House version of bailout was $850 billion

Hey.

I’m not supposed to be blogging today, but I just ran into my congressman, Maurice Hinchey, and asked him how the House and Senate were going to reconcile the $150 billion difference between the two versions of the bailout. He said something that stunned me — the House passed the Senate’s version yesterday — for an $850 billion bailout. (He voted against it for the same reasons he voted against it Monday, see blog below.) What is strange is that the mainstream media is still reporting this as a $700 billion bailout. But anyone who has taken as much as a junior high school social studies class knows that the the House and Senate have to adopt the same bill for a law to pass.

Eric Francis

I also learned that most of the extra $150 billion is for a tax cut that is instead going to be funded by debt. I am trying to think of metaphors for how stupid a way to run a business this is. Let’s see, in the middle of the credit crunch Discover just gave me a $6,000 card for a year interest free (fact). So I could give myself a raise in salary as editor of Planet Waves, then take the new Discover card and buy 75 subscriptions from my own company to pay for it. Then I would send the Discover card bills to, well, I don’t have a kid, but if I had one, I would send the bills to him or her.

One of our astrological writers in Finland has been emailing me the past couple of days asking for coverage of the bailout and credit crisis and how it relates to international banking and economy. I’ve decided to take this one to the crowd. Is there anyone out there with experience in Asian and European credit markets that can help us develop this angle? If so please drop a note to editorial – at – planetwaves.net. This can be anonymous help — all of our Wall Street sources have helped coverage of this issue from behind the scenes, without their names being used. Some have been incredibly generous, and they know their stuff — I can tell because they break it down into clear terms, they answer the questions till I actually understand what they are saying, and then their facts check out. Please consider helping out if you have a clue. Many thanks!

Eric Francis
(stopping into my studio on a sunny day to check email)

4 thoughts on “House version of bailout was $850 billion”

  1. Hi.

    I think it’s a great idea to get some gunslingers on here to explain Asia and the Eurozone. It’s pointless to try to get anything out of CCN; they’re broadcasting a nonstop anxiety attack. I think most of New York has stopped sleeping and has been drinking steadily for weeks. Those people are hanging by a thread, seriously — if it were up to me they’d all be cut off from any additional stimulants if not collected from their desks for a long weekend in the locked ward.

    They’re reminding me of last time, when we were all supposed go out and buy duct tape to seal our windows in case of some sort of…anthrax bomb. Remember?

    One guy on there today was literally losing it, raving about fertilizer and farmers and famine and dictatorships. People are gonna starve! he’s yelling. Then the government is going to step in, it will be a fascist dictatorship! On CNN, seriously!

    That same guy a few weeks ago started on this thing about how kids shouldn’t bother with student loans anymore and should instead go into the trades, since the nation was going to need mechanics.

    I don’t mind bad news, I’d just like to hear it from someone, you know, sane.

    ~j

  2. Agree that the bill was a monumentally stupid piece of legislation; but mental health parity was attached to this to help grease it’s passage. This is a huge shift in this country. If you are fortunate enough to have health insurance and need to see a a psychiatrist or therapist, it is now law that the insurance company has to cover those visits at the same percentage as any other medical illness.

    But something else happened in the field of mental health: one of the most influential psychiatrists has been required to temporarily step down from is post as chair of a leading psychiatry department because of inappropriately reporting income from Big Pharma.

    http://www.nytimes.com/2008/10/04/health/policy/04drug.html

    Perhaps this is part of a shift: those who would say whatever was needed to keep up their financial rackets are starting to fall.

  3. Iceland’s going bust….

    http://www.telegraph.co.uk/news/worldnews/europe/iceland/3135874/Icelandic-bank-with-British-savers-money-enters-crisis-talks.html

    Yups – here’s one example of the interconnectedness…

    Kaupthing may be headquartered in Reykjavik, some 1,000 miles away from the City of London, but the financial volcano threatening to erupt on the island could send shockwaves down every High Street in Britain.

    The bank, whose liabilities are several times larger than Iceland’s GDP, runs accounts for 150,000 Britons. Not only that, it is a key lender to some of Britain’s biggest entrepreneurs, including the top chef and restaurateur, Gordon Ramsay and the property tycoon, Robert Tchenguiz, and bankrolls major retail chains from House of Fraser and Debenhams to Woolworths, Hamleys, Whittards of Chelsea and Karen Millen.

    Yesterday the Icelandic government was desperately trying to stitch together a package that would restore confidence in the bank and prop up the country’s ailing economy which is teetering on the brink after years of over-expansion by its banks.

    More at the link…

  4. I also learned that most of the extra $150 billion is for a tax cut that is instead going to be funded by debt.

    It doesn’t matter that much, which it’s tacked onto a bill that’s going to blow 700 billion, also funded by T-bills. It’s a bunch of money. The problem at that point, isn’t that were running a large national debt, it’s that the credibility behind those T-Bills may collapse. On the other hand, if the banking system goes down, it may not matter very much. So the tax cut is only problematic in same way as the entire bailout bill is problematic. (Which it is.)

    One of our astrological writers in Finland has been emailing me the past couple of days asking for coverage of the bailout and credit crisis and how it relates to international banking and economy.

    The European banks are in trouble in just the same way as the American ones are but worse. They are even more overleveraged than the American banks. So they are vulnerable to the same problems as the American banks and the problems have already been happening. The upside for the Europeans is that they have some Treasury departments with some sense, and they’re just going and nationalizing the banks straight away.

    The Asians have a different problem: they are heavily invested in the US. If they try and pull out, they’ll lose a lot of money, but if they don’t the banking collapse may cost them a lot of money. In any event, they’ve been running a standard mercantilist trade policy which has been nice for them, but bad for the US, and if they don’t stop they’re going to lose their investments and their markets at the same time, which will throw them into recessions, probably with inflation.

    The overarching picture is that ‘globalization’ of the sort that’s been practiced for two decades is rapidly unwinding; it was never sustainable anyways. (And I mean, if you take a hard free markets viewpoint, it’s not sustainable. If you take a socialist (soft variety) viewpoint, it’s not sustainable. The whole globalization thing has been a big scam.

    max
    [‘And the jig, as they say, is up.’]

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