But now he's caving on hope, too?

We're still getting the ponies, though. Right?

Don't worrry. Everything's going to be fine. There's still plenty of hopey-changey for the donors.

[ ] Very tepidly voting for Obama [ ] ?????. [ ] Any mullah-sucking billionaire-teabagging torture-loving pus-encrusted spawn of Cthulhu, bless his (R) heart.

Ds to Rest of America: Fuck You!

That's where it sounds like this is heading. Where are those pitchforks and torches I'd been setting aside for a rainy day...

we need a Department of Stand and Deliver

any financial instruments--in his post about The Mother of All Hedge Funds.

Dodd's language broadens the purchasing areas! Altho, it had been in the process of morphing from mortgage related to just about anything, this makes that clearer. Would include the truly scary CDS's (credit default swaps). From the Dodd proposal:

SEC. 2. AUTHORITY TO PURCHASE TROUBLED ASSETS.

(a) OFFICES; AUTHORITY.—

(1) AUTHORITY.—The Secretary is authorized to establish a program to purchase, and to make and fund commitments to purchase troubled assets from any financial institution, on such terms and conditions as are determined by the Secretary, and in accordance with policies and procedures developed by the Secretary.
...
SEC. 21. DEFINITIONS.

(7) TROUBLED ASSETS.—The term ‘‘troubled assets’’ means—

(A) residential or commercial mortgages, and any securities, obligations, or other instruments that are based on or related to such mortgages, that in each case were originated or issued on or before March 14, 2008; and

(B) upon the determination of the Secretary, in consultation with the Chairman of the Board of Governors of the Federal Reserve System, any other financial instrument, as the Secretary determines necessary to promote financial market stability.

The Dodd version gets lauded by Krugman, DeLong and other 'liberal' luminaries.

This while the bailout language morphed from "mortgage related assets" to "any financial instrument."

The Dodd version added some nice little extras for a homeowners in distress and some oversight provision. But it also extended the scope of the Paulson plan far beyond housing and mortgages towards an all encompassing bailout for any financial issue.

Since 2003 Dodd collected over $4 million in contributions from Securities and Investment companies. His top five doners include Citibank, SAC Capital Partners and Royal Bank of Scotland. That may well be the reason why he does not want to keep the bill restricted to mortgage related assets but wants to include any financial instrument.

If this becomes law, Paulson and whoever replaces him in January will have the authority to buy Asset Backed Securities from car loans and credit card loans. He will be able to buy and sell derivatives based on ABS that have build in leverage effects. The Treasury may even deal in synthetic Collateral Debt Obligations and derivatives base on those. It can buy and sell shares of public dealt companies, precious metals, future contracts on these and it can speculate on interest moves of Russian government bonds.

Are there any big long future positions on the Canadian dollar the U.S. president does not like? Just get the Treasury buy them up. Congress is giving it the right to do so.

With a capital of $700 billion and the authority to buy and sell any highly leveraged financial instruments, the Treasury will become one gigantic hedge fund that can and may well act to move multi-trillions.

If such an entity makes one wrong move, it can bankrupt its owners within a few hours. The Treasury is too knowledgeable to make such mistakes? So were two Nobel Price winners at LTCM.

Gotta run--doctor's appt.

I'd love to see what people more knowledgeable than I am about this stuff think of Bernhard's analyses (go read more at his blog--it's hair on fire time.) This may truly be a time when the cure is worse than the disease.

by, once again, their own lack of boldness. Anglachel on the Democrats' problem:

But even Dodd's effort to beat back the demons of stupidity is still failing to redefine the issue on the Democrats' terms. They are not moving boldly, as Hillary has advocated, to redefine the power relationships of the priviliged few to the government and to the rest of us. The Democrats are getting suckered, once again, by the earnest entreaties of the High Borderists to be "bipartisan" and to "set aside politics" to address the crisis as quickly as possible. Shorter Broderism - give Hank what he wants and quit being obstructionist! The Democratic leadership is afraid to challenge Bush and the Republicans directly this close to the election, allowing their consent to be bought through "concessions" on a plan that was moronic on the face of it. The Dems are, as usual, trying to mitigate the shit sandwich presented by the Republicans instead of whipping up a tasty pastrami on rye with a side of jicama slaw in opposition. All they can do is drag the proposal slightly less to the right and get their hands covered in the effleunt oozing from the sandwich.

And they are screwed. If they have nothing significantly different of their own to offer (and Dodd's proposal is pedestrian, good mostly in comparison to Paulson's deposit on the great shitpile), then they have tied themselves to Bush's toxic administration in yet another way. Their partisanship can be priced - it is the revolving credit line on $700 billion less the depreciation of assets and a few mostly symbolic cuts to CEO pay.

They're doing what they always do, take whatever shit the GOP hands them and try to simply make it less shittier at the margins when what they need is to come up with their own non-shit solution.

Now compare this to how the GOP will react, Patrick Ruffini via Anglachel:

Republican incumbents in close races have the easiest vote of their lives coming up this week: No on the Bush-Pelosi Wall Street bailout.

God Himself couldn't have given rank-and-file Republicans a better opportunity to create political space between themselves and the Administration. That's why I want to see 40 Republican No votes in the Senate, and 150+ in the House. If a bailout is to pass, let it be with Democratic votes. Let this be the political establishment (Bush Republicans in the White House + Democrats in Congress) saddling the taxpayers with hundreds of billions in debt (more than the Iraq War, conjured up in a single weekend, and enabled by Pelosi, btw), while principled Republicans say "No" and go to the country with a stinging indictment of the majority in Congress....

In an ideal world, McCain opposes this because of all the Democratic add-ons and shows up to vote Nay while Obama punts.

History has shown us that "inevitable" "emergency" legislation like the Patriot Act or Sarbanes-Oxley is never more popular than on the day it is passed -- and this isn't all that popular to begin with. All the upside comes with voting against it.

Anglachel again:

Pelosi-Bush Wall Street Bailout. Bingo. Bush drags us into the sewer, Democrats frantically try to drag the nation back to shore, and the Republicans get to both have their political obstructionist cake and eat their financial giveaway pie, too.

The Dems need to quit trying to make Paulson's plan better (it is deeply flawed and dressing it up isn't going to change that) and put forth instead their own plan that will favor Main Street over Wall Street. Otherwise, the Dems are going to pass a deeply unpopular version of the GOP President's plan and then be blamed for it by the GOP candidates.

Hillary advocated we bring in Greenspan and Rubin to to help with this mess.

about economics, but I read a lot of folks who do.From today's www.nakedcapitalism.com :

"One sign that the credit crisis is accelerating: Nouriel Roubini's forecasts are coming to fruition faster. In the past, Roubini has too often played the role of seemingly mad prophet in the wilderness until he is proven correct. His calls that the housing bubble would collapse in a nasty way, that subprime was most certainly not contained, that Freddie and Fannie would get in trouble, that total credit crunch losses would reach $2 trillion, all sounded apocalyptic and were generally ignored, to the detriment of those who failed to take heed.

The time between Roubini making a dire forecast and it coming to pass has just collapsed. From yesterday's Financial Times:

The next stage will be a run on thousands of highly leveraged hedge funds. After a brief lock-up period, investors in such funds can redeem their investments on a quarterly basis; thus a bank-like run on hedge funds is highly possible. Hundreds of smaller, younger funds that have taken excessive risks with high leverage and are poorly managed may collapse. A massive shake-out of the bloated hedge fund industry is likely in the next two years."

Comments to this post over @ NC suggersted that yesterday's 350 pt Dow drop was due to hedge fund redemptions rather than a response to bailout plan.

Thus far, Krugman has focused on pricing and getting equity warrants. I hope he comments on the inclusion of hedgies.