http://www.reuters.com/…

California Gov. Arnold Schwarzenegger has informed U.S. Treasury Secretary Henry Paulson that the most populous U.S. state may need to turn to the federal government for short-term financing because of a lack of liquidity in credit markets.

California needs $7 billion to cover short-term expenses and has planned to issue revenue anticipation notes for it.

“Absent a clear resolution to this financial crisis that restores confidence and liquidity to the credit markets, California and other states may be unable to obtain the necessary level of financing to maintain government operations and may be forced to turn to the Federal Treasury for short-term financing,” Schwarzenegger said in a letter to Paulson dated Oct. 2 and provided to Reuters on Friday.

“The economic fallout from this national credit crisis continues to drain state tax coffers, making it even more difficult to weather the continuation of frozen credit markets for any length of time,” Schwarzenegger said, adding he supports a $700 billion emergency financial rescue plan due to be voted on Friday by the U.S. House of Representatives.

It’s not like we’ve had states go bankrupt before. Perhaps California will be the first in modern times. One can only hope.

I know that many of us were deeply disappointed when the U.S. House of Representatives today failed to pass Treasury Secretary Henry Paulson’s emergency stabilization plan. We believe that the defeat of this plan is not only bad for the markets and for our firm - but a dangerous course for the country with negative consequences for people far from Wall Street.

Indeed, following the vote today, the financial markets sent Congress a loud and clear message about the consequences of Congress’s failure to respond to the financial crisis at hand - sending the Dow down more than 700 points. In the aftermath of the vote and the market’s reaction, the leaders of both parties have vowed to regroup and consider how they can bring the financial market rescue package back to the floor of the House for successful reconsideration.

We believe it is critical that members of Congress hear about the importance of passing a plan this week.

If you share this view, I encourage you to call your Congressman and Senator at (202) 224-3121 and let them know how important this plan is for the American economy.

Translation: “We fucked up and now you need to bail us out or it’ll hurt you too. We promise.”

The individual who released this received 13.33 times his salary as his bonus in 2006 and after all other forms of compensation are calculated in: over 20 times. Much of that was stock. My guess is a bailout by the taxpayers would significantly impact his bank account. I think it’s safe to say that likely has a significant impact on his opinion. I’m not seeing any hesitation, no condemnation of the CRA, no concern for artificially low interest rates, moral hazards or the Federal Reserve System.

If the company he works for can’t keep itself afloat without interference by the government it deserves to fail.

http://www.bloomberg.com/…

The Federal Reserve will pump an additional $630 billion into the global financial system, flooding banks with cash to alleviate the worst banking crisis since the Great Depression.

The Fed increased its existing currency swaps with foreign central banks by $330 billion to $620 billion to make more dollars available worldwide. The Term Auction Facility, the Fed’s emergency loan program, will expand by $300 billion to $450 billion. The European Central Bank, the Bank of England and the Bank of Japan are among the participating authorities.

The Fed’s expansion of liquidity, the biggest since credit markets seized up last year, came hours before the U.S. House of Representatives rejected a $700 billion bailout for the financial industry. The crisis is reverberating through the global economy, causing stocks to plunge and forcing European governments to rescue four banks over the past two days alone.

“Today’s blast of term liquidity will settle the funding markets down, and allow trust to slowly be restored between borrowers and lenders,” said Chris Rupkey, chief financial economist at Bank of Tokyo-Mitsubishi UFJ Ltd. in New York. On the other hand, “the Fed’s balance sheet is about to explode.”

Is that hyperinflation I hear? Who needs Congress when you already have the power to bailout these institutions in other ways?

All the money in the world wouldn’t help this… why do they continue to try?

No word on if or when Paul will speak.

I love how Bernanke stutters after Paul interrupts him with “coins.”
The pleading of the Fox Business people are pretty entertaining too.

http://www.engadget.com/…

Look, kiddie porn and terrorism are bad. Obvious. But what better way for a government to push through controversial legislation quickly than to harness their emotive properties? After all, what self-respecting member of the US House of Representatives would vote against legislation called Securing Adolescents From Exploitation-Online, or SAFE? Only 2 it turns out (Rep. Paul Broun from Georgia and Rep. presidential candidate, Ron Paul) with 409 members voting yesterday in favor. The new bill requires everyone (that includes you and Starbucks) offering an open WiFi connection to the public to be on the lookout for report known “illegal images” and “obscene” cartoons and drawings. The reporting requirement extends to cover social networking sites, ISPs, and email providers. Failing to dutifully report what you’ve seen (or haven’t seen but are unwittingly complicit in) could leave your data seized and in debt from fines of up to $300,000.

H.R.3791.EH can be found here.

The bill requires those who “obtains actual knowledge of any facts or circumstances described in paragraph (2)” report it to the CyberTipline. Paragraph 2 refers to Title 18, Part 1, Chapter 110, Sections “2251, 2251A, 2252, 2252A, 2252B, or 2260 that involves child pornography” and Chapter 71, Section 1446A. The Engadget article is a bit misleading in that it’s all in regard to children but the definitions are no less clear. Section 1446A reads: an offense is “Any person who, in a circumstance described in subsection (d), knowingly possesses a visual depiction of any kind, including a drawling, cartoon, sculpture, or painting, that — (1) (A) depicts a minor engaging in sexually explicit conduct; and (B) is obscene; or (2) (A) depicts an image that is, or appears to be, of a minor engaging in graphic bestiality, sadistic or masochistic abuse, or sexual intercourse, including genital-genital, oral-genital, anal-genital, or oral-anal, whether between persons of the same or opposite sex; and (B) lack serious literary, artistic, political, or scientific value;” This is very vague and highly subjective. The fact it can be something not even related to an actual human makes this far worse. At this point what would be the difference between a cartoon and the image in your mind or a description on paper or spoken? It’s a victimless crime. A thought crime. The fact that they have now tacked on requiring others to nark on people adds a whole new level to this. Those affected have been drafted by the nanny state morality police. The fact it carries penalties also implies to me that they are considering not narking aiding and abetting.