On 60 Minutes this evening, Steve Kroft examined the complicated financial instruments known as credit default swaps and the central role they are playing in the unfolding economic crisis. Interesting segment. More information about the Commodity Futures Modernization Act here.
10/26/08
Government officials worry that the collapse of a major insurer could further destabilize the financial system because of the crucial role the companies play in backstopping a wide range of financial transactions, although the direct impact on holders of car, life and other insurance policies would be modest, industry officials said.
Here’s the guy we should be listening to. One of them, anyway. If a Nobel prize winning economist says Obama is the best pick to lead us out of the financial crisis, people should listen. But hey, there’s no lack of stupid in the country.
In other words, there’s not much Ben Bernanke can do for the economy. He can and should cut interest rates even more — but nobody expects this to do more than provide a slight economic boost.
On the other hand, there’s a lot the federal government can do for the economy. It can provide extended benefits to the unemployed, which will both help distressed families cope and put money in the hands of people likely to spend it. It can provide emergency aid to state and local governments, so that they aren’t forced into steep spending cuts that both degrade public services and destroy jobs. It can buy up mortgages (but not at face value, as John McCain has proposed) and restructure the terms to help families stay in their homes.
And this is also a good time to engage in some serious infrastructure spending, which the country badly needs in any case. The usual argument against public works as economic stimulus is that they take too long: by the time you get around to repairing that bridge and upgrading that rail line, the slump is over and the stimulus isn’t needed. Well, that argument has no force now, since the chances that this slump will be over anytime soon are virtually nil. So let’s get those projects rolling.
Will the next administration do what’s needed to deal with the economic slump? Not if Mr. McCain pulls off an upset. What we need right now is more government spending — but when Mr. McCain was asked in one of the debates how he would deal with the economic crisis, he answered: “Well, the first thing we have to do is get spending under control.”
If Barack Obama becomes president, he won’t have the same knee-jerk opposition to spending. But he will face a chorus of inside-the-Beltway types telling him that he has to be responsible, that the big deficits the government will run next year if it does the right thing are unacceptable.
He should ignore that chorus. The responsible thing, right now, is to give the economy the help it needs. Now is not the time to worry about the deficit.
Video: Anderson Cooper has a segment called 10 Most Wanted. He’s listing the top 10 responsible for the financial collapse. Last night it was Alan Greenspan.
The Old Fashioned Bail-Out
Serves one (you), right.
In a double old-fashioned glass, place a thick slice of blood orange (try to keep your hands clean; if you can squeeze blood from a turnip then use that instead), a large piece of lemon peel, and a teaspoonful of sugar. Add three dashes Angostura bitters and mix with a muddler until everything is completelymuddled.
Toss in a pony of Cointreau and two jiggers of Old Overholt rye whiskey. Shake with ice, or with
trepidation, whichever is most handy, and strain into a cocktail glass. Add several ounces chilled
champagne; the $700,000,000,000.00 Dom Paulson variety if you can borrow some, although the
cheap stuff will do. The champagne will have bubbles, but at least they are small and cause no harm
when they burst. Garnish with a maraschino cherry, for a bit of forced gaiety.
Drink it while you can, or you may have to share it.
This one courtesy of: http://huffingtonpost.com/chris-hall/what-to-drink-in-a-financ_b_131189.html The Blackberry n’ Soda
Because you need all the distractions you can get when you don’t know what to do about the economy, so why not make something up, something technological and cool that you invented.
Fill glass with ice, 1/4-1/3 blackberry vodka, finish with club soda and maybe a squeeze of something
naturally sour.
Mr Fuld, who has been testifying on the financial crisis before the US House Oversight Committee, was attacked on a Sunday shortly after it was announced that the banking giant was bankrupt.
Following rumours that the incident had occurred, Vicki Ward, a US journalist, said “two very senior sources - one incredibly senior source” had confirmed it to her. “He went to the gym after … Lehman was announced as going under,” she told CNBC. “He was on a treadmill with a heart monitor on. Someone was in the corner, pumping iron and he walked over and he knocked him out cold.
“And frankly after having watched [Mr Fuld's testimony to the committee], I’d have done the same too.”
“I thought he was shameless … I thought it was appalling. He blamed everyone … He blamed everybody but himself.”
So many people 55-65 have been totally fucked after putting money into retirement accounts for years. I know MANY who planned on retiring in the next few years and now they can’t. So unfair. I’d like to know who in congress knew what, Democrat or Republican, and get rid of them. What a huge slap to the American people who have worked hard and saved for their golden years, only to watch it disappear. I wouldn’t wish death on anybody…..but I sure have visions of Wallstreet suits like Paulson, Gramm, Greenspan, Bernake and that dickwad from Lehman jumping. And while they’re at it, I’m sure there’s some politicians from both sides of the aisle they could take with them.
Americans’ retirement plans have lost as much as $2 trillion in the past 15 months, Congress’ top budget analyst estimated Tuesday. The upheaval that has engulfed the financial industry and sent the stock market plummeting is devastating workers’ savings, forcing people to hold off on major purchases and consider delaying their retirement, said Peter Orszag, the head of the Congressional Budget Office.
As Congress investigates the causes and effects of the financial meltdown, the House Education and Labor Committee was hearing from retirement savings and budget analysts on how the housing, credit and other financial troubles have battered pensions and other retirement funds, which are among the most common forms of savings in the United States.
“Unlike Wall Street executives, America’s families don’t have a golden parachute to fall back on,” said Rep. George Miller, D-Calif., the panel chairman. “It’s clear that their retirement security may be one of the greatest casualties of this financial crisis.”
Yahoo! Alerts Yahoo! News - My Alerts - Edit Alert
Tuesday, October 7, 2008, 10:08 AM PDT
WASHINGTON (AP) Bernanke: Financial crisis “has worsened” outlook for economic growth, weakness could persist.
Federal Reserve aims to unfreeze credit markets by buying loans crucial to business.
NEW YORK (CNNMoney.com) — The Federal Reserve announced a new program to help the battered market for short-term business loans - taking its closest step yet to lending directly to businesses.
The program addresses commercial paper, a form of short-term funding that is crucial to many businesses operations.
In the past month, the amount of money outstanding in commercial paper loans has fallen 11% to $1.6 trillion on Oct. 1 from $1.82 trillion on Sept. 10. Since much of the paper that was outstanding at the start of the credit crisis is now coming up for renewal, there were fears that it could drop even more sharply in the weeks to come without some drastic improvement in the market.
Under the program announced Tuesday morning, the Fed will purchase three-month unsecured and asset-backed commercial paper directly from eligible issuers. The program is slated to expire in April 2009 and will have financial support from taxpayers.
“The Treasury believes this facility is necessary to prevent substantial disruptions to the financial markets and the economy and will make a special deposit at the Federal Reserve Bank of New York in support of this facility,” said the Fed’s statement.
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