Big Shitpile hits close to home:

July 30 (Bloomberg) — Cadwalader, Wickersham & Taft, the New York-based law firm founded in 1792, will fire 96 salaried lawyers in the U.S. and London because of “a significant slowdown” in real-estate finance and securitization work.

“Cadwalader has adapted to this market reality,” the firm said today in a statement sent by spokeswoman Claudia Freeman. Cadwalader fired 35 lawyers in January. The latest round of cuts will leave the firm with 580 attorneys, the same number as in January 2006, it said.

Big Shitpile - it’s not just for bankers anymore.

Cadwalader to Fire 96 Lawyers on Real Estate Slowdown [Bloomberg]

The Washington Post had some of the sordid tale of soon-to-be gone HUD Secretary Alphonso Jackson today. His cronyism made the post-Katrina housing situation worse; his lack of oversight and continuing efforts at deregulating the mortgage industry made the mortgage crisis worse; pretty much everything he’s touched has gone to shit. I mean, typical Bush Administration appointee crap, whatever, we’ve all heard this story like a million times, right? Oh, but there’s one catch. When asked by a reporter if he had any good legislative ideas for Congress, Alphie had this reply:

“When Congress calls up and asks us, we’ll give them advice,” he said. “You have 534 massive egos up there, so unless they ask you, you don’t volunteer anything.”

One problem, though: there are 535 Members of Congress. Yeah, he’s that stupid.

HUD Chief Inattentive To Crisis, Critics Say [Washington Post]

Gothamist publisher Jake Dobkin the nail on the head in a Tweet he sent out just a moment ago.

Park Slope as metaphor for America: a bank on every corner and nowhere to buy bread
1 minute ago from txt

I think that’s pretty much sums it up.

If there was any doubt in your mind that the cost of Big Shitpile would be paid by us taxpayers, well …

CNBC’s Steve Liesman reports on a letter from Treasury Secretary Paulson to New York Fed President Tim Geithner. In the letter, Treasury agrees that the Fed can bill Treasury for any losses from the Bear Stearns deal.

And you think there won’t be losses?

Just some more detail from the WSJ: Mortgage Securities Back Fed Loan to Bear Stearns

The securities backing a $29 billion Federal Reserve loan to Bear Stearns Cos. consist primarily of “mortgage-backed securities and related hedge investments,” the Treasury Department said.
…
The Fed has declined to provide any underlying detail so far.

JPMorgan will take the first $1 billion in losses on the $30 billion portfolio, and the U.S. taxpayers will pay for the remaining losses (if any).

If any? Count on it my fellow cynics.

Treasury Agrees to Absorb Any Losses to the Fed from Bear Stearns [Calculated Risk] Treasury: Bear Stearns Collateral Mostly MBS [Calculated Risk]

As you know, our economic ship of state has hit a seriously big iceberg. So does it surprise you that the Bush administration’s response is to rearrange the deck chairs?

Anyone who has worked in a large organization — or, for that matter, reads the comic strip “Dilbert” — is familiar with the “org chart” strategy. To hide their lack of any actual ideas about what to do, managers sometimes make a big show of rearranging the boxes …

You now understand the principle behind the Bush administration’s new proposal for financial reform, which will be formally announced today: it’s all about creating the appearance of responding to the current crisis, without actually doing anything substantive.

Sounds like Katrina, non? More incompetence after the jump.

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The Treasury Building adorns the back of America’s useless currency

The US Treasury Dept. rolled out their proposal for a major overhaul of the American banking system today. The plan, championed by Treasury Secretary Henry Paulson, calls for the creation of new regulatory bodies to oversee “risky practices” on Wall Street. We won’t bother going into the details of the plan for this reason: it’s never going to happen. It’s already dead in the water. “Since this is opening day in baseball, I might as well make a baseball metaphor,” Sen. Chris Dodd told the New York Times. “This is a wild pitch. It is not even close to the strike zone.”

The White House however, is eager to see the changes made into law, arguing that it’s not at all like this is some plan that they just made up yesterday. “Secretary Paulson has been working on this package for about a year, so it’s not like pulling a rabbit out of a hat,” White House Press Queen Dana Perino said at the press briefing today. Wow, Dana, that is a relief. You guys saw this one coming a mile away!

But even Secretary Paulson has his reservations. “Some may view these recommendations as a response to the circumstances of the day,” Paulson said today. “That is not how they are intended.” He doesn’t think Congress should act on his recommendations until after the crisis is over and possibly a new president is in place. He can rest his weary head on that one. This adorable little plan is no danger of becoming law.

Treasury Rolls Out Overhaul of Financial Regulators [New York Times]
Crossposted from WhiteHouse.com

Hey everyone! Just the week after the Iraq War’s very special 5th birthday, we hit 4,000 dead American soldiers! Dana Perino did some of her special brand of lying this morning to say that Bush was ‘grieved’ by the news, but that he of course grieves for every single casualty from the first to the most recent. And he promises to take care of the families of the deceased (unless they want money or health benefits, then no dice!) He would have made a speech himself, except he overdid it on the coke last night and needed a timeout to sleep it off.

And, of course, I imagine the wingnuts will be more outraged by the protesters disrupting Easter service than by 4,000 war dead. It is already a shot-of-whiskey-on-Monday- morning kind of a week.

I realize ’sad panda’ is too overused and cliche at this point, but I really couldn’t think of a way to convey this without my utter outrage and grief actually coming through and making this too earnest for all of you.

Bush “grieved’ by 4,000 deaths in Iraq [The Swamp]

[Calculated Risk]

So the Fed (that means us taxpayers) bailed out Bear Stearns.  The Fed guaranteed about $30 billion worth of Bear’s share of Big Shitpile, and we all know how that will turn out. Markets around the world are tanking, and the golden parachutes are thick above Wall Street.  If you own oil or gold or Euros (or if your last name is Bush) you might get through this.  If you own anything else, especially Bear Stearns shares, you are fucked:

Bear Stearns Cos. reached an agreement to sell itself to J.P. Morgan Chase & Co., as worries grew that failing to find a buyer for the beleaguered investment bank could cause the crisis of confidence gripping Wall Street to worsen.

The deal calls for J.P. Morgan to pay $2 a share in a stock-swap transaction, with J.P. Morgan Chase exchanging 0.05473 share of its common stock for each Bear Stearns share. Both companies’ boards have approved the transaction, which values Bear Stearns at just $236 million based on the number of shares outstanding as of Feb. 16. At Friday’s close, Bear Stearns’s stock-market value was about $3.54 billion. It finished at $30 a share in 4 p.m. New York Stock Exchange composite trading Friday.

Keep in mind that the stock closed at around 88 bucks a share on December 31st of last year.  More good news after the jump.

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