Shift in Economic Bailout

Fed Chair Paulson today announced that their strategy to give money to banks pretty much sucked eggs, and a new set of guidelines has been put in place. Also, he is shifting emphasis away from large institutions and wants to focus on credit, to get us back in debt and buying new cars and consumer goods. Have a nice Christmas this year...

NY Times reported: "He announced a new goal for the program to support financial markets, which supply consumer credit in such areas as credit card debt, auto loans and student loans.

Mr. Paulson said 40 percent of the nation’s consumer credit was provided through selling securities that are backed by pools of auto loans and other such debt. He said these markets had “for all practical purposes ground to a halt” and needed support.

“With the Federal Reserve we are exploring the development of a potential liquidity facility for highly-rated AAA asset-backed securities,” he said. “We are looking at ways to possibly use the TARP to encourage private investors to come back to this troubled market, by providing them access to federal financing while protecting the taxpayers’ investment. By doing so, we can lower costs and increase credit availability for consumers.”

Meanwhile, from the Washington Post:

Goldman Sachs lays off nearly 3,300 and could post its first quarterly loss since becoming a publicly owned company.

General Motors begs Washington for a payday loan, warning it may collapse without it.

KKR, the buccaneer of private equity, is unable to sell shares to public investors.

The federal budget deficit hurtles toward $1 trillion, with serious economists arguing it should go even higher.

Oil-rich Russia scrambles to defend its currency, oil-rich Dubai steps in to rescue its banks and China -- China! -- worries enough about a slowdown that it promises a stimulus package equal to 15 percent of its annual economic output.

Things are so bad that even the Yellowstone Club, Montana's super-exclusive private ski and golf resort, where the price of admission starts at $5 million, has filed for bankruptcy.

And sales of Starbucks overpriced, stale coffee has declined 97%, while McDonald's is reporting a fine sales quarter pounder...

It seems that no matter what is tried, we keep spiraling downhill, and haven't hit rock-bottom yet. We have to take the rest of the world's markets along with us and plunge us into a global recession... Whatever decisions are made will not be fair to the thousands who still are losing their jobs.

Other than create some kind of public works job core, I don't see what Obama can do to create jobs. We could nationalize the financial markets, mortgages, and the auto industry to finish up what the current administration has started, but that will lead to more government corruption and incompetence, because we will have lawyers in charge. We don't have any innovating technology like the computer industry to lead us out like what happened back during the 80's and 90's, even though it's hoped that alternative energy can become the next big thing. War has sucked our reserves at over 12 billion dollars per month, so that won't work, either.

There's nothing funny about the immediate future, I know people are hoping Obama can pull a rabbit out of the hat, but the poor thing was foreclosed on months ago; sheriffs broke the lock and evicted the rabbit and left his belongings by the curb.