Con-tango

Outline of Congress draft

From a Reuters factbox, I thought it would be a good idea to include here where the house bailout draft stands so far.

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Republican balls

Las Vegas
Courtesy of Iñigo Biain

Man, o’man, o’man, I’ve got to hand it to them, the some republicans have titanium balls, they started with a pretty large sum, $700 billion, but now, they’re asking you and me to take out of these clowns’ hands the potential risk of the whole $62 trillion insured debt (or credit default swaps).

As reported by Reuters:

On Thursday, a small group of conservative House Republicans —
including Texas’ Jeb Hensarling and Virginia’s Eric Cantor — offered
their own alternative to the Bush proposal. Focused on mortgage
insurance, the one-page alternative plan was presented to reporters at
a briefing.

The plan calls for the U.S. government to offer
insurance coverage for the roughly half of all mortgage-backed
securities that it does not already insure. The Treasury Department
would charge premiums to holders of the securities, under the plan.

Let me see,

• pay outright $700,000,000,000 or assume the risk of a debt default worth $62,000,000,000,000?
• or approximately $2,100, versus risking $186,000 for each one of the 300+ million US citizens.

Gee, when did Las Vegas take over the whole USA?

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Of foxes and chicken coops

Explosion

As I read, and keep on reading –we are living through a historic event–, it does not cease to amaze me how well aligned is the book with the talk. And, it is a relevant discussion point because it would seem that we have the fox in charge of the chicken coop…

Don’t I recall Mr. Paulson getting a compensation of Goldman Sach shares in the $100s of millions?
If GS fails he would stand to get a substantial haircut, or wouldnt he?

Update 09/29/2008: According to this article, Mr. Paulson sold the lion’s share of his GS holdings, about $492 million, at about the date of his confirmation; keeping for himself:

• 494,054 restricted shares of common stock (worth $60 million roughly at this moment’s $122.75 share price), all of which are vested and deliverable,
• plus, options to buy –at an unknown price– 680,474 shares of common stock, all of which are exercisable.
         

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