Paulson abandoning toxic assets for stock purchases.

Some economists have said that buying those bad financial assets (aka – the bundled mortgages loaded with sub-prime mortages) was a bad idea. Instead, the treasury should focus on buying up financial company stock.

This may be the best idea now, and Paulson has decided to take that route instead of just buying up the crap. Considering that some companies are using the bailout money to pay stock dividends instead of issuing new loans (otherwise, people might sell the company stock, company stock gets sold, company has less money to spend) – this may be the best solution.

Guess we’ll wait and see now.

Treasury Don’t Want Transparency on Bailout

Oh, Bush Administration. You do so love your secrets. When Paulson put out his three page original request of “Give me the money, don’t ask any questions, and nobody gets hurt”, we all laughed. Because handing out $700 billion dollars without knowing where the money was going? What – did we look stupid?

I think the Treasury thinks we’re stupid, as they refuse to name who they’re bailing out, for how much, what collateral they’re taking in return. Now, their argument is that it would freak the market out as people knew who was going to survive with federal funds and who wasn’t.

Of course, everybody else is saying that the market is freaking out because they don’t know what the hell is going on, but hey – when did sense ever get in the way of the Bush administration’s need to be super-secret?

AIG gets a bigger bailout. More spa treatments – yay!

Evidently, AIG just can’t lose. It lost $25 billion last quarter, so the US government is going to buy up another $40 billion shares of stock to keep the company funded.

In a lot of ways, it’s a “do over” of the original $85 billion loan to $60 billion, but it’s still proof that the US government is willing to do what it takes to keep AIG liquid. For now.

Economy still getting worse. Start up the soup kitchens!

For the record, I make a killer chicken soup, my chili is a heat legend, and my stew is divine. I may have to get that pressure cooker and start making a whole lot for storage plans. unemployment number rose by another 240,000 in October alone, and people who used to have “lifetime jobs” are finding “lifetime” just ended.

GM loses big – can’t buy cool toys like Chrysler

So much for GM coming to Chrysler’s rescue, as one of the biggest companies in the world has issued a $2.5 billion loss for last quarter.

That’s one quarter alone. Three months. $2.5 billion lost. I am boggling.

Car sales lowest since 91

My bet, is car sales are about to get even worse with the loss of credit in the market and the lack of truly gas efficient affordable cars.

Oh, yeah. This is going to be a bumpy ride.

Goldman Sachs: £6 billion bailout? £7 billon bonus time!

Now we’re just getting stupid. Goldman Sachs, after getting £6 billion in bailout money, is going to give out £7 billion in salaries and bonuses.

Oh, well, it’s good to know that the money is going to good use. Gee – thanks. It’s always nice to hear that the 443 partners get an average bonus of £3 million.

More signs of a bad economy

You’ve got Qwest cutting 1,200 jobs.

The Bush administration is still trying to figure out how to help home owners – which means they don’t think the bailout is going to cut it.

We’re not sure that the housing market has reached the bottom in California – this after homes have already dropped some 30+ percent.

Parents are taking advantage of Nebraska law to abandon their teenage children, likely because they can’t afford them.

90% of US workers are losing sleep, and homelessness among children is up 25%.

And there’s likely more of this bad news on the way.

Bailout? What was that bailout for again?

There seems to be a problem in understanding what the $700 billion bailout was for:

1. Take toxic assets off the hands of banks.
2. Banks, now having free money again, can start issuing loans in the form of commercial lines of credit, personal loans, and so on.
3. The credit market unsticks, everybody’s happy.

The problem is – nobody bothered to tell the big banking companies. You’ve got JP Morgan Chase who took $25 billion telling a private group that they were going to use the money to buy up banks in trouble for their assets – nevermind that whole “use the money to start issuing loans and help the economy” thing.

Oh, well, pardon us – what were we thinking? I guess next time JP Morgan Chase says they need this bailout money, maybe we’ll just, you know, say “Frack you.”

The Limping Financial Housing Market

There are people still out there working hard, keeping up on their debts. All while their #1 investment, their house, steadily loses value and destroys what options they had left.

It’s starting to hurt people who were getting ready to retire – instead of selling off their house and then going to either a retirement home or someplace like Florida, they have to stay at home and cancel their plans.

What do to about it? All of the options are pretty sucky. Stop paying your mortgage and hope for a bailout? Keep going while your house loses value and hope you can hold out – and watch someone else get a better deal? And what is the government’s response going to be – just insure mortgages that are out there and trust the banks to renegotiate those rates themselves?

It’s a hard question. I’m not going to say “Yeah, I know what to do,” because the real heart of the question isn’t just “What’s going to be justice that will help fix the problem?”, but “What’s going to be fair for everyone?”

Sadly, as my dad once said, Justice isn’t interested in what’s Fair.