Check it out.

Under the agreement, Citigroup will absorb up to $42B of losses on a $312B pool of loans. The FDIC will absorb losses beyond that. Citigroup has granted the FDIC $12B in preferred stock and warrants to compensate the FDIC for bearing this risk. In consultation with the President, the Secretary of the Treasury on the recommendation of the Federal Reserve and FDIC determined that open bank assistance was necessary to avoid serious adverse effects on economic conditions and financial stability.

This is so typical of this nightmarish crisis we are in. Wachovia closed Friday at 10, and now it is pricing near 2. Because of the mess of what is really on these financial institutions balance sheets, no one knows what they are actually worth. Why would banks want to lend other banks when a bank like Wachovia can have this occur so quickly? How do they know that the bank they are lending to is not another Wachovia–KSH?

Update: A NY Times article is now here.

Despite all the constraints Congress supposedly wrapped around him, Treasury Secretary Henry M. Paulson is about to become the most powerful mortgage financier of the modern era — most likely of any era.

Buried beneath the 100-plus pages of detail that Paulson’s financial rescue plan has picked up during its 10-day journey from a Bush administration wish list to a bipartisan congressional compromise is the striking fact that the Treasury secretary got almost everything he sought — an eventual $700 billion and the authority to spend it largely as he sees fit.

Read it all.

Update: An article from the New York Times on the same theme is here.

But we should be under no illusions that, even if it works as well as its authors hope (a large aspiration), it is already too late to avert a serious economic downturn ”” not just for the US, but for the world and, like the residents of New Orleans that fateful weekend three years ago, we seem ill-prepared for what is about to hit us.

I say this with great reluctance. It is no business of journalists (who, as someone once said, are like harlots, who wield power without responsibility) to go around scaring people. What’s more, until a few months ago I’ve been a relative optimist, convinced that we would get through this with not much worse than the kind of mild recession we’ve seen in the past 20 years. Now I think it might be time to panic.

The US is already in a recession that, even if financial conditions returned to normal today, would still be very unpleasant. In the quarter that ends tomorrow, it seems almost certain that US total output declined. Consumer spending and investment have been alarmingly weak in the past two months. On Friday we are quite likely to get another depressing report on the labour market, expected to show the ninth straight month of job declines in September. The housing market still seems to be getting worse, with sales falling faster than new construction, adding to the excess supply.

Britain’s economic activity is already declining, as is that of most of the big eurozone countries. So much for “decoupling”. We may have got into this predicament by different routes, but we’re all going the same way.

Read it all.

Yet the Church of England has not collapsed – not quite, anyway. And the result of the Archbishop’s sabbatical in the United States is a splendid book on the wild, strange genius of Dostoevsky.

I was very glad to hear that he is quite unrepentant about having taken time off to write about the great Russian.

Rowan Williams says: “I think it is important that anyone in this sort of position does not become reactive, so your thoughts aren’t determined by what’s just come off the computer. And to keep that alive you need some sort of space.

“And I think it is some part of this job to try and keep stirring the cultural pot, even in a very limited way, and to say: when we are having all these debates about faith and atheism and science and so on, don’t let’s forget what lives of faith actually look like imaginatively, in ways that really serious writers and artists portray them, because if your view of religion is confined to a few fundamentalist platitudes, there’s no debate there. Yes, just to remind people that some imaginatively serious non-trivial, non-Pollyannaish writers have lived with this. Yes, it’s worth doing.”

Read it all.

“Terrorism, child abuse, absent fathers and the fragmentation of the family, the secularisation and the sexualisation of culture, the future of liberal democracy, the clash of cultures and the nature of national identity – so many of the anxieties that we think of as being quintessentially features of the early 21st century are omnipresent in the work of Dostoevsky, his letter, his journalism and above all his fiction. The world we inhabit as readers of his novels is one in which the question of what human beings owe to each other is left painfully and shockingly open and there seems no obvious place to stand from which we can construct a clear moral landscape. Yet at the same time, the novels insistently and unashamedly press home the question of what else might be possible if we saw the world in another light, the light provided by faith.”

Read it all.

Beleaguered Christians in India have “run out of cheeks to be struck” a senior Anglican bishop declared yesterday, on hearing reports that a Christian mob had hacked a Hindu to death in the troubled state of Orissa.

Dr Michael Nazir-Ali, the Bishop of Rochester, called for peace, and said that the murder, conducted by a knive-wielding mob of 50 Christians, could not be condoned. But he told The Times: “For months now, scores of Christians have been killed, homes, convents and presbyteries have been burnt down to the ground.”

He said: “Now one Hindu has been killed, allegedly by Christians. We do not know under what circumstances but it suggests that the worm has turned and the Christian community has run out of cheeks to be struck.”

Read it all.

(ACNS) The Archbishop of York launched the “Education For All” initiative during a session of the UN’s emergency summit on Millennium Development Goals yesterday.

Speaking in New York alongside Gordon Brown and Former US President Bill Clinton, Dr. Sentamu said: “We are half way to the 2015 MDG targets and yet 75 million children remain out of school completely. Twice as many, mostly girls, go for a short while but then drop out. We may think we are making progress on education but the facts are that too many children around the world are receiving inadequate education and in many cases, no education at all….This is a scandal for many reasons. If we do not educate our children, what hope can there be for the future? But it is also a scandal because it shows just how wrong our priorities have become.”

The “Education For All” initiative is part of the Global Campaign for Education which seeks to provide free, compulsory public education, and to meet the third of the Millennium Development Goals: universal primary education.

Highlighting the urgent need for action the Archbishop said: “As citizens, and as children of God, we need to build a society where each individual can flourish and become the whole person they were created to be. Education is part of that transformative process for us to become fully human. …Education is about finding out who we are, where we belong, and what the purpose of our lives is. It is not just about acquiring knowledge and skills ”“ the root of ‘education’ is ‘educare’ which means to ‘draw out’. We need to draw out from every person in every country, the gifts and potential they possess. As Christians, as educators, as human beings, our calling is to help others to attain their full humanity ”“ not to beat them in the race but to share with them the prize.”

Dr. Sentamu also highlighted the work of the Edith Jackson Trust, one of the charities for which he is patron, and of their work to build primary schools in Southern Sudan:

“Southern Sudan has the lowest access to education than any other country in the world, with only 20% of children enrolling at primary school and less than 2% completing primary education. For girls, this figure is less than 1%. As a result 92% of southern Sudanese women and 80% of men are illiterate….Girls in southern Sudan are more likely to die in pregnancy or childbirth than complete primary education.

“Today we need to remember that we who have received the benefits of education have a responsibility to those who went before and those who come after us. That responsibility is to pass on the learning and discernment and wisdom, and to ensure all children are able to receive the benefits of that education.”

The 110 page pdf of the whole proposed bill is here.

I have not had a chance to link to this yet.

106 pages-oh my.

The Financial Times summarizes:

The US financial services sector could be forced to reimburse the US government for any losses on its $700bn rescue plan under a breakthrough agreement that paves the way for congressional approval as early as Monday.

After a weekend of frenzied talks, Hank Paulson, the Treasury secretary, and Nancy Pelosi, the Democratic House speaker, announced early on Sunday that a tentative deal had been reached authorising the government to buy up to $700bn of troubled assets from financial institutions.

The more I understand about the current financial situation, the more I’m persuaded that some form of government bailout of the financial sector really is necessary. This is not to say that I love the Bernanke-Paulson plan. If time permitted and private financing were avilable, I’d very much prefer a plan that looked more like the Chrysler bailout, in which the government acted as a guarantor rather than a principal.

What’s not acceptable, however, are the barnacles already attaching themselves to the bailout.

Read it all.

Check it out.

I see over on Intrade that the chances of the bailout bill passing have sunk below 50 and are currently at 48.9.

Watch it all.

A breakthrough came when Democrats agreed to incorporate a GOP demand ”” letting the government insure some bad home loans rather than buy them ”” designed to limit the amount of federal money used in the rescue.

Another important bargain, vital to attracting support from centrist Democrats and Republicans who are fiscal hawks, would require that the government, after five years, submit a plan to Congress on how to recoup any losses.

Lawmakers could block half the money and force the president to jump through some hoops before using it all. The government could get at $250 billion immediately, $100 billion more if the president certified it was necessary, and the last $350 billion with a separate certification ”” and subject to a congressional resolution of disapproval.

Still, the resolution could be vetoed by the president, meaning it would take extra-large congressional majorities to stop it.

The presidential nominees came behind the outlines of the bailout.

Read it all.

Hedge funds pointed to the willingness of the Church commissioners to lend foreign stock from their £5.5bn ($10.2bn) of investments ”“ an essential support for short selling ”“ and derided the pair for not understanding shorting.

“They are trying to shoot the messenger and … deflecting attention away from the dramatic incompetence of bank executives,” said Hugh Hendry of Eclectica Asset Management, a London hedge fund. “Short selling is the pursuit of truth.”

Andreas Whittam-Smith, who as First Church Estates Commissioner oversees the Church’s assets, said the commisioners yesterday referred the practice of stock lending back to their ethical advisory group, which had previously approved it.

Read it all.

Read it all.

Yes, this bailout is necessary. This is a credit crisis, and credit crises involve a breakdown in confidence that leads to no one lending to anyone. You don’t fool around with a credit crisis. You have to overwhelm it with capital. Unfortunately, some people who don’t deserve it will be rescued. But, more importantly, those who had nothing to do with it will be spared devastation. You have to save the system.

But that is not the point of this column. The point is, we don’t just need a bailout. We need a buildup. We need to get back to making stuff, based on real engineering not just financial engineering. We need to get back to a world where people are able to realize the American Dream ”” a house with a yard ”” because they have built something with their hands, not because they got a “liar loan” from an underregulated bank with no money down and nothing to pay for two years. The American Dream is an aspiration, not an entitlement.

When I need reminding of the real foundations of the American Dream, I talk to my Indian-American immigrant friends who have come here to start new companies ”” friends like K.R. Sridhar, the founder of Bloom Energy. He e-mailed me a pep talk in the midst of this financial crisis ”” a note about the difference between surviving and thriving.

“Infants and the elderly who are disabled obsess about survival,” said Sridhar. “As a nation, if we just focus on survival, the demise of our leadership is imminent. We are thrivers. Thrivers are constantly looking for new opportunities to seize and lead and be No. 1.” That is what America is about.

Read the whole thing.

Although it was not widely known, Goldman, a Wall Street stalwart that had seemed immune to its rivals’ woes, was A.I.G.’s largest trading partner, according to six people close to the insurer who requested anonymity because of confidentiality agreements. A collapse of the insurer threatened to leave a hole of as much as $20 billion in Goldman’s side, several of these people said.

Days later, federal officials, who had let Lehman die and initially balked at tossing a lifeline to A.I.G., ended up bailing out the insurer for $85 billion.

Their message was simple: Lehman was expendable. But if A.I.G. unspooled, so could some of the mightiest enterprises in the world.

A Goldman spokesman said in an interview that the firm was never imperiled by A.I.G.’s troubles and that Mr. Blankfein participated in the Fed discussions to safeguard the entire financial system, not his firm’s own interests.

Yet an exploration of A.I.G.’s demise and its relationships with firms like Goldman offers important insights into the mystifying, virally connected ”” and astonishingly fragile ”” financial world that began to implode in recent weeks.

Although America’s housing collapse is often cited as having caused the crisis, the system was vulnerable because of intricate financial contracts known as credit derivatives, which insure debt holders against default. They are fashioned privately and beyond the ken of regulators ”” sometimes even beyond the understanding of executives peddling them.

Read it all.

Watch it all.

In an earlier post I mentioned an Adult Education possibility:

Another idea of which I am fond is called “Questions from the Heart.” You have an Adult Sunday school class explicitly devoted to questions people are wrestling with in their faith. When the class begins you ask people to come prepared with written questions ”“ which they in their hearts really need answered ”“ which the leader then reads aloud. After that first introductory class, the questions are then printed and numbered. The subsequent classes consist of taking numbered questions, several at a time, and preparing for them over the next week together. This is the kind of an environment which someone wrestling with faith sometimes finds inviting.

As it so happens, I am teaching just such a class in the parish in which I am now serving, and I thought you would be interested to see the questions which were submitted:

1. Over the past years I have lost a number of animals. This has been very difficult for me. Is it possible that animals have a soul and that there is a place beyond the grave for them? Will I ever see them again?
2. Does God change his mind? In other words, how effective are my prayers if God already has his eternal plan and has his mind made up?

3 I have a deep desire to be filled by the Holy Spirit and to live a life of “intimacy” with God. Is it right for me to desire a filling experience that engages the senses as well as the mind? (a vision, experience, etc.)

4. Does our church teach that infant baptism saves or in some way guarantees the future salvation of that infant? Do we believe in baptismal regeneration? In other words, if I have received the sacrament of baptism and confirmation does this assure some measure of salvific grace? I have been told that by some Episcopalians.

5. I struggle with the issue of innocents suffering. We are told that God’s plans are always wise and always perfect, so why is there so much suffering? What’s the difference between justice and punishment? Why the feeding of the 5,000 by Christ and the wandering Israelites being sent quail only to be stricken with a plague and killed? Why the stricken tribes in Numbers 16 and total grace for Christ’s persecutors?

6. I also struggle with forgiveness. Before coming to the altar to receive I find myself asking for forgiveness for not being able to forgive someone. (I don’t ever expect this person to ask for forgiveness) I think sometimes I have forgiven and feel wonderful about receiving communion, then something happens to remind me about the wrong and I have to start the process of forgiveness over again. Which is worse…receiving without forgiving, forgiving and taking back or not receiving at all (which I have had do at times)? I do realize there is a difference between forgiving and forgetting (I don’t think I’ll ever be there!!)

7. In the presidential primaries, with Mitt Romney running, a lot of attention was paid to his Mormon faith, but I found a number of the articles confusing. Is Mormonism Christian or not? Some articles said yes, but others said no. I need to have this clarified.

8. How can a loving God send someone””especially someone who is precious to me””to hell?

9. I have a personal issue in my family, in that one parent has treated the other parent and the children very badly. This would be an issue in either case, but in our situation it is the father. It has created a crisis of faith especially for the children””how do I help them deal with this?

10. What significance does the color blue have when you pray? Sometimes
when I’m praying I see the most brilliant beautiful color of blue and I’m not sure what it means.

11. How do you recognize God’s answer to prayer?

12. One of the biblical concepts I struggle with the most is the idea of election, that people become God’s people only because God chooses them and enables them to come to faith in him. Does this not mean that God chooses some and not others? How do I reconcile this with God’s goodness and love?

13.besetting sin– How do you truly pray for God to heal you of a besetting sin, that you know in your heart is wrong, and for the most part you can live in victory over this sin, But it is happened unto them according to the true proverb, The dog is turned to his own vomit again; and the sow that was washed to her wallowing in the mire. (II Peter 2:22)
As the passage states you return to the sin ??? I have grown weary in the battle of this debt and the failure of company’s bankruptcy only reminds me daily of the besetting sin in my life. I want to believe that the LORD one day will take all the failures of my life and use them for HIS good. But some days more now than before when I go to work I feel my self drifting into this state on mind that I would welcome the loss of every thing and just live a simple and uneventful life as [the rector] mentioned in his sermon today. Knowing very well the hurt and pain I would cause [my wife], my family and the dedicated employees that have been through the muck and the mire with me. one of our foreman told [my wife] last week that he will be with us as long as we continue.
So how do I release the slothfulness in my heart when I know it is wrong, but yet I really don’t give it up to the LORD, I just wallow in it and pretend I am working hard, when I am really letting many people down and not really caring of the hurt that I may be causing ???

14. Discerning God’s Will:
The words come easy, in the prayer for God to show me his Will, but the deep heart searching true discernment is not always truly there. I think sometimes I have a revelation that this is really what God is calling me to do then the reality of the commitment comes to the surface and I sink back into the routine of the day to day existence. So how do you know when it truly God’s Will and not my own???

Congressional leaders and the Bush administration this morning said they had struck an accord to insert the government deeply into the nation’s financial markets, agreeing to spend up to $700 billion to relieve Wall Street of troubled assets backed by faltering home mortgages.

House and Senate negotiators from both parties emerged with Treasury Secretary Henry M. Paulson Jr. at 12:30 a.m. from a marathon session in the Capitol to announce that they had reached a tentative agreement on a proposal to give Paulson broad authority to organize one of the biggest government interventions in the private sector since the Great Depression.

Full details of the plan were not immediately available. Lawmakers said their staffs would be working through the night to assemble the package and post it on the Internet.

Read it all.

A bio with a picture at the bottom is here.

James Duane’s big plans for Duanesburg never quite materialized, but the modest wooden church he built about a mile west of the small hamlet named after him has endured for more than 200 years.

Christ Episcopal Church, built in 1793, stands now much as it did two centuries ago. The only major difference is a tower that was added in 1811, the money for that coming from one of Duane’s daughters. Situated on Route 20 at Duanesburg Churches Road in the town of Duanesburg, the church is a plain but dignified two-story white building that was added to the National Register of Historic Places in 1987.

“There are four very special historic buildings in Duanesburg, and that church is foremost among them,” said town of Duanesburg historian Arthur D. Willis. The Duane Mansion, the North Mansion and the Quaker Meeting House round out his list. “You can tell a lot of care went into the building of that church, and the congregation and the different ministers over the years have done a great job taking care of the building and preserving it.”

Read it all.

Each [side] says it’s the only true Diocese of San Joaquin.

As in a bitter divorce, each claims to be noble but wronged. One has the house, the other, at least for now, rents an apartment with help from Mom. Though children struggle with loss, each spouse is glad to be free.

“We have that kind of fervor that you would have found in the early church,” said Nancy Key, spokesman for the reorganized Episcopal diocese

The other side is no less exuberant.

“We’ve been able to get about the gospel and doing our work as a church without being distracted by the kinds of arguments that folks seem to want to get into in the Episcopal Church. We’re not about trying to change the church. We are trying to be the church as best we can and as imperfect as it is,” said Rev. Carlos Raines, who has remained rector of St. James Cathedral.

When the diocese voted in september 42 of 48 parishes chose to leave the Episcopal Church, leaving six buildings in Episcopal hands and fragments of other congregations in community centers or rented churches.

Although much about San Joaquin’s experience is unique, its story is instructive about the problems that may lie ahead for the Episcopal Diocese of Pittsburgh, which will vote Saturday on whether to join San Joaquin in seceding.

Read it all.

It has become fashionable to fret that the current crisis on Wall Street marks the end of American capitalism as we know it. “This massive bailout is not the solution,” Sen. Jim Bunning (R-Ky.) warned Tuesday. “It is financial socialism, and it is un-American.” It is neither. The near-collapse of the U.S. financial system and Washington’s sudden and massive intervention to try to shore it up certainly mark a major turning point, but a bailout would represent a thoroughly American next step for our economic system — and one that will probably lead to better times.

Americans may assume that the basics of capitalism have been firmly established here since time immemorial, but historical cataclysms such as the Great Depression strongly suggest otherwise. Simply put, capitalism evolves. And we need to understand its trajectory if we are to bring our economic system into greater accord with the other great source of American strength: the best principles of our democracy.

No, our economy is not a shining example of pure unfettered market forces. It never has been. In his farewell address back in 1796, 20 years after the publication of Adam Smith’s “The Wealth of Nations,” George Washington defined the new republic’s own distinctive national economic sensibility: “Our commercial policy should hold an equal and impartial hand; neither seeking nor granting exclusive favors or preferences; consulting the natural course of things; diffusing and diversifying by gentle means the streams of commerce, but forcing nothing.” From the outset, Washington envisioned some government involvement in the commercial system, even as he recognized that commerce should belong to the people.

Capitalism is not really the best word to describe this arrangement. (The term was coined in the late 19th century as a way to describe the ideological opposite of communism.) Some decades later, people began to use a better term, “the American system,” in which the government involved itself in the economy primarily to develop what we would now call infrastructure — highways, canals, railroads — but otherwise let economic liberty prevail. I prefer to call this spectacularly successful arrangement “financial democracy” — a largely free system in which the U.S. government’s role is to help citizens achieve their best potential, using all the economic weapons that our financial arsenal can provide.

So is the government’s bailout a major departure? Hardly. Today’s federal involvement offers bailouts as a strictly temporary measure to prevent a system-wide financial calamity. This is entirely in keeping with our basic principles — as long as the bailout promotes, rather than hinders, financial democracy.

Read it all.

That would be New York City’s Nehemiah program. The program started about 30 years ago by several church groups in the Bronx who saw row after row of desolation and sought to change it.

The groups set forth strict income guidelines to make sure that the homeowners had a sense of ownership over the homes and that they would fulfill their obligations. Those guidelines mean people are less likely to get in over their heads:

In the 27 years since the program started, fewer than 10 of the 3,900 households have defaulted on mortgages, a rate that is close to zero, said Michael Gecan, a senior organizer with the Metro Industrial Areas Foundation, one of the forces behind the program.

“We demanded down payments,” Mr. Gecan said, “and we resisted government attempts to have us waive down payments. Over the last six or eight years people kept suggesting various programs with zero down. We kept saying, ”˜That’s ridiculous ”” that’s how you get into mass foreclosures.’”

Read it all.

We have not always put children first in recent times. They have been the victims, in Britain, of the breakdown of marriage, the instability of families, changes in work practices, and the consumerisation of society. We still have a long way to go in making ours a child-friendly society. In February 2007 a Unicef survey of 21 industrialised nations found Britain’s children the unhappiest of all. Children are always vulnerable. They are dependent on others. They have no vote and all too little voice. There are many different interpretations of the famous passage in the Bible ”” we read it on the second day of the new year ”” about the binding of Isaac, but I read it as God’s command to Abraham, and through him to us: Do not sacrifice your children. Isaac lives. God countermands his earlier request. Ever afterward, throughout the Bible, child sacrifice is seen as the most heinous of all sins.

There are many ways in which children can become victims, but none is justified. All too often, nations are driven by a sense of the past: there are grievances to be redressed, honour to be recovered, past glory to be regained. Yet we would have a more peaceful and constructive world if we looked to the future, of which our children are the symbol and the beneficiaries.

If we put children first, we would, I believe, have a saner society and a less conflict-filled world. The rabbis said that the Universe only survives because of the innocent chatter of children.

Read it all.