What a flippin’ zoo. The House had no clue what it was voting on and Wall Street is having a nervous breakdown as it realizes there is no one in DC with any answers.
Blame this one on the P&P gang — Pelosi and Paulson, two giant intellects — in their own minds. Nancy Pelosi intentionally sank this bill, I believe, with her strident oratory. Now Obama can save us all!
And Paulson is the biggest disaster as a cabinet member since Cyrus Vance left choppers flaming in the desert. His narrow focus on liquidity ignores the larger capital problem. Worse, he has actively used the gnomes at Treasury to undermine any attempt to bring sanity to this effort.
At this point I can only point to Chris Whalen’s continued yeoman efforts to explain what is going on and how to possibly fix it. As Whalen points out, this is a capital problem now, not just liquidity. The Paulson approach cannot and will not fix that by buying selective bad assets.
However, we might not ever be able to get to the fundamental capital issues until some phoney-baloney bailout package is passed which calms everyone down. If so, add another P to the mix — placebo. See if Paulson resigns and Congress does not come back with substantially the same approach in the next day or two.
Bonus Observation: There is much up in the air on the Citi – WB transaction. I cannot even tell exactly which units are ending up where. What is clear is that there was a run on WB after WaMu went under, one large enough to have the FDIC ready to step in. Another bit of certainty in uncertain times? That this is quite possibly the dumbest thing Pat McCrory has ever said and done:
But, he told reporters this morning, that “it is essential that Wachovia maintains a strong presence in North Carolina.”
McCrory said he planned to talk to Citigroup head Vikram Pandit today to learn more about the company’s plans for Charlotte. He also is talking with Charlotte Chamber President Bob Morgan and Jim Fain, the state’s secretary of commerce, to discuss steps officials can take immediately to “sell our strengths of what Charlotte has to offer” and “to make sure Charlotte is part of the equation.”
Earth to Pat: You and Bob have nothing to sell or more precisely, there is no buyer. This is not about Charlotte, this not about you, there is no spin or lunch you can do to fix this. Wachovia’s fate was sealed by Ken Thompson’s arrogance. If you want to do something now, maybe wonder if you should’ve nagged Wachovia’s execs so much about art projects and Uptown glitz while they should’ve been focusing on running a sound bank.
Bonus Bonus Observation: Doug Smith is getting ripped apart on his own blog.
