Insane America: Obama Wants You to Bailout the Asshats Who Live Next Door

Updated on Feb 19, 2009 at 3:59 PM by DailyBail

Have we lost our collective minds. I woke up this morning, and apparently I now live in Havana, where Castro is leading a parade of unemployed clowns all driving '57 Chevys.  Team Obama: pehaps you missed the message the American people have been trying to communicate.  Stop The Bailouts. All of them.  And we sure as hell did NOT want you to extend the bailout to homeowners.  This is a country of responsibility, and you are giving those who played by the rules the middle finger salute.

The newest twist on government bailouts commenced officially today with relief for your irresponsible neighbor.  You are now paying for his greed and stupidity, and perhaps even the Hummer and Corvette he bought with his home equity loan that he'll never re-pay.  Yes, you are footing the bill for his vehicles as well.  It's all pooled capital. He purchased near the top with no money down, got a $200k home equity ATM, bought all his toys, walked away from the house and both mortgages last year when prices plummeted. No recourse.  Before walking away, he secured a mortgage on a newer home 2 blocks away that was a short sale.  He got in the newer house for 50% less than he paid for the 1 across the street from you.  His credit is now damaged from the walkaway, but in 3 years that will disappear.  And guess what, his new short sale purchase now qualifies for mortgage assistance under Team Obama's Plan to Save the Asshats.

Since the Mortgage Foreclosure Bailout Plan was announced Wednesday the outrage has been palpabe. For most taxpayers, the ongoing bank and auto bailouts, though more costly and extremely un-popular, do not resonate personally. But bailing out an irresponsible neighbor who purchased more house than he could afford is understood by everyone.  Particularly our most maligned housing sub-group, renters, all of whom made an intelligent choice NOT to participate in the real estate bubble, yet now are being asked to subsidize the mistakes of those who did.  Considering that renters already get shafted by the unfair tax subsidies given to homeowners, this proposal accomplishes nothing further than reminding them how worthless they are in the eyes of Washington.

Reuters says Obama's home foreclosure mortgage bailout plan will cost taxpayers $275 billion to help 9 million homeowners and yet most analysts believe it simply won't work.  Housing prices nationwide still have much further to fall as evidenced by this must-see chart from Yale economist Robert Shiller.  Yet Obama and his team seem focused on slowing the decline at great expense until it has been proven indisputably that we are the new Japan.  Where is the change, President Obama.  Every day your administration feels more like the last 20 years of Bush-Clinton incest.

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Absolutely Must See Bailout Video: Travel Around With Taxpayer Prize Patrol

This 5 minute clip is phenomenal.  These guys attempt to deliver hundred-billion-dollar checks to AIG and Citi corporate offices on behalf of taxpayers. Well played. They sneak into Senator Olympia Snowe's offices and request her signature on a billion-dollar check.  Hilarious bastards.  And that's just the start, then they deliver invoices for $26k to unsuspecting taxpayers, Publisher's Clearinghouse style.

Their anti-bailout website is here.  Go there immediately and sign their petiition.  It's a beautiful site, you will not be disappointed. 

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Bailout News For Feb.17th: Insolvent Banks, Autos, Ireland and Eastern Europe

Ireland is in trouble and facing default, not too surprising given the blanket guarantee offered for its entire banking system.  Eastern Europe is threatening to implode and take several lender nations along for the ride. General Motors is out of cash and back to the public trough on D-Day for the big three automakers.  California fell one vote short of passing a budget to cut their deficit.  The state of Kansas has suspended all income tax refunds and can't meet its payroll.  The NBA secured a $175 million bailout for 15 of its weaker franchises. South Korea is having a currency moment as Woori bank struggles.  And finally, everyone seems to agree that the US banking system is utterly insolvent.

After the jump, I have all 45 links neatly packaged and ready for your consumption.  We promise it won't hurt.  Just open your eyes slowly, start reading and then call someone in Washington and tell them how you feel.  All the relevant phone numbers and email addresses are inside.

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Land of The Free And Home of The Broke: The United States of Insolvency

The heretofore unthinkable is getting some notice.  The impending passage of the $800 billion federal stimulus is stoking the fires.  We are a nation on an ever-steadying path to insolvency.  David Walker was correct, we are Rome. 

I have been waiting to do this piece for awhile.  As a 21 year-old rookie at still fledgling CNN Washington in the summer of 1987, I got to know one of our senior producers while I rotated through the graveyard shift.  Charlie covered the overnight from Washington and never had anything to do because Atlanta was in charge from our Larry King sign-off at 10 pm until they tossed back at 7 am the next morning. (This was the summer of Oliver North and the Iran Contra hearings and Atlanta wanted someone on stand-by in DC just in case.) Mostly, Charlie just read to pass the time and talked.

I heard nightly about the insolvency of our money-center banks because of bad loans to Latin America, the abandonment of the gold standard under Nixon and the burgeoning federal deficit then 2 years into Reagan's second term.  This was back when an $80 billion dollar fiscal deficit got your attention. Thus unfortunately indoctrinated, I have been watching this build for 21 years and lecturing my unsuspecting friends and family with the details every step of the way. To be sure, I didn't think it would take this long to play out. Immigration and the huge boost it provided to social security (fica) revenues, without exacting a commensurate outlay, helped slow the train.  Also aiding was the unexpected second wind our economy got in the late 90s as we became the world leaders in several new industries, and Washington reaped the associated windfall in tax revenues.

Never lost but simply delayed, the piper recently has made his way home.  Here's some quick math that demonstrates where we are today.  The total federal debt is almost $11 trillion.  The deficit this year will be at least $2.5 trillion, and $1.5 trillion next year when the stimulus is included.  This means a $15 trillion federal debt by the beginning of fiscal 2011.  Now add $5 trillion more for the next 2 years in additional funds needed for the banking system, hopefully after having placed C, BAC, JPM and WFC into receivership, wiping out the bondholders and starting fresh with taxpayer dollars.  The tally would then be $20 trillion at a minimum (very likely could be higher if the bank bailout costs grow.)  Here's where it gets tricky, Bloomberg puts the cost so far of the bailouts at $9.7 trillion in outlays plus guarantees, and only part of this is in the above calculations.  For simplicity, I am sticking with the $20 trillion figure assuming the total bailout cost to be $5 trillion and not the $10 trillion possible. 

At $20 trillion in debt, assuming an average debt cost of 5%, (don't forget a lot of this debt is older and carries a higher cost, and that future debt will not likely be as cheap as it is currently), the interest on the debt would be $1 trillion, almost 3 times what we already can't afford.  We have crossed the red line into fiscal oblivion, as we are now borrowing to pay the interest.

Let's examine some round numbers for the 2011 fiscal budget.  With the failed attempt at a stimulus likely completed, we might finally return to our fiscal sense.  Accordingly, let's take the 2008 budget outlay of $3.2 trillion (including TARP funds of $350 billion) and add 10% for the unchecked growth of general government including automatic increases for medicare and social security.  The result is a $3.5 trillion federal budget for FY 2011.  Now a quick look at receipts. If we are extremely lucky, receipts will have returned to 2008 levels of of $2.5 trillion.  Under this semi-optimistic scenario, we are looking squarely in the face at a structural deficit of $1 trillion, in a normal fiscal year.  At that point we will be borrowing $1 trillion just to pay interest on our federal VISA. 

Just a few more calcualtions. This $1 trillion debt-interest figure will be 29% of the budget and more importantly 40% of total receipts.  Folks, that is not sustainable.  And we haven't discussed a couple of very contentious budget-accounting related issues.  The first is that these budget deficit figures I've given are calculated on a cash accounting  basis.  Money in versus money out.  As an example, they do not account for the monies that Congress steals (borrows) annually from the social security surplus to make it's budget numbers look about $200 billion less distateful.  Furthermore, my numbers also don't account for the net present value of our future liabilities for social security and medicare. (And the unfunded liability for medicare alone is $32 trillion.)  When these liabilities are taken into account, the deficit numbers are higher annually by several trillion and the total national debt becomes $56 trillion.

So, on the day after the Economist wonders aloud whether we are bankrupt already, it is time for everyone to start telling the truth.  And the painful veritas is that the United States of America is now un-offically the United States of Insolvency.  Sleep well, citizenry, if you are able.

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Video Round-Up From The World Economic Forum at Davos: Nassim Taleb, Joseph Stiglitz, Daniel Kahneman, Wen Jiabao, Angela Merkel, Bill Clinton and Vladimir Putin

You must see this clip. Nassim Taleb goes after Bob Rubin, former chairman of Citigroup and a few others even though he was asked by the organizers not to be specific in individual criticism.

As usual, Taleb delivers the right mix of sarcasm and pointed jabs to knock his prey senseless, as he issues a siren call to nationalize the failed banks.

After the jump we have video of Davos' speeches by former President Clinton, Chinese Premier Wen Jiabao, German Prime Minister Angela Merkel, Russian Leader Vladimir Putin, plus more from Stiglitz and Kahneman.

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Davos Video: Nobel Economics Laureate Daniel Kahneman Reflects on the Failures of Alan Greenspan

In this short 3 minute clip from the World Economic Forum held in Davos a few weeks ago, 2002 Nobel Economics winner Daniel Kahneman, offers some interesting thoughts on former Federal Reserve Chairman Alan Greenspan and the failure of his regulatory framework to foresee and prevent global economic collapse.

It's a simple clip that will appeal to econowonks as well as the rest of us.  After the jump I have the full 1 hour video from Davos from which this slice was pulled.

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Bank Bailout News Video: From The World Economic Forum at Davos, Nobel Laureate Joseph Stiglitz Discusses 'Bank Management Stupidity'

This is a 7 minute clip from the recent World Economic Forum at Davos.  Nobel Economics Laureate and former chief economist at the World Bank, Joseph Stiglitz tells the truth about the government bailouts.  He touches on everything from AIG, to CDS, leverage on wall street, the bad bank proposal and our burgeoning national debt.  It's great watching, not wonkish, and very easy to follow. 

Higlights: bad bank is cash for trash, aig is a never-ending black hole, and stupid bankers and their leverage made this crisis much worse. 

These are all points we have been making here on a daily basis, and it's helpful for our sanity to learn that Stiglitz is of the same mind.  Attention Obama: get Stiglitz on your team quickly, your opportunity to fix the banks fades daily as more taxpayers discover that your plan is nothing but Bush Paulson 2.0.

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New Bailout Comedy Videos: More from Jon Stewart & The Daily Show Feb. 15th

The Daily Show With Jon StewartM - Th 11p / 10c

Recap - Week of 2/14/09

Daily Show Full Episodes
Important Things With Demetri Martin

Funny Political News
Joke of the Day

Jon Stewart has been making a living on financial comedy lately.  After the jump are 5 new videos from the Daily Show including a testy exchange between Vermont Senator Bernie Sanders and Treasury Secretary Geithner.  All five are required viewing for those who need a laugh.

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New CNBC Video Dr. Doom & The Black Swan: Complete Interview of Nouriel Roubini and Nassim Taleb

Some of you saw this live on Monday.  I am posting for those who missed it.  The clip runs just short of 10 minutes.  It's outstanding.  I love that Taleb wants the failed bank CEOs fired.  I prefer listening to Taleb over Roubini any day. Excellent stuff.  For the newcomers, these are the 2 gentleman who have been given the most credit for understanding and predicting our current crisis.  Whether it is deserved is another question, but these are the annointed two.

Updated Friday Links.  Now 42 Articles.

Thursday Links

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Bailout CNBC Video: New Jim Rogers Interview on Squawk Box Europe Feb.9th

Updated on Feb 13, 2009 at 6:05 AM by DailyBail

This clip runs approximately 6 minutes.  Rogers was a half-hour guest on Squawk Box Europe and this is the best chunk.  He's slightly more thoughtful here than in some interviews, he doesn't have visible contempt for this team of anchors. Thousands have used 'I don't suffer fools gladly' as canned response in job inteviews when asked to name a personal fault.  When jim rogers says it, it's true.  This guy does not hide his frustration when he is displeased.  Part of his charm for viewers.

As usual, CNBC does not allow video embedding.  So just click the photo above and you'll go directly to the cnbc clip.  In case you missed it, here's gentle Jim bringing the asian pain upon Geithner on Bloomberg yesterday.  It's a phenomenal clip.  Below are all the links for the last few days.

Friday Links

Thursday Links

Wednesday Links

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New Hilarious Bailout Comedy Video: Clusterf#@k to the Poorhouse The Daily Show with Jon Stewart from Feb.11

The Daily Show With Jon StewartM - Th 11p / 10c

Clusterf#@k to the Poor House - Wall Street Bailout

Last night Jon focused on Geithner's new bank bailout plan.  Watch the whole clip it gets better after the 1st minute.  At the 3 minute mark, Jon mistakenly breaks a wine bottle all over the desk and from there it's gold the rest of the way. Watch for the 'guy para-sailing in a hurricane' clip in the last 10 seconds.  It's pretty crazy.

"Let me briefly explain the 'rescuer-rescuee' relationship.  I would suggest that you don't complain about whether or not you get a window seat on the rescue boat, cuz by the way, wtf? are you doing in the water anyway."

Beautiful.

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Bailout Video Dr. Doom: Complete Bloomberg Interview With Nouriel Roubini

This is the complete 13 minute interview of Dr. Nouriel Roubini with Kathleen Hayes from Monday Feb. 9th of this week. It's typical Roubini except he's smiling more.  Maybe he has a thing for Kathleen which would be a rather sharp diversion from the mean.  Dr. Doom is envied by academic peers more for his groupies than his graphs. Young people, forget Wall Street and get a PHD in economics. Then forecast global collapse every year of your career.  Buy an apartment in Tribeca, and wait. When the roulette wheel comes up 44 black, pop the cristal and loosen your tie. Cuz, you just became a guru.

Inside I have a 2nd video of Roubini at Davos being interviewed by Becky Quick of CNBC. It's much shorter at just over 2 minutes.

Thursday Links

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Must See PBS Frontline Video: 'Inside The Meltdown' A Sneak Peak

Frontline has produced several trailers for their new series 'Inside The Meltdown' debuting on PBS Feb. 17th:

FRONTLINE investigates the causes of the worst economic crisis in 70 years and how the government responded. The film chronicles the inside stories of the Bear Stearns deal, Lehman Brothers’ collapse, the propping up of insurance giant AIG, and the $700 billion bailout. Inside the Meltdown examines what Treasury Secretary Henry Paulson and Federal Reserve Chairman Ben Bernanke didn’t see, couldn’t stop and haven’t been able to fix.

Inside we have 2 more Frontline clips exploring different angles of the crisis.

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Bank Bailout Congressional Video Part 3: Failed Bank CEOs Discuss Compensation. Pandit Thinks He's Special

Note to Vikram Pandit: taxpayers appreciate that you've reduced your compensation for this year, but drawing attention to the matter invites scrutiny. Thanks for the invitation.

You made almost $200 million in 2006 selling Old Lane Partners to Citi. That was a crap sammich. Citi paid $800 million for Old Lane which it closed down completely 18 months later.  The entire $800 million was taken as a loss. Taxpayers then bailed out Citi. Transitively, you owe us some cash, Vikram, about $165 million.  Next time, think before you raise your hand to impress teacher.

Thursday Links

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