Tuesday, November 18, 2008

Wouldn't You Like to Get a Bailout, Too?

1) Bailouts R US - When I first heard this story last week, I assumed that it had to be a joke. In essence, a taxpayer advocacy group (www.taxpayer.net) got a copy of the application to get a piece of the bailout.

Here is the application......

Trust me it's worth looking at this thing. 2 PAGES!!! I had to fill-out a longer form to buy a NY State fishing license this year. Has anyone ever filled out a banks application for a loan? How long was that application -- 200 pages, but the Treasury can get all the info they need on a two pager?

The Treasury assures us that there is a lot more too getting the money than this application, but I'm not sure that anyone has any idea what they are doing. This form looks like some MBA flunky drafted it while Facebook was down for routine maintenance one night. The level of incompetance demonstrated by Congress and the Treasury is simply stunning.

2) Markets - The Dow had a nice little reversal (up 300 pts in the last hour again) on very little news. I suspect that some program trades kicked in to account for BUD's acquisition by InBev (since BUD went away, funds that track the S&P 500 had to redistribute their $$$ into other stocks to rebalance). This buy program perked up stocks some and then everyone was afraid to miss another 10% rally off the 8,200 level so a few more people bought into the close. I'd note however, that the S&P and NASDAQ have both violated previous closing lows and are not acting well. We'll see....

3) The latest news on the economy has been jaw dropping. It's hard to know how much weight the big investment banks still carry, but Goldman Sachs published a note tonight with a couple of scenarios for the economy - either case - "Just bad" or "Ashlee Simpson Singing Bad" - would show Q4 GDP down 5-8%. These are numbers that we haven't seen since a bunch of college kids beat the mighty Soviets on a frozen pond in Upstate NY (Do You Believe in Miracles? YES!!). I've said for some time that this recession feels alot more like 1981 or 1974 than 1991 or 2002. The rest of the world seems to be coming around to that line of thinking.



Anonymous said...

I showed the 2 page bailout application to my economics class. Several of the people in my class were not even a little surprised. I recieved responses that included "Well , last time I applied for food stamps I only had to fill out 1 page" and "My first Grant was only 3 pages long"
Apparently the government has decided to streamline the fraud process!

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