The Fed is going to buy up $600 billion of debt issued or backed by Fannie Mae, Freddie Mac, Ginnie Mae and Federal Home Loan Banks — a move that makes the nation’s central bank a lender to almost every corner of American life. This is one of the first major moves from the Fed to ensure that commercial credit markets remain liquid, meaning that things like mortgages, student loans, car loans and other forms of consumer credit remain available at reasonable prices. The standard disclaimer on all of these bailout measures apply: May not work, maybe have long lasting repercussions, and the Fed now basically owns everything ever.
President-elect Obama has announced his National Security Team. The big news is that he will be keeping Defense Secretary Robert Gates in his current post for the time being. However, some commentators I respect are saying that the real question is going to be who gets to pick the mid and junior level staff.
US consumer spending fell by 1% in October, the largest decline since September 2001. So go buy stuff.
A position that I feel hasn’t gotten enough attention FDA commissioner. What with my desire to not get e coli, the appointment will signal how serious the Obama administration will be about making the FDA an actual regulatory body again.
The Thanksgiving tradition of Op-Eds about Pilgrims is alive and well. Luckily, Tom Friedman has an outstanding Op-Ed about the Citi bailout. Nothing earth-shattering, but some enjoyable vitriol.
Bailouts Bailouts Bailouts! The federal government agreed Sunday night to rescue Citigroup Inc. by helping to absorb potentially hundreds of billions of dollars in losses on toxic assets and injecting some fresh capital. I am not sure exactly how these things work, but some how the government is going to invest more than the company is worth and still not actually own it. The other key part of this story is that President Bush emphasized how he and President-Elect Obama worked closely on this plan. As I said, I don’t know whether this is a good idea or not but I tend to defer to Paul Krugman in matters like this (what with his Nobel prize and all):
A bailout was necessary — but this bailout is an outrage: a lousy deal for the taxpayers, no accountability for management, and just to make things perfect, quite possibly inadequate, so that Citi will be back for more.
Meanwhile, GM remains in a lot of trouble and is considering bankruptcy if they don’t get a federal bailout. The New York Times has a great article which includes interviews with several bankruptcy specialists about what bankruptcy proceedings would look like for GM and what they could accomplish. If that sounds a little dense for a Monday, then the money quote says it all: “Bankruptcy sucks as a way to achieve real business resolution.”
Twilight, a movie I probably won’t see based on a series of popular books that I have never heard of was the #1 film at the box office this weekend. James Bond took the #2 spot with Disney super-dog epic Bolt coming in third.
SuperbloggerKanye West’s new album drops this week and while we will have a longer review later in the week, the initial reports are that like all of West’s albums he succeeded somewhat in spite of himself.
A lame duck congress is when Congress gavels back into session after the November elections but before the new Congress is sworn in in January. The majority of the Congress and Senate live pretty far from Washington and like to go home for the holidays, so they don’t tend to call these sessions unless there is something pretty important going on. Like, say, the collapse of the US Economy.
Democratic Congressional leaders way that they want to pass emergency legislation to aid the imperiled auto industry during the lame-duck session that begins next week. President Bush, predictably, has said that he doesn’t favor tapping the $700 billion bail out fund to help automakers. Don’t these factory workers understand that there are employees at Goldman Sachs who need to sell their second houses in the Hamptons? Thank god we have a President who looks out for the little guy.
GM plant employees are not the only one’s looking at the prospect of unemployment checks. The nation’s top two intelligence officers are not to happy about the indication that they are going to shown the door by President-elect Obama. Director of National Intelligence Mike McConnell and CIA Director Michael V. Hayden today clearly leaked to the Washington Post that they want to remain in their current posts and that they feel early departures could be seen as politicizing their offices and keeping them could help stabilize the intelligence community. These are good points, but Hayden was in charge of the White House’s warrentless wiretapping program and both of them have publicly defended torture. Guys, don’t let the door hit you on the way out.
Unemployed autoworkers and senior intelligence officers will both but unable to afford prescription drugs. Monthly premiums for Medicare’s prescription drug coverage will increase on average 43% next year. So, uhh, don’t get sick.
You know who has had it for too easy for too long? Whales. You know, the big lazy fuckers just swimming around out there, getting in the way of our submarines, eating our krill. Thank God the Supreme Court is here to put them in their place.
Apparently no one in the Treasury Department has any friends who are habitual gamblers or drug users. If a friend asks you for money, they ALWAYS need more then they ask for and they ALWAYS end up coming back for more. Fannie Mae and AIG, both of whom received massive government loans in September, have reported billions more in losses and have requested more support to the tune of $150 billion from the Federal Government. If you give a mismanaged and hemorrhaging company a glass of milk…
Apparently, President Bush and President Elect Obama did more than just measure the drapes yesterday. The two discussed the financial crisis and Obama pressed the President to provide emergency aid to the auto industry. Hard to say where to come down on this one and you can make your own arguments. Automakers are failing now because of their own lack of foresight. However, something like one in 12 people in this country is employed by the auto industry.
NASA has officially ended a six-month mission at Mars’ north pole after they lost contact for more than a week with the Phoenix Lander. The mission was a resounding success; the lander discovered water and soil that could support life. More whimsically, Phoenix’s weather relay also discovered that it snows on Mars. The lander became famous when a NASA communications staffer set it up with a twitter account which was shot around the internet. The tweets were fun and informative (that is where NASA broke the news of water on Mars) but as the lander has powered down they just started bumming me out.
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