The Real News Network's Paul Jay interviews McClatchy's national economics correspondent Kevin Hall on the topic of hearings into the ratings agencies role in the Wall Street meltdown:
A very interesting post: by Karl Denninger, More Banking Fraud (Foreclosure Stats).
When does the willful blindness in terms of bank fraud taking place daily in the so-called "marks" on housing-related loans stop?
Posted by permission of Nicholas Benton, Owner/editor of the Falls Church News Press.
Obama's Stimulus and Alexander Hamilton
by Nicholas Benton
There are two things that most pundits commenting on the parameters of the Obama stimulus package don't seem to get.
First, the package is not aimed at jump-starting an economic recovery. It is designed to mitigate the impact on average Americans of a still-looming prospective, unprecedented global economic meltdown.
Second, it involves a desperately-necessary, profound and fundamental restructuring of the core elements of what constitutes value and wealth in the national economy.
On both counts, simply offering tax cuts, instead of stimulus policies, as many would prefer, is simply way off point. An undifferentiated tax break to all the same components of the present economic miasma will fix nothing. It will provide momentary relief, at best, for many of the same rotten apples that have already contaminated the national and worldwide economic barrel.
Yesterday in a comment to Breaking, Agreement Reached... (see sidebar), I posted a letter by almost 200 leading economists who criticize the bailout plan:
As economists, we want to express to Congress our great concern for the plan proposed by Treasury Secretary Paulson to deal with the financial crisis. We are well aware of the difficulty of the current financial situation and we agree with the need for bold action to ensure that the financial system continues to function. We see three fatal pitfalls in the currently proposed plan:
1) Its fairness. The plan is a subsidy to investors at taxpayers’ expense. Investors who took risks to earn profits must also bear the losses. Not every business failure carries systemic risk. The government can ensure a well-functioning financial industry, able to make new loans to creditworthy borrowers, without bailing out particular investors and institutions whose choices proved unwise.
2) Its ambiguity. Neither the mission of the new agency nor its oversight are clear. If taxpayers are to buy illiquid and opaque assets from troubled sellers, the terms, occasions, and methods of such purchases must be crystal clear ahead of time and carefully monitored afterwards.
3) Its long-term effects. If the plan is enacted, its effects will be with us for a generation. For all their recent troubles, America's dynamic and innovative private capital markets have brought the nation unparalleled prosperity. Fundamentally weakening those markets in order to calm short-run disruptions is desperately short-sighted.
This has strengthened Republican opposition to the plan. The Washington Post covers the story with the headline, Away from Wall Street, Economists Question Basis of Paulson's Plan .
Senator Richard Shelby (R-Ala.), the leading Republcan on the Senate Banking committee was interviewd on CNN yesterday, voicing his opposition to the bailout in its present form. In the interview he brandishes to the economists letter.
While Bush is putting pressure on the Congress to pass legislation to establish a Treasury dictatorship, a new story has has emerged that the legislation had been in the works for months. Hat tip to Raw Story.
In Roll Call today, Keith Koffler writes:
Asked during a telephone briefing for reporters today whether Bush was speaking with lawmakers, White House Deputy Press Secretary Tony Fratto said the president is aware of their concerns but that Paulson is the salesman."
Fratto insisted that the plan was not slapped together and had been drawn up as a contingency over previous months and weeks by administration officials. He acknowledged lawmakers were getting only days to peruse it, but he said this should be enough.
Printed with permission by Nicholas Benton, owner/editor of the Falls Church News Press
Global Financial Meltdown
by Nicholas Benton
It's becoming unclear which will bring the McCain candidacy down faster or harder: the economy or Sarah Palin.
Many of us predicted long ago that by this fall, the economy would catch up to the GOP, which since the 1970s has become synonymous with an Ayn Rand philosophy of wanton free markets and deregulation, factors that are the sole reason we are now teetering on the brink of an unprecedented global financial panic and meltdown.
Posted with permission by Nicholas Benton, Owner/Editor of the Falls Church News Press
"We're trying to come to grips with the end of a 20-year secular credit expansion that went parabolic in the last six years," the chief North American economist for Merrill Lynch said on national TV yesterday.
"The U.S. economy is at the outset of the first consumer recession since the early 1990s, and it's facing headwinds comparable to the six-quarter recession that pushed the Standard & Poors Index down 40 percent in the 1970s," David Rosenberg said in a live interview on CNBC.
"We've gone from housing to credit to employment, and now I think we're going to start to see some negative consumer spending numbers now that we're past this fiscal stimulus program," he went on.
posted by permission of Nicholas Benton, owner/editor of the Falls Church News Press Benton anticipates today's headlines on Wachovia in his latest Op Ed.
Bernanke's Good Advice
For those who blame Sen. Chuck Schumer for the failure of the IndyMac Bank in California last weekend, alleging his identification of the bank's troubles triggered a run, what are they saying now about the prominent front page headline and story in yesterday's Washington Post baring Wachovia Bank's dirty laundry? What are they saying about the fact the FBI has now launched an investigation into IndyMac?
Those who urge us to "shoot the messenger" divert attention from the realities of the unraveling U.S. economy, including the role of predator lending in it, and are appealing to those incapable or unwilling to accept things as they actually are.
So it was with President Bush's lame attempt on national TV Tuesday to blame the nation's economic woes on "psychology." This, of course, comes from the man who sold us "weapons of mass destruction in Iraq," "we don't use torture," and other bald-faced lies.