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[Ben-San]

If you want to keep your money in a mattress, are you just supposed to put it between the mattress and the boxsprings, or are you supposed to cut the mattress open and actually put the money inside?

You cut open the underside, between the mattress and the boxspring, and slip the money in there. Warning: do not do this with an air mattress.

[wombat]

Or a waterbed. I see.

Thanks, it is good to have specific instructions at a time like this. Why does it somehow make sense that Ben is the one who can provide these?

[Doc]

Because he's a man of action who gets things done, a two-fisted detective.

[Arachno-capitalist]

     Things seemed to be put on hold if the congress passes ~$1 trillion package to buy out all the bad mortgage debts. Whatever entity is created to handle the instruments will slowly unwind them and try to sell them. News of this is why markets rebounded at the end of the week. As said by Bush, this is a big problem that needed a big solution. Personally, however, I wonder why the money is going to financial institutions, paid by tax payers, as opposed to relief to the people who were led by fraud by financial institutions into mortgages they can't pay. It seems that a broad mortgage restructure plan would help the actual people involved, as opposed to the financial firms. This week has been the grandest example of government privatizing wealth and socializing costs. Taxpayers will pay to bail out the companies, but you'll fly before you see a check from any of the supposed "profits" from this scheme.
     Further, there is a ban in place on short-selling. Short selling is when investors are allowed to sell stocks they don't own and then buy them back later. While ostensibly bizarre, it actually serves a very necessary market function. The market effect is that stocks cant go down as fast as they did in the past. The political effect is that the administration looks like they saved the crisis, when in reality they have frustrated people looking to short sell stocks. What exactly do they expect to happen when the ban is lifted?

[Doc]

Any comment on this? To be very superficial and cynical it seems like investment banks becoming holding banks will mainly mean that the next time this lesson is forgotten and people start taking stupid risks out of greed it will be people's savings as well as their investments that go up in flames. I realise that this also means there'll be more oversight but it seems like a vaguely worrying move.

I'm only just starting to appreciate what's going on here. I'm not the type of person who thinks regulation or deregulation are inherently good or bad things, they are tools to be applied when appropriate, but the gall of an industry that has made a lot of people very rich by being allowed to play by their own rules being bailed out by the government now that they've taken too many stupid risks is really, well, galling. I understand that it's basically become so big at this point that a lot of people of varying degrees of innocence would be taken down along with the idiots in charge but... ech. I suspect not many CEOs will be losing their houses once this is through y'know? And it seems like they should be, if you're willing to take huge risks for great reward you should also have to pay up when it all goes to hell.

On top of that this and this leads me to believe that the people who wrote the current $700,0000,0000,000 (I just love writing that out because it's so goddamn huge, that's something like $2,295 per person) proposal seem to think a continued lack of oversight is the best way to deal with the situation. Seriously, what the hell?

[Doc]

[CortJstr]

Supposedly Bush was initially against the bail-out as "free market" means that huge banks are free to fail if they fuck up. But then he was convinced otherwise for this one case. I'm not sure if I buy that, but it's what the local news station is saying.

[Arachno-capitalist]

Supposedly Bush was initially against the bail-out as "free market" means that huge banks are free to fail if they fuck up. But then he was convinced otherwise for this one case. I'm not sure if I buy that, but it's what the local news station is saying.

Well look, the lesson learned is that its ok to fuck up a little. But when you fuck up ROYALLY, the government will help you out with other peoples money.

[AugustWest]

Steal a little and they throw you in jail, steal a lot and they make you king.

[jaydub]

Three Panel Soul.  Very nice.

[AugustWest]

That man understands history.

Can't take credit ... that man would be one Robert "Zimmy" Zimmerman.

[KeithHernandez]

Really, old Zimmy said that?  Nice to know.

Oh, he said it in the 80s, thats why I don't know already.

[Arachno-capitalist]

Doc, i made sure that comic found its way around the department today.

So Investment Banking used to be this profession that people in business school would aspire to. It used to be a thing people did with money. I think I read somewhere that the new largest investment bank is some 300 person firm no one has heard of.

I like the thing we're doing now where the government is asking the government for a bailout. Because the financial wizards in congress know more about business than people in business, they are writing a bill to spend 900 billion of your dollars to engineer some kind of government company whose sole job will be to buy and sell the most toxic investments in the world.

900 billion dollars. The iraq war in its entirety has cost 845 billion.   

[Arachno-capitalist]

In further effort towards starting my blog, I posted this on my facebook:

Wtf are Credit Default Swaps? I explain in a non-boring way.
The Credit Default Swap, or CDS market, is a multi-multi-trillion-dollar thing where each vendor sells special IOU notes, as opposed to things with actual value. These special IOUs, CDSs, aren’t actually good for any money. They are really just a quasi-insurance policy against default.

When you buy a CDS, you pay the person who sold it to you a premium. If someone who owes you money says they can’t pay up on their IOU, that's not a thing. The person who sold you the CDS will find you and throw money at you to cover the loss. Natch.

Not sure who to buy a CDS from? That's cool. You can buy or sell CDSs to and from invisible people, too (Due diligence? What is that?). Don't worry about identifying the person who will actually pay you when someone defaults on a loan. A wizard will appear to create money when defaults occur.

When defaults on the IOU occur, search for the person who issued the CDS. If you can’t find them: (1) Hire a lobbyist and learn the meaning of "rent seeking". (2) Someone from the government will hand you a sack with a dollar sign on it.

If you don't have the resources to send people to D.C., wrap your CDSs in rubber bands (print them out so they look like real things) and then tell your accountant they are "Assets".

Then, if other people are in trouble, tell them you have "Assets" and can help them by buying them out with these "Assets". Repeat these steps until someone from the government hands you a blank check.

See: AIG, Bank of America, Citicorp, Wachovia, etc

[smick]

A wizard will appear to create money

I had just kind of ASSUMED this is how the system works, but it's nice to see that fact confirmed.