Daily Archives: October 12, 2008
Some key decision makers in Israel fear that unless they attack Iranian nuclear enrichment facilities in the next few months, while George W Bush is still president, there will not be another period when they can rely on the United States as being anywhere near as supportive in the aftermath of a unilateral attack.
In the past 40 years there have been few occasions when I have been more concerned about a specific conflict escalating to involve, economically, the whole world. We are watching a disinformation exercise involving a number of intelligence services. Reality is becoming ever harder to disentangle.
Ed Knippers was Washington’s home-grown Michelangelo ”” a painter of larger-than-life biblical scenes known for their physicality and passion.
But his nude Davids, Bathshebas, Mary Magdalenes, Samsons and Delilahs have gotten limited acceptance in conservative circles. When he exhibited his work at Huntington College, an evangelical school in Indiana, there were so many complaints from students and the outside community that the college closed the exhibit after five days.
“Some Christians tend to be orthodox in their theology but emotionally they are gnostics,” he told me last week. “They do not like that physical stuff. But we have an incarnational religion and you have to get past that. In art, we can come to grips with our physicality and human possibilities in our body. That’s all we have here.”
The scale of the fundraising could lead to trading at the London stock market being suspended. This would give time for the market to digest the impact of the moves.
One consequence of the deal might be that Lloyds could renegotiate the terms of the HBOS takeover, although both sides are still keen for the merger to take place.
An economist who declined to be named said: “This is the biggest risk of the UK’s balance sheet ever undertaken. No-one knows the extent of the toxic assets these banks are exposed to.”
Separately, the future of Morgan Stanley, the American investment bank, is also in doubt today following a sharp sell-off of shares and warnings of a possible credit downgrade from Moody’s the ratings agency.
In short, regulation and state intervention are likely to become more fashionable than at any time since the end of the Cold War. In political science terms, it seems we’re about to veer left. Witness a Republican president’s $US700 billion example.
But few are yet asking what this might mean for social politics. Perhaps this is because it seems a separate matter to questions of economic policy. Yet it is foolish to assume that each can be quarantined from the other.
Economics is important precisely because it has the power to topple social dominoes. And it is in the realm of social politics that some of the most frightening possibilities of the financial crisis suggest themselves.
Consider the Great Depression, to which some are ominously likening this crisis. Latin America, which was hit particularly savagely because of its significant trade links with the US, retreated into a shrill form of nationalism. The result was the rise of fascism across the continent….
Graham Kendrick – the author of such painful hymns as Shine, Jesus, Shine has been included amongst a list of 50 people responsible for ruining Britain.
Being placed alongside individuals as nauseating as Paul Burrell, Jeffrey Archer and Janet Street-Porter might seem a little harsh for someone whose only crime is to have penned more happy-clappy songs than anyone else.
Four hundred at the last count.
But it’s hard to fault the argument.
Let us make no bones about it. This financial crisis is a major spiritual crisis. It is the crisis of a society that worships at the temples of consumption, and that has isolated and often abandoned millions of consumers now trapped on a treadmill of debt. It is the crisis of a society that values the capital gains of the rentier more highly than the rights of people to a home, or an education or health. It is the crisis of a society that idolises money above love, community, wellbeing and the sustainability of our planet. And it is a crisis, in my view, for faith organisations that have effectively colluded in this idolatry, by tolerating the sin of usury.
I define usury as the exalting of money values over human and environmental values; of creating money at no cost and lending at rates of interest intended to accumulate reserves of unearned income. Of reaping that which one did not sow.
Christians began to dilute the sin of usury as far back as the 1500s. John Eck, supported by the Fugger banking family, in his book Tractates contractu quinque de centum (1515), defended 5% as an acceptable rate of interest as long as the borrower and lender mutually agreed to the loan. Martin Luther took exception to this laxity, and raged that “heathen were able, by the light of reason, to conclude that a usurer is a double-dyed thief and murderer. We Christians, however, hold them in such honour that we fairly worship them for the sake of their money … Meanwhile, we hang the small thieves … Little thieves are put in the stocks, great thieves go flaunting in gold and silk.”
Brazilian Finance Minister Guido Mantega said that the president told the finance ministers that he was doing all he could to involve other countries in efforts to resolve the crisis. According to White House spokesman Tony Fratto, Bush acknowledged the problems began in the U.S., with a meltdown of the market for subprime mortgages in the summer of 2007. The president felt it was important to take the rare step of coming to such a meeting because the problems were spreading globally.
“It doesn’t matter if you’re a rich country or a poor country, a developed country or a developing country””we’re all in this together,” Bush said, according to Fratto. “We take this seriously, and we want to work with you.”
In response, the G-20 countries issued a joint statement in which the finance officials pledged to work together “to overcome the financial turmoil and to deepen cooperation to improve the regulation, supervision and the overall functioning of the world’s financial markets.”
Remember the Rule of Holes: When you find yourself in one, the first thing to do is to stop digging.
Right now we’re in one of the deepest economic holes anyone has ever seen. And what we need to do is to stop making things worse by continuing to over-rely on financial markets and financial institutions that have proven to be incapable of performing their core missions: getting capital to where it needs to go and pricing that capital in a way that reflects the risks and underlying economic values. We have to stop digging. Another week like this one, and there won’t be much left to rescue.
A year ago, Robert Paynter was comfortably retired and looking forward to years of refurbishing old cars and boating from his dock on Lake Norman in North Carolina. Over a 17-year career at Wachovia, he amassed a pile of stock and options from the bank that he had assumed would be worth more than $600,000.
But now the options are worthless, and he watched the value of his Wachovia shares shrink to about $15,000 before he sold all of them this week after the bank succumbed to the financial crisis and its stock fell to fire-sale prices. The rest of his investments are in free fall.
“It’s like having an out-of-body experience,” said Mr. Paynter, 61. “It’s like being in a hospital bed and watching yourself dying. Whatever the bottom is going to be, I wish it would just get there. It’s the every day, watching the blood drain out of it, that’s hard to take.”
But first, let me offer a note of optimism before I serve up the not so good news. This is not the end of the world. There are a lot of very positive things happening in the US and the world. Companies are creating new inventions. Much of the economy, including health care, is moving along fine. I have lived through two serious recessions (1973-74 and 1980-82), and the point is that a free-market economy will find a way to eventually get back to solid growth. Recessions are simply part of the business cycle. Congress cannot repeal the business cycle. This will not be the last recession of my life. I hope to live long enough to go through 4 or 5 more.
Depressions are caused by governments making major policy mistakes. And we have made some in the areas of not regulating mortgage lending, allowing the five large investment banks to increase their leverage to 30 or 40 to one in 2004 (what was the SEC thinking?), and failing to oversee the rating agencies. That is behind us. It will make a normal recession deeper and the recovery longer, as I have been forecasting for some time.
But as I argue below, immediate actions must be taken by the government to avoid a much deeper problem. To not take actions to stem the credit crisis would be that major policy mistake which would compound all the other mistakes. I think everyone knows the seriousness of the problem and will act. Let’s pray they do.
But whatever happens, there will be plenty of opportunity for investors and entrepreneurs to exploit. The world is on the cusp of a remarkable explosion of new technology of all sorts that will transform our lives. This march of progress went on unchecked last century, through two world wars, major depressions, numerous smaller wars, recessions, financial crises all over the world, famines and natural disasters, not to mention a lot of man-made ones.
The current crisis will pass. None of us will want to go back to the “good old days” in 20 years, for we will be living in the best of times.
They outplayed Oklahoma today in the second half and deserved to win–but that was the worst officiating in a major game in as long as I can remember. Read it all.
The landscape of American finance has been radically changed. The independent investment bank””a quintessential Wall Street animal that relied on high leverage and wholesale funding””is now all but extinct. Lehman Brothers has gone bust; Bear Stearns and Merrill Lynch have been swallowed by commercial banks; and Goldman Sachs and Morgan Stanley have become commercial banks themselves. The “shadow banking system”””the money-market funds, securities dealers, hedge funds and the other non-bank financial institutions that defined deregulated American finance””is metamorphosing at lightning speed. And in little more than three weeks America’s government, all told, expanded its gross liabilities by more than $1 trillion””almost twice as much as the cost so far of the Iraq war.
Beyond that, few things are certain. In late September the turmoil spread and intensified. Money markets seized up across the globe as banks refused to lend to each other. Five European banks failed and European governments fell over themselves to prop up their banking systems with rescues and guarantees. As this special report went to press, it was too soon to declare the crisis contained.
That crisis has its roots in the biggest housing and credit bubble in history. America’s house prices, on average, are down by almost a fifth. Many analysts expect another 10% drop across the country, which would bring the cumulative decline in nominal house prices close to that during the Depression. Other countries may fare even worse.
We in the Bedouin community do not normally discuss sensitive issues like polygamy with the general Israeli public. We have already seen that any interest that may exist among Jewish Israelis in this subject extends only to the “demographic” implications of multiple marriages among the Bedouin.
But the topic is important on a purely human level, and needs to be placed on the public agenda, because it is something that hurts us, the female members of the country’s Arab population. In fact, it is something that should interest the entire public, which rarely knows much about what’s going on next door, among the Arab citizens of the state.
Unfortunately, nearly every Bedouin woman in the Negev is at risk of becoming a “first wife” if we don’t take action against the phenomenon.
The conventional assumption about polygamy is that it is permitted in Islam. It is essential, however, to be precise about the source of the sanction in Islamic law. Hence, while there is multiple marriage that is permitted by the faith, in most cases today, the practice is being followed for social reasons alone, with no connection to the religion.
Read it all. (Hat tip: DP)
As much as members of Congress want to find scapegoats, the root of this problem is political greed in Congress. Members of Congress from both parties wanted short-term political credit for promoting home ownership even though they were putting our entire economy at risk by encouraging people to buy homes they couldn’t afford. Then, instead of conducting thorough oversight and correcting obvious problems with unstable entities like Fannie Mae and Freddie Mac, members of Congress chose to ignore the problem and distract themselves with unprecedented amounts of pork-barrel spending.