Monday, November 24, 2008
(Cont'd from above)...

Jim (cont'd):    More important, though... We'll have Larry Summers... holy cow! House of pleasure... heading the National Economic Council as Director... Summers will have Obama's ear... and that matters. This is a guy who knew the fundamentals weren't sound the whole time, and wasn't afraid to say so... someone who knew that things were falling apart... and Summers has solutions, not to mention the respect of our trading partners. So he can knock some sense into the Europeans and the Chinese, and get them to slash rates, because their rates are much, much too high.

Main Street hates uncertainty. Now we have Obama announcing a jobs program... a real stimulus program... not an iPod-in-every-pot spending program... but an infrastructure program that we all desperately need. You and I know that... just to stem unemployment... well, actually, just because our country's falling apart...

In fact, almost everyone hates uncertainly... It's more hated than even I am...

And now we have much less uncertainty and much more confidence. We've just saved Citigroup, the biggest bank in America. We actually made - get this - Citigroup a buy! Yeah! Right here!...

We're finally dealing with a template that can work. Not the failed confiscatory, Lenin template that the Bush administration has endorsed... The Fannie and Freddie nightmare template... Not the too-small company hijacking AIG template, where we took 80% of the company and guaranteed $80 billion and have had to pour more and more and more and more money in, because that figure was way too low... in part, because AIG won't open its books, which I think is disgraceful. Is it too much to ask, to let us know where our money is going and who's benefitting? Let's stop the covert operation that is AIG, and open things up.

And, of course, the Citigroup template bears no resemblance at all to the horrific, let-it-die Lehman approach that we still think Tim Geithner had way too much to do with...

Now, Friday, it looked like Citigroup - the biggest bank in the world - would fail. Now it will be saved! And we've got a real template, not some piecemeal garbage, for saving other troubled banks... one that's not too small.

The Feds are guaranteeing $400 billion in troubled loans which, by the way, is about $370 billion more than Citigroup said they had a week ago, but that's more realistic...

I can't take (CEO, Vikram) Pandit off the Wall of Shame... because it now sure looks as though everything he assured us about how great Citigroup was doing is now wrong. Now I'm calling him a fibber... The Citigroup plan allows the common (stock) to play on... punishing the short sellers for once... keeps the preferred stock alive, and keeps the troubled assets from being dumped on the market. That was the original plan behind TARP. It always could work, and now it's being put into action.

Finally, the taxpayer gets some realistic upside with warrants and preferred stock... the same kind of deal that Warren Buffett got. Hey, we held it when he did it. We can't go here... the house of pain... when he didn't...

We've just taken so much of the systemic risk off the table... so much of the uncertainty off the table with this Citigroup rescue... one that can actually be applied to other banks. But, more important than that... we now have an economic team from Obama... boy, much faster than I ever thought we could. And you know what?... Let's have faith in them. Let's be honest, for the last eight years, it's been like the movie, Ground Hog Day, where we knew every day would be the same, where Bush and his minions declaring that the fundamentals were sound... over and over again how sound the fundamentals were...

To me, at last, our long national nightmare is indeed over...

With Obama and his team, we're getting a functioning domestic presence... something we... we haven't had that in eight years... We also seems to be getting a pragmatic president... who is anxious to make a difference, and is actually participating with what's happening with our economy... especially Main Street for once.

Jobs, jobs, jobs!... Obama - unlike Bush - seems to want to get his hands dirty. That's cause for optimism, not gloom.

We're now over the 60-day hump, and getting closer and closer to Bush finally leaving office, and it looks like the Obama team will be ready to take over... and, lo and behold, the democratic leadership in congress seems to be acting extremely responsibly... which may come as a shock to you, as it does to me... The leadership showed real gumption in dealing with GM and the unions... This is the dems... they can be tough with the unions... everyone thought they were owned by the unions.

With the new congress and new president, the republican rump won't be able to block help for Main Street, as they've done for the last eight years, in my humble opinion. We finally have a government that's willing to spend what's necessary... $100 billion here, $100 billion there... and, pretty soon, we're talking about real money, to get us out of the mess that Bush and his team did create. Hoover's out. FDR's in...

And all thanks to our electorate, and congress, neither of which are willing to spend enough money to keep things from imploding, unless the media and politicians scare them into taking action. Case in point... I was ranting and raving well over a year ago about how bad things could get... but nobody listened until a financial apocalypse was finally upon us.

If people think that our problems could be solved by sensible actions, they'd never be willing to go along. We have to be told that we've already gone a cliff before they'll sign on... Still, I don't think that Obama and congress can wait until January to get things done... a stimulus package to save jobs now, because more unemployment means more people who can't pay their mortgages, and that's the root of all our problems. Every day that we delay means more job losses and more foreclosures. We can't have that.

Obama needs to work with the congress to produce a plan that will save jobs now, and call for Bush to approve it ASAP. We don't have any time to waste.

Here's the bottom line...

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The Bottom Line!:     We got a real template today from Citigroup to save the banks. That takes the 1932 bank failure situation... gone... off the table... not going to happen. I can assure you of that now. I couldn't on Friday. With an incoming economic team that both Wall Street and Main Street believe in, things have become a lot less uncertain. And that means, to be realistic, we have to be more optimistic. We have to recognize that things are, at last, better. And I say, hallelujah!

[verbatim recap]

Read Jim's next Segment here