COLORADO SPRINGS- We held posters that read SEIZE THE FED, JAIL NOT BAIL-OUT, FORECLOSE ON WALLSTREET, NO REWARD FOR HIGH RISK, and of course NO BUSH BAILOUT. When we got rebuttals, it went like this: “Why do you bring Bush into this? Bush doesn’t have anything to do with the bailout.” We needed to complain to Barack, apparently.

Bush supporters come in either the biggest pickup trucks or the rustiest. There’s probably no socio-economic divide between the voters who wanted Bush for a drinking buddy.

A Vectra Bank representative came outside to ask us if we could move from under their sign, so as not to give the false impression we were protesting their bank, particularly at a time when depositors might easily be spooked into a run on the bank. We moved nearer the Wachovia Bank, perhaps a better juxtaposition anyway.

We were prepared for the inevitable, can you suggest something better? From Karl Denninger at Market Ticker, who credits Janet Tavakoli:

1–Force all off-balance sheet “assets” back onto the balance sheet, and force the valuation models and identification of individual assets out of Level 3 and into 10Qs and 10Ks. Do it now. : (In other words, no more Enron-type accounting mumbo-jumbo and no more allowing the banks assign their own “values” to dodgy assets)

2–Force all OTC derivatives onto a regulated exchange similar to that used by listed options in the equity markets. This permanently defuses the derivatives time bomb. Give market participants 90 days; any that are not listed in 90 days are declared void; let the participants sue each other if they can’t prove capital adequacy. (If trading derivatives contracts can damage the “regulated” system, than that trading must take place under strict government regulations)

3–Force leverage by all institutions to no more than 12:1. The SEC intentionally dropped broker/dealer leverage limits in 2004; prior to that date 12:1 was the limit. Every firm that has failed had double or more the leverage of that former 12:1 limit. Enact this with a six month time limit and require 1/6th of the excess taken down monthly. (Ed: The collapse in the “structured finance” model is mainly due to too much leverage. For example, Fannie Mae and Freddie Mac had $80 of debt for every $1 dollar of capital reserves when they were taken into government conservatorship.)