(ACNS) The Archbishop of the Sudan, the Most Revd Dr. Daniel Deng Bul, on the weekend was in Yambio on a tour of the Western Equatoria State ECS dioceses. On Sunday 14th September the Archbishop visited Ibba, to enthrone the new diocesan bishop, Bishop Wilson Kamani, who was elected the Second Bishop of Ibba in June this year. During the service in St. Barnabus’ Cathedral, Ibba, on Sunday morning, incoming Bishop Wilson told his priests and congregation the “the people” were his priority for the diocese, both spiritually and in terms of services. Though the Ibba area was hard hit by an attack of the Lords’ Resistance Army (LRA) earlier this year, Bishop Wilson is well placed to serve both the ecclesiastical and developmental needs of his people, having been the General Manager of the Episcopal Church of the Sudan’s Sudanese Development and Relief Agency (ECS/SUDRA) until his election as bishop. Please keep the Diocese of Ibba in your prayers.

Before stopping in Ibba between Friday 12th and Monday 15th, Archbishop Daniel passed through the ECS dioceses of Rokon, Lui, Mundri and Maridi, greeting the diocesan bishops and faithful as he went. The enthronement has been an opportunity for him to visit all the Western Equatorian dioceses bar one ”“ Ezo ”“ on the far western border with the Central African Republic.

In a service on Tuesday 16th September in Yambio Cathedral attended by the Governor of Western Equatoria State amongst other dignitaries, the Archbishop spoke passionately about the Church’s role in building unity and peace in Southern Sudan ”“ especially in the run up to next year’s elections and the 2011 referendum on secession from the North, as well as in the wake of recent Zande-Dinka clashes over cattle grazing. The Archbishop reminded the assembled that God had put all the Southern Sudanese tribes together, so to reject this and fight amongst themselves not only played into the hands of those “enemies of the Comprehensive Peace Agreement (CPA)” both in the North and the South, but was also to go against God’s wishes.

The Archbishop gave his promise to do everything he could to spread peace and unity in Southern Sudan, and told all the faithful gathered to do the same. “Pastors are not for one place, they are international” he said, adding “if the white people could come here and preach the Gospel, why can’t we go to other bits of Southern Sudan and do the same? It is only through Jesus Christ that our people will truly be one”. He closed by encouraging all church groups to stand up and lead Southern Sudan to peace and unity.

“I feel so much more joy and peace coming here,” said Nancy McBride, a resident of Palos Verdes Estates who left St. Francis Episcopal Church about five years ago and now attends Christ Our Savior. “What I know is right, and I no longer have to defend that view.”

John Whitmeyer, also a lifelong Episcopalian, came Sunday at the invitation of McBride, but describes him as “on the fence” when it comes to switching churches.

“It’s hard to leave a church where all your friends are,” said Whitmeyer, who has attended St. Francis since 1960. “I don’t want to leave the Episcopal church, but it is a ship that’s sinking.”

Read it all.

A.I.G.’s financial statements provided a clue to the identities of some of its credit default swap counterparties. The company said that almost three-quarters of the $441 billion it had written on soured mortgage securities was bought by European banks. The banks bought the insurance to reduce the amounts of capital they were required by regulators to set aside to cover future losses.

Enjoy the absurdity: Billions in unregulated derivatives that were about to take down the insurance company that sold them were bought by banks to get around their regulatory capital requirements intended to rein in risk.

Got that?

Which brings us to Item 2 for policy makers. Stop pretending that the $62 trillion market for credit default swaps does not need regulatory oversight. Warren E. Buffett was not engaging in hyperbole when he called these things financial weapons of mass destruction.

“The last eight years have been about permitting derivatives to explode, knowing they were unregulated,” said Eric R. Dinallo, New York’s superintendent of insurance. “It’s about what the government chose not to regulate, measured in dollars. And that is what shook the world.”

Read it all. I didn’t catch this piece until this morning, but please note once again the absolutely crucial role of the Credit Default Swaps market–KSH

It was a message he never expected to deliver. Henry Paulson””free-market thinker, former CEO of Goldman Sachs and Treasury secretary to a conservative Republican president””was unveiling to the world a massive taxpayer bailout of the American financial system. Afterward, as he headed into yet another weekend of nonstop work with his team, carrying the weight of the troubled markets on his shoulders, the former college-football star was clearly conflicted about what he’d just proposed. “It’s very unpleasant for me, but it’s a lot more attractive than the alternative,” Paulson told NEWSWEEK. “We can spend a lot of time talking about how it happened and how we got here. But we have to get through the night first.”

Let us hope the old saw, about the night being darkest before the dawn, is true. Recent weeks certainly have been the darkest Wall Street has seen since October 1929. Investment banks that had survived the Great Depression, the crash of 1987 and the trauma of 9/11””venerable names like Lehman Brothers and Merrill Lynch””fell by the wayside. They were just the latest victims in the subprime-mortgage and credit debacle that has taken down banks and lenders across the country, and yanked the dream of homeownership away from millions of Americans. For the past several months, the government’s solution to the problem has been to make a series of Solomonic decrees about who would live and who would die. Investment bank Bear Stearns? “Too big to fail,” the government decreed, arranging a sale of the firm to JPMorgan Chase. Lehman Brothers? It must be sacrificed and file for bankruptcy. Overextended homeowners? Try renting. The nation’s largest mortgage companies, Fannie Mae and Freddie Mac? Bail them out and let taxpayers foot the bill. AIG, the world’s largest insurer? Uncle Sam owns it now.
Wielding much of this power over financial life and death is this tall, calm man. Paulson came to Washington from Wall Street in 2006 expecting to deal with issues like Social Security reform and trade agreements. But the economy had other ideas. At a time when President Bush seems to have largely checked out, the teetotaling 62-year-old has emerged as the nation’s most powerful leader””the investment banker in chief. As he did on the Street, Paulson continues to advise CEOs on the best course of action, to arrange financing and to get the best terms possible for his clients. Only now his clients are American taxpayers, the president and the global financial system.

Read the whole article.

Yes, greed is ever with us, at least until Washington transforms human nature. The wizards of Wall Street and London became ever more inventive in finding ways to sell mortgages and finance housing. Some of those peddling subprime loans were crooks, as were some of the borrowers who lied about their incomes. This is what happens in a credit bubble that becomes a societal mania.

But Washington is as deeply implicated in this meltdown as anyone on Wall Street or at Countrywide Financial. Going back decades, but especially in the past 15 or so years, our politicians have promoted housing and easy credit with a variety of subsidies and policies that helped to create and feed the mania. Let us take the roll of political cause and financial effect:

– The Federal Reserve. The original sin of this crisis was easy money. For too long this decade, especially from 2003 to 2005, the Fed held interest rates below the level of expected inflation, thus creating a vast subsidy for debt that both households and financial firms exploited. The housing bubble was a result, along with its financial counterparts, the subprime loan and the mortgage SIV.

Fed Chairmen Alan Greenspan and Ben Bernanke prefer to blame “a global savings glut” that began when the Cold War ended. But Communism was dead for more than a decade before the housing mania took off. The savings glut was in large part a creation of the Fed, which flooded the world with too many dollars that often found their way back into housing markets in the U.S., the U.K. and elsewhere.

Read the whole article.

We’ve looked at the [Housing] bubble question and we’ve concluded that it is most unlikely.

—Alan Greenspan, July 2002

It’s a rare day when finance officials, leftist intellectuals and ordinary salespeople can agree on something. But the economic meltdown that wrought its wrath from Rome to Madrid to Berlin this week brought Europeans together in a harsh chorus of condemnation of the excess and disarray on Wall Street.

The finance minister of Italy’s conservative and pro-U.S. government warned of nothing less than a systemic breakdown. Giulio Tremonti excoriated the “voracious selfishness” of speculators and “stupid sluggishness” of regulators. And he singled out Alan Greenspan, the former chairman of the U.S. Federal Reserve, with startling scorn.

“Greenspan was considered a master,” Tremonti declared. “Now we must ask ourselves whether he is not, after [Osama] bin Laden, the man who hurt America the most. . . . It is clear that what is happening is a disease. It is not the failure of a bank, but the failure of a system. Until a few days ago, very few were willing to realize the intensity and the dramatic nature of the crisis.”

Read it all.

From here:

…a note from Jon Hatzius, the Goldman analyst who was an early housing/financial firm bear and has forecast that credit-related losses to the economy will reach $2 trillion. His outline of what the rescue program must do:

Basically, I see three main conditions for resolving the crisis (a slicker marketer would call them “The Three R’s”):

a) Recognition. We need to find out what the assets on the balance sheets of banks and other financial institutions are really worth, and what the balance sheets of the most troubled institutions look like under a regime of realistic marks.

b) Recapitalization. The US banking system needs a lot more capital. Credit losses are depleting equity capital, and deleveraging increases the required equity capital per unit of balance sheet capacity. So capital infusions are needed to avert a sharp contraction in lending.

c) Relief. In many cases, we need to restructure the loan terms of homeowners who lack the ability (or economic incentive) to service their mortgage. This isn’t just in the interest of the homebuyers, but it’s often also in the interest of the lender (given the cost of foreclosure) and certainly in the interest of the macroeconomy (given the feedback effects between foreclosures, home prices, and economic performance)….

In any case, recognition is only a start. In fact, recognition actually increases the need for recapitalization because it brings capital shortfalls out into the open. So it will be important to see how the Treasury proposal addresses this. Do they force banks to seek equity infusions from private investors in a specified time period? Do they simply “pay over the odds” for the assets (this would promote recapitalization but jeopardize recognition)? Is part of the program earmarked for the purchase of preferred stock in banks? Or is there a public/private partnership scheme such as an issuance of publicly financed puts in e xchange for warrants for would-be private investors?

Congressional Democrats began to set their own terms on Sunday for a plan to rescue the nation’s financial institutions, including greater legislative oversight of the Treasury Department, more direct assistance for homeowners and limits on the pay of top executives whose firms seek help.

The Democrats’ demands came as Treasury Secretary Henry M. Paulson Jr. blanketed the Sunday talk shows to promote the Bush administration’s $700 billion bailout package, emphasizing that it was needed not just for Wall Street, but for all Americans. He urged Congress to move swiftly to approve a “clean” rescue plan without tacking on extra programs.

“I hate the fact that we have to do it, but it’s better than the alternative,” Mr. Paulson said on “Fox News Sunday.”

Read it all.

The financial crisis that began in the United States spread to many corners of the globe. Now, the American bailout looks as if it is going global, too, a move that could raise its cost and intensify scrutiny by Congress and critics.

Foreign banks, which were initially excluded from the plan, lobbied successfully over the weekend to be able to sell the toxic American mortgage debt owned by their American units to the Treasury, getting the same treatment as United States banks.

On Sunday, the Treasury secretary, Henry M. Paulson Jr., indicated in a series of appearances on morning talk shows that an original proposal introduced on Saturday had been widened. “It’s a distinction without a difference whether it’s a foreign or a U.S. one,” he said in an interview with Fox News.

Read it all.

The Communion has repeatedly asked TEC to make pastoral provisions and avoid steps that will alienate further those within TEC who wish to live by the Anglican faith which they believe to be true and remain in fellowship within the Anglican Communion. Even as recent[ly] as at the recent Lambeth, the great majority of Bishops present, including those from TEC, have expressed sincere desire for healing and reconciliation and to observe restraints on contentious issues for the Windsor-Covenant process to proceed.

The HOB has instead proceeded to depose a faithful bishop of the Gospel and the diocese under his care. This raises serious questions yet again, and more strikingly so soon after Lambeth, as to how sincere TEC and some of its bishops are in wanting to bring reconciliation, healing and resolution to the Communion crisis at hand.

Read it all.

All of us should. Below, John Mauldin wrote:

We absolutely must move credit default swaps to a regulated exchange, no matter how much investment banks and hedge funds scream. Must be done. Do it now. Real rules about writing mortgages, although now that losses are in the hundreds of billions, underwriting rules are already becoming quite restrictive.”

I cannot possibly tell you how important this is. Jim Chanos said something similar earlier in the week on CNBC. If I had to recommend ONE thing in what Congress and our national leadership does in the package they put together this week, it would be this. Remember: the few somewhat intelligent commentators this week on the crisis noted that the bond market is WAY bigger than the stock market, and was much more at the center of the real storm (see, e.g. Henry Paulson below).

By the way, one of my very knowledgeable friends who has lots of industry ties thinks the current CDS market is now in the range of 90 trillion dollars (I think that is high, and it is more like 60-70 trillion, but no one really knows exactly). That’s up from $900 billion in 2000. Everett Dirksen would know that is a lot of money–KSH.

MR. BROKAW: The market did go up a record amount. Since 1987 it went up more than 600 points in two days. But that really is a false positive sign, as they would say in laboratory testing, isn’t it?

SEC’Y PAULSON: Yeah, I, I would say this. It’s not what we should be looking at. It is not what we should be looking at. The stock market going up and down is not what we should be looking at. We need to look at what’s going on in the credit markets, and they are still very fragile right now and frozen. And we need to do something to deal with this and deal with it quickly.

MR. BROKAW: There is a big political debate about whether, whether the fundamentals of the American economy are strong or not. Is it fair to say that the fundamentals of the American economy may not be strong, but, in fact, they’re staggering at the moment?

SEC’Y PAULSON: Well, what I should say is, I won’t bet against the American people. We’re an entrepreneurial people, a hard-working people, and we will work through this, we always do. I wouldn’t bet against the American people, and I wouldn’t bet against the long-term fundamentalists of this country. But this is a humbling experience to see so much fragility in our capital markets and to ask how did we ever get here.

Read it all. I enjoyed the interview with Mayor Michael Bloomberg also.

The market was 500 trades away from Armageddon on Thursday, traders inside two large custodial banks tell The Post.

Had the Treasury and Fed not quickly stepped into the fray that morning with a quick $105 billion injection of liquidity, the Dow could have collapsed to the 8,300-level – a 22 percent decline! – while the clang of the opening bell was still echoing around the cavernous exchange floor.

According to traders, who spoke on the condition of anonymity, money market funds were inundated with $500 billion in sell orders prior to the opening. The total money-market capitalization was roughly $4 trillion that morning.

The panicked selling was directly linked to the seizing up of the credit markets – including a $52 billion constriction in commercial paper – and the rumors of additional money market funds “breaking the buck,” or dropping below $1 net asset value.

Read it all.

We absolutely must move credit default swaps to a regulated exchange, no matter how much investment banks and hedge funds scream. Must be done. Do it now. Real rules about writing mortgages, although now that losses are in the hundreds of billions, underwriting rules are already becoming quite restrictive.

—John Mauldin in this week’s newsletter

At first, I didn’t recognize the place.

On Karada Mariam, a street that runs over the Tigris River toward the Green Zone, the Serwan and the Zamboor, two kebab places blown up by suicide bombers in 2006, were crammed with customers. Farther up the street was Pizza Napoli, the Italian place shut down in 2006; it, too, was open for business. And I’d forgotten altogether about Abu Nashwan’s Wine Shop, boarded up when the black-suited militiamen of the Mahdi Army had threatened to kill its owners. There it was, flung open to the world.

Two years ago, when I last stayed in Baghdad, Karada Mariam was like the whole of the city: shuttered, shattered, broken and dead.

Abu Nawas Park ”” I didn’t recognize that, either. By the time I had left the country in August 2006, the two-mile stretch of riverside park was a grim, spooky, deserted place, a symbol for the dying city that Baghdad had become.

These days, the same park is filled with people: families with children, women in jeans, women walking alone. Even the nighttime, when Iraqis used to cower inside their homes, no longer scares them. I can hear their laughter wafting from the park. At sundown the other day, I had to weave my way through perhaps 2,000 people. It was an astonishing, beautiful scene ”” impossible, incomprehensible, only months ago.

Read it all.

Of all the points raised by different analysts about the economy last week, surely the best was Representative Barney Frank’s reminder on “Charlie Rose” that Ronald Reagan’s favorite laugh line was telling audiences that: “The nine most terrifying words in the English language are: ”˜I’m from the government, and I’m here to help.’ ”

Hah, hah, hah.

Are you still laughing? If it weren’t for the government bailing out Fannie Mae, Freddie Mac and A.I.G., and rescuing people from Hurricane Ike and pumping tons of liquidity into the banking system, our economy would be a shambles. How would you like to hear the line today: “I’m from the government, and I can’t do a darn thing for you.”

In this age of globalization, government matters more than ever….

Those are the kind of words that would get my attention. The last president who challenged his base was Bill Clinton, when he reformed welfare and created a budget surplus with a fair and equitable tax program. George W. Bush never once ”” not one time ”” challenged Americans to do anything hard, let alone great. The next president is not going to have that luxury. He will have to ask everyone to do something hard ”” and I want to know now who is up to that task.

Read it all.

Bipartisan support appeared to be emerging Sunday among American lawmakers to give quick approval to a vast bailout of financial institutions.

The Bush administration has proposed granting unfettered authority for the Treasury Department to buy up to $700 billion in distressed mortgage-related assets from private firms as part of a program that Treasury Secretary Henry M. Paulson Jr. said “has to work.”

“I hate the fact that we have to do it, but it’s better than the alternative,” Mr. Paulson said on “Fox News Sunday.” “This is a humbling, humbling time for the United States of America.”

The proposal, presented on Saturday, would raise the national debt ceiling to $11.3 trillion and would place no restrictions on the administration other than requiring semiannual reports to Congress while allowing the Treasury secretary unprecedented power to buy and resell mortgage debt.

With some estimates that the program could involve the purchase of as much as $1 trillion in assets from private firms, Mr. Paulson emphasized that the true cost would be “determined by how quickly the economy recovers and how quickly housing prices stabilize.”

Read it all.

And that really is the crux of the matter ”” the financial system has seized up. But so far, the government’s actions haven’t helped. Letting Lehman go bust may have sounded good at the time, but it has had disastrous consequences.

It has led to complete chaos in the multitrillion-dollar market for credit-default swaps and was a crucial reason Morgan Stanley was forced to scramble to stay alive this week. It is also why questions were raised about the viability of Goldman Sachs, a firm with a pristine balance sheet and almost none of the bad assets that are bringing down other firms.

The rescue of A.I.G. further undermined confidence because, within the space of several days, the government did a complete about-face. The bailout suggested the Treasury Department was as confused about what to do as the rest of us.

So rather than help solve the crisis, the Treasury Department has actually contributed to the biggest problem in the market right now: an utter lack of confidence.

Nobody understands who owes what to whom ”” or whether they have the ability to pay. Counterparties have become afraid to trade with each other. Sovereign wealth funds are no longer willing to supply badly needed capital because they no longer know what they are investing in. The crisis continues because nobody knows what anything is worth. You simply cannot have a functioning market under such circumstances.

Will this latest round of proposals end the crisis? I know the stock market reacted joyously on Friday, but I’m not hopeful….

Read it all.

Uncle Sam is turning into Uncle CEO. But will the new corporate suit be a good fit?

By agreeing to bail out insurance giant American International Group Inc. and mortgage lenders Fannie Mae and Freddie Mac, the federal government has put itself in the unprecedented position of running huge private companies. In the case of American International Group, or AIG, the government is now the majority shareholder, acquiring 80% of the company in exchange for lending it as much as $85 billion over two years to keep the business out of bankruptcy as it is dismantled.

But some lawmakers and financial experts wonder whether U.S. officials are up to the task of directing large corporations through such turbulent times. AIG, for instance, has 116,000 employees and does business in about 100 countries. Fannie Mae and Freddie Mac together hold or guarantee $5.4 trillion of mortgages, about half of the nation’s home loans.

“The government does not have a core competency to run an insurance company of the magnitude of an AIG,” said David M. Walker, former head of the Government Accountability Office, the congressional watchdog agency. “It’s clearly not going to be able to effectively manage AIG and do what needs to be done.”

Read it all.

Decades of saving and hard work as a teacher earned Beverly Welsh what she thought would be a comfortable retirement.

She bought a townhouse in Las Vegas to be near her mother, but the longtime South Pasadena resident continued to spend time in her beloved Southern California. She spoiled her five cats. She took acting classes, landing small parts in a few low-budget films.

Then the bottom fell out of the real estate market and stocks cratered, wiping out a third of her $750,000 net worth over the last two years. Tight on cash, the 76-year-old retiree says she may seek work as a substitute teacher to supplement her dwindling investment income.

“It’s unbelievable how quickly it happened,” Welsh said. “I’m not sleeping well.”

Read it all.

South Carolina’s jobless rate has hit its highest point in 15 years, forcing the state to write so many unemployment insurance checks that the account is about to go broke.

The state’s unemployment rate spiked to 7.6 percent in August, according to the S.C. Employment Security Commission. Right now, the agency is paying more than $10 million in unemployment insurance benefits every week, about twice as much as in recent years.

The fund has only about $130 million left.

“You do the math,” said Executive Director Ted Halley. “Even if we drop below the 7.6 percent rate, I estimate that it will go broke about the second week in January.”

Money flows into the fund from South Carolina businesses, which pay taxes on the first $7,000 of each employee’s annual salary. Halley said he’s meeting with Gov. Mark Sanford’s office Monday to discuss raising the tax rate.

Read it all from the front page of our local paper yesterday.

An initial confidence that the global crisis would spare France is eroding. A poll taken Wednesday and Thursday of about 1,000 adults and published Friday in Le Figaro found that 80 percent of the French expected “a grave economic crisis” at home. Some 94 percent expected the United States to undergo such a trauma. Sixty-six percent said that Mr. Sarkozy’s government could not protect France from the aftershocks, and only 14 percent that it could.

Eric Le Boucher, an economist and editor, said Thursday that “it’s frustrating for Europeans to think they are paying for the excesses of the American financial system,” according to Jacques Mistral, head of economic studies at the French Institute of International Relations.

Élie Cohen, director of research at the Center for Political Research at the Paris Institute of Political Studies, known as Sciences Po, and a member of the government’s Council of Economic Advisers, was blunter. “There’s certainly an idea that the American financial system has gone crazy,” he said in an interview. “This has dealt a mortal blow to the timid admiration we had of the American system. But not even the most conservative French person is capable of defending it anymore.”

Read it all.

Is the Catholic Church a beleaguered underdog, fighting for a voice in secular Europe, or a still-mighty power, wielding its influence on European law through friendly center-right governments?

That question, which has been building momentum throughout Pope Benedict XVI’s three-year-old papacy, came mightily to the fore in his recent trip to France.

Yet even as the pope calls for more animated discussion of church and state and more interreligious dialogue, no one, probably not even at the Vatican, expects Europe to become newly devout any time soon. Mass attendance is at record lows, as is the number of priests.

Nor does anyone expect France to overturn its dearly held tenet of “laïcité,” a strict separation of church and state, in spite of the pope’s admonition that secularism leads to nihilism and President Nicolas Sarkozy’s calls for a more “positive laïcité.”

But Benedict’s insistence that religion and politics be “open” to each other ”” coupled with his strong renewal while in Lourdes of the church’s opposition to same-sex couples, communion for the divorced and euthanasia ”” sends a direct message: the church doesn’t want European law to be at odds with church teaching, and he wants Catholics to make some noise about it.

Read it all from yesterday’s New York Times.

“But I am influenced heavily by the impact on relationships-relationship within The Episcopal Church and relationships within the Anglican Communion, if we act now rather than acting AFTER the Pittsburgh Convention has its second reading on the proposed constitutional change. To be sure, there will be a price to be paid whether abandonment is determined now or then-but I think the cost will be considerably higher if we are seen to act precipitously. There is a matter of “good will”, of mercy, as well as justice, which I consider relevant.

“Yes, Duncan intends to abandon within the meaning of the canon-no doubt in my mind whatsoever. But I think the finding of abandonment will be viewed as less unacceptable, less unfavorably, if the diocesan convention has acted the necessary two times, rather than just one. I also believe that we should put the ball back in Duncan’s court-let the decision be his, not ours.

“I also consider it important that we attempt as much as possible to separate what we think and feel about Bob Duncan (and others considering similar moves) from the greater good of Christ’s mission and Church-that is, separate personalities from what, by God’s grace, we can do to promote more effectively both the mission AND the unity of the Church.

“I am anxious to hear the thoughts and opinions of others, but this is where I am at the moment. I am not compelled, or even impelled-but I am inclined to vote no on a finding of abandonment now, and to vote yes on any effort to suspend action until after the Pittsburgh convention acts.

Read it all.

Under the revised canons, inhibition occurs as soon as the Title IV [disciplinary] Review Committee certifies sufficient grounds to proceed with a hearing. Retired bishops, who by and large have not attended meetings of the House of Bishops in recent years, will lose their status as voting members of the House.

During a press conference sponsored by the American Anglican Council (AAC) shortly after the deposition vote on Sept. 18, the Rev. Philip Ashey, president of the AAC, observed that it was now easier to depose a bishop for abandonment than it is for a bishop to resign or for the House to approve a 10-minute recess during debate. The loosening of procedural safeguards for the accused greatly expands the Presiding Bishop’s curial powers over the church. From its inception right up through its recent submissions to the Covenant Design Group, a curial style of polity is something that most Episcopalians have strongly resisted.

The deposition of Bishop Duncan prior to his actually leaving The Episcopal Church may further future litigation interests against the current diocesan leadership in Pittsburgh, but is likely to “tear the fabric” of the Anglican Communion further. The ham-handed manner in which this deposition was advanced also may diminish the number of conservative delegates to the annual meeting in Pittsburgh who will vote to remain with The Episcopal Church on Oct. 4.

Read it all.

The Bush administration asked Congress on Saturday for the power to buy $700 billion in toxic assets clogging the financial system and threatening the economy as negotiations began on the largest bailout since the Great Depression.

The rescue plan would give Washington broad authority to purchase bad mortgage-related assets from U.S. financial institutions for the next two years. It does not specify which institutions qualify or what, if anything, the government would get in return for the unprecedented infusion.

Democrats are pressing to require that the plan help more strapped borrowers stay in their homes and to condition the bailout on new limits on executive compensation.

Congressional aides and administration officials are working through the weekend to fill in the details of the proposal. The White House hoped for a deal with Congress by the time markets opened Monday; top lawmakers say they would push to enact the plan as early as the coming week.

“We’re going to work with Congress to get a bill done quickly,” President Bush said at the White House. Without discussing specifics, he said, “This is a big package because it was a big problem.”

Read it all.

They beat the Cardinals 5-4. I kid you not, I turned on the game and it was 5-0 and about a minute later it was 5-4. I was sweating….

(I am quoting above from the print edition which arrived for us today in the U.S. mail. The subtitle is: They had a party. Now you’re going to pay.)

If you’re having a little trouble coping with what seems to be the complete unraveling of the world’s financial system, you needn’t feel bad about yourself. It’s horribly confusing, not to say terrifying; even people like us, with a combined 65 years of writing about business, have never seen anything like what’s going on. Some of the smartest, savviest people we know ”” like the folks running the U.S. Treasury and the Federal Reserve Board ”” find themselves reacting to problems rather than getting ahead of them. It’s terra incognita, a place no one expected to visit.

Every day brings another financial horror show, as if Stephen King were channeling Alan Greenspan to produce scary stories full of negative numbers. One weekend, the Federal Government swallows two gigantic mortgage companies and dumps more than $5 trillion ”” yes, with a t ”” of the firms’ debt onto taxpayers, nearly doubling the amount Uncle Sam owes to his lenders. While we’re trying to get our heads around what amounts to the biggest debt transfer since money was created, Lehman Brothers goes broke, and Merrill Lynch feels compelled to shack up with Bank of America to avoid a similar fate. Then, having sworn off bailouts by letting Lehman fail and wiping out its shareholders, the Treasury and the Fed reverse course for an $85 billion rescue of creditors and policyholders of American International Group (AIG), a $1 trillion insurance company. Other once impregnable institutions may disappear or be gobbled up.

The scariest thing to average folk: one of the nation’s biggest money-market mutual funds, the Reserve Primary, announced that it’s going to give investors less than 100 cent on each dollar invested because it got stuck with Lehman securities it now considers worthless. If you can’t trust your money fund, what can you trust? To use a technical term to describe this turmoil: yechhh!

There are two ways to look at this. There’s Wall Street’s way, which features theories and numbers and equations and gobbledygook and, ultimately, rationalization (as in, “How were we supposed to know that people who lied about their income and assets would walk away from mortgages on houses in which they had no equity? That wasn’t in our computer model. It’s not our fault”). Then there’s the right way, which involves asking the questions that really matter: How did we get here? How do we get out of it? And what does all this mean for the average joe? So take a deep breath and bear with us as we try to explain how financial madness overtook not only Wall Street but also Main Street. And why, in the end, almost all of us, collectively, are going to pay for the consequences.

Read it all. If you want to know what I meant in my comment below about monocausal explanations, the Time Magazine print cover is exhibit A–KSH.

[BOB] ABERNETHY: And that’s what happened in these cases. People were, traders were encouraged to take big risks and not pay attention to all the costs that there would be for people down the line if those risks didn’t pay off.

Dr. [REBECCA] BLANK: That’s certainly true in part, but I will also say that there was also a culture where what those traders were doing was what everyone in all the cubicles next to them were doing. And, you know, there’s always the question of to what extent is that an excuse — and a justifiable excuse? There were also a lot of people at the very beginning of this, the whole sub-prime crisis that started this off, who saw themselves as providing more funds for low-income families. They were doing a good thing. So motives here are very mixed. I think it’s hard to say this is all about greed.

ABERNETHY: What about justice? Was there injustice involved?

Dr. BLANK: So, you know, we love a world in which the people in the white hats get rewarded, and the people in the black hats pay the price, and that I have to say doesn’t happen very often, particularly in a very complex economy. We’re in a time of panic right now where people have lost trust in what the banks are doing, what the investment firms are doing — lost trust beyond a level of reasonableness, to be honest, and it’s got to be stopped.

Read it all.