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Financial news I consider important, with my opinion, which is worth as much as you paid for it.
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Wednesday, October 1, 2008

Bailout Bill passes Senate, onto the House

Senate Majority Leader Harry Reid, D-Nev., pressed for passage, with the alarming news that one of the country's premier insurance companies was about to go bankrupt if the crisis was not quickly resolved.

"We don't have a lot of leeway on time," Reid told reporters in the Capitol. "One of the individuals in the caucus today talked about a major insurance company -- a major insurance company -- one with a name that everyone knows that's on the verge of going bankrupt. That's what this is all about."

>> My spin: America has NO independant Investment banks. Largest bank & mortgage company failures since great depression. Indy Mac, Freedie Mac, Fannie Mae, Washington Mutual, Wachovia, to name a few. Then there is AIG, a very large insurance company that has failed. Considering over 267 mortgage companies have imploded since 2006, its not a far stretch to believe another insurance company has issues getting the governments attention.
NOTE: As previously mentioned, I will not go into detail on insurance companies.

In any event, the bill should still be opposed. It will NOT restore confidence. It will NOT fix the system. What is required to fix the system is fix the accounting as previously blogged.
So please contact your representative and oppose this bill.

Tacked onto the bill is to expressly allow FDCI "Unlimited funds" to the treasury. As I previously blogged, the Fed would print money and never allow the FDIC to fail. But what makes it worse is rasing the FDIC limit from 100K to 250K. What that means is the Fed will print twice the cash it would have had to. All of this points to massive inflation, but first we still need to deflate.

Funny of the day:
Alan Fishman of Washington Mutual took the position as CEO for 3 weeks before WaMu failed, and is headed for the doors with $19 million in his pocket. Read that again, he took the job for THREE WEEKS and is given 19 Million for heading the company into bankruptcy. The previous CEO was paid 14 Million, but had to work 1 year at the job. I think I'll propose to my work my plan to bankrupt them, and ask for only 4 million, thats a steal!
(image source)

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