• Schwarzenegger has eliminated funding for a statewide beach monitoring program. In other words, swim at your own risk in IB and Mission Bay, and avoid the ocean after rainfall.
• High-Speed Rail Benefits San Diego – KPBS has some info on Proposition 1A. High speed trains to SF or LA, I’d love it.
• You need to get out more. City Beat has a big list of art and events this fall.

Decisions by the Secretary pursuant to the authority of this Act are non-reviewable and committed to agency discretion, and may not be reviewed by any court of law or any administrative agency.

You have got to be kidding me. You are a pretty funny guy, Paulson.

The way Bernanke sees the auction working, however, it’s the other way around: the banks would tender their assets for sale, and then Treasury would put in a bid at what it considers “close to the hold to maturity price”

Which means that the Treasury would have no idea what the market rate is on this toxic debt, and would probably end up paying whatever the original price was. This is simply crazy.

As Rich says:

1. It’s ridiculous that we are using taxpayer money to pay above market prices for possibly worthless assets and that the proceeds are going to highly paid people who knowingly took huge risks.

2. I hope there is going to be some sort of accountability among all the regulators who first denied the risks and are now throwing our money at fixing their aftermath. If all the same people stay in charge, this kind of stuff will just keep happening.

I’d also add a third point: If taxpayers are on the hook for recapitalizing the institutions, there needs to be equity participation for taxpayers.

The whole thing is eerily similar to the last time we heard “trust us”.

Quoth the AP:

Wall Street rallied in a stunning late-session turnaround Thursday, shooting higher and hurtling the Dow Jones industrials up 400 points following a report that the federal government might create an entity to absorb banks’ bad debt. The report also cooled investors’ fervor for safe investments like government debt that were in demand for much of the day.

The report that Treasury Secretary Henry Paulson is considering the formation of a vehicle like the Resolution Trust Corp. that was set up during the savings and loan crisis of the late 1980s and early 1990s left previously solemn investors ebullient. Wall Street hoped a huge federal intervention could help financial institutions jettison bad mortgage debt and stop the drain on capital that has already taken down companies including Bear Stearns Cos. and Lehman Brothers Holdings Inc.

It is sadly amusing that those that made fortunes on deregulated markets are now pushing for socialism (and tax payer money) to save their investments. The issue here is not capital. The issue is insolvency.

As a side note, the article says that the report cooled the fervor for govt debt. Some seem to think this is a good thing, that people aren’t harboring cash in “safe” investments. But I see it slightly differently. Would you buy bonds from an instituation that wants to use its customer’s money to buy the worst assets of other companies? Once again, insolvency seems to come to mind.