for $16K in a modest moorage. By contrast, OR Republican senator Gordon Smith lives in a $3.2M baronial estate.

Use, or not, of money is always about debits and credits..money either taken from an account or added to an account. The closer an accounting system is to this simple method, the more accurate it is. In the current scandal, the worth of assets (credits) is being manipulated and devalued, converting those assets into losses (debits) temporarily, which can later have their value restored. For now, it's a loss on paper. It can be made to be very complicated, but keeping one eye on the credits and the other on the debits even as they change labels helps follow the movement of the "shells".

Here's a rough timeline of what they did to pull this off. Note the different government agencies that were looted along the way, too. The worst part is, they set these people up to fail. All along this journey they also collected voters and campaign donations, then they turned that campaign bus around and ran over these homeowners. And did you hear the outrage about what the "risky" home buyers DID to our economy??
http://forums.therandirhodesshow.com/index...amp;qpid=172619
This is the kind of people we are talking about....

http://jessescrossroadscafe.blogspot.com/2...gage-ponzi.html

LOL!!!

I do know about debits on the left, credits on the right. I worked for Peat, Marwick, Mitchell in the late 70's to early 80's, and took at least one economics course. Economics is not my forte' at all (crossing eyes now).

I like the Issac solution. And it was interesting how the PTB tried to keep Issac away from the congress people.




Thanks fla1sun.

Oh, that's a nice set up - a moorage in Oregon, no less. (sigh) Beats a 3.2m estate by a longshot.

Just like Iraq neo-Cons were warned that financial system was headed for disaster. When they did the first bailout former FDIC head I believe said it might help but it was a year too late and they were warned.

There may be a bigger disaster looming but at least American people have woken up and hopefully we won't get robbed blind again and will have a fighting chance to change course vs stay the course of the war.

Well it just gets more and more interesting! I just read the bill...nearly caused my head to explode...it seems ok and that it will protect taxpayers....then I read this and think maybe the bill isn't necessary...now i have to go find comments by THIS guy, Isaac....my head is spinning and I am sure that is the intent of the thieves. I'm not a stupid person but this IS confusing!

Keeping it complicated (chaotic) so they can steal. Name of the game.

Disaster looming. I'm fine with some kind of legislation (let Defazio and Kucinich do it?) as long as the same people who did this are not looting again. That is essentially what is happening. They are circling like vultures. (Sure giveaway.)

Pelosi said today, the party is over, never again. And there will be much more legislation passed to rectify this mess. Hello? Bankruptcy protections - put it back please?

She really looked like she had a lot on her mind today. Weighted down by what she knew to be the truth when she described how SURPRISED the Administration seemed about this crisis (liars). Then she used the word "catpaws" in describing their malice, and that did it for me. One could almost see fury steaming from her head as she talked. It almost seemed she wanted to break out of the chains of politics and blurt the doublecross out and bring everything to a halt.

A few of Pelosi's latest rants:

Bingo baby!

"It's disaster capitalism. And when we get disoriented like this we look for a Daddy", as Randi says. Hence repackage McCain (yet again) and Paulsen as the hero's of the day.

From today's LA Times on Isaac's take on this:

http://www.latimes.com/news/nationworld/na...story?track=rss

Also weighing in on the bailout last week was William M. Isaac, former chairman of the Federal Deposit Insurance Corp., who pronounced Congress' rush to spend $700 billion on questionable assets "disheartening."

Isaac proposes revisiting a 1980s-vintage FDIC program that buoyed problem savings and loan associations by issuing them promissory notes they could use to shore up their capital base, allowing them to start lending to worthy borrowers again.

He also says the banks should get relief from an onerous accounting requirement known as the "mark-to-market" rule, which forces them to declare values on mortgage security holdings that reflect only their short-term worth, which in a troubled market may be far below their real value. The markdowns, he argues, have contributed heavily to major banks' huge reported losses, sapping investor confidence.


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I'm sorry, Egghead. I didn't intend to imply that I thought you didn't understand the movement of money. You are, clearly, a very intelligent individual. I was just addressing the subject in general and mumbling to myself about it, really and then didn't even say what I set out to say...which was that I don't like or trust fancy financial instruments because they seem to be meant to blur the lines of clarity.
I like the Issac solution, also and it doesn't surprise me one bit that some don't want him to be heard.
This whole fiasco has had me wondering who people like Pelosi turn to for advice about this issue. Who has she consulted? What research has she done about what they have done? Does she rely on her aids? Who are they? Has she spoken to people like David Walker?
I, for one, don't think there will be a consumer credit crash if Paulson isn't given money now. I don't think Paulson is credable, I think he has proven himself untrustworthy and I don't think the house and senate should be listening to his advice, recommendations or opinion.

Neo-Cons may have played their last hand.

Paul Krugman on Olberman said Dems can now put together their own bill and have Dems pass it. Not sure about the numbers though if straight party line.