Paulson's Ultimatum

• Really great bit of journalism from The Times this morning about what happened in Paulson's meeting with The Nationalized Nine two days ago. It covers in brief not only what led to the meeting, but what happened in the meeting itself, who said what, and even the terms of the deal.
  

  Indeed, several of the banks represented in the room are in need of capital. And analysts said the terms of the government’s investment are attractive for the banks, certainly compared with the terms that Warren E. Buffett extracted from Goldman Sachs for his $5 billion investment.

  The Treasury will receive preferred shares that pay a 5 percent dividend, rising to 9 percent after five years. It will get warrants to purchase common shares, equivalent to 15 percent of its initial investment. But the Treasury said it would not exercise its right to vote those common shares.

• WSJ has what amounts to a companion piece to the Times article above.
• Ed Chancellor in the Financial Times draws the obvious comparisons to economic collapses of the past. And yeah, it's a *facepalm* bit of reading:

  Bank panics always have the same origin. “Every genuine business panic springs from the same root, which is rank speculation,” wrote one Victorian commentator. Thomas Tooke, the ­early 19th century merchant and author, ascribed the British crisis of 1793 to “a great and undue extension of the system of credit and paper circulation”. A year earlier, Thomas Jefferson, observing the first financial collapse in the independent United States, noted that “our paper bubble has burst”.

• Here's some fun bailout related news, it turns out AIG executives are complete dickheads. The NY Daily News has a story about four of them shooting up pheasants in England while Rome burned. Money quote:

  "The recession will go on until about 2011 - but the shooting was great today and we are relaxing fine," AIG honcho Sebastian Preil was quoted as saying.

  Preil wasn't the least bit embarrassed that AIG, which got its first $85 billion bailout from the feds last month, needed taxpayer money to stay in business. The hunting trip came the week AIG got a second loan of $37.5 billion.

• On the campaign trail, WaPo points out that Obama's cash advantage has gone a long way towards flogging McCain into submission. The 50 state strategy, which was once considered folly, has forced McCain to lay cash he doesn't have into markets where he didn't want to spend. So even if Obama doesn't win Indiana, Missouri, Nevada or North Carolina, his investments there have served their purpose by forcing McCain to take money out of even more crucial markets like Colorado, Virginia, Florida and Ohio. It's to the point now that Obama doesn't have to defend a single Kerry state, while McCain has to run the table on what's left as a potential toss-up.
• And finally, Time's Mark Halperin asks if McCain has what it takes to rattle Obama in tonight's third and final presidenial debate. I think it's much more likely that McCain loses his cool and starts shouting at the damn kids to get off his damn lawn than he actually lands a knock-out blow, which is what he needs to get him back into this thing. In other words, the last 20 days before the election should be a processional, not a sprint.