Running down the press:
Years ago in Phoenix, a huge, top-heavy, out-of-control cement-pumping truck crushed four lanes of cars at a stoplight on a busy street.
Not only awful but an awesome sight.
The same kind of feeling you get watching the out-of-control Wall Street schnooks flattening us.
Shock and awe, and we gave Wall Street its weapons of mass destruction.
Naturally, the Wall Street Journal has extensive coverage, but try the “Crisis on Wall Street” collection of stories at London’s Financial Times.
That said, Eric Lenkowitz‘s lede in this morning’s Post is a suitable on-the-scene report:
And what injuries did we onlookers suffer? Another Post story, this posted at 4 a.m., provides some answers: “NY WILL TAKE $1B HIT: GOV.”
Yeah, but what about us? What about, for instance, the state and city pension funds? Further down, the story notes:
We’ll see about that, because the fallout from Wall Street’s greed will be long-lasting. The numbers are scary:
The state’s $154 billion pension fund owns about 5 million shares of Lehman common stock.
Jim Fuchs, a spokesman for State Comptroller Tom DiNapoli, said losses from Lehman could total about $400 million.
Lehman shares held by the state were worth about $80.6 million at the start of September and were valued at $1.05 million yesterday.
The New York State Teachers $100 billion pension also held an estimated 2.2 million Lehman shares. Officials didn’t return repeated calls about the fund’s potential losses.
The teachers’ pension shares were worth about $36 million at the start of this month and about $462,000 yesterday.
Set aside those worries for a minute so you can read an excellent story that helps explain why this happened: David Lightman‘s “Wall Street crisis is culmination of 28 years of deregulation.” The McClatchy piece is stark from the start:
After a “shit happens” explanation from the Milken Institute (an org set up by former Wall Street junk-bond goniff Michael Milken) — “They just haven’t done a particularly good job” — Lightman extracts a great quote from someone who brings this crisis down to our level:
Sardonic, and then Lightman gets right to it. Not trusting that people will read down into his story, I hand you this long backgrounder passage:
On Monday, one Wall Street bank, Lehman Brothers, filed for bankruptcy protection and another, Merrill Lynch, sought comfort by selling itself to Bank of America for $50 billion. Earlier this year, the government helped enable the sale of faltering investment bank Bear Stearns to J.P. Morgan Chase, and more recently took over mortgage giants Fannie Mae and Freddie Mac.
Such troubles were supposed to have been prevented, or at least mitigated, by regulatory systems that the nation began to put in place after the banking system collapsed at the start of the Great Depression.
Many banks at the time were badly wounded by their personal and financial ties to securities trading. The 1933 Glass-Steagall Act, and later the 1956 Bank Holding Company Act, mandated the separation of banks, insurance companies and securities firms.
Those and many other federal laws stabilized the banking and securities markets, but by the 1970s, a stumbling U.S. economy led to a change in America’s political-economic values. Ronald Reagan led a movement that came to power in 1980 proclaiming faith in free markets and mistrust of government. That conservative philosophy has dominated America for the past 28 years.
Even after taxpayers had to rescue deregulated savings and loans, or S&Ls, with a $200 billion bailout in the late 1980s, the push to loosen regulation paused only briefly.
In 1999, President Clinton signed the Financial Services Modernization Act, which tore down Glass-Steagall’s reforms by removing the walls separating banks, securities firms and insurers.
Under President Clinton and his successor, the government became eager to promote home ownership. Interest rates were low, the market grew for loans to borrowers with weak credit and private-sector mortgage bonds boomed. About 38 percent of those bonds were backed by subprime loans. They are at the root of today’s financial crisis.
Just this past July 25, the Wall Street Journal laid out some of that history:
The housing and financial crisis convulsing the U.S. is powering a new wave of government regulation of business and the economy.
Federal and state governments alike are increasingly hands-on in their effort to deal with failing businesses, plunging house prices, worthless mortgages and soaring energy prices. The steps add up to a major challenge to the movement toward deregulation that has defined American governance for much of the past quarter-century since the “Reagan Revolution” of the early 1980s. In fact, some proponents today of a bigger oversight role for government are Republican heirs to the legacy of President Reagan.
Too late, of course.
I mentioned Glass-Steagall in a February 2005 item, but stupidly I buried it in a general rant about Bush and the war. Here’s the relevant passage:
Back to the present: There’s much more meat in Lightman’s McClatchy piece today, so check it out.
Al Jazeera: ‘Markets devastated in Lehman’s wake’
By the way, don’t assume that this major Muslim medium is knee-jerk anti-Jewish. Or, maybe you can assume that.
Its coverage this morning includes a humane perspective about “the average American” that many U.S. outlets don’t match. And the perspective is from a guy who’s obviously Jewish:
“The customer is very squeezed right now, houses are worth nothing, people are up to their ears with credit cards debt,” he said, describing the situation as a “confidence crisis”.
“We’ve been making a lot of money from cheap money . . . we are the pinnacle of greed . . . we’re going to pay for it all the way through next year. The bleeding is going to haemorrhage.”
Of course, the other way to look at this quote is that Al Jazeera‘s millions of anti-Jewish readers in Arab countries get to have their prejudices confirmed by hearing a Jewish banker say, “We are the pinnacle of greed.”
Wonder if Adelman realized how his observation about greed — accurate but applicable also to Wall Street’s non-Jews — would be used.
Wonder if Al Jazeera called an obviously Jewish banker just for that purpose.
Wonder if Adelman will tell Al Jazeera the next time it calls, “No comment.”
At the other end of the scale of sophisticated agitprop this morning, Thomas DeFrank‘s lede:
Really. No insane expert knows, either. And no sane expert would brainlessly declare who’s a “hotter commodity.”
If you want something of substance about Palin — and also a good read — check out Steve Coll‘s piece in the latest New Yorker. In “The Get,” Coll (a former Washington Post managing editor who penned the scintillating Afghan War book Ghost Wars and kicked ass on the Pat Tillman story four years ago), notes:
She confirmed that she has never been abroad, apart from visits to Canada and Mexico, and a recent trip “that changed my life” to Kuwait and Germany, where she met American soldiers. She also said that she has never had occasion to meet a foreign head of state. She added, a little defensively, “If you go back in history and if you ask that question of many Vice-Presidents, they may have the same answer.”
Perhaps she was thinking of the antebellum period. Since the dawn of the atomic age, of the thirty-one other Vice-Presidential candidates nominated by both major political parties, perhaps only Spiro Agnew, a governor of Maryland, had comparably scant exposure to the world beyond the United States at the time of his selection. However, Agnew did earn a Bronze Star during military service in France and Germany during the Second World War. (His Vice-Presidency ended with his resignation, in 1973—something to do with bribery payments, handed over in brown paper bags.)
Coll does give the Ashley Banfield lookalike her due, though Palin’s positive attributes still don’t justify her being a veep nominee — let alone the fact that she’s not as smart as Banfield:
Daily News: ‘Bronx man hacks up ex, hides remains’
Speaking of cement and death . . .
Julio Flores, 32, even called the family of Jaritza Calderone, 28, to tell them they’d never see her again.
Daily News: ‘The Milkman and His Wife’
“Johnny, get up,” she said. “Your father is killed.”
She guided the boy into her bedroom so he could have a look.
Chris Rovzar‘s Daily Intel post yesterday is still well worth reading, in part because of the many links he provides to statements and stances by Obama and McCain.
Over at the Washington Post this morning (“Economy Becomes New Proving Ground For McCain, Obama”), Dan Balz and Robert Barnes provide a play-by-play of the candidates’ latest reactions.
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