“I’ve had people say: ‘what’s with the Episcopal Church? They’re open to everybody’,” she said, noting that many such group are offered only to congregation members. Trinity Church in Princeton offers a similarly unrestricted job-seekers group, she added.

Johnson also predicted that the newly “reduced profile[s]” of many of the area’s employers will mean reduced incomes for people who do keep their jobs. That reduction could mean changes in local economies, she added.

Sandra McPhee, a lawyer who belongs to St. Matthew’s Episcopal Church in Evanston, Illinois, and the chair of the Consortium of Endowed Episcopal Parish’s endowment committee, told ENS that she expects that Episcopal parishes with endowments of all sizes are consulting their investment experts and “taking a wait-and-see attitude.” While the consortium does not give investment advice and does not track how member parishes invest, McPhee said the best investment strategy in times like this is one of prudence based on the advice of a trusted adviser.

McPhee, who is also a member of the Episcopal Church’s Executive Council, participated in the Eucharist at St. Matthew’s this past Sunday (during which her two-month-old granddaughter was baptized) and recalled that rector Jane Henderson acknowledged in her sermon that “everyone’s antsy, everyone’s nervous.”

Read it all.

President Bush appealed to the nation Wednesday night to support a $700 billion plan to avert a financial meltdown on Wall Street, and he invited both major presidential candidates to join him and Congressional leaders at the White House on Thursday to forge a bipartisan compromise.

Warning that “a long and painful recession” could occur if Congress does not act quickly, Mr. Bush said the consequences could play out in “a distressing scenario,” including potential bank failures, job losses and inability for ordinary Americans to borrow money to buy cars or send their children to college.

“Fellow citizens, we must not let this happen,” he said.

The address, and the extraordinary offer to bring together Senator Barack Obama, the Democratic presidential nominee, and Senator John McCain, the Republican, just weeks before the election underscored a growing sense of urgency on the part of the administration that Congress must act to avert a far-reaching economic collapse.

It was the first time in Mr. Bush’s presidency that he delivered a prime-time address devoted exclusively to the economy, and it came at a time when deep public unease about shaky financial markets has been coupled with skepticism and anger directed at a government bailout that would be the most expensive in American history.

Read it all.

Unfortunately, there were also some serious negative consequences, particularly in the housing market. Easy credit — combined with the faulty assumption that home values would continue to rise — led to excesses and bad decisions. Many mortgage lenders approved loans for borrowers without carefully examining their ability to pay. Many borrowers took out loans larger than they could afford, assuming that they could sell or refinance their homes at a higher price later on.

Optimism about housing values also led to a boom in home construction. Eventually the number of new houses exceeded the number of people willing to buy them. And with supply exceeding demand, housing prices fell. And this created a problem: Borrowers with adjustable rate mortgages who had been planning to sell or refinance their homes at a higher price were stuck with homes worth less than expected — along with mortgage payments they could not afford. As a result, many mortgage holders began to default.

These widespread defaults had effects far beyond the housing market. See, in today’s mortgage industry, home loans are often packaged together, and converted into financial products called “mortgage-backed securities.” These securities were sold to investors around the world. Many investors assumed these securities were trustworthy, and asked few questions about their actual value. Two of the leading purchasers of mortgage-backed securities were Fannie Mae and Freddie Mac. Because these companies were chartered by Congress, many believed they were guaranteed by the federal government. This allowed them to borrow enormous sums of money, fuel the market for questionable investments, and put our financial system at risk.

The decline in the housing market set off a domino effect across our economy. When home values declined, borrowers defaulted on their mortgages, and investors holding mortgage-backed securities began to incur serious losses. Before long, these securities became so unreliable that they were not being bought or sold. Investment banks such as Bear Stearns and Lehman Brothers found themselves saddled with large amounts of assets they could not sell. They ran out of the money needed to meet their immediate obligations. And they faced imminent collapse. Other banks found themselves in severe financial trouble. These banks began holding on to their money, and lending dried up, and the gears of the American financial system began grinding to a halt.

With the situation becoming more precarious by the day, I faced a choice: To step in with dramatic government action, or to stand back and allow the irresponsible actions of some to undermine the financial security of all.

Read it all.

Mr Paulson’s proposal to purchase distressed mortgage-related securities poses a classic problem of asymmetric information. The securities are hard to value but the sellers know more about them than the buyer: in any auction process the Treasury would end up with the dregs. The proposal is also rife with latent conflict of interest issues. Unless the Treasury overpays for the securities, the scheme would not bring relief. But if the scheme is used to bail out insolvent banks, what will the taxpayers get in return?

Barack Obama has outlined four conditions that ought to be imposed: an upside for the taxpayers as well as a downside; a bipartisan board to oversee the process; help for the homeowners as well as the holders of the mortgages; and some limits on the compensation of those who benefit from taxpayers’ money. These are the right principles. They could be applied more effectively by capitalising the institutions that are burdened by distressed securities directly rather than by relieving them of the distressed securities.

The injection of government funds would be much less problematic if it were applied to the equity rather than the balance sheet. $700bn in preferred stock with warrants may be sufficient to make up the hole created by the bursting of the housing bubble. By contrast, the addition of $700bn on the demand side of an $11,000bn market may not be sufficient to arrest the decline of housing prices.

Something also needs to be done on the supply side. To prevent housing prices from overshooting on the downside, the number of foreclosures has to be kept to a minimum. The terms of mortgages need to be adjusted to the homeowners’ ability to pay.

Read it all.

I will take comments on this submitted by email only to at KSHarmon[at]mindspring[dot]com.

President Bush readied a prime time speech to the nation and Treasury Secretary Henry Paulson accepted a major change in legislation for a $700 billion bailout of the financial industry on Wednesday as the administration scrambled to prevent further deterioration in the economy.

Republican officials said that Paulson had bowed to demands from critics in both parties to limit the pay packages of executives whose companies benefit from the proposed bailout. They spoke on condition of anonymity because Paulson’s decision had not been formally announced.

White House officials said Bush’s speech would dwell on the financial crisis.

Press secretary Dana Perino said the president wants to tell the American people how the crisis affects them and help them understand the depth of the problem.

Read it all.

AN OPEN LETTER OF SUPPORT TO BISHOP BOB DUNCAN
24th September 2008

The Rt. Rev. Robert Duncan
Pittsburgh, PA USA

Dear Bishop Duncan,

I greet you in the name of our Lord Jesus Christ, the name above all names, and the One who is the same yesterday, today, and forever. I have very intentionally addressed this letter to you as Bishop Duncan, for, indeed, you are a Bishop.

I was upcountry tending to pastoral business when the TEC House of Bishops took their vote to supposedly depose you, so I am very sorry that I could not add my name at the time to the very good statement issued by my esteemed colleagues, Archbishops Venables, Gomez, and Nzimbi. I hope you know of the unqualified support you have from me and our entire House of Bishops.

In 2004, when the Church of Uganda broke communion with TEC, we stated that, although we were breaking communion with TEC, we remained in communion with you, the Diocese of Pittsburgh, and all who uphold the historic and Biblical faith of Anglicanism and did not support the unbiblical decision of confirming the election of Gene Robinson to the episcopate.

Despite the shameful action taken last week by the majority of TEC Bishops, nothing about our position has changed. We continue to recognize you as a Bishop of the One, Holy, Catholic, and Apostolic Church. We continue to recognize you as a Bishop in good standing in the Anglican Communion, and we whole-heartedly support the action of Archbishop Greg Venables and the House of Bishops of the Province of the Southern Cone to receive you into their House of Bishops. We continue in full communion with you and we do not recognize the action of the TEC House of Bishops to depose you.

Furthermore, we are praying that on 4th October the majority of the Diocese of Pittsburgh will vote to be reunited with you as their Bishop. When the King of Buganda tried to destroy the Christian movement in 1886 by killing the converts in his court, he instead fueled the spread of the Gospel among our people. I believe that can also happen in North America. So, do not be discouraged. Our God is a God of redemption, and He will take what was intended for evil and bring good out of it.

Finally, if the world couldn’t see it before, this vote reveals how spiritually lost TEC is and why North America needs a new Province that authentically represents historic and Biblical Anglicanism. The Instruments of the Anglican Communion could have averted this crisis. Instead, institutional inertia is preferred, and meanwhile, the tear in the fabric of our communion is now deeper and wider, the mission of the church suffers, and many people miss out on hearing the good news that a Saviour has come.

I look forward to the day when you are not only the Moderator of the Common Cause Partnership, but when we can also welcome you to the table of Primates as the Archbishop of a new, Biblically faithful Province in North America. May the Lord grant you wisdom and apostolic favour as you lead that movement, and may He add daily the number who are being saved.

Yours, in Christ,

The Most Rev. Henry Luke Orombi

ARCHBISHOP OF CHURCH OF UGANDA.

The biggest problem Paulson faces, though, is that the American people don’t seem to have understood that the crisis on Wall Street could spread to Main Street with very painful consequences. “We just haven’t communicated as well as we need to,” Paulson acknowelged this morning. “The average American looks at this as being about Wall Street, and they’re angry, and I’m angry too. There have been huge excesses and flaws in the system, but the average American doesn’t understand the implications this has for them: money needs to flow through the system so that every American business virtually every day can operate the way it needs to.”

Paulson faces other problems on Capitol Hill too. Both parties in Congress are by now deeply skeptical of any new Administration demands for increased executive authority and are vehemently pushing for more oversight of how Treasury will manage the bailout. The Paulson plan is bigger in that regard than just about anything Bush asked for in the war on terror. Section eight of the proposal he sent to Congress says, for example, “Decisions by the Secretary pursuant to the authority of this Act are non-reviewable and committed to agency discretion, and may not be reviewed by any court of law or any administrative agency.”

Senators and Representatives feel most keenly uncomfortable about the nasty politics of the deal. In an election year dominated by a bad economy, it’s not good to throw huge money at a bunch of Wall Street firms, especially when each party is worried the other is going to bluff and ultimately try to use the deal as a populist rallying cry. This is compounded by the fact that Paulson just happened to lead one of the biggest market players, Goldman Sachs, before coming to Treasury. In that role, he acknowledges, he placed a lot of the bad debt that the now defunct Fannie Mae and Freddie Mac were peddling. “Yeah, I and everyone else placed Fannie and Freddie debt,” he says, but “We didn’t create this system and this was a mess that had to be cleaned up.” He also acknowledges that he put the former Fannie Mae head, Jim Johnson, on the board of Goldman, and that Johnson chaired Paulson’s compensation committee.

All of this, however, will not be enough to blow out the deal, because the consequences of a collapse in the so-called shadow banking system would be much worse.

Read it all.

The Archbishop of Canterbury, Dr Rowan Williams, was today branded a ”˜papal puppet’ after he became the first leader of the Church of England to accept visions of the Virgin Mary at Lourdes as historical fact.

He asserted that 18 visions of Our Lady allegedly experienced by Bernadette Soubirous in 1858 were true.

His words shocked millions of Protestants worldwide because they not only signified a break with Protestant teaching on the Virgin Mary but also Dr Williams’s personal acceptance of the Catholic doctrine of the Immaculate Conception, which is explicitly linked to the apparitions.

The archbishop made his remarks during a three-day visit to the shrine in the French Pyrenees – the first ever by a leader of the Church of England.

Read it all.

The difference between what banks and the Treasury pay to borrow money for three months, the so-called TED spread, was 2.73 percentage points earlier today, the highest since Sept. 18, when it was 3.13 percentage points, the most since Bloomberg began compiling the figures in 1984.

A chart is here and, no, this isn’t good at all, as 3 where it hit today and last Thursday is at 1987 stock market crash levels.

Update: There is much more here, including a longer term short.

And so, instead of mild medication and rest, it became apparent that quadruple bypass surgery is necessary. The extreme measures are extended government guarantees and the formation of an RTC-like holding company housed within the Treasury. Critics call this a bailout of Wall Street; in fact, it is anything but. I estimate the average price of distressed mortgages that pass from “troubled financial institutions” to the Treasury at auction will be 65 cents on the dollar, representing a loss of one-third of the original purchase price to the seller, and a prospective yield of 10 to 15 percent to the Treasury. Financed at 3 to 4 percent via the sale of Treasury bonds, the Treasury will therefore be in a position to earn a positive carry or yield spread of at least 7 to 8 percent. Calls for appropriate oversight of this auction process are more than justified. There are disinterested firms, some not even based on Wall Street, with the expertise to evaluate these complicated pools of mortgages and other assets to assure taxpayers that their money is being wisely invested. My estimate of double-digit returns assumes lengthy ownership of the assets and is in turn dependent on the level of home foreclosures, but this program is, in fact, directed to prevent just that.

In effect, the Treasury will have the fate of the American taxpayer in its hands. The Resolution Trust Corp., created in the late 1980s to deal with the savings and loan crisis, dealt with previously purchased real estate, which was flushed into government hands with a “best efforts” future liquidation. Today, the purchase of junk mortgages, securitized credit card receivables and even student loans will be bought at prices significantly below “par” or cost, and prospectively at levels allowing for capital gains. This is a Wall Street-friendly package only to the extent that it frees up funds for future loans and economic growth. Politicians afraid of parallels to legislation that enabled the Iraq war are raising concerns about a rush to judgment, but the need for speed is clear. In this case, there really are weapons of mass destruction — financial derivatives — that threaten to destroy our system from within. Move quickly, Washington, with appropriate safeguards.

Read it all.

Read it carefully.

Very soon thereafter, CNBC said it was not true.

Journalists like simple stories with clear-cut villains who are easy for readers (and journalists themselves) to recognize. And so, as the financial crisis has brought Wall Street to its knees in recent weeks, it’s become so much easier for journalists to cope. Time Magazine, for instance, tells us in its current issue that Wall Street “sold out” America, while the New York Times decries “Wall Street’s ”¦.real estate bender.” John McCain has helped out the scribes by attributing the problems we now face to greed on Wall Street.

Listening to this sort of chatter, it’s easy to forget that this mess began with a heap of bad mortgages made by American consumers who never came within a hundred miles of the card sharps on Wall Street. The inability (and in a good deal of cases, the unwillingness) of these same ordinary Americans to pay back these loans, many of which are sitting in mortgage backed-securities held by institutions around the world, helped tilt us toward this systemic threat to our financial system. And even as we focus on bad bets and lousy leverage ratios on Wall Street, these toxic mortgages continue to unwind, and as they do, we are getting a better look at how they were made””and it’s not pretty. If it wasn’t clear before, it should be now, that speculation and fraud””much of it on the part of borrowers””were rampant.

As I have observed before, mortgage fraud soared in the run-up to this mess, and believe it or not, it’s continuing to rise. The FBI says that reports of suspicious mortgage activity increased by 10-fold from 2001 through 2007, and rose another 42 percent in the first quarter of 2008.

As I continue to insist, this is only part of the story that has four parts, but it is a part which cannot be ignored. I am afraid in many more instances than people want to admit, the lender was so incentivized to make the mortgage that he or she did not present it to the would be borrower realistically and truthfully. Read it all–KSH

As Setser and Duy pointed out, we got a subsidy of $1000 a person from our friendly foreign funding sources. The bailout bill $700 billion figure (which could be larger, since that is the maximum outstanding at any one time; the real limit is the increase in the debt ceiling) amounts to $2000 a person. Will our creditors play ball and lend us the money? It isn’t at all clear that they will, at least at current interest rates. They have become decidedly cool on buying agency paper. The man on the street in Asia and Europe is taken aback by the events of the last two weeks. Funding the US has become controversial in China, and may be in other major lenders. And a rise in interest rates would considerably undermine the supposed benefits of the program.

The sorry fact is the US has consumed at an unsustainable level. We need to reduce consumption and increase savings (and reducing debt is a form of savings).

Read it all and especially take the time to look at the main useful charts.

The most obvious solution is to pay more than 25 cents on the dollar and then demand something in return for the premium ”” namely, a stake in any firm that participates in the bailout. Congressional Democrats have been pushing for such a provision this week, and it’s one of the most important things they have done.

The government would then be accomplishing three things at once. First, it would take possession of the bad assets now causing a panic on Wall Street. Second, it would inject cash into the financial system and help shore up firms’ balance sheets (which some economists think is actually a bigger problem than the bad assets). And, third, it would go a long way toward minimizing the ultimate cost to taxpayers.

Why? The more that the government overpays for the assets, the larger the subsidy it’s providing to Wall Street ”” and the more it is pushing up the share prices of Wall Street firms. As Senator Jack Reed, Democrat of Rhode Island, notes, the equity stakes allow the government to recapture some of the subsidy down the road. It’s a self-correcting mechanism.

Some details of a bailout will have to remain vague, in part so that Treasury officials have the flexibility to respond to an obviously fluid situation. But Congress can still do a lot this week to make sure the final cost is a lot closer to, say, $100 billion than $700 billion.

Read it all.

By a margin of 55 percent to 31 percent, Americans say it’s not the government’s responsibility to bail out private companies with taxpayer dollars, even if their collapse could damage the economy, according to the latest Bloomberg/Los Angeles Times poll.

Read it all.

A difference in beliefs within the Episcopal Church is distressing, but is not necessarily reason to leave. Unfortunately, many of those who hold “progressive” beliefs have gone further than disagreeing with Christian tenets. They have hijacked the denomination into which I was confirmed more than 30 years ago.

These leaders have become intolerant of the traditional Christians in their midst and have sought systemically to suppress those whose beliefs remain Christian by refusing to ordain or appoint them as priests or bishops. Faced with the inability to worship and witness as our faith dictates, we have sought to leave and maintain our membership in the worldwide church from which the Episcopal Church has alienated itself.

In response, we have been harassed by those who call themselves tolerant, as the deposition of Bishop Duncan illustrates. Remember, he was deposed in anticipation of an act not yet taken and with the intent to intimidate those in the Pittsburgh Diocese who soon will be voting on whether to leave the Episcopal Church. We have even been asked to heed his deposition as a warning.

As a good (and agnostic) friend of mine exclaimed, “If they don’t believe in what the church teaches, let them leave and create their own group.” Since they haven’t, and since they have sought to silence us, we must leave.

Read the whole piece.

The congregation – which was formed in 1847 to minister to the spiritual needs of Irish weavers and their families who came over in the wake of the Irish potato famine – has had many ups and downs in its 160-year history.

But sadly, despite modest growth in numbers over the past year, there has not been sufficient support for the congregation for them to justify the large amount of money which would need to be spent repairing the building.

Surveyor’s reports over the past eight years indicated that there were several structural problems which would require extensive remedial work. The congregation at the time was at a low ebb and did not feel able to spend large amounts of money on the building.

However, since then, the deterioration has worsened to the extent that the chancel is no longer used for health and safety reasons.

Read it all.

Under the Bretton Woods system, worried foreign creditors would long ago have cleaned out Fort Knox. But, conveniently, the dollar is uncollateralized and unconvertible. America’s overseas creditors hold it for many reasons. Some ”” notably Asian central banks ”” acquire dollars simply to help make their exports grow. But even the governments that scoop up dollars for no better reason than to manipulate their own currency’s value presumably put some store in the integrity of American finance.

As never before, that trust is being put to the test. In the best of times, the Treasury and the Federal Reserve pretended as if the dollar were America’s currency alone. Now, in some of the worst of times, Washington is treating its vital overseas dollar constituency as if it weren’t even there.

Which failing financial institution will the administration pluck from the flames of crisis? Which will it let roast? Which market, or investment technique, will the regulators bless? Which ”” in a capricious change of the rules ”” will it condemn or outlaw? Just how shall the Treasury secretary spend the $700 billion he’s begging for? Viewed from Wall Street, the administration’s recent actions appear erratic enough. Seen from the perch of a foreign investor, they must look very much like “political risk,” a phrase we Americans usually associate with so-called emerging markets, not with our own very developed one.

Where all this might end, nobody can say. But it is unlikely that either the dollar, or the post-Bretton Woods system of which it is the beating heart, will emerge whole. It behooves Barack Obama and John McCain to do a little monetary planning. In the absence of faith, what stands behind a faith-based currency?

Read it all.

More than a year before it ‘broke the buck’ with losses that spread chaos through the financial system last week, the Reserve Primary Fund began loading up on a type of short-term debt that the money-market fund had long shunned.

Even as Bruce Bent, the fund’s founder, told shareholders in a July 2008 letter that the fund had ‘unwavering discipline focused on protecting your principal,’ Reserve was gobbling up commercial paper. By May of this year, 54% of the fund’s holdings were in commercial paper, up from 0.9% about a year earlier. Exposure to drab but safe certificates of deposit plunged.
While the run on money funds that was ignited by the fund’s losses has eased, Mr. Bent’s failure to follow his own advice on the virtues of conservative investing is having catastrophic consequences for Reserve’s money-market funds, managed by Reserve Management Co.

The firm lost 90% of its assets, which had fallen to $8.5 billion as of Monday, down from nearly $86 billion at the start of September, according to iMoneyNet Inc. Reserve faces at least two lawsuits over its disclosure of losses on soured Lehman Brothers Holdings Inc. securities and indefinite suspension of further redemptions.

Read it all.

This spring, Disney pop star Miley Cyrus became the center of a media backlash when Vanity Fair released photos of the Hannah Montana lead in nothing more than a sheet. While the magazine is known for pushing boundaries of propriety, these images were particularly troubling due to the age of the star (15) and those who emulate her (girls as young as 8). The images illuminated the way children younger and younger are becoming players in a sexual culture traditionally reserved for adults.

How did children come to be seen as sexually available as adults? M. Gigi Durham contends in The Lolita Effect: The Media Sexualization of Young Girls and What We Can Do About It (4 stars) that the sexualization of children, especially young girls, is largely perpetuated by print and electronic media. Durham’s title evokes Vladimir Nabokov’s 1955 Lolita, a modern classic about a French scholar who falls in love with a 12-year-old. What does the Lolita Effect look like today? “Adult sexual motifs are overlapping with childhood””specifically girlhood, shaping an environment in which young girls are increasingly seen as valid participants in a public culture of sex.” Durham, a University of Iowa communications professor, argues that the Lolita Effect harbors a special interest in those less discerning about sexual boundaries.

Read it all.

Whether or not tomorrow’s accounts of today’s turmoil prove David Owen of Dresdner Kleinwort right; whether or not this is the beginning of the end of the dollar’s pre-eminence in the world’s central banks and foreign exchanges, the economic landscape has undoubtedly changed forever.

The US taxpayer bail-out of America’s banking sector is an event whose significance will reverberate for many years. What it means for free markets, for the way Western economies are run, for the prosperity of the world economy, must remain to be seen.

But as investors scrambled to make sense of last week’s events, already one conclusion was all but irrefutable ”“ the US dollar will have to take another major fall.

Read it all.

Iran’s president addressed the U.N. General Assembly Tuesday declaring that “the American empire” is nearing collapse and should end its military involvement in other countries.

Iranian President Mahmoud Ahmadinejad said terrorism is spreading quickly in Afghanistan while “the occupiers” are still in Iraq nearly six years after Saddam Hussein was ousted from power in Iraq.

“American empire in the world is reaching the end of its road, and its next rulers must limit their interference to their own borders,” Ahmadinejad said.

He accused the U.S. of starting wars in Iraq and Afghanistan to win votes in elections and blamed a “few bullying powers” for trying to undermine Iran’s nuclear program.

Read it all.

The Rev Jim Cotter said the service celebrating the civil partnership of the two women was a “day of great delight and healing”.

However a complaint was made and he has now been reprimanded by the Archbishop of Wales, Dr Barry Morgan.

It is the latest example of priests defying Anglican Communion guidelines over homosexuality – which state that practising homosexuals should not become clergy and same-sex unions cannot be blessed in church – in a row that has driven the 80 million-strong worldwide church to the brink of schism.

Read it all.

With financial markets in flux and a massive government rescue package in the works, financial reporter and New York Times columnist Gretchen Morgenson looks into what’s involved in the nearly $700 billion deal.

One central concern: The way troubled banks’ assets get valued when the federal government buys them. “Depending on how [the bailout program] is operated, and how the assets are valued before taxpayers are forced to buy them, it could bloat our final bill for this mess while benefiting the very institutions that got us into it,” Morgenson wrote in a recent column.

Morgenson talks to Terry Gross about strategies the government might employ to value the assets taxpayers are buying from endangered institutions ”” and how regulators might earn back some of the trust they’ve lost in recent weeks.

Listen to it all from NPR.

There are only seven basic plots in literature. One of them, surely, must be “cry wolf”. Last week, a variation on the “cry wolf” story emerged which, in its long-term impact, threatens to be far more dangerous to Western civilisation than any banking collapse.

Reports emerged that Sharia had been enshrined in English law. According to one newspaper: “Five Sharia courts have been set up in London, Birmingham, Bradford and Manchester and Nuneaton, Warwickshire. The Government has quietly sanctioned that their rulings are enforceable with the full power of the judicial system, through the county courts or High Court.”

Cue outrage and condemnation. But Muslim organisations dismissed the story as nonsense. And they were backed by the Government. As the Ministry of Justice and Department for Business, Enterprise & Regulatory Reform put it in a joint statement: “Sharia law is not part of the law of England and Wales and the Government has no intention of making any change that would conflict with British laws and values.”

So can we all breathe easily again? If only. Sharia may not be enshrined in English law, but the real impact of Sharia is just as worrying.

Read it all.

1. You two gentlemen have been wrong about the Housing crisis, missed the leverage problem, and understated the derivative issue. Recall the overuse of the word “Contained.” Indeed, you two have been wrong about nearly everything financially related since this crisis began years ago.

Question: Why should we trust your judgment on the largest bailout in American history?

2. How are you pricing the purchase of these damaged assets? Is the taxpayer paying 22 cents on the dollar? 5.5 cents? If there is no market price for this junk paper, how are you going to determine a purchase price?

Read it carefully and read it all.

President Bush’s proposed solution, which he wants Congress to authorize immediately, tells taxpayers to write a check for $700 billion and trust the government and Wall Street to do the right thing ”” with inadequate regulation and virtually no oversight.

We agree with Senator Barack Obama that the administration’s plan lacks regulatory muscle, and we agree with Senator John McCain when he said: “When we’re talking about a trillion dollars of taxpayer money, ”˜trust me’ just isn’t good enough.”

Nearly everyone agrees that the there will have to be another very big bailout. The financial system, gorged on its own excesses, cannot stabilize without intervention. The $700 billion would be used to buy up the bad assets that are presumably clogging the system.

To protect the American taxpayer, Congress must ensure that the bailout comes with clear ground rules and vigilant oversight. In an appalling, though familiar fashion, the ground rules proposed by the Bush administration are wholly unacceptable ”” as are its tactics.

Read it all.

Most economists accept that the nation’s financial crisis ”” the worst since the Great Depression ”” has reached such perilous proportions that an expensive intervention is required. But considerable disagreement centers on how to go about it. The Treasury’s proposal for a bailout, now being negotiated with Congress, is being challenged as fundamentally deficient.

“At first it was, ”˜thank goodness the cavalry is coming,’ but what exactly is the cavalry going to do?” asked Douglas W. Elmendorf, a former Treasury and Federal Reserve Board economist, and now a fellow at the Brookings Institution in Washington. “What I worry about is that the Treasury has acted very quickly, without having the time to solicit enough opinions.”

The common denominator to many reactions is a visceral discomfort with giving Treasury Secretary Henry Paulson Jr. ”” himself a product of Wall Street ”” carte blanche to relieve major financial institutions of bad loans choking their balance sheets, all on the taxpayer’s bill.

There are substantive reasons for this discomfort, not least concerns that Mr. Paulson will pay too much, thus subsidizing giant financial institutions. Many economists argue that taxpayers ought to get more than avoidance of the apocalypse for their dollars: they ought to get an ownership stake in the companies on the receiving end.

Read it all.