Is it too cynical to see this as a final pre-election smash and grab?

With Obama the rules have changed, and there's an uncomfortable hint of possible accountability, combined with threats of a smaller credit card limit.

Reading between the lines of the Citi press announcement yesterday, both the written and the public statement by the big cheese, the 25 billion that was 'forced' on them, is what they have to brag about. They made reference to it to counter the smudge of laying off another 53,000 people (a significant percentage because of asset sales to a German company.) They claimed to be in better shape than Wells and BofA. Citigroup to shed another 53,000 jobs

Part of me is a "We are the forces of chaos and anarchy" type who believes in and would love to see the system reset in a way that disavowed the connivers who pay for the "How Low Can You Go" Limbaugh-esque propaganda.

Part of me says that the rebellion won't be pretty and the guys with the guns aren't on the side of more National Parks and long term benefits for all the stakeholders.

Unfortunately, the middle ground was loaning bucks to the bankers (without gaining corporate control) and it worked to the degree that the system is apparently able to somewhat stand against the current whirlpool.

I'm not sure that holding back at this point, leaving some ammunition in the gun so to speak, isn't a bad idea. Throwing money into the black hole of alleged value of homes seemed like a bad way to keep people in their houses.

Never underestimate their intelligence, always underestimate their knowledge.

Frank Delaney ~ Ireland

Interestingly, if I'm reading this right, none of this money seems to have been spent on toxic assets.

"Ideas or the lack of them can cause disease." - Kurt Vonnegut

I'll throw in one other off-the-wall suggestion on the holdback of further bail-outs at present: they can't sell enough bonds. The Chinese, Saudis, etc. may have told them that they're not in the market. The Chinese, for one, have decided to use what's left of the US$ credibility to finance their huge infrastructure, public-works projects.

paul spencer

Sinclair Lewis reportedly noted that "it is very hard for a man to understand something if his livelihood depends on him not understanding it."  I guess that the essence of the bull mentality is: "Don't look a gift horse in the mouth."  It seems that the vast majority of the players are simply incapable of attempting such a feat.

I recall my mortgage broker in Los Angeles indicating that some of the real estate appraisers in the local market could generally be relied on to meet or exceed the proposed sale price with their estimate of value.  If you did not do so, the sale might fail and repeat business would dry up.  The nature of the compensation system guaranteed that Gresham's law would come to prevail regarding the intrinsic worth of the estimates.

I suspect that one has to have been knocked around a bit in order to be able to see such things.  Else it is too easy to go along in order to get along.

The bit about short sales enabling the continuation of the market illustrates the importance of personal interest and profit to understanding a transaction.  To the short seller, he wants to sell short because he thinks it is going to tank.  To his counter-party, his short sale is the equivalent of printing another security certificate with a slightly reduced face value.  He assumes it won't tank.  The dependence of the market on conflicting assumptions is probably why it is so tricky to understand.

If sanity be culturally normative, then by the norms of this culture I claim insanity.

1. No one could have predicted this;
   
2. Congress got in my way just when I was saving the world;
   
3. The dog ate my homework.

My take: I think Paulson's credibility with the financial markets has been exhausted. Now I am not sure what the magic solution was. Maybe some recapitalization of key players plus an Uncle Sam-led home refinancing plan. Or maybe a) suspending mark to market, b) a zero capital gains tax for the next five years, and a corporate income tax holiday.

But I will give this to Paulson: He does strike me as a guy who is working himself near death to deal with an amazingly tough problem.

- James Pethokoukis
 I can agree with the last--Paulson's giving it his best shot. But through those good old neolib, market-as-God glasses, Paulson's useless.

Grabbing what you can, as John Ruskin said, isn't any less wicked when you grab it with the power of your brains than with the power of your fists.