Holy crap.

[nonelvis]

It's not like I have any faith at all in the current administration, but this is just astonishing:

In fact, some of the most basic details [of the Wall Street bailout plan], including the $700 billion figure Treasury would use to buy up bad debt, are fuzzy.

"It's not based on any particular data point," a Treasury spokeswoman told Forbes.com Tuesday. "We just wanted to choose a really large number."

Apparently there is no one in the entire U.S. Treasury Department qualified to even make a guess at how much this bailout could cost. After all, it's not like anyone over there is responsible for "[Serving] the American people and strengthen[ing] national security by managing the U.S. Government's finances effectively, promoting economic growth and stability, and ensuring the safety, soundness, and security of the U.S. and international financial systems."

We are so screwed.

Comments

[kalleah.livejournal.com]

I can't think about it too much or I will weep uncontrollably. What got me going last night was seeing Bill Clinton on The Daily Show ... SOMEBODY PUT THAT MAN BACK IN CHARGE, QUICK. I miss my Bill.

[nonelvis]

Goodness knows I had my differences with Bill Clinton -- "don't ask, don't tell," anyone? -- but I'd take him any day over what we have now.

[kalleah.livejournal.com]

He sounded so comforting and sensible. Sigh.

[profrobert.livejournal.com]

He also signed the repeal of Glass-Steagall, which is really what started the financial bender, which has now turned into the mother of all hangovers. So, yes, while he's not a mushmouthed imbecile like Bush, he also wasn't George Washington, Abraham Lincoln or FDR rolled into one.

[nonelvis]

Primary Colors was on the other day, and I hadn't watched the whole thing since I first saw it in the theater. I was struck again at how perfectly the movie (and the book) capture the essence of Bill Clinton: an almost principle-free rogue who's so damned charming you just can't help but love him.

I knew he was responsible for the Glass-Steagall repeal, but the Republicans aren't exactly covered with glory here, either. They've had control for nearly the past eight years, and they've done everything they can to help big business at the expense of the little guy.

[kalleah.livejournal.com]

I don't disagree that Clinton had/has serious issues -- I'm not forgetting that the DMCA came in under his watch, for one! -- but I just look at our political scene and want him back.

In hindsight, all that Wag the Dog stuff looks a little silly.

[elliptic-eye.livejournal.com]

I would assume that it's a lot of books, and that they are very complicated books, but, er… isn't there somebody with a calculator going through these companies' books? Somewhere? Sufficiently motivated teams of lawyers can comb through documents of incomprehensible magnitude in days; surely sufficiently motivated accountants can do the same.

Holy shit.

I don't yet understand why "May you live in interesting times" is a curse, but I have a feeling that I'm about to.

[nonelvis]

Some of these companies will definitely be audited, no question, but it isn't happening right this instant. Even so, what with the IRS being part of the Treasury, you'd think they'd be able to pull tax returns; assume, say, the companies are only reporting 1/3 of their income; and make a guess from that. At least then it doesn't sound like you are totally pulling a humongous number out of your ass.

[profrobert.livejournal.com]

It's not simply a matter of making a list, or even checking it twice. Generally speaking, assets are valued based on a market. If you, say, have 100 shares of AT&T, you can look it up at any moment to see how it's valued. But suppose you own a mortgage. Well, you can look at the interest rate and length, and then compute a present value. But some percentage of mortgagors default. So you build in an assumption related to the cost of foreclosure. But how much is the underlying real estate worth? You know what the mortgagor paid for the house. You know what other people paid for their houses and what they're selling them for. But suppose -- just suppose -- the housing market drops suddenly and precipitously. What's your mortgage worth now? Any time you're dealing with illiquid assets (i.e., assets for which there is a limited market), or where conditions are changing so fast that financial models no longer are reliable, you really can't know what an asset is worth.

[nonelvis]

It's the pulling a number out of their ass bit I object to. I understand the financial issues here are massive, and there's no way Treasury would ever get a completely accurate figure. But before we commit to $700 billion in spending, shouldn't we at least try to get a better picture of what's going on? What if the right number is $200 billion? What if it's $1 trillion?

[mmancuso.livejournal.com]

Illiquid. Snort. I'm going to use this word daily and incorrectly for weeks.