Just when it felt like it was safe to get back in the water, a second and potentially much meaner version of this summer’s credit crisis has reappeared. This week we look at why there are more mortgage write downs coming (in a self-fulfilling prophecy) in the financial sector, how an obscure new accounting rule is shedding light on a lot of risk in the world’s banking system, how this is all tied to the consumer and is part of the reason for the fall in the dollar. It’s a complex world, and I am going to spend a considerable part of a beautiful Friday evening in Texas trying to make it simple for you, gentle reader. That’s my job, and I love it. And since I can’t think of my usual “but first” we’ll jump right in.

I have written for some time that we are in a credit crisis brought on by a lack confidence which has the real possibility of devolving into a credit crunch which will make loans harder to get and has the potential to slow down the US economy, on top of a weakening consumer. Data released in the past few months, and again this week, have shown that banks and other lenders are tightening their standards for all sorts of loans. And it is not just that they are becoming more like an old-fashioned banker who actually wanted to know that he could get his money back. Their new found conservatism is being forced on them. But let’s start at the beginning.

The Financial Accounting Standards Board (FASB) is the referee for accounting practices. They recently issued a new rule which will be implemented November 15. Essentially, Statement 157 requires a financial firm to divide its assets into three categories called simply enough, Level 1, Level 2 and Level 3.

Under FASB terminology, Level 1 means assets that can be marked-to-market, where an asset’s worth is based on a real price, like a stock quote. Level 2 is mark-to-model, an estimate based on observable inputs which is used when no quoted prices are available. You can go get several bids and average them, or base your assumption on what similar assets sold for.

Level 3 values are based on “unobservable” inputs reflecting companies’ “own assumptions” about the way assets would be priced. That would be market talk for best guess, or in some cases SWAG (as in Simple Wild-***ed Guess.)

Financial companies have never had to break out this information. As you might expect, there is particular interest in how much and what kind of Level 3 assets a bank or brokerage firm might have. It turns out, that there may be more problems lurking in those assets than we realize.

Read it all.

One of the largest provinces in the Anglican Church has voted to “extend its jurisdiction” to cover the whole of the US.

The decision marks the formal start of a “realignment” of the Anglican Communion in the row over gays and could help stave off actual schism.

The province of the Southern Cone, which includes Argentina, Peru and Chile and is headed by expatriate British Bishop Greg Venables, is offering itself as a “safe haven” for traditionalist US dioceses that wish to secede over gays.

The plan will allow disaffected US dioceses to leave the oversight of The Episcopal Church Primat Bishop Katharine Jefferts Schori but to remain within the body of the Anglican Communion and in communion with the Archbishop of Canterbury.

According to well-informed insiders, Dr Rowan Williams, while opposed to separatist solutions to the Anglican crisis, has described the plan of Bishop Venables as a “sensible way forward.”

Read it all and also see the entry on her blog here which includes this:

The Archbishop of Canterbury’s recent letter to John Howe was apparently one of the documents which encouraged Southern Cone bishops to take this path of extending provincial jurisdiction to the US.

In keeping with laudable and true Catholic tradition, Rowan made it clear in the letter that diocesan autonomy is paramount. The Southern Cone solution also offers a means of maintaining unity while allowing a degree of separation within that unity. But it does demand a new frame of mind from archbishops and bishops, one that permits a new form of structure, with extra-geographical boundaries. This will be resisted, for reasons of ecclesiological tradition. But I do have to ask, if doctrine can be changed unilaterally, why not structure? It seems to me the latter is and should be the lesser ‘sin’, as sin it will certainly be deemed by some to be.

I have it on impeccable authority that Rowan’s response to Bishop Greg, while not exactly falling over himself with joy, was that this was a ‘sensible way forward’. Bishop Greg discussed it briefly with the Archbishop in London in September, I understand, but Greg himself declined to tell me what the Archbishop said.

Much has changed in the once-blue-collar neighborhood of Locust Point in South Baltimore. Factories have made way for pricey developments, watering holes have been displaced by upscale eateries.

But the edifice on Fort Avenue, Our Lady of Good Counsel, has stood unaltered, long a pillar for the area’s Catholics. Down the street is the Episcopal Church of the Redemption. A few blocks away is the Christ United Church of Christ, better known as the German Lutheran church.

For more than 100 years, congregants from these three churches have gone to one another’s dinners and carnivals, attended funerals and weddings together, and collaborated on bake sales and bingo nights.

So the news yesterday that the Rev. Ray Martin, pastor of Our Lady of Good Counsel, was forced to resign for offenses that included officiating at a funeral Mass with an Episcopal priest, was met with outrage. Community members of all faiths decried Archbishop Edwin F. O’Brien’s action and vowed to protest, noting how sharply it seemed to break from the emphasis on religious tolerance by his predecessor, Cardinal William H. Keeler.

“Locust Point was ecumenical before it was kosher to be,” said Joyce Bauerle, 65, who attends the Church of the Redemption. “The three churches have always worked together. We do dinners together. We work at their church. They work at our church. Christmas bazaars, Easter bazaars, we always help each other.

“This is just a big slap in the face to this whole community,” she said yesterday. “We’re appalled by this.”

Read it all.

The presiding bishop of the Episcopal Church warned the leader of the conservative Fort Worth diocese this week that he could face discipline if he continues to back proposals to separate from the U.S. church.

The warning was issued in advance of a meeting next week in which Fort Worth will consider taking steps to leave the national church over deep differences in biblical interpretation.

“I call upon you to recede from this direction and to lead your diocese on a new course that recognizes the interdependent and hierarchical relationship between the national Church and its dioceses and parishes,” Presiding Bishop Katharine Jefferts Schori said in a letter Thursday to Fort Worth Bishop Jack Iker.

Read it all.

When Gene Robinson was elected and approved as the bishop of the Episcopal Diocese of New Hampshire in 2003, it ignited a forest fire in the Episcopal Church. Robinson is the first openly gay bishop in the Episcopal diocese — a big problem for many church conservatives.

The Episcopal Diocese of Chicago, of which Kankakee is a part, will hold its election for bishop Saturday, and one of the candidates is an openly gay priest from Cleveland, the Rev. Tracey Lind.

The issue of ordaining gays and lesbians and electing them to positions of power in the church has been one of contention since before Robinson’s election, and some Episcopal churches have left the denomination to join up with the more conservative Anglican branches, like the Convocation of Anglicans in North America, which is sponsored by the Church of Nigeria.

The House of Bishops, which must approve each diocesan election, has said it will not approve Lind if she is elected, said the Rev. Frank Warthan, the priest at St. Paul’s Episcopal Church in Kankakee. He is unsure of where he stands on the topic of electing gay clergy to the top position in the church, but he is bothered that the church would even let Lind run after it has already said it won’t consider her.

“I think the diocese is being cruel for including her in that,” Warthan said, and he added that if she is elected, he thinks she should be approved.

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With the election of a new diocesan bishop on the agenda tomorrow (Nov. 10), clergy and lay delegates to Diocese of Chicago’s two-day convention in Wheeling decisively approved a resolution calling on General Convention 2009 to overturn the moratorium on the consecration of partnered homosexual candidates to the episcopacy.

“By approving this resolution we would join a growing list of dioceses who have voted to uphold the canons of our church,” said the Rev. Ruth Meyers, professor of liturgy at Seabury-Western Theological Seminary in Evanston, prior to debate. “It does not endorse a particular candidate for tomorrow’s election.”

There are eight nominees on the ballot for the election of a bishop. One is a partnered lesbian. The House of Bishops, meeting in New Orleans in late September, affirmed that the bishops would “as a body” honor Resolution B033, which calls on standing committees and bishops with jurisdiction to exercise caution before granting consent to the consecration of a partnered homosexual candidate.

About 15 people followed Ms. Meyers to the podium to speak to the motion, nearly all in favor of adoption, including the Very Rev. Gary Hall, dean and president of Seabury, who described B033 as bad legislation theologically and a violation of church law. The resolution also runs the risk of politicizing the consent process, he said.

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It’s a topic that jumped up like a stunned ferret from God’s own hot plate three separate times recently ”” indicating, I think, that I’d better pay some sort of attention to it ”” the topic being the obvious but still desperately under-discussed idea that perhaps the most dangerous problem facing man in this modern age of radical technology and dazzling scientific conundrum and otherworldly raspberry vodka and ever-expanding notions of love and sex and human interconnection is the sad and treacherous fact that, well, religion and belief as we know them in America are, by and large, far too horribly stuck, limited, fixed in time and place and stiff karmic cement.

Put another way: We as a culture just might be suffering a slow, painful death by spiritual stagnation, by ideological stasis, by cosmic rigor mortis. It has become painfully, lethally obvious in the age of George W. Bush and authoritarian groupthink that our major religious systems and foundations don’t know how to move. They don’t learn, adjust, evolve, see things anew. They don’t know how to dance. And what’s more, this little problem might just be the death of us all.

The idea is everywhere, and not just in the obvious, sour religious outhouses of evangelical Christianity and fundamentalist Islam and rigid Catholicism. It even popped up while I was in conversation with tattooed Buddhist and author of “Dharma Punx” Noah Levine at the Roxie theater during LitQuake ’07, he and I chatting about the dangers of dogma and the problem of trying to adhere too closely, too severely, to classical Buddhist rules of behavior, concluding that even Buddhism has its dangers, its limits and its issues and general theological potholes.

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Ugh.

“It’s going to take some time for these problems to work their way through the financial system,” said Matt DiFilippo, a Pittsburgh-based senior portfolio manager at Stewart Capital Advisors LLC, which has about $1 billion under management. “They might provide a cap on the market, particularly when you start to see an overflow into what most would believe are non-related sectors.”

Indeed.

A counterterrorism project in Los Angeles that would collect information about Muslim neighborhoods is drawing outrage from Islamic groups and civil libertarians who say it unjustly singles out residents based on faith and could lead to unconstitutional police tactics.
The groups complain that the Los Angeles Police Department’s “community mapping” project, which aims to prevent radicalization and homegrown terrorism, unfairly brings suspicion on Muslims.

They say it undermines trust established between Muslims and police since the 9/11 attacks and is reminiscent of how Nazis identified Jews during the Holocaust.

“This is anti-Semitism reborn as Islamophobia,” said Shakeel Syed, director of the Islamic Shura Council of Southern California. “We will fiercely resist this.”

The mapping project would collect information about specific neighborhoods but not individuals, according to Michael Downing, the LAPD’s counterterrorism chief.

Read it all.