Helicopter Ben, Part 9

Bary Ritholtz, at his The Big Picture, noted something about the first press conference for a Chairman of the Federal Reserve, ever -- in this case, 'Helicopter' Ben Bernanke -- and parsing the tea leaves to determine what the policy of the Federal Reserve Bank is going to be going forward.

Since I trust Ritholtz's analysis on this issue, and as it underlines what has already been reported about the true aftermath of the 2007-2008 Crash for America's financial institutions, I'm passing the information along:

At yesterday’s presser, Fed chief Ben Bernanke indicated an easy policy stance for the foreseeable future... I believe it is really to buy time to rehabilitate the bank’s balance sheets. They remain poorly capitalized.

Rather than put insolvent institutions into [Chapter 13 Bankruptcy reorganization], we have allowed the 'hang on, slowly getting better' through a massive back door bailout: Borrowing from the Fed at near 0%, and lending it right back to Treasury at 2-3%. This is more politically acceptable than just writing them checks for $100s of billions of dollars.

Consider:

• Q1 2008: JPMorgan Chase had an average of $1.2 billion in outstanding Fed loans with a 2.1% interest rate while it held $2.2 billion in U.S. government securities with an average yield of 4.6%.

• Q4 2008, JPMorgan Chase had an average of $10.1 billion in outstanding Fed loans with a 0.6 % interest rate while it held $10.3 billion in U.S. government securities with an average yield of 1.7%.

• Q1 2009, JPMorgan Chase had an average of $29.2 billion in outstanding Fed loans with a 0.3% interest rate and held $34.6 billion in U.S. government securities with an average yield of 2.1%.

• Q2 2009, JPMorgan Chase had an average of $7.6 billion in outstanding Fed loans with an interest rate of 0.25% interest. Meanwhile, it held $34.6 billion in U.S. government securities with an average yield of 2.3%.

• Q1 2008, Citigroup received over $5.2 billion in Fed loans with a 3.3% interest rate and held $7.9 billion in U.S. Treasury Securities with an average yield of 4.4%.

• Q4 2008, Citigroup received $15.8 billion in Fed loans through the Fed’s Primary Dealer Credit Facility with a 1.2% interest rate; $11.6 billion in Term Auction Facility loans with a 1.1% interest rate; and $4.9 billion in Commercial Paper Funding Facility loans with a 2.7% interest rate. It simultaneously held $24 billion in U.S. government securities with an average yield of 3.1%.

• Q1 2009, Citigroup received over $12.1 billion in Fed loans with an interest rate of 0.5% while holding $14.3 billion in U.S. government securities with an average yield of 3.9%.

• Q2 2009, Citigroup received over $23 billion in Fed loans with an interest rate of 0.5% while holding $24.3 billion in U.S. government securities with an average yield of 2.3%.

• Q3 2009, Bank of America had an average of $2.9 billion in outstanding Fed loans with an interest rate of 0.25% while purchasing $23.5 billion in Treasury Securities with an average yield of 3.2%.

(Sources: Federal Reserve, US Senate)

Similar arbitrage has existed for the top 20 banks since the Fed took rates down to zero.

The bailout has always been about rescuing the banks, their management, shareholders, and most especially, their creditors and bond holders.

The American government has allowed banks to make money, from the government -- that is, from us. You and I are paying money to the U.S. Government, which makes it available, through the Federal Reserve, as loans to our major financial institutions. The interest rate to those institutions for the past three years has been nearly 0%: Nearly Free Money.

The banks then loan (some of) this money out to you and me for cars, business transactions; even the occasional home loan -- all at much higher rates of interest. They also loan that same money back to the U.S. government. In this, they receive a net profit of (as Ritholtz reported) around 2 to 3 per cent.

For that money loaned back to the government, it's a bit like 'trickle-charging' a battery; banks and investment houses very slowly make money to offset some of the bad debt they're carrying on their books: The securities backed by pools of bad home loans, and the mortgage loans themselves (if the CDOs were valued properly, the financial groups holding them would have to go bankrupt). That simply isn't going to be allowed to happen: We're Too Big To Fail. We'll Take The Rest Of The Global Economy Down With Us.

The alternative to a trickle-down approach is to just give the Banksters trainloads more money, openly -- but that would be "politically unpopular".

The 'money shot' in this article? The bailout has always been about rescuing the banks, their management, shareholders, and most especially, their creditors and bond holders.

This is just another aspect of "making private debt into public obligation": You and I are paying for this. We're paying for the large bonuses and wonderful, comfortable lifestyles of people you wouldn't want to leave your children alone with for five minutes, and their families.

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Bye-Bye Euro Bye-Bye

Calculated Risk mentioned yesterday (via a quote from Little Rupert's 'Wall Street Journal' that the Greek government forecasted it's 2011 budget deficit to be 10% of its GDP.

Greece's budget deficit in 2010 was 10.5% of gross domestic product, significantly larger than forecast ... Lower-than-expected government revenue was the main culprit behind the higher deficit number. ... The Greek government was targeting a 2010 deficit of 9.4% of GDP ...

The missed target was "mainly the result of the deeper-than-anticipated recession of the Greek economy that affected tax revenue and social security contributions," the Greek government said in a statement after the Eurostat announcement.

CR went on to remark, "More austerity coming - the beatings will continue until morale improves!"

The yield on Greece's ten-year bonds increased to 15.3%, and on 24-month bonds up to 24%. "It seems like the markets expect a credit event soon", CR commented, adding that "the ten year yields for [Irish government bonds] at 10.5%, Portugal['s] up to a record 9.6%, and Spain['s] at 5.5%."

In Europe and America, governments had the choice to say to the banks and financial houses which created this massive crisis of real-estate-fueled securities, You made this mess, now suffer the Penalty Of The Market for your bad judgment: Eat your pie, every bite.

Arguably, the banks and investment houses could have been allowed to fail -- following the 'General Motors model' here in the U.S., they could have received a government loan to continue operation (as GM did), declare bankruptcy, and reorganize.

That would have cost their stockholders, true; they would have been paid pennies on the dollar. But it would have been nothing less than Caveat Emptor, and a general principle that effects of risk in business are assumed by the parties responsible for creating it, and the legal principle that other parties harmed by the effects of that risk may seek relief or compensation.

For a time, the entire American banking structure would have been effectively nationalized -- but like the GM 'bailout', the focus of such a plan would have been to put some financial groups back on their feet. Those (like Lehman Brothers) with falsified balance sheets and debt-rotted to the core would be allowed to go into the black hole of receivership. The survivors would have had to work to pay the government loans back, and move forward.

This plan would very probably have resulted in a sharper Recession, but just in one Dog's opinion would have resulted in a stronger financial sector -- and one which had been taught a lesson that would have lasted for at least a couple of decades. The debt they had created would have, at least, been acknowledged and handled.

But, it didn't happen that way -- not in America, and not in Europe. The Free Market is founded on a wonderful principle: In Business, only risk other people's money. So, because the Banksters were unhappy and threw tantrums and claimed The World Will End If We Go Down, governments the world over gave them money -- lots and lots of it, essentially for free, so they wouldn't Fail.

And, all that private debt (created by Banksters) became public debt (owned by The Peasantry in each country, here and abroad). Our Banks did more than keep their doors open; they used the TARP and Bailout cash not to clear debt, but to do other deals and put a band-aid over their losses. The Banksters made even more obscene profits, and paid themselves even bigger bonuses.

All the debt that was created during The Bubble is still out there, unaddressed, like an unexploded Mustard Gas shell in some farmer's field in Flanders, just waiting for the touch of a plow to go off.

However, in places like Greece, Ireland, Portugal, Spain -- it was worse. With smaller economies, less diverse, their governments were faced with a simple choice: To avoid defaulting on national obligations and to maintain the viability of the Euro, these governments had to accept loan packages from the EU's European Central Bank, just to 'keep the doors open', and so their citizens wouldn't run through the streets, burning banks and the homes of billionaires and voting Communist governments back into power. Pas du tout.

As a condition of these loans, these governments had to accept "Austerity" measures. To pay for all the debt created by their banks, the Greek and Spanish and Irish people will have to do more with less. Fewer jobs, fewer teachers, firefighters and police; public services are reduced or 'outcourced' -- sold to private companies, who will run them for a profit. Reduced medical care, pensions, caps on wages and salaries. All this has resulted in serious demonstrations in these countries (particularly Greece, Portugal, and Ireland), with people running through the streets, setting fire to banks and considering that perhaps voting Communist wasn't a bad idea after all.

CR noted that a "credit event" is expected, and that term is defined as a "general default related to a legal entity's previously agreed financial obligation." That means in this case that one of these European governments "fails to meet its obligation on any significant financial transaction (coupon on a bond it issued or interest rate payment on a swap for example). The marketplace will recognize this as an event related to the legal entity's credit worthiness."

Europe's return to a multiple-currency structure would be very bad (you can view a brief BBC news report on this here), and not just for Europeans. Our own "recovery" -- which daily is becoming more of a weak joke -- would be kicked to the curb.

Thought the 'Great Recession' was bad? Reminds me of a post on the Financial Times' website, 'Alphaville': "Invest in gold? No; I'm diversifying my portfolio into canned goods."

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The Revenge Of The Giant Face

Douglas Kass is a financial / investment advisor who, between 2002-2007, was among the few who cried that the nation's economy was in danger of being devoured by Wolves in Sheep's clothing.

Barry Ritholtz, who was also making the same observations back in those long-ago times, quoted Kass today on his blog, The Big Picture (Paragraphing added):

In 2007 and early 2008, I warned that the impact of unregulated, unwieldy and unpriced derivatives plus a speculative blowoff in residential home prices around the world produced a toxic combination that would bring down stock markets and economies worldwide...

Let's now fast-forward to April 2011.

With every Treasury POMO and with every uptick in the world's stock markets, investors are building up their stock portfolios with a false sense of security as their optimism blossoms under the encouragement of the strongest of market trends...

In many ways, today's problems -- namely, structural unemployment, the screwflation of the middle class and fiscal imbalances (around the world) -- are even more serious and more difficult to resolve than its recent predecessors.

It is clear to this observer that the U.S. economy's forward momentum peaked in February as first-quarter 2011 growth, expected to be +3.5% 90 days ago, looks closer to +1.5% now.

Most notably, higher costs for life's necessities (food, gasoline, etc.) have begun to sap the purchasing power of an already vulnerable consumer. Meanwhile, home prices are exhibiting no signs of recovery and, arguably, have begun to experience a second dip.

In contrast to cash-rich large corporations, small businesses continue to suffer, as evidenced by low readings in confidence surveys. Domestic loan growth is still weak and our local and state governments are preparing for European-style austerity (along with the implementation of higher marginal tax rates).

Over there (in Europe), central banks are tightening, and austerity measures are being implemented. In Japan, the natural disaster has created dislocations and a material slowdown in growth. The Middle East remains a powder keg and a risk to worldwide growth. And even in China, growth is decelerating under the pressure of a series of tightenings aimed at lower inflation.

At best, subpar growth looms on the domestic economy's horizon; at worst, a double-dip is still possible...

It feels like deja vu all over again.

Read the full article here, if you have the spittle for it.

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Crafty Ol' Hog Stayin' In The Waller

TPM reports that the Klavern's Grand One-Eye Wizard Governor of Mississippi Haley Barbour revealed today that he will not run for the Republican nomination for President in 2012.

Clearly, there was a titanic groundswell of support for a Southern gentleman, busily engaged in obtaining a third chin, to seek the office once held by the evil the evil the evil Abraham Lincoln. Barbour said that "Hundreds of people" had encouraged him to run.

His wife, Marsha, had told the press earlier that the "thought of [Barbour's] running for President terrifies me" -- as indeed it terrified that portion of the American population not lulled to sleep by cable teevee porno sports, cold-filtered beer, and the promise of a Lotto win.

You may remember Barbour's clueless an bizarre remarks earlier this year, which amounted to a defense of the right of persons of the Caucasian persuasion to organize as they see fit when dealing with the encroachment of Those Other People.

A Barbour presidency would have brought back the rustle of crinoline and a whiff of Magnolia to the White House, where Jeff Davis certainly would have put it had things gone as ol' Haley would have preferred.

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Remembering The Present

Reposting another author's work in full is something I don't like doing, unless the circumstances call for it. Calculated Risk is a site dealing in analysis of the Big Indicators of economic movement (Housing, Employment, Money Supply; Manufacturing; Shipping, and Durable Goods), created by Bill McBride.

I'd at least give it a cursory look, even if reading about data and numbers isn't your thing. I've been a financial analyst Dog and enjoy the satisfaction of working (not massaging) the data to determine a result. Due to the clarity of his analysis (the infoporn quotient of his charts is Teh Hot) and utter lack of spin, the site is excellent.

McBride posted a short article yesterday which succinctly described the movement of society and economics over the past ten years, and gives the flavor of what you might find on the site on any given day. I'm reposting it here.

More than a Lost Decade
by CalculatedRisk on 4/20/2011 09:13:00 PM

I've been more upbeat lately, but even as the economy recovers - and I think the recovery will continue - we need to remember a few facts.

There are currently 130.738 million payroll jobs in the U.S. (as of March 2011). There were 130.781 million payroll jobs in January 2000. So that is over eleven years with no increase in total payroll jobs.

And the median household income in constant dollars was $49,777 in 2009. That is barely above the $49,309 in 1997, and below the $51,100 in 1998. (Census data here in Excel).

Just a reminder that many Americans have been struggling for a decade or more. The aughts were a lost decade for most Americans.

And I'd like to think every U.S. policymaker wakes up every morning and reminds themselves of the following:

There are currently 7.25 million fewer payroll jobs than before the recession started in 2007, with 13.5 million Americans currently unemployed. Another 8.4 million are working part time for economic reasons, and about 4 million more workers have left the labor force. Of those unemployed, 6.1 million have been unemployed for six months or more.

So even as we start to discuss how to fix the structural budget deficit, and also to address the long term fiscal challenges from healthcare costs, we can't forget about all of these Americans.

Of course, during the same period (2001 - 2011), in addition to employment, we also lost over four thousand soldiers, sailors, Marines and airmen; the trust of a civilized world; and much of our collective self-respect and what passed for democracy in America. We also lost much of our reason, our capacity for outrage, and squandered the fruits of the labor of generations just to satisfy the greed of a small percentage of our population.

But, hey; we got to see pictures of Brittney Spears and Lindsay Lohan climbing out of limos without underwear. So 's all Good; Yo.

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Gary Busey's Awareness

Trumped

Gary Busey, a household name which encompasses so much of the flavor of this Great Nation™, has decided to endorse a person for President. Video of the event via the ubiquitous UTub was provided by Little Rupert's Newsy-Truthsy organization, aber natürlich (You may see the full-sized video here -- don't worry; it's like being waterboarded, and even that has to end sometime).

My favourite Gary Busey moment is, but naturally, the "So You've Got A Temporary Restraining Order" video-within-the-video segment of The Simpsons.

BUSEY: I'm gonna let you in on a little secret: 'Joe" is me -- and 'Sally' is a composite of twenty-two other women, and a small, independent film company, who couldn't handle me because I'm too real [Insert insane cackling laughter here].

I'm Guessing there wasn't enough pay in doing 'Celebrity Rehab' for ol' Gary, so (in the time-honored tradition of Little Annie Coulter) Herr Busey is performing this stupid pet trick in order to grasp another thirty seconds of attention from the media, who are happy to film any train wreck capable of getting on Entertainment Tonite!.

I'm waiting for the time when, like Mr. Busey, Little Annie -- raddled, pouched and looking every hour of her later years -- goes on teevee to announce she has always been lovin' her that Hitler, in a pathetic attempt to focus attention on herself and make just a little more money; and to convince herself that she has, or ever did have, any relevance whatsoever.

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Thinking About The Future

I'm thinking about closing down this blog.

The reasons behind it are (as always) personal. Like most blogs, I've used this site as a creative outlet: I write and do art when not posting here, and writing and/or doing the occasional Photoshopped picture was a way of keeping my hand in. At no time did I ever kid myself that my goal was to become a "popular" blogger. That I have even four people who occasionally look in to see what's happening is a bonus.

Essentially, my vision of what's happening in my country is dark (not as if my postings haven't made that clear). The deck does seemed stacked in favor of the Few taking as much advantage of The Many as they can; that won't change. There isn't anything active in our society to stand against that. I'm not quite as pessimistic as Dr. Morris Berman, for example, but close -- I don't anticipate anything on the Macro scale but continued deterioration into a new Feudalism. Ergo Hoc; Ergo Propter Hoc.

Below the Macro, our lives are played out. We grow older, and at some point will die. What was it all about? Where did it all come from, what purpose does it all have; what is it for? There is music, children, food and laughter, and frustration and fear. We're affected by the flux and wash of greater forces but have to move forward, one moment at a time, and at street level: This is where life is lived. This isn't "Doctor Zhivago"; at least, not yet.

Acclaim and approval have been huge draws in my life, and I've fallen far short of any half-made goals in pursuit of that. There were (way too many) times when vanity ruled, and I did want to be that Dog who offered sage or funny observations, and was held in esteem by large numbers of people. In truth, I just wanted a small box to get up on and bark from time to time.

I may be doing new writing, and possibly in a new blog... but I think Before Nine's time may be drawing to a close.

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Ooopsie

Little Lloyd Has No Pants

Goldman-Sachs Interrelationships With People And Other
Organizations, Businesses (Ineractive: Muckety.com)

As reported by Reuters, the Senate Permanent Investigations subcommittee, chaired by Senator Carl Levin (D-Michigan) released a report today accusing investment whorehouse Goldman Sachs of misleading clients and manipulating markets.

The report also condemned greed, weak regulation and conflicts of interest throughout the financial system.

No one was surprised. Despite the revelations and accusations in the 639-page report (proof that the financial suffering of the United States, if not the world, was created and manipulated by Wall Street), most people continued their day in a normal manner.

"Well, yeah; that's what these people do," said Ruby Stintmacher, 62, of Sedavia, Missouri, hanging out her laundry. "They [deleted] us. I gotta toothache and can't afford a dentist, but that Little Lloyd Blankfein -- he's got five houses. I'd like to hangin' him, instead of these sheets."

"All the unemployed people we got? It's just a more public show that we got a permanent underclass in America," said Stintmacher. "Ya gotta keep a certain percentage of people poor. Ya need a cheap labor pool -- except we just don't got no manufacturing base to put 'em to work."

Promp Amboy, a buoy maker in Witchita, Kansas, was more philosophical. "The way I see it, the bloodsucking parasites should be scraped off the skin of the country, along with their bourgeois fellow-travellers, and the wealth redistributed -- and if it takes a literal class war to do that, I'm all for it."

Bobby Thompson, 9, of Los Angeles, observed "My daddy says poor people suck and that we should invest heavily in shotguns now. This gonna be on teevee?"

Case studies from the go-go years of the real estate bubble formed the bulk of the report, which said a runaway mortgage securitization machine churned out abusive loans, toxic securities, and big fees for lenders and Wall Street.

It cited internal emails by Wall Street executives that described mortgage-backed securities underlying many collateralized debt obligations, or CDOs, as "crap" and "pigs."

It said Washington Mutual -- which became the largest failed bank in U.S. history in 2008 -- embraced a high-risk home loan strategy in 2005 while its own top executives were warning of a bubble that "will come back to haunt us"...

Mass downgrades of mortgage-related investments in July 2007 by Moody's and Standard & Poor's constituted "the most immediate cause of the financial crisis," it said.

Investment banks, it said, charged $1 million to $8 million in fees to construct, underwrite and sell a mortgage-backed security in the bubble, and $5 million to $10 million per CDO.

As for Goldman, the subcommittee said, the firm "used net short positions to benefit from the downturn in the mortgage market." It said Goldman designed, marketed, and sold CDOs in ways that created conflicts of interest with clients, while also at times providing the bank with profits "from the same products that caused substantial losses for its clients."

A spokesperson for Goldman said, "While we understand the feelings of many Americans over events in the markets of the past several years, we don't care. So sorry about you peasants." *

(* Note: No spokesperson for Goldman Sachs has made such a remark. It was not intended to be a factual statement, but to underline the main point of the post.)

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Kicking The Baby

The Kyl Defense

Jon Kyl, Explaining Recent Fish Catch Was As Big As He Claims

Of course, all sentient beings now living know of U.S. Senator Jon Kyl (R-Bedlam)'s comment in a speech on the floor of the Senate about Planned Parenthood ( an organization so evil all conservatives must publicly hate it, and so pass a crucial litmus test with evangelical and conservative Catholic voters):

"...You want an abortion, you go to Planned Parenthood; that's where ninety per cent of that money [i.e., budgeted Federal support to the organziation] goes."

This was, of course, utter bullshit. In truth, three per cent of Planned Parenthood's budget is spent on abortion services. Kyl's office later provided a press release in clarification, saying "The senator's comment was not intended to be a factual statement."

Right. Well, now that concept just has so many uses, doesn't it?

SENATOR JON KYL (R-Idiot): Sir, don't you understand the gravity of the threat to Our Great Nation™ ? Do you know that, as we're sitting here today -- your daughter is in an Al-Qaeda training camp in the middle of nowhere, Afghanistan? Learnin' how to make explosive devices to butcher helpless, defenseless American civilians? Do you??

And you thought she was going to Vassar! Well, I'm disgusted -- and what's more, I know all real Americans join me in saying your daughter is a traitor and no better than a two-dollar hoor.

WITNESS: What are you talking about? That-- that's insane! I had breakfast with my daughter this morning before coming to the Capitol, Senator; she was just in this room until a few minutes ago!! What in the -- what do you mean, she's in a terrorist training camp??

SENATOR JON KYL (R-Idiot): Well, sir; that was not intended to be a factual statement. It merely illustrated my point.

WITNESS: What?

[** Hat Tip To Roger J. ('El Rog The Magnificent') **]

This kind of thing happens in Little Rupert's "News" or on Lard Boy or Little Glenny's programs quite often. But I've had about all an adult Dog can stand about this kind of willful obfuscation, and so inaugurate a new blog category, Kicking The Baby:


(Courtesy Of UTub: See The Big-Screen Version Here.)

As seen on South Park, Kyle has fun by "Kicking The Baby" -- which means making it appear as if Ike (the baby) had done something wrong. Ascribing qualities or behavior to Ike that were not accurate, in order to portray The Baby in the worst possible light. Or, if you prefer, Lying About Ike The Baby.

So, using the Kyl Defense, just about any position is defensible -- so long as you grossly distort and lie about someone or something in your remarks, and later state they were only made to illustrate and underline your main point. Whatever it was.

MONGO: You know, John Kyl is an unindicted pederast who continues to be one of the largest distributors of child pornography in North America.

NOT MONGO: Are you nuts?? There isn't a shred of accuracy in any of that; it isn't true! And isn't his name spelled "Jon" Kyl?

MONGO: Oh, I'm sorry. Let me explain: It wasn't intended to be a factual statement.

Jon Kyl: All American (What the hell kind of name is 'Kyl', anyway? Armenian? Czech? Bondostan?) And do I really need to explain this further?

No? Ausgezeichnet, Kinder.

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UPDATE: I was trying to determine a basis for Kyl's statements and actions generally, along with other Tea Partei and Rethug themes, and I thought: Kyl is getting along in years.

It's my personal theory that past a certain age, you just don't give a damn anymore. You're liable to say and do things that you think are sharp 'n classy, but really just make you look clueless, and full of shit. You realize this, somehow, but rather than pause in reflection about that, you double down with more outrageous behavior. Think of Donald Rumsfeld.

I believed I was on to something here. Then, I thought about Eric Cantor; or Little Michelle Bachmann (workin' on being Mike Bachmann; yeah!), and the whole theory just fell apart... like a used teabag.

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Thugs

After The Ball Was Over

Paul Krugman writes:

... Mr. Obama is conspicuously failing to mount any kind of challenge to the philosophy now dominating Washington discussion — a philosophy that says the poor must accept big cuts in Medicaid and food stamps; the middle class must accept big cuts in Medicare (actually a dismantling of the whole program); and corporations and the rich must accept big cuts in the taxes they have to pay. Shared sacrifice!

I’m not exaggerating. The House budget proposal that was unveiled last week — and was praised as “bold” and “serious” by all of Washington’s Very Serious People — includes savage cuts in Medicaid and other programs that help the neediest, which would among other things deprive 34 million Americans of health insurance.

It includes a plan to privatize and defund Medicare that would leave many if not most seniors unable to afford health care. And it includes a plan to sharply cut taxes on corporations and to bring the tax rate on high earners down to its lowest level since 1931.

The nonpartisan Tax Policy Center puts the revenue loss from these tax cuts at $2.9 trillion over the next decade. House Republicans claim that the tax cuts can be made “revenue neutral” by “broadening the tax base” — that is, by closing loopholes and ending exemptions. But you’d need to close a lot of loopholes to close a $3 trillion gap; for example, even completely eliminating one of the biggest exemptions, the mortgage interest deduction, wouldn’t come close. And G.O.P. leaders have not, of course, called for anything that drastic. I haven’t seen them name any significant exemptions they would end.

... the nation wants — and more important, the nation needs — a president who believes in something, and is willing to take a stand. And that’s not what we’re seeing.

Josh Marshall at TPM [Paragraphing Added]:

It's now taken for granted that the White House must make major concessions if Rep[resentatives] Boehner and Cantor are to allow a vote to raise the nation's debt ceiling.

A few months ago, even Cantor was saying that at the end of the day, the vote would be held and the limit raised. But coming off his Friday deal, even Boehner is threatening to let the nation go into default on its [national] debt unless the President offers a package of concessions with "something really, really big attached to it"...

Take a moment to consider what is involved in the whole question of national indebtedness. Those who are pressing the issue the hardest argue that at some date in the not-to-distant future, the country will no longer be able to manage the scale of its debt. The costs of financing it will go through the roof as foreign lenders lose faith in our ability to pay it off and/or we'll enter into some mammoth debt crisis... an arbitrary decision to stop paying our debts is the only way to trigger the sort of catastrophe these folks claim they are worried about.

...Even if you set aside the more apocalyptic scenarios, welching on the national debt is very likely to provide a severe shock to the still fragile economic recovery and woud likely raise the cost of borrowing into the indefinite future -- something that really would make our financial predicament significantly worse than it is.

The whole thing is crazy. It's holding a gun to the head of the country and saying, "Give me what I want or else." Accepting it as a given about how this year is going to be conducted is even crazier.

The president needs to start saying now that Boehner and Cantor need to pass a clean no-conditions bill to raise the debt ceiling. You can't negotiate with hostage takers -- not at the local bank heist, not in the Middle East, not at the other end of Pennsylvania Avenue.

The President made a bad deal to keep the government from shutting down; we don't even know the details. But the concensus opinion is that by compromising on Friday, just to fund the government in this year, he's emboldened the Thugs to up the ante.

This is 'bipartisan negotiation' as the Thugs have practiced it, every time. I've read some comments that claim this situation is on a par with Clinton-vs-GOP in the 1995 government shutdown over the Federal Budget; I don't agree. That occurred when the economy was stable, even booming. This time, it's different.

Now, the stakes are very high. What we're witnessing is another red-letter moment -- when America's conservatives used the worst economic crisis since the Great Depression not as a wake-up call to help the country, but as a rallying cry for Teh Crazy, and to use the crisis as a lever to force an end to the New Deal, a thing they could never legitimately achieve in an honest election -- and that's what the Democrats will give them, or (it's strongly suggested) they won't vote to raise the National Debt ceiling.

That would mean the U.S. defaults on its public debt, which affects other countries buying U.S. Treasury bonds (read: China, Saudi Arabia), or doing business with America (read: The Entire Planet). The Rethugs are saying Get Rid Of The New Deal, Yo, or we burn down your m___________' house.

The only thing to prevent it are the efforts of the Democratic leadership -- the President, and Democratic Members of Congress. And, Obama has compromised any Democratic or Progressive bargaining position so badly that it will be difficult, if not impossible, to hold in the face of the Thugs. He's given up too much ground, just as he did with the banking and investment houses in 2009.

America is a nation -- an Empire, like others in history. We are not special. We are not exempt from suffering cowardly and greedy political or social leadership, who make rabidly bad choices that result in more wealth and comfortable living for the Happy Few; and penury, fast-food healthcare, and wage slavery for the rest: That's where we seem to be going; that's your 'Shining City On A Hill'.

At this point, I don't know what's more radioactive and harmful to human life -- the Fukushima reactors, or the decisions of Mr. Obama and his administration.

I get the feeling that if Very Bad Aliens landed on the White House's south lawn tonight, and demanded that we surrender and provide them with Sandra Bullock for xeno-interspecies sex, we'd all be working as slave asteroid miners by the end of the week and Sandra would be carrying an alien baby that looked a great deal like Yertle The Turtle Mitch McConnell.

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MEHR: The New York Times writes editorials.

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