The Fed’s under-the-radar bailout

That $700 billion from the Treasury? Chump change in the light of more than $7 billion in potential Federal Reserve bailout money.

Problems? Yes, beyond the size of that. The Fed is stonewalling on saying who is getting how much money from it.

“Some have asked us to reveal the names of the banks that are borrowing, how much they are borrowing, what collateral they are posting,” Bernanke said Nov. 18 to the House Financial Services Committee. “We think that’s counterproductive.”

A President Obama who was really about change would have the name of a new Fed head ready to go, and would publicly say so right now. A Congress that was really angry would tighten up the terms on TARP as part of any new bailout.

Will Congress push harder than it has so far for disclosure? It needs to:

“It’s unprecedented,” said Bob Eisenbeis, chief monetary economist at Vineland, New Jersey-based Cumberland Advisors Inc. and an economist for the Atlanta Fed for 10 years until January. “The backlash has begun already. Congress is taking a lot of hits from their constituents because they got snookered on the TARP big time. There’s a lot of supposedly smart people who look to be totally incompetent and it’s all going to fall on the taxpayer.”

But, these are the same folks who passed the Patriot Act sight unseen seven years ago. What the hell do or did you expect?

Citigroup bailout NOT the light at end of tunnel

First, there’s plenty of indications GE is shaky. Probably not shaky enough to need a bailout, but shaky nonetheless. And, who knows who will line up at the hog trough next?

As for the bailout itself, we’re paying more for the company than it’s worth on paper right now? At least it’s not a total pig in a poke. Dividends above 1 percent are forbidden. That’s about the only silver lining here; the turds in the punchbowl are legion, including Citi folks who got it into this mess getting to keep their jobs.

Otherwise, We the People are supposed to eat up to 90 percent of Citi’s bad money. (What happened to the “bad bank” being touted last week? I guess We the People are the bad bank.)

And its sheer size has analysts thinking that we could indeed still have further trains coming down the track like this:

“It looks enormous in size and scope,” said Tony Morriss, senior currency strategist at ANZ Bank in Sydney. “Does this mean support for other financial institutions will be this big? Does this mean there will be more problems around calculation of so-called toxic assets?”

And, it was a big enough big in a poke to let CEO Vikram Pandit stay on the job, which means the Paulson Gang still refuses to hold up a “oral hazard” standard:

“You’re seeing an inept management team being rewarded by the U.S. government,” said William Smith, chief executive of Smith Asset Management in New York, which owns Citigroup stock.

And, while the Paulson Gang continues to fret over massive banks like Citi, and BushCo says bank mergers will just solve all our problems, your Main Street-level banks are still doing well, Washington Monthly says.

IMF economist - worst to come

If the IMF doesn't need a bailout itself

International Monetary Fund chief economist Olivier Blanchard said we won't get out of the recession until 2010.

He then added this lovely bit of cheer:

Withdrawals of capital leading to problems of liquidity "can be so significant that the IMF alone cannot counter them," he said, adding that massive withdrawals of investments from emerging countries could represent "hundreds of billions of dollars.

"We do not have this money. We never had it," he said.

The IMF had spent a fifth of its 250 billion dollar (200 billion euro) fund in the last two weeks, Blanchard added.

Geez, it sounds like AIG.

The Chrysler bailout's limited applicability to today

While the 1979 bailout does offer a number of lessons, some of them are about how a 1979-style bailout probably WON'T work well today.

First, the $1.5 billion of 1979 is far less than $25 bil today. And, I'll adjust for inflation and for three carmakers.

Take that up to $5 billion to allow for three automakers. In inflated values, that's $15 billion today, still far less than $25 billion.

On the other hand, though, the formerly Big Three still were the Big Three in 1979. So, we should knock that inflationary $15 billion back to $10 billion. Now do you see how ridiculous, and worrisome, it is for the formerly Big Three to be seeking $25 bil? Sand down a rathole ridiculous?

And speaking of Big Three vs. formerly Big Three, in 1979, they had more than 75 percent of the market. Today? Only half.

And, as the story notes, Japanese cars are now on NASCAR.

Tips on surviving, or thriving in, Black Friday

Black Friday, for those of you with a lower level of retail shopping hankering, is the No. 1 shopping day of the year, the day after Thanksgiving, and NOT the next date for the financial world to implode.

Anyway, here's some tips for getting the most out of the day, including pre-shopping retailers' websites.

The flip side of Cedar Hill's 24-year electric deal ...

Is dark and dirty.

In exchange for locking in electric rates for 24 years with electrical provider Luminant via the Cities Aggregation Power Project, Cedar Hill (and other participating cities) are getting all coal-fired electricity.

THAT is how they avoid the volatility of commercial electric rates priced on natural gas rates.

But, Cedar Hill Mayor Rob Franke, and the city, have in the past presented an environmental image. How does coal-fired electricity square with this?

And, if President Obama and the incoming Congress pass a carbon cap-and-trade system, coal-fired electric prices are surely going up. Is there an "out" in the contract if that happens? Was the possibility even discussed?