$$$ The Google Stock Plunge [Dealbook]

$$$ HedgeFundGirls Dot Com [FINalternatives]

$$$ Marc Ecko: Gentleman & Patriot [1-2]

And from today's Wall Street Journal:

I know we work up a lot of righteous indignation on behalf of the short selling community over the ass backwardness that is the ban. All of it it warranted-- especially that which is thrown at people like the proprietors of GLG and Man Group-- but this might actually be the last time we act as a proxy for the particular injustice that is the Long Only Suction. Because it will probably be difficult if not impossible to top the richness of this latest episode. AMB Property (an Industrial REIT) was not one of the original Lucky 799. Since the barrier to entry was non-existent, the company requested it be added to the list last Monday. Then on Wednesday, it oh so coincidentally decided to slash earnings guidance for the remainder of the year (which, we're told, they did on a property tour in Europe that unless you were on or listening in on the internet probably didn't notice). And on Friday night, AMB proclaimed with flourish that they wanted off the list because, they told The REIT Newshound,* "It didn't feel right. We believe we're a good company and if someone wants to short us that's okay."

*Which is apparently "The Page Six of the REIT world."

At least if the Wall Street Journal is to be believed, the short sale ban will be extended for at least a week or two after the original October 2nd sunset date. Doubtless the incredible success of the plan (see attached chart after the jump), put into place on September 19th, and its immense popularity with market participants are the central influences spurring its renewal. Said the SEC at the time:

Under normal market conditions, short selling contributes to price efficiency and adds liquidity to the markets. At present, it appears that unbridled short selling is contributing to the recent, sudden price declines in the securities of financial institutions unrelated to true price valuation. Financial institutions are particularly vulnerable to this crisis of confidence and panic selling because they depend on the confidence of their trading counterparties in the conduct of their core business.

As we pointed out earlier today, Taiwan got in on the act and banned short selling outright. I don't know about the rest of you, but I am really enjoying my new found equilibrium based on the "true price valuation" of high leveraged financial institutions that feel no downward price pressure except that of their own bloated balance sheets.

Don't Blame Short Selling [Wall Street Journal]

Related: DealBreaker Swag

As you know, the Securities and Exchange Commission came out with some news today. We consulted an expert on the matter, and he suggested that Cox and Co. take things one step further. And when you think about it, it's really not that giant a leap from one to the next. His thoughts are after the jump.

A review of "fair value" accounting promises to be a long, painful procedure that not only carries with it the possibility of severe and potentially deadly infection, but entails a long recovery time and is likely to reveal any number of other tumors and growths that threaten to be a bigger deal than the original concern.

Accounting pathologists that we are, our attention has been rapt.

Take a seat in the visitors observation lounge. We're going in.

Press Release (plus Q&A!) from Coxville:

FOR IMMEDIATE RELEASE 2008-234

Washington, D.C., Sept. 30, 2008 -- The current environment has made questions surrounding the determination of fair value particularly challenging for preparers, auditors, and users of financial information. The SEC's Office of the Chief Accountant and the staff of the FASB have been engaged in extensive consultations with participants in the capital markets, including investors, preparers, and auditors, on the application of fair value measurements in the current market environment.

There are a number of practice issues where there is a need for immediate additional guidance. The SEC's Office of the Chief Accountant recognizes and supports the productive efforts of the FASB and the IASB on these issues, including the IASB Expert Advisory Panel's Sept. 16, 2008 draft document, the work of the FASB's Valuation Resource Group, and the IASB's upcoming meeting on the credit crisis. To provide additional guidance on these and other issues surrounding fair value measurements, the FASB is preparing to propose additional interpretative guidance on fair value measurement under U.S. GAAP later this week.

While the FASB is preparing to provide additional interpretative guidance, SEC staff and FASB staff are seeking to assist preparers and auditors by providing immediate clarifications. The clarifications SEC staff and FASB staff are jointly providing today, based on the fair value measurement guidance in FASB Statement No. 157, Fair Value Measurements (Statement 157), are intended to help preparers, auditors, and investors address fair value measurement questions that have been cited as most urgent in the current environment.

Bloomberg reports that the Swiss bank is going to eliminate 1900 employees in investment banking, equities and fixed income. They're also planning on announcing a $2.7 billion write-down, probably tomorrow.

[click to view]

Good Morning America interviewed Representatives Marcy Kaptur (D-OH) and Marilyn Musgrave (R-CO) this morning; both were on Team Nay yesterday at the Patriot Act Rescue Bill game.* If you don't have time for the six minute clip, just start paying attention at around 4:45. That's when Kaptur says "I think one of the problems is that Mr. Paulson is a day trader."

*That's another idea along the lines of the name change. Somehow we should convince people this is about football.

After the jump.

Yeah, it figures. Taiwan has banned short selling in equities. Period.

The brilliant and original move is aimed at "preventing short-sellers from depressing the market and [at] boosting investor confidence...."

Taiwan, I believe I may have detected the flaw in your plan.

Taiwan bans short-selling on shares of any company [Reuters]

Is there really anything else to add?

Mark-to-Market is a love it or hate it sort of topic. Either you think its critical to proper disclosure or you think its tearing the financial system apart. Either way, you probably will want to pay attention to what happens when the US Accounting Board and the SEC emerge from their tender love-making session, and who is wearing a grin.

Updates, along with FAS 157 discussion, to come!

US accounting board, SEC discuss fair value [Reuters]

CNBC has been building the fake suspense for three commercial breaks now. Who could it be? What penetrating commentary should we expect? We are game. And easily amused. So we got excited when we heard. We fantasized that it was David Einhorn of the Einhorn Eagle Scouts or someone.

It is "Ric Dillon." What a let down. President and CIO of Diamond Hill Investments. Hoo-ray. My excitement is testing the threshold of explosive incontinence, let me tell you. Well, he did short Detroit. Anyone who shorts that armpit can't be that bad.

If you don't recognize the name, he's kind of the typical looking Midwest football jock-come-mini-regional-bank-President. You know the one I mean. After living next door for 5 years he first met your parents when he came over at 3am and compelled his dejected looking son to admit that he had stolen your parents' car and gone on a joy ride out to the country and would they please not press charges because, after all, he didn't mean any harm and all the kids were doing it and he will wash it for free if they just forget about the police. Yeah. That guy.

I was really hoping for some sparks. I got nothing. He spent all of 15 seconds on short selling. Then he went on to deliver a very weak pitch for Apache (NYSE:APA). Christ.

The November issue of Vanity Fair has a story featuring two ladies near and dear to all of our hearts: Maria Bartiromo and Erin Burnett. Specifically, what may or may not be a network-manufactured rivalry between the "Money Honey" and the "Street Sweetie." Both parties claim the catfight is in no way based in reality, though Erin does admit to "getting it," telling writer Suzanna Andrews, "Maybe it's...a male-fantasy thing."

The timing of this article is actually quite a coincidence because just the other day we were wondering to ourselves if the fur was still flying between the two, or if the claws had been retracted. We were leaning toward the latter, and that made us a little sad. But since they whole thing is supposedly not real anyway, what we're thinking here is that we (you) should come up with some new scenarios that could be reignite things. Then we (me) will figure out a way to plant the seeds of said scenarios and we (me and you) will watch Catfight 2.0 grow. Or, since the whole thing's allegedly a sham (SO THEY SAY), you can just replay whatever we come up with in your heads as though it's real. Either way, someone wins.

Okay, so far, all we've got is 1. Some sort of love triangle involving Dennis Kneale and 2. A daily competition in which Charlie Gasparino places a piece of soprassata on set, equidistant between the ladies, and they must race, on-air, to grab it. Those both suck, but I bet you can come up with something better, and I challenge you to do so at this time. For inspiration, pics of the ladies from the article after the jump.

Congressmen supposedly want to hear from their constituents regarding the bailout. Unfortunately, many people are receiving the following auto response after shooting emails to their House Representatives to say "Hi? Could you please pass this thing? Thx" or "Fuck Fat Felines":

1. "Speculation that President Sarkozy's meeting with banking officials today will result in a guarantee of the French bank debt similar to the move in Ireland this morning."

2. "Whispers of a coordinated rate cut by the Swiss, ECB, Canada and US by noon tomorrow."

[click to enlarge]

Since you are businessmen and ladies, you surely know that even when every institution in the world is falling off a cliff, there's still money to be made. If you're not into buying put options or credit default swaps, might we suggest putting your powers of prognostication (and rumor-spreading abilities) to use? Round up your friends and foes and fill out the September Madness bracket that's been going around all morning (whoever created it: bravo, though Barclays prefers to be spelled with out a 'k.') Those participating in the DB pool are competing for the chance to win dinner with Dick Fuld.

All depositors are fully protected and there is expected to be no cost to the Deposit Insurance Fund. Wachovia did not fail; rather, it is to be acquired by Citigroup Inc. on an open bank basis with assistance from the FDIC.

[...]

The FDIC has entered into a loss sharing arrangement on a pre-identified pool of loans. Under the agreement, Citigroup Inc. will absorb up to $42 billion of losses on a $312 billion pool of loans. The FDIC will absorb losses beyond that. Citigroup has granted the FDIC $12 billion in preferred stock and warrants to compensate the FDIC for bearing this risk.

This wouldn't be the first time we've pointed out that financial Newspeak (the purge of all meaning from some phrases and words and the concentration of it in others) seems to be all the rage with the kids today. I realize that, conflicted though it looks, one could interpret "expected to be no cost" and "Citigroup Inc. will absorb up to $42 billion of losses...." as something other than mutually exclusive. That catch-all word "expected" makes the world your oyster as a public relations professional. For example:

Lehman Deal Expected This Weekend [Wall Street Journal]

Lehman Expected To Follow Merrill's Route [Reuters]

Sales Of Some Lehman Units Expected Soon [Reuters]

Lehman's Chairman, Dick Fuld, Is Expected To Attend The Gala Dinner [Unknown]

Even as I type this, the usual CNBC wonks are salivating over that tasty FDIC Chairwoman, Sheila C. Bair. Apparently, she get's "three thumbs up." I guess the insight that FDIC insurance premiums might have to be bumped up after weeks and weeks of massive losses qualifies one as a brilliant master of all things finance. (At least it does in Newspeak).

All Sheila needs is a slight improvement, elevating her to the "heckofajob" level and she'll be unceremoniously dismissed fired a week later.

Citigroup Inc. to Acquire Banking Operations of Wachovia [FDIC.gov]

Hong Kong's Securities and Futures Commission (SFC) warned against abusive short-selling today which, of course, we are all for (abusive short-selling being curbed...not abusive short selling). The SFC issued this statement despite the fact that daily monitoring of the market indicates that short-selling activity is at the same levels as it was pre-financial crisis. This leads us to believe we (meaning Martin Wheatley, the SFC's Chris Cox) is headed down a slippery slope. Tomorrow it'll be a ban on abusive short selling. Thursday it'll be a ban on short selling in general. Friday, Wheatley is cutting $600 million checks for takeout food when he and his team burn the midnight oil to draft legislation establishing a fine for any adults who fail to buy at least 100 shares of each of the 10 stocks on the "mandatory longs" list.

SFC warns of action against abusive short selling [SFC]

So, this is kind of shady. Yesterday the Patriot Act Bailout Bill failed to pass, 228 nays to 205 yeas, with Representative Jerry Weller (R-IL) invoking the..."no opinion" option. At first we assumed Weller's decision to not cast a vote was merely a matter of him being a cough, pussy, cough. But maybe not? According to the Daily Journal, Weller not only missed yesterday's vote but all 30 votes since Friday. Additionally, his whereabouts could not be determined over the last few days. And, maybe most significantly, Weller already announced earlier this year that he would not be running for re-election, meaning he didn't have to worry about angering his constituents. We called the Congressman's office DC and Illinois just now; the former wouldn't comment (on anything), the latter went to voicemail.

Weller a no show on bailout vote [Daily Journal]

We have pointed out a few times that identifying a liquidity crisis and distinguishing it from a solvency crisis is something like an essential precursor to develop and execute a rescue plan (or to adopt "Plan B" if the first rescue plan fails to return the country and its many mistresses to the style to which they have grown accustomed).

Forgive us for nitpicking, but either market actors are so beyond reliable or rational function that they cannot bear price discovery, or solvency and liquidity are in equal measure gummed up all through the works.

"Quietly" injecting $650 billion of cash into the system, as the Fed decided to this week, may delay total chaos and prevent cats and dogs from living together before Easter, but it doesn't solve the basic issue faced by most (heavily leveraged) finance institutions: their liabilities may well significantly exceed their (still deteriorating) assets. As if that's not enough, almost no one knows how long and to what degree insolvency has been sloughing rotten skin off all over the new industrial ply carpet in various regional banks. Hopefully, this will limit the egg-splash to the first two rows around the dohyo, but certainly there is going to be some breakage. Here's hoping one of the wrestlers doesn't teeter over into the spectators.

Fed Pumps Further $630 Billion Into Financial System [Bloomberg]

By which we mean calling it a "bailout." As many have noted, one not so small factor in Congress's failure to pass the bill is that many perceived as a "Fat Cat Bailout." BUT! If we just swap that dirty little word for something more palatable, there's probably a decent chance all of the naysayers will suddenly say, "Oh yes, sure, pass it. Why are you bothering me with this? I'm trying to watch Two and a Half Men."

Yesterday, 78.8 percent of you agreed that the name of the bill should be changed to "The American Freedom and Anti Terrorism and Defense Of Marriage Finance Act." Before we send it along to our friends in the District, are we set on this one? We're fine with it, but is there anything else we should consider? The only other things we can come up with are "The Emaciated Dog Bill" (which would probably be popular as it is the opposite of overweight felines, and you know how people love their dogs), "The 2008 Ass Tourniquet Bill," and "The We're Going To Give You Guys The Money, But Upon Receipt, You Have To Promise To Strip Naked And March Down Wall Street Chanting We're Not Worthy Bill." Surely you can do better.

Yesterday, the NYSE bell doesn't work. Today there was one person on the platform, which is usually stuffed to the gills with the entire cast of Biggest Loser. We don't have to tell you, this is not good for morale. Tomorrow, we want to see the barbershop quartet starring Stan O'Neal, Chuck Prince, Jimmy Cayne and Dick Fuld up there. Thursday, Bald and Beard. Friday, Angelo Mozilo and a gaggle of Oompa Loompas.

Bushie just addressed the press, and gave a slightly longer speech than his last one regarding the bailout. He is "disappointed by the outcome" and stressed that we need legislation that "helps the economy get moving again," as the "situation is urgent." He also mentioned the big huge number...777 points, and said that there will be "painful and lasting" economic damage if we (Congress) don't move our asses (to really drive the message home, 777 flashed on a green screen behind the president as well, before dropping into an animated lava pit, and emerging with what looked like severe third degree burns, with the question "Do you like scar tissue?" scrolling along the bottom).

Futures indicating rebound after historic sell-off (RTT News)
Oh, see. We're still here. The world hasn't gone anywhere. In fact the stock market is looking up this morning. A few hundred points. Sure it's just a sliver of what we lost yesterday. But did any banks fail last night? (Don't answer). Seriously though, Wall Street better cut out this "buying" stuff if it wants a deal to happen (just kidding!). Of course, others will say that the market is only up on high expectations of a deal. See: Next story.

Senate May Try to Revive Bank-Rescue Bill by Tomorrow (Bloomberg)
Ah, the swift discipline of the markets. Despite the "death" of the bailout bill, the Senate plans to vote on something tomorrow, and pundits increasingly expect a deal by the end of the week. Basically, conviction is one thing, but it's no match for diminished 401(k)s.

Market Drop Pressures Hedge Fund Managers (WSJ)
As part of that ideological gun being held to dissenting Republicans was the threat of end-of-quarter hedge fund redemptions, triggering a "cascade" of selling. Well, we're getting to the end of the quarter here, so we'll see if there's anything to it. Though we can confirm to you that some dude on CNBC just said he didn't think it was a real big deal.

2008 Presidential Election (Intrade)
Besides stocks, the other big loser in the markets was McCain. He's not at 37 cents on the dollar. And just look at the state-by-state map. He's basically losing everything that might be considered a tossup, from Florida to Ohio. We're talking Reagan-Monday here. Ok, not that bad. Prediction: This will tight up. Were we betting, we'd be more bullish on McCain's chances.

Presented without comment. (After the jump).

$$$ The world: yesterday and tomorrow [Master of None]

$$$ LEH's Demise Triggered Cash Crunch Around The World [WSJ]

$$$ Slick insight on monitoring oil mergers [The Deal]

$$$ Personal Banks [Newsgroper]

Supposedly, very supposedly, Morgan Stanley will hold talks tonight concerning a possible deal to buy the remaining parts of Wachovia, and Robert Steele taking over as CEO.

Decent commentary on the bailout is hard to come by. Certainly most "financial press" fails to fit the bill. It is a pleasant surprise, then, to see Posner describe the issues with something like clarity and aplomb.

A complicating factor was that the value of those securities was and is very difficult to determine, because each security represents a share in pieces of many different mortgages. The bank that owns the security cannot readily determine the value of all those different mortgages, since it has no direct relationship with the mortgagor, having sold the mortgage to the entity that issued the mortgage-backed securities.

[...]

If the Treasury pays the actual value (if anyone can determine what that is) of the securities, it will not be injecting new capital into the banking industry, but merely swapping one form of capital for another. If the Treasury pays more than the securities are worth, then it is contributing capital to the industry all right, but it is also enriching the owners and managers of the banks, which creates the familiar moral hazard problem as well as upsetting people by rewarding careless management practices. The more it overpays, the most costly the bailout plan to the taxpayer.

There is a rather serious issue here that has gotten only the smallest bit of attention. How difficult are mortgage backed securities to value? And, given that they are difficult or impossible to value, is it a coincidence that the Treasury seems to be using this opacity to funnel some extra cash.

The $700+ Billion Bailout [The Becker Posner Blog via Broken Symmetry]

Bailout Roll Call [House]

[click to view]

Source: THE HORSE'S MOUTH. 2:26: "And now it's time for all members of Congress to go back to the drawing board."

Hank Paulson is scheduled to address the press any minute now. While we wait, shall we predict what he might say? All I'm picturing right now is a re-staging of the picture at left, and some sort of declaration like, "I'm going to do to you what I did to my friend here. But with you I'll be less gentle."

What he actually said:

I'm very disappointed in today's vote. Leaders on both sides of the aisle have worked hard. I've spoken to them, and they're disappointed, too. Markets around the world are under stress, reducing available credit. Families, too, feel the credit crunch.* We're continuing to address the problem. I am committed to using all the tools I have to fix this. Our tool kit is substantial, but not sufficient. We've got much work to do, and this is much too important to simply let fail.

Q from reporter: Can the banking system withhold the pressure?
A from Paulson: Our banking system has been holding up.

*Really? I thought that's why this thing didn't pass? Because people who aren't on Wall Street supposedly don't understand the direness of the situation?

Remember how bad credit was for awhile after Bear Stearns imploded? Particularly in the repo market? We're back there again. Collateral holders seem to be in a great position in the repo markets as the demand for the stuff, treasuries, almost all special collateral, is soaring. Unfilled trades have been piling up. This gums up the works pretty severely and is beyond bad news if it gets any worse. We mentioned the issues in short, liquid paper markets last week briefly, but the problem seems much more severe now, but still has been getting very little play in the markets. Bloomberg and the Wall Street Journal both seem to have noticed the problem (finally). Let's hope it cools off before things get out of hand.

Dude on CNBC reflects on the non-passing bailout:

"If I were John McCain and Sarah Palin I'd be suicidal right now."

"Republican Congressmen fighting for seats just had nails put in their foreheads."

Everyone on CNBC keeps saying this thing didn't pass because it was perceived as a "Fat Cat Bailout." So:

Update: Steve Liesman reports that there won't be a new vote 'til Thursday. Congressional staff said they need time to figure out "how to bring this to the floor in a way that will pass." We say: name change.

Earlier: The Bailout Vote

Shares of National City plunged today, though the bank can't understand why. "Our funding and liquidity levels are good and that is represented by our strong pool of core depositors," Kelley Wagner Amen, a spokeswoman for NC said, taking a page from former Bear CEO Alan Schwartz's playbook. Amen added, "We believe there is extreme market volatility and a bit of irrational speculation at play." Also? "(National City) is far better capitalized than WaMu and Wachovia," so if you could please stop the comparisons that would be top notch.

Earlier: Checking It Twice

I wonder what they'll discuss. In related news, Pelosi has responded: "We delivered on our end of the bargain...but the legislation has failed. The Republican caucus has not gotten the message. The crisis remains."

Update: Bushie says, "We put forth a plan that was big because we got a big problem...we're going to attack this head on."

[click to view]

Cantor, speaking now, says that Nancy Pelosi's speech prior to the vote was too partisan.* Blunt said they felt rushed because of the Jewish Holidays.

*This is EXTREMELY rich, considering that Mr. Shit Eating Grin basically spent the entire weekend being all "Guysss, I don't know if this is going to happennnn."

205 v 228. Don't really know what say here. Obviously, 77.4 percent of us did not see this coming. Representative Jerry Weller (R - IL) did not vote. They've moved on to voting about minting commemorative coins now. For serious. According to the Times House leadership is planning a second attempt to pass the bill, though Steve Liesman is saying that there's no possibility it will happen today.

That's it! They've got 15 minutes...get YOUR say in before then.

1:35: 122 v 111, for v against

1:37: 137 v 139, for v against

1:39: 145 v 142, for v against

1:41: 168 v 172, for v against

Barnett "Barney" Frank!
1:44: 189 v 208, for v against

1:47: 203 v 227, for v against

Dow Down 500 Points
1:49: 205v 228, for v against

You can change your vote; ONE person has
1:53: 207 v 226, for v against

2:02: The 207 number is holding, because politicians are pussies and no one wants this pinned on them in case it backfires. I still have the C-span audio on and it just sounds like people milling around chit-chatting. Shouldn't now be the time for yelling? Or for Barney Frank to get into that fistfight?

Asking: "Does anyone wish to change their vote?" Some asshole does:
2:07: 205 v 228

This bailout shit is serious and that's why we offer this bit of constructive criticism completely sincerely. Watching Representative Boehner up there on the podium trying to scare the ass out of people regarding what will happen if we don't pass this, I can't help but thinking that he should've taken up Bill Maher's suggestion from the other day to shine a light under his chin in order to make the scary story-telling more effective. And maybe drop the pink tie.

Above, a dramatic interpretation of how we're feeling re: 1 o'clock at the House. But that's just us. Anyway, you know how we like to credit you people with having the best crystal balls on the market, so, ahead of the tally, let us know what's going to happen:

The WSJ reports that Lehman has reached an agreement to sell Neuberger Berman to private equity firms Bain Capital and Hellman & Friedman for $2.15, a number that has got to hurt, as it is a swift kick to the erstwhile bank's family jewels, once valued at nearly $8 billion.

Still watching the House. Rep. Bill Foster (D-IL): Let's do it so we can have the satisfaction of saying, "Yeah, we saved their butts."

Rep. Ginny Brown-Waite (R-FL) asks: "Do you like extortion?......This is so embarrassing...a vote for this bailout is a vote for business as usual in Washington."

Update circa 12:15ish: Okay, I get that Pelosi, who is up at the podium needs to cover her ass in case this thing backfires, but if you're trying to get this thing passed, is it really the best idea to say "The fundamental basis is almost arrogant and insulting"?

Citi held a conference call earlier to discuss the newly formed Shitichovia but I didn't listen to it and for that I'm sorry (I feel slightly better about this knowing that Meredith Whitney was not in on the call either). If anyone was worried about this being a crap deal, DO NOT FEAR: Vikram Pandit reassured everyone that Citi looked at this thing for a while, and everyone feels pretty okay about it. Below are Big C's talking points on the matter.

Download the PowerPoint presentation.

Update: The good people at Deal Journal listened in on the call. Choice moment: 11:19: Crittenden cannot stop kvelling. "We have a deposit base that is truly unassailable after this, the strongest in the country."

CNBC is running a special on a day trader named Tim Cutt. Why? I don't know but it's actually marginally entertaining. Tim shorted AAPL, even though it was his favorite stock, on September 18th. Now he's going long on Jobs. When asks why he'd rather take matters into his own hands instead of getting someone else to manage his money, Tim says "If you're going to lose a horse race, you'd rather do it on your own horse than their camel."

Update: Amazingly, the budding Buffett added, "I feel like a eunuch at a sex party. So much to do but no tools to do it with."

Bear Stearns
IndyMac
Lehman Brothers
Washington Mutual
Wachovia
National City

National City Drops 52% as Market Wonders Who's Next [CNBC]

Re: coming up with the $700 billion:

"It's not based on any particular data point," a Treasury spokeswoman told Forbes.com Tuesday. "We just wanted to choose a really large number."

Top Of The Ticket [LA Times]

Hidden in the middle of a Wall Street Journal article on vulture investors is a small observation that suggests, perhaps unwittingly, that the Treasury might be on the eve of complicity in one of the largest cases of accounting fraud in recent memory.

Other opportunistic investors, though, say they likely will stick to the sidelines for now. They are skeptical that the government's purchase of distressed assets will accurately establish what they are worth. So far, there have been few transactions, despite the desperation of banks to sell, because of disagreements over pricing. (Emphasis ours).

If the Treasury buys assets at inflated prices and that permits banks to mark-to-the-Treasury-model, well... you get the idea.

Vulture Funds Plan to Buy Assets Ahead of Bailout

In advance of the 1 pm Vote on the Bailout, we're watching the C-Span Live Stream of the House of Representatives, and highly suggest you do the same. It's basically going to be two and a half hours of airings of grievances. Ron Paul got himself good and worked up a few minutes ago. Hopefully there'll be a fistfight before 1. I'm not sure who I think would be the most worthy opponent but I would like to see Barney Frank rumbling with one of his colleagues.

Update: Okay Rep. Paul Kanjorski (D-PA) just suggested that his colleagues who are against the bill "watch movies about the Depression to see what might happen." Movies. "Watch Cinderella Man, gang. Russell Crowe is too fat now to save us. Watch The Sting. Paul Newman is dead now and Redford looks like the suitcase in your attic, so there'll be no puckish scamps to bring good cheer with their lovable cons. If that's all out at Blockbuster, and it probably is, because you know people are feeling nostalgic, try Armageddon. This is serious, people."

Rep. Ted Poe (R-TX): Is Our Congressman Learning: "This bill is a hundred pages. That's a billion dollars a page* that the Wall Street Fat Cats want Joe Six Pack to pay for." Barney Frank adds, "While I think the gentleman was a little too hard on the Bush administration, I agree with what he had to say."

Update, 11:24: Rep. Maxine Waters (D-CA) adds the Wizards of Short Selling to her Enemies List:

"I hate the high priced schemers of Wall Street and their tricky products, and hedge funds, and short selling. I'm not voting for this bill because of Them, I am voting for it because of Main Street."

*Let's not be too hard on him, he's not off by *that* much.

You know, one of those really thick, syrupy, brownish antibiotic infusions that takes 25 seconds to pull into the syringe.

The Fed and the European Central Bank doubled to $240 billion the amount of dollars being made available to banks hungry for cash. In an announcement Monday by the ECB -- the central bank to the 15-nation euro zone -- said it and the Fed decided to double their temporary reciprocal currency arrangements, or swap lines, from $120 billion to $240 billion.

Europe has managed to fail to avoid the financial failure of the United States. All those smug, French-accented cat calls from last month are sounding a bit premature now. So is the