In Washington and on Wall Street, it's harder to figure out who is negotiating for the pirates and who is negotiating on our behalf.
Dale Dougherty , founder of Make, wrote this for Boing Boing:
Pirate Ship, Pirate Ship, Pirate Ship. Hold the tip of your tongue and say it as fast as you can. Or hold your nose. I don't know what to make of the juxtaposition of the negotiations in Washington to pass a bailout plan for Wall Street and the negotiations off the Somali coast to pay a ransom to pirates who with small boats captured a Ukranian cargo filled with tanks and other military weapons. It's clear the pirate story has better quotes.
Pirate Ship, Pirate Ship, Pirate Ship. Hold the tip of your tongue and say it as fast as you can. Or hold your nose. I don't know what to make of the juxtaposition of the negotiations in Washington to pass a bailout plan for Wall Street and the negotiations off the Somali coast to pay a ransom to pirates who with small boats captured a Ukranian cargo filled with tanks and other military weapons. It's clear the pirate story has better quotes.
“We just saw a big ship,” the pirates’ spokesman, Sugule Ali, said in a telephone interview. “So we stopped it.”He added:
“We don’t want that suffering and chaos to continue. We are not going to offload the weapons. We just want the money.” He said the pirates were asking for $20 million in cash; “we don’t use any other system than cash.” But he added that they were willing to bargain. “That’s deal-making,” he explained.Both quotes come from the NYT story Somali Pirates Tell Their Side: They Only Want Money. In today's followup story, we learn that the pirates who are surrounded by the US Navy have lowered the ransom price, but the advice from one "expert" is to pay it.
“It’s down to $5 million,” said Andrew Mwangura, program coordinator for the Seafarers’ Assistance Program in Kenya, which tracks pirate attacks and communicates with the families of crew members. “But this needs to be done quickly. The longer that ship stays in Somalia, the more people who are going to get involved and the greedier they’re going to get.” “My advice,” said Mr. Mwangura who has been involved in several hijacking negotiations, “is give these gunmen what they want before the sharks come.”I watch the market fall and then rise and then fall again. Is the bailout coming? Commentators speak as though the market is a person. "The market couldn't decide today whether the bailout would happen and so that's why we ended where we did." The Senate version of the bailout is going to vote, adding incentives to the package, incentives that will add to the cost.
“The whole thing now is about the price,” said one Western official involved in the ransom negotiations. “The ship owners are talking with the pirates. But the two sides are still pretty far apart.”In Washington and on Wall Street, it's harder to figure out who is negotiating for the pirates and who is negotiating on our behalf.
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What makes you so sure that we aren't the pirates?
Interesting reading (though I'm a bit biased since I know the guy): http://cto-rebelmonkey.blogspot.com/2008/10/bailout-and-bullshit.html
I'm not quite that paranoid, but still... I flat-out do not trust *anything* this administration says, and announcing panic is guaranteed to create panic. This looks entirely too much like another case of the president using terror tactics against his own citizens, and I'm really not comfortable writing them a blank check even if I _do_ agree that something probably ought to be done now that they've pissed in the pool.
NOTE TO READERS: These are bad pirates. Not the kind with parrots who sing and have amusement-park rides built in their honor. They're into kaht, not rum, and "pieces of eight" is a game they play with a hostage and an axe.
NOTE TO READERS: The market has an invisible hand which flips you the bird right in front of your face. Also, those flattened animals on the road weren't hit by cars. They were smashed by the invisible hand of the market. It gets off that kind of thing.
Ha ha... I see wut U did ther.
Yes, the bailout stinks, but what's the alternative? Let it all collapse. Oh sure, we middle classes may, for a while, enjoy pointing and laughing as the fatcats run about in a panic. But when the huge layoffs start hitting we'll all be wishing the bailout had gone through. So the bed is made and now America has to sleep in it.
The important thing now is to hold government to the memory of this moment. The next time a politician poo-poos overregulation of big corporations, citing the free market, remind them how free the market was when billions were spent to bail out America's biggest banks. When a congressman scoffs at universal healthcare, citing the ability of the private sector to handle things better than the government, remind them how America's biggest financial lenders handled things when left to their own devices.
We either have a controlled market or one that the government leaves alone completely. Corporations can't get a handout when they fuck up and then expect to be lightly regulated the rest of the time.
With the bailout, a precedent has been set. Hold your government to it.
. . . so I'm watching what CNN's captioned as "Senate discusses bailout" and a female senator is talking about rail safety. What is in that 450 page bail out document? Perhaps paying the pirate ransom is in there?
So if the bailout goes through, I get a tank? Cool!
Very, very astute comparison.
Way to see the greater parallel themes, and sew them together so succinctly. I'm not even going to try and think up a clever comment, or reference a MSM article whose title includes the phrases "Wall Street" and "Main Street".
Because, you know, it's so clever -- they both include the word "street".
wealth (including money, goods, service) usually goes from bottom to top, not top to bottom. good resources and workers build financial strength - whereas trickle-down economics is nonsense.
thus the bailout should start at the bottom. raise 700 billion and put it towards paying off huge chunks of subprime and default interest rate mortgages. this will result in huge increases in deposits starting at the smaller banks and filtering upward to the larger ones, as well as higher ratings on mortgage backed securities, and huge increases in consumers' home equity - all of these things will contribute to economic growth
@ #5 Kathryn Cramer
I was listening to Marketplace on NPR as I drove home tonight, they were talking about how fat with earmarks the bill has gotten:
http://marketplace.publicradio.org/apheadline_detail.php?story_id=D93HTKCG0&group=ap.online.headlines.business
"There are dozens of other highly targeted provisions helping makers of wooden practice arrows used by children, film and television productions, motorsports racetrack property and the wool trust fund."
It is all just business as usual. We get the (arrow) shaft and someone else gets the money for it.
Yeah, go ahead and negotiate with the pirates and watch as more situations happen because they know they can get a sweet $5mil deal. I'm no expert, but my advice would be the same as Tommy Lee Jone's character in the Fugitive: never negotiate with criminals." (Paraphrased, its been a while)
@ #8 bobhughes
I don't claim to know how to fix this mess, but I liked this letter written by the CEO of BB&T, a bank that stayed out of the poor-credit housing market.
http://www.bizjournals.com/atlanta/stories/2008/09/22/daily70.html
"A significant and immediate tax credit for financial institutions to purchase homes would be a more effective solution for the financial crisis than the proposed $700 billion federal bailout, says BB&T Chief Executive John Allison.
The federal government should also buy homes, and not securities backed by mortgages, he wrote in a Sept. 23 letter to the U.S. Congress."
Wall Street analogies aside, if anyone wants to send the pirates a video of what the Russians dd last time schoolchildren were held hostage or the last time hostages were taken in Moscow, they might think twice about this ransom stuff and just run the hell away.
Once the Russian warship arrives, things will probably go rapidly down hill for the pirates.
This is hands-down the most brilliant thing I have ever seen on BB. Mark, all is forgiven.
(Xeni is still in dutch for mentioning her iPhone in headlines.)
The best way to think about Congress is to start by assuming they're screwing us. Then look for evidence to the contrary.
Today they're explaining why they're giving the greedy, corrupt, pirates who've ruined our futures $700 billion ... to save US.
Gosh, we're not dumb enough to believe that, are we?
@#4
Yes, the bailout stinks, but what's the alternative? Let it all collapse.
Why do you assume that those are the only two possibilities?
Is it because some Serious Men In Suits got on TV and said that collapse was 100% guaranteed if the current bailout package did not go through?
Were these the same Serious Men In Suits who a few short months ago said that the economy was sound? Or was it the ones who said the Iraq war would be a cakewalk that would pay for itself?
You know what I heard when I heard those dire warnings about the bailout? I heard this...
So how are the various alternative plans going to give the lenders in market funds to loan out?
Well, since the link didn't get posted, I'll post it in a comment. There's a draft bill for an alternative approach to easing the credit crunch.
Please take a look. It costs the taxpayer nothing up front and it DOES NOT reward stupid, greedy behavior.
If you prefer this approach, I urge you to do whatever it takes to tell your congresscritters that the senate bill is still unacceptable and to pay attention to this approach instead.
Bailout, 'rescue', 'What's the alternative if we don't?', 'Should it all collapse?' etc. etc.
We have let 3% of the planets population enslave, murder and screw with the other 97%, but people still believe this nonsense? C'mon...With just the people who post comments on this site we could probably come up with a half way sane way of running world economies. It's a clear cut case of a a few people with way too much power.
Long story short...These shenanigans need to stop.
I say kill them all.
You sound like you are under the impression that this bailout will solve anything. It won't - all the same problems will still exist. The proposal behind this bailout package is simple: levy a tax of some $2k on every citizen in order to delay the problem until after the next election. They'll be right back in the same problem in about 12 to 24 months, but that will be the problem of the next administration. Oh, and the citizens, who will be facing all the same problems with less cash in the bank.
This is not a problem that will go away with an infusion of fresh capital. Many real solutions have been proposed, but the simple fact is that nobody has ever successfully prevented a recession, so nobody really knows a way to prevent it all from collapsing, just a bunch of ways to make it happen later (and if that sounds like a good idea, consider whether you want to live permanently in the current economic climate).
There's a great article in the times about how a lack of confidence among lenders made a shaky economy swirl down the toilet in the early 1930s: http://www.nytimes.com/2008/10/01/business/economy/01leonhardt.html?ei=5070&emc=eta1
Everyone says let it all fall down. Our foreign creditors are waiting for a sign that rational humans and not insane jackasses are in charge. The original plan was a joke, but something reasonable (helping homeowners and penalizing naughty bankers) needs to pass right now, otherwise the credit markets will freeze for good. (I don't want to test my bartering skills just yet.)
"“We just saw a big ship,” the pirates’ spokesman, Sugule Ali, said in a telephone interview. “So we stopped it.” "
...Read: "We are so *TOTALLY* fucked."
I love this post, but I want to give some critique on it. Something felt absent in the linking between pirates and... who? Did you consider adding a punchline or explicitly linking pirates and Wall Street?
#23: I believe the writer was assuming we were all clever enough to read between the lines and see the implications. Obviously you did...
Sometimes spoon-feeding the punchline ruins the (graveyard) humor.
What I would really, really like to see (but which sounds astonishingly complex to implement) is a comparison spreadsheet that would show what a few different scenarios would yield for a few different "investors" in the American economy based upon the assets they are likely to hold in what form, whether securities or land: a farmer, a college student at a state school, a freelance Web developer (props and mind-bling to the BB crowd, yo!), a waiter, a 4th grade teacher, a biotech engineer, a local real estate broker, a pharmaceutical salesperson, etc). Wouldn't that be great? To see where your likely-held (based upon an admittedly generic profile) assets are likely to be redistributed whther you like it or not?
Than
I loathe and despise the bailout, but we can't write off our financial system without letting ourselves in for a world of hurt that'll keep on hurting for a long time. If the cvtshpxref have to be bailed out yet again, I want us to get something for our money this time, like ownership of some of these companies, liens on others, and regulations requiring them to be more thoughtful and prudent, and less well-paid.
yup. Take something back and don't let them use the usual trickery to steal it back beforehand.
The East Africa Seafarers Assistance Programme (stet) is officially known by its (shortened) acronym S.A.P. and their charter includes "design, co-ordinate and carry out training, cultural and leisure activities for all seafarers".
The biggest problem with the bailout as it was just passed by the Senate is that there's no limitation on purchasing credit default swaps.
If the US was to purchase mortgage-backed securities exclusively that would be FINE. These are financial instruments that have actual mortgages as collateral. When someone doesn't pay there's a house to repossess, or put a lien on if it's a 2nd mortgage.
The CDSes, on the other hand, not only have no collateral on them but don't necessarily involve parties to the mortgages. They require the issuing party to pay the holder the full face value of the security based on the criteria even though the CDS holder might not have any financial interest in the matter being insured.
I personally cannot think of a single way in which these things qualify as anything other than plan and simple betting. It's not even a bet on the level of "I can eat 50 eggs" - there's no personal accomplishment or loss necessarily involved. I'm okay with people betting on whether the person in line will order a soda or coffee, but under no circumstances should the government be bolstering this crap.
The pirates will not unload the tanks, because if they tried to, the navy ships will open up with their big guns ...
I'm wondering, what's the range of those little pirate boats? 100km? 500km? Why don't those freighters simply take a route further from the Somali coast? If they have to pass near there, why don't the form convoys, with escorts of armed navy ships?
#4 - Bring on the layoffs, and shut the credit firehose off. Sometimes you have to rip the scab off and bleed a little in order for your wound to heal properly.
I don't recall a bailout of the tech industry in '01. Hell, I had to go back to ramen and PB&J. Took me up until yesterday to pay off the last of my debts.
Is it because some Serious Men In Suits got on TV and said that collapse was 100% guaranteed if the current bailout package did not go through?
@#15 You sir, are an idiot.
I am not some sheep who believes whatever is told to me just because it is said by a man in a suit. So if you wish to debate, I suggest you take your patronizing insinuations elsewhere.
There is a very simple reason that allowing this many banks to go under will result in immediate and dire economic consequences, and that is a simple little thing called credit.
The U.S.ofA (which, by the way, is not my country) operates day to day on huge amounts of credit. Companies borrow money to finance expansion, or even just to make payroll. Payroll! Why? Because a company needs to produce the goods requested by an increased demand BEFORE it sells them (imagine that). I personally don't think it's a great way to finance, but that's the way AMERICA does it, therefore, it must be right.
Now, stay with me here, I know I'm using a lot of big words.
If there are suddenly less banks, or more concisely, the financial services sector shrinks, its lending power also shrinks. It will shrink, in fact, to a point where America will no longer be able to finance it's day-to-day credit-based operations.
That would not be good. That would be BAD.
Personally, I think the US Navy should just shoot the damn ship out of the water, board anything that still floats, then hang the pirates.
I feel much the same way about Wall Street and the bailout.
Maybe Xopher isn't quite as crazy wrong as s/he/it sounds. Maybe it is time for a good ol' fashioned French Revolution style revolt, with guillotines.
Well, okay, maybe not QUITE yet. But we're not too far off if the ultra-rich don't stop their class warfare.
-abs
#33:
Depending too much on easy credit is exactly what got us into this problem. We've been running our economy in a wholly unsustainable manner, and throwing more money at a broken system won't fix it- it will just delay the collapse a little bit longer.
The problem isn't that these financial assets have lost value, it's that they never had value in the first place.
The only way we can get the system back into a model that can work over the long term is to make sure that prudent investments are rewarded and poor ones are punished. It's gonna hurt like hell in the transition, but that will happen whether or not the bailout goes forward.
If credit is short and we need to solve that problem, why not just.. oh, I don't know... offer government-backed credit with appropriate financial guarantees? Why bail out an organization that's already shown they can't safely manage money, and then get them to hand out more money? Why the demonstrably incompetent middleman?
I realize that it's a moot point since our money has already been stolen and given to said incompetent, but I still wonder. There's a lot to be said for addressing actual problems, rather than trying to preserve a broken ecosystem.
Depending too much on easy credit is exactly what got us into this problem. We've been running our economy in a wholly unsustainable manner, and throwing more money at a broken system won't fix it- it will just delay the collapse a little bit longer.
And I agree with you, to a point. Throwing money at the situation will not solve the problem. The American government also needs to impose greater restrictions on the market. This was, in fact the main point I made in my first post.
The bailout needs to happen to stop chaos NOW, but it is only a knee-jerk reaction. The LONG-TERM solution is more regulation. That was my main point.
The market either needs to be self-regulating and subject to its own failures, or it needs to be highly-regulated and provided allowance for federal assistance should the economy falter. It cannot take the best of both worlds.
#36
Someone else on this thread (see #8) actually suggested an interesting bottom-up solution. That is, give all the Americans who have bad mortgages the money to finance their homes. This allows them to pay back the bankrupt lenders (such as Fannie Mae and Freddie Mac) and get the credit system moving again while creating new homeowners.
It sounds like a good idea to me, but we all know that a bunch of number-fudging greedy corporations are better at managing money than some deadbeat middle-classes that can't make their mortgage payments... right?
As is, the american government now finds itself in the interesting position of having some say as to whether the credit industry shall foreclose the mortgages of american taxpayers who helped finance the bailout. Ironic.
The "chaos" we're seeing now IS what makes the market subject to its own failures. If the bad investments don't sting the people who made them then we will never see the push for market regulation that we need for stability in the future.
I suspect that you and I agree on more than we disagree, but I still haven't heard any convincing arguments that giving these guys another $7 billion is in our best interests.