Stock market wash-out... time to buy some?

As we wend our way downward in this brutal bear market one indicator has now turned positive.  What goes down, must go up... well, maybe not, but this market is showing signs of life as the credit markets un-freeze.  Just ask Santelli his opinion of the Treasuries.  The question is how many buyers have the stones to get back in.

In previous entries, I have warned against the technical breakdown of the current market, but even within bear markets we can have significant rallies.  Now we are seeing one very important sentiment indicator at all time low levels and this tends to be a screaming buy signal.  

The percentage of stocks below their 200-day moving average is an excellent look at how negative investors are towards the stock market.  At such times as now, when many stocks are trading below their long term moving average, this usually indicates that a wash out has occurred... a capitulation... and represents a buying opportunity.

This is a sign of "blood in the streets", everything is being sold.  For long tern investors, with a 5 year time horizon or longer, this may represent a very good opportunity to put money to work.  Perhaps the market will go down another few percentage points, heck we are down 14% on major averages in the last two weeks and the trend is DOWN, but in a more medium term time-frame-- weeks to months-- the chance of being higher is very good.

Be advised, we are in uncharted territory and we must all keep stocks only to the extent of our risk tolerance.  Remember that "crisis" is a combination of danger and opportunity.  Personally, I've been looking at growth stocks for the next few months, and buying only very carefully.

Why is Obama Scary?

OK, I give up.  I have watched every debate and have seen the candidates in action for what seems like my entire adult life (is every campaign this long?), and I just don't get it.  What is the deal with this meme that Obama is scary?

I've heard it in passing from a lot of people who then back-track and change the subject.  I need to know.  What is so fucking "scary" about this guy????  

This is how the conversation goes:

They:  What do you think of the election?

Me: You don't want to know.  But if you do really want to know, then read my website: Kalamazoopost DOT blogspot DOT com; it's all there.

They:  I dunno who I like.  I'm undecided.  (Which usually means they are voting for McCain but don't want to admit it.)

Me:  Really?  You're undecided?  (Thinking: how the hell can anyone be undecided at this point!!??)  Well, what do you like about McCain?

They: I dunno.  I guess my problem is that Obama scares me.

Me: Scares you?  How so?

They:  I dunno. I guess it's his....  lack of experience.... or something.

Me:  Or something?

They:  Well what do you think?  I told you, now you tell me.

Me:  The problem with that reasoning is that if McCain is so concerned about Obama's lack of experience, then why did he choose a vice-presidential running mate with the same or less experience as Obama?  It must not really be a big issue for him.

They:  That's interesting...  but Obama still scares me.

Me:  Whatever.

Can someone help me out and enlighten me on what is so damn scary about Barack Obama?  Am I being naive? Am I missing something and should I be scared, too?  Is it the Harvard education?  The living in Chicago?  The fact that he's a White Sox fan?  What?  Taxes, health care, abortion, foreign policy, his alleged liberal-ness?  Specifically, what?

I realize that there may be some racial undertones to this election (imagine that) and that he has a funny name and that he lived in Indonesia when he was 8 years-old, but can any of this be as scary as having an old man in charge while the VP is an airhead who cannot read a newspaper?  

In fact, in the 2 or 3 decades I have participated in political discussions, I cannot remember ever hearing the word "scary" to describe a candidate so many times.  Somebody please tell me why.

Why John McCain Should Not Be President

(Disclosure: I have voted for John S. McCain in two separate primary elections.)

As we wade through the vapidity of silly season, voters must keep attuned to the real issues: the economy, the war, the elections.  Discipline is necessary in order to fulfill our citizens' duty to keep informed.

I can see many reasons why Barack Obama would be a far better president than John S. McCain, but one single item stands out as the deal-breaker for me ever voting for Mr. McCain again.

In a recent interview with Katie Couric, Mr. McCain took issue with Mr. Obama's characterization of the Sunni Awakening and it's impact on the stabilization of Iraq during the current US military surge.  

Katie Couric: Senator McCain, Senator Obama says, while the increased number of US troops contributed to increased security in Iraq, he also credits the Sunni awakening and the Shiite government going after militias. And says that there might have been improved security even without the surge. What’s your response to that?

McCain: I don’t know how you respond to something that is as—such a false depiction of what actually happened. Colonel MacFarland was contacted by one of the major Sunni sheiks. Because of the surge we were able to go out and protect that sheik and others. And it began the Anbar awakening. I mean, that’s just a matter of history.

Except—Gaffe!—no, that’s not a matter of history. In fact, the Anbar Awakening predated the U.S. troop surge. The surge began in February 2007; the Awakening began in the summer…of 2006. That’s just a matter of history.  (Read the reference for the evidence as to why McCain is mistaken.)

OK, OK, apologists will allow that Mr. McCain, like all of us, will misspeak or get some details confused at times.  But think about this for a minute.  John McCain is selling himself not on his intellect nor his economic expertise, but on his security credentials.  He will keep us all safe in a horrifically dangerous world.

Yet on the seminal issue of his candidacy: the US military surge in Iraq and the central front on terror, McCain gets the very kernal of issue completely wrong-- not a little bit mixed up, but 180 degrees off.  And to add insult to injury, he then castigates his opponent who in fact got the issue correct!

I am as respectful as anyone else toward Mr. McCain and what he has sacrificed for his nation. His loyalty and bravery as shown 30 years ago are above reproach.  However, it has become apparent that he lacks either the insight or the mental discipline to get the facts straight about the very issue that he has defined as primary to his campaign.

McCain deserves respect, but not the presidency.   At 72 years old, it is indeed time for his retirement.

More Intelligent? Biden 52% to Palin 26%

This is America, and everyone is entitled to their own opinion, but according to CNN:

...26 percent of those surveyed said that Palin was more intelligent in the debate, compared with 57 percent who chose Biden, according to the poll of 611 adult Americans who tuned in to watch it. 

There may be many very good reasons to prefer Sarah Palin over Joe Biden as Vice-President.  Just because nobody I've met and nothing I've read or seen has ever convinced me of a valid reason does not mean than one doesn't exist.  Perhaps Palin has some stance on an issue or two to which you hold dear.  Perhaps Joe Biden is vile and holds views to which you disagree.  Palin is certainly eligible to be Vice-president and there is definitely a distinct difference between the candidates.  All this I understand.

But how can 152 people (26%) watch that debate last night and come away thinking Palin was more intelligent than Joe Biden?  Huh?   Maybe like Palin, these viewers forgot to turn the sound up on their TV.  More intelligent?  Really?  

This is THE story of the debate.

Yeah! She talks good!

Without a doubt, Gov. Sarah Palin blew the doors off every expectation I had of her going into the debate last night.  For 90 minutes she spoke in complete sentences and actually made a few coherent arguments with valid points, references to legislation and even tried to come up with the name of the top US general in Afghanistan.  She got the name wrong (she said McClellan --from the Civil War?-- and not McKiernan), but she tried, and apparetnly neither Biden nor Ifill knew his name either since she was not corrected.  My gut tells me they were just being polite.

This debate was a forum for Palin to show that she was not an abject moron, and she succeeded.  I hold the firm belief that nobody could be as stupid as Sarah Palin appeared in the Katie Couric interviews, not even able to remember one newspaper or magazine that she reads regularly.  Palin appeared nervous and even intimidated with Couric, but last night she looked more self-assured and engaging.

Sen. Biden, on the other hand, was as informed and articulate as always.   Reciting votes on individual bills, outlining a grand plan for foreign policy, explaining his vote on the Iraq Force Resolution, expounding on his committment to the middle class.  Biden was vintage Biden, only absent the missteps and run-on diatribes.

To me, this was like watching the Chairman of Surgery debate proper intraoperative management with a nursing student.  Sure, the student will have some talking points and may know basic anatomy, but Surgeon Biden was coasting in second gear and one got the impression that he had several more layers of nuance that would never be reached in 90 minutes, or ten hours for that matter.  

More importantly, Palin's stance on nearly every issue was opposite to mine.  She is in favor of prolonging the mission in Iraq, applying strategies in Afghanistan that would fail, giving Israel free reign with our blessing, closing down the scant negotiations we have with Iran, cutting taxes to the highest income groups, not really mentioning nuclear proliferation, ignoring health care, among others.  She did not recognize the tatters that our diplomatic relationships are in with our allies.  

This type of performance is all Palin needed to do in order to assuage the hemorrhage of dissent from the Republican base:  Just get dressed up and speak in complete sentences.  Furthermore, she took a swipe at Charlie Gibson and Katie Couric when she stated that she wanted to only speak directly to "the American people, you all", and not have her views "filtered through the mainstream media", as if TV interviewers made her look like a dolt.  This plays into the intense hatred the right wing voters have for the so-called liberal media (SCLM), which will surely win her some points from the nutjobs.

So this is where we are now in the United States.  We can pull a beauty queen out of the woods, prep her for 5 weeks, cramming her brain with facts and names, and throw her potentially into the White House.  Hockey mom becomes president, as Matt Damon had said, sounds more like a title for a Disney movie.  Life imitating art.  Because the anti-intellectual candidates have sometimes been operable presidents-- Eisenhower, Ford, Reagan-- now some look for anti-intellectualism as a prerequisite for the office, and while it's fun having that folksy charm and "aw-shucks" demeanor around, the problem is that ocassionally you get an anti-intellectual like George W. Bush and I know we can't afford to take that chance right now.

 

Dick Armey: Still a Wingnut, Blaming GSE's*

*GSE's: Government Sponsored Enterprise, specifically in this instance Federal National Mortgage Association (Fannie Mae) and Federal Home Loan Mortgage Corporation (Freddie Mac).

On CNBC today I was treated to yet another facet of the decrepit ignorance of our populace and our (previously) elected officials.  I used to get emails from such morons, but since I began answering them back instead of deleting them, the number of emails has thankfully fallen off.

So this morning's Squawk Box show featuring the ignoble Mr. Armey (at right) gave me a glance into what I've been missing.  Apparently, deregulation dummies have been circulating an email containing a 1999 New York Times article about the the 1977 Community Reinvestment Act and drawing some conclusion that this somehow has led to the current mortgage crisis.  Idiots.

Fortunately, the venerable Barry Ritholtz has done the heavy lifting and referenced the complete lunacy of such an argument.  Read it in full, but here are the salient points:

Let's clarify the causes of current circumstances. Ask yourself the following questions about the impact of the Community Reinvestment Act and/or the role of Fannie & Freddie:

• Did the 1977 legislation, or any other legislation since, require banks to not verify income or payment history of mortgage applicants?

• 50% of subprime loans were made by mortgage service companies not subject comprehensive federal supervision; another 30% were made by banks or thrifts which are not subject to routine supervision or examinations. How was this caused by either CRA or GSEs ?

• What about "No Money Down" Mortgages (0% down payments) ? Were they required by the CRA? Fannie? Freddie?

• Explain the shift in Loan to value from 80% to 120%: What was it in the Act that changed this traditional lending requirement?

• Did any Federal legislation require real estate agents and mortgage writers to use the same corrupt appraisers again and again? How did they manage to always come in at exactly the purchase price, no matter what?

• Did the CRA require banks to develop automated underwriting (AU) systems that emphasized speed rather than accuracy in order to process the greatest number of mortgage apps as quickly as possible?

• How exactly did legislation force Moody's, S&Ps and Fitch to rate junk paper as Triple AAA?

• What about piggy back loans? Were banks required by Congress to lend the first mortgage and do a HELOC for the down payment -- at the same time?

• Internal bank memos showed employees how to cheat the system to get poor mortgages prospects approved that shouldn't have been: Titled How to Get an "Iffy" loan approved at JPM Chase. (Was circulating that memo also a FNM/FRE/CRA requirement?)

• The four biggest problem areas forhousing (by price decreases) are: Phoenix, Arizona; Las Vegas, Nevada; Miami, Florida, and San Diego, California. Explain exactly how these affluent, non-minority regions were impacted by the Community Reinvesment Act ?

• Did the GSEs require banks to not check credit scores? Assets? Income?

• What was it about the CRA or GSEs that mandated fund managers load up on an investment product that was hard to value, thinly traded, and poorly understood

• What was it in the Act that forced banks to make "interest only" loans? Were "Neg Am loans" also part of the legislative requirements also?

• Consider this February 2003 speech by Countrywide CEO Angelo Mozlilo at the American Bankers National Real Estate Conference. He advocated zero down payment mortgages -- was that a CRA requirement too, or just a grab for more market share, and bad banking?   

The answer to all of the above questions is no, none, and nothing at all.

[snip]

The CRA is not remotely one of the proximate causes of the current credit crunch, Housing collapse,and mortgage debacle. As I detailed in Barron's, there is plenty of things to be angry at D.C. about -- but this ain't one of them.

Rescue the Economy... NOW

(Exra-linky version.)
Not angry, just stunned that this isn't clearer to the masses and Congress, not that I would expect mental midgets like Pete Hoekstra to understand the ramifications of a credit crisis.  I find it slightly amusing that everyone comes out of the woodwork to pontificate their grand theories of social engineering at a time of hair-on-fire crisis.  

I could be wrong, but I'm pretty sure I'm not.  look at LIBOR , look at HIBOR , look at the bank failures ,BIG banks, look at European agencies now bailing out their banks.  Look at the fed needing to backstop money market funds.  This is heady stuff... not seen in our lifetimes.  Sure, the trickle down has not hit us yet, but be sure this will be profound and long-lasting .

Now the bill is up to $850,000 "festooned with all kinds of Christmas tree ornaments" (as J. S. McCain would say) to ensure passage.  Unbelievable.  Ten days late and ridiculously overburdening.  Municipalities and small businesses are forced to pay higher rates to borrow, if they can borrow at all, which will stagnate the economy and cost you and me money.  Will foreign investors "forgive" us for this dithering, or will they punish us by refusing to buy our debt and thus make us increase the interest we pay?  The answer will come very soon.

I can understand that the Cheney administration has cried wolf before and the mantra is old.  I understand that the budget is a mess and we need to be more fiscally responsible.  Our garage is full of oily rags and gas cans.  This is even more reason to be adult about this and put out the fire now before our house blows... accept the debt paper, quickly.  This has nothing to do with food stamps or education grants or whatever.

Even with rapid passage of a rescue, or bailout, or whatever, this may still devolve into chaos.

Really stunning.

FDR: "...above all, try something."

As the world credit markets freeze up, ideologues on the right and left seem willing to take down the economic system to spite their opponents.  What we need is leadership, and we have none. In another time, not too different from our own, we had such daring men who recognized tragedy and were not afraid to act.

Perhaps I am more sensitive because here in Michigan we have been suffering depression-like unemployment and economic stagnation for several years.  The hope was that we were the aberration and that the mass of wealth and growth from elsewhere would help to heal our ills, but instead it is becoming more apparent that the virus of mismanagement has infected the entire "economic machine." 

The choice is to dither away precious time pontificating about the perfect plan to thaw the credit markets, or to take a more immediate approach and refine it later if necessary.  The paralysis of such analysis comes at a large price and it is stunning the chances that political operatives are willing to take with the world's well-being.

Franklin Delano Roosevelt from 1932:

"We need to correct, by drastic means if necessary, the faults in our economic system from which we now suffer.

"We have not been brought to our present state by any natural calamity -- by drought or floods or earthquakes or by the destruction of our productive machine or our man power.  This is the awful paradox with which we are confronted, a stinging rebuke that challenges our power to operate the economic machine which we have created."

The country needs and -- unless I mistake its temper -- the country demands bold, persistent experimentation.  It is common sense to take a method and try it: If it fails, admit it frankly and try another. But above all, try something."

Thank you, Fred Upton (R-MI)...

Not that it matters, but my US representative here in the Michigan 6th deserves some kudos for joining the Democratic majority in attempting to pass the the bailout bill.  The same cannot be said for the idiot in our neighboring district, Pete Hoekstra.

Some of us worked all day today only to leave work in time to find out that the financial markets are imploding due to the complete incompetence of our political leadership.  Sure, the finance geniuses who leveraged up to buy worthless debt paper merit come culpability for their years of malfeasance, but don't pay their salaries.   I pay the salaries of elected officials who are charged with regulating the inherent greed that moves the markets.

This is a disaster.  The final bill was fine, as far as anyone could tell, and those against it have no idea the depth to which the worldwide economy may fall with the freezing of capital.  I totally empathize with the sentiment to allow the knuckleheads who engaged in alchemy and lost money to smolder, but the problem now is that the house is on fire and everything will be destroyed without a rescue.  And the rescue failed.

Stunning.  I heard Joe Scarborough on MSNBC, someone I don't regularly agree with, and he said point blank John McCain is hurt the most with this because he made the issue a presidential issue and he failed to deliver the necessary Republican votes.  Secondly, Speaker Nancy Pelosi is to blame for putting such an important bill up for a vote, before the world's markets, without KNOWING it would pass.  I could not agree more.

Sure there may have been a better way to fix the credit crisis, but right now is not necessarily the time to argue about the make of the fire truck we need, let's just start pumping water.  This crisis can escalate rapidly as hedge funds and mutual funds need to sell more to cover redemptions over the next few days.  The conflagration can explode, but even if it does not explode the risk is not worth taking.

Who the hell is running the show?  WTF!!

Even those of us who have lightened our stock exposure these past several months know the importance of passing this bill to unlock the credit that lubricates the world's financial markets. The guy working at the corner muffler shop, or single mom slinging hash at the local eatery, may be sentimentally correct when they rail against the bill, but they will suffer too when their employers cannot clear enough capital to back their paychecks this week or next.  

Kudos to the legislators who put politics aside to vote in favor of this bill, as flawed as it may be-- now go back to work and get soemthing passed this time!

Uh-oh, Palin Makes Her "Cringe"

Kathleen Parker, a conservative woman writing in the National Review, compels Sarah to put country first:

Palin’s recent interviews with Charles Gibson, Sean Hannity, and now Katie Couric have all revealed an attractive, earnest, confident candidate. Who Is Clearly Out Of Her League.

No one hates saying that more than I do. Like so many women, I’ve been pulling for Palin, wishing her the best, hoping she will perform brilliantly. I’ve also noticed that I watch her interviews with the held breath of an anxious parent, my finger poised over the mute button in case it gets too painful. Unfortunately, it often does. My cringe reflex is exhausted. 

[snip]

Only Palin can save McCain, her party, and the country she loves. She can bow out for personal reasons, perhaps because she wants to spend more time with her newborn. No one would criticize a mother who puts her family first.

Do it for your country.

Ouch. 

Jesus Told Me to Take Out That Mortgage I Can't Afford

From the Cunning Realist:

"And so we need more counseling and more education to make sure our fellow citizens know what it means to buy a home and can get comfortable with the idea of buying a home. And so we've doubled the amount of money available for community-based programs, faith-based programs -- (applause) -- to be able to brief their parishioners and/or their fellow citizens about the opportunities and the hope and what it takes to be able to purchase a home."

-George Bush 10/15/03


The setting for that 2003 speech? Just outside of Fresno, California. If you don't know what happened there, here's one post-mortem.

Favre Sets Personal Best; Aaron Rodgers Possibly Out

D'oh!

I won't say I toldya so... OK, on second thought, I will.  Somewhere in the Packers' front office, they're rifling through desks looking for Don Majkowski's phone number.

Paul Newman (1925-2008)

A Hollywood icon, philanthropist, and he makes a great salad dressing. He is certainly missed.

(Turn the music off on the right to watch videos on the blog.)

Bush: "This sucker could go down."

Perhaps emblematic of his entire presidency, now we have Bush staring into the abyss of yet another cavernous disaster created by his own inattention.  And yet again, we have to endure his bleating like a schoolgirl while the adults scramble to assuage fears and pull us all back from the ledge.

“If money isn’t loosened up, this sucker could go down,” President Bush declared Thursday as he watched the $700 billion bailout package fall apart before his eyes, according to one person in the room.

“We’re in a serious economic crisis,” Mr. Bush told reporters as the meeting began shortly before 4 p.m. in the Cabinet Room..."

No shit, Sherlock.  Everything is a crisis, mainly because the folks in charge allow it to get to crisis stage before looking up from their Guns and Ammo magazines or The Pet Goat to see the warning lights blinking red.  The World Trade Center falls down, intelligence fails about WMD,  Iraq devolves into chaos, Abu Ghraib, Katrina, etc...  I know I'm leaving out some, but for the sake of brevity just consider these and then we can see that the latest crisis is merely the most recent completely avoidable debacle in a long series of completely avoidable debacles.

Good Lord, I cannot wait until January, and I'm sure that Bush can't either.  It's obvious that the latest crisis of inattention is the result of  Bush staring at his navel, counting down the minutes until his tenure is up when he can start his ambition of  "wealthy boredom" and jump onto the lecture circuit to "you know, replenish the ol' coffers."  Idiot.

Let's face it, this economic volcano has been choking and burbing up methane for months, even years, and Bush has dawdled, hoping that the lava flow would wait until after January 21st when he is safely dispatched to his Paraguyan villa (Paraguay has no extradition treaty with the US and grants immunity from the International Criminal Court for war crimes.)   

But, alas, the eruption wouldn't wait the necessary 4 more months, and now we have to endure Mr. Bush whining one last time for pounds of funding to fix a disaster that could have been prevented with an ounce of common sense.

More thoughts on the bailout

1.  The problem with the Republican idea of "warrants" (from the website of Greg Mankiw, former chairman of Bush's Council of Economic Advisers.)

2.  What is the precedent of having two Senators, presidential candidates or not, involving themselves in ongoing Senate business of which they are a) not members of the committee handling it, or b) have no special expertise?  What would have been the scenario is Obama were not a Senator but, say, a governor; then would he have been invited to the Senate Banking Committee meeting with the president?  Answer: doubtful.

3.  Furthermore, how can McCain one day say that the economy is "fundamentally sound", and within ten days he's cancelling his presidential campaign, flying back to Washington, barging into Senate Committee meetings, cancelling debates, and basically running around like his hair is on fire?  It just seems like odd behavior.

4.  Why hadn't McCain read Treasury Secretary Paulson's 3 page proposal by Tuesday, when it was put out on Saturday?  Hell, even I took the 7 minutes to read it on Monday.

I'm torn over the propect of using taxpayer money to buy mortgages, but I do know that I trust the Senate Banking Committee, as messed up as it is, to be better at finding a solution than a retired naval aviator who never even read the proposal.

5. Also, I think that the Republicans who gutted the regulatory regime should have their noses held in the stink a little bit longer:

Critics in the financial industry and academia insist the abuses would not have happened if federal and state regulators were doing their jobs.

For instance, banking regulators at federal and state levels failed to monitor lenders that were offering mortgages without following basic industry guidelines on income levels and without requiring appropriate documentation on applications. Those practices led to a high number of risky loans...

...Then there were the failings of the SEC at the federal level and self-regulatory bodies like the Financial Industry Regulatory Authority, which supervises brokers. Those entities were supposed to oversee investment banks and brokers, partly to prevent the recent string of catastrophic financial failures that seemed to catch everyone by surprise.

While no one is pointing to any single regulator, the SEC has the broadest responsibilities, including monitoring the financial health and operations of investment firms.

This is what happens when the the refs get fired... and it's going to be expensive.

I realize that now may not be the time for such partisan venom, and I apologize if I have trampled any delicate tendencies in this contentious election season, but this is demostrative that there are fundamental differences between the two parties and the two men running for president.

We're from the Government and We're Here to Help

Random thoughts on the Global Economic Crisis (TM):

1.  Somewhere in a cave in Waziristan, a bearded millionaire terrorist is smirking.  After all, bin Laden had written to his buddy Mullah Omar in October 2001:

"...Thus our plan in the face of this campaign should focus on the following:
—Serving a blow to the American economy, which will lead to:
a) Further weakening of the American economy
b) Shaking the confidence in the American economy. This will lead investors to refrain from investing in America or participating in American companies, thus accelerating the fall of the American economy …"

Who knows, he may have even shorted Lehman and Bear Stearns all the way down.

2.  Intrade betting site has the odds of Congress passing a bill to fix the current crisis at 0.77.   We all know a bill will get passed this weekend by our spineless representatives on Capitol Hill.  The best trade out there is taking the Intrade for passage for a quick 23% return.

3.  Aren't we all glad that Grandma and Grandpa didn't put their Social Security into Fannie, Freddie and AIG stock like President Bush wanted in 2004?

4.  So much for President Bush being conservative and keeping government small.   The Bailout 2008 will push the federal deficit to record levels and expand governmental agencies to record size.  Who voted for this guy?  Seriously, who?  If you voted for him because he is "conservative", then you fail basic economics (and need to return to civics class to re-learn the Constitution as well.)

5. Be advised as the drama unfolds this week, as the president urgently calls for a "robust package" to bailout Wall Street, and Secretary Paulson urges immediate passage of a "clean bill" that gives him comically unchecked power, that these guys have been mulling this thing for "months."  Months.  That seems like enough time to have convened a bipartisan group of Congress critters and other assorted principals to the White House for a pow-wow before now.

Defending the package, White House spokesman Tony Fratto said Tuesday that the bailout had been "months" in the making but insisted that lawmakers should pass it "this week."

"This was not a program that was conceived of, or put together, hastily. There was an enormous amount of analysis and debate and discussion before we came forward with this program," said spokesman Tony Fratto.

"Some of the policy staff have had months to think about what a program like this would be like and how it would work. Others have had at least weeks to think about it," he told reporters on a conference call.

"We do need to get it done quickly and urgently and would oppose efforts to delay it," the spokesman said. "I think we want to be confident that it will get done this week."

In a subsequent email exchange, Fratto declined to say when the administration first began internal discussions on the mammoth plan, but told AFP: "It shouldn't come as a surprise that we think about contingencies."

Methinks we're being played.

6.  Nobody says it better than The Cunning Realist:

Regular readers know that I don't give financial advice here. But I'll say this. It's clearer than ever that one's after-tax savings are not safe if kept within this system. When two or three unelected statists can decide on a moment's notice that the nation will embark on something as costly as another Iraq -- and then dictate the terms to a cowed Congress -- does that need much explanation? The chances are rising for a sudden and massive dollar devaluation at some point in the future. Moreover, we know now that the system is capable of anything. We've already seen rock-bottom interest rates, new credit facilities, expanded repurchase agreements, unprecedented liquidity, well-timed futures goosing, interventions, conservatorships, and now short-selling bans and bailouts. If all that proves insufficient, expect literally anything: national bank holidays, market shutdowns, restrictions on gold ownership, and capital controls. You really don't need much of a historical perspective to predict this stuff, just a little intuition about what happens when a jingoistic, militarized, increasingly socialistic nation overextends itself and is confronted with the consequences. Evaluate your exposure and plan accordingly.

Indeed.