In late January, I asked 12 of the senior, most respected priests of the Diocese to begin meeting together as a clergy discussion group to assist me in addressing the tensions and conflicts involved in the life of our Diocese as we move toward a Diocesan Convention vote in November to separate from the General Convention of The Episcopal Church. I am sorry to report that after several meetings over the months, they have been unable to agree on any proposed remedy for the divisions that face us.

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The Rev Rod Thomas, chairman of the Reform network of evangelicals, said some clergy and congregations may make the “radical” move of secession from the established church because of the liberal direction in which it is moving on women bishops and homosexuality.

He claimed the differences are now so great that there effectively two religions within the church, one liberal and one conservative, and that at least 25 parishes are already seeking “alternative oversight” because their bishop does not share their beliefs in tradition and the Bible.

He said he hoped this could be provided by creating new “religious communities”, by getting conservative bishops from other dioceses to provide oversight, or by employing retired English bishops to take over the care of those who did not want to be led by a liberal prelate.

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“The consecration was wonderful, especially the gift of having the Presiding Bishop here for her first official trip to Idaho,” Thom said on October 13, his first day in the office. “Everyone is very eager for new relationships and continuing ones, because I’ve been in the diocese 17 years already.”

His experience in the diocese will pave the way for new ministry, he believes, adding that he received a number of honorary gifts from congregations”””both serious and whimsical, acknowledging the office and the kind of work that will be happening.”

Among those gifts were a desk organizer, a handcrafted stole, a serving tray, a bag of grass seeds to symbolize new growth, and, from a congregation that is providing space for a heliport for a local hospital, a toy helicopter.

“I know all the clergy,” Thom said. “We are excited about what we can do because we don’t have to spend two years getting to know each other.

“We are very eager to continue building this relationship,” he said. “We are starting in a different place.

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The political endorsement was clear, although the words were carefully chosen.

New Hampshire Bishop V. Gene Robinson, the Episcopal Church’s first openly gay bishop, clearly wanted to inspire his supporters, even his own priests, to back Barack Obama for president. Still, he stressed that his endorsement was personal, not corporate.

”I will not be speaking about the campaign from the pulpit or at any church function,” the bishop told reporters in a 2007 conference call that drew low-key, calm news coverage. ”That is completely inappropriate. But as a private citizen, I will be at campaign events and help in any way that I can.”

The reaction was different after the Rev. Luke Emrich preached to about 100 evangelicals at New Life Church this past weekend, near Milwaukee.

Veering from Scripture into politics, he said his beliefs about abortion would control his vote.

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The new situation will reopen old rifts in the Democratic Party. One the one side, liberals will argue (are already arguing) that it was deregulation and trickle-down economic policies that led us to this crisis. Fears of fiscal insolvency are overblown. Democrats should use their control of government and the economic crisis as a once-in-a-lifetime chance to make some overdue changes. Liberals will make a full-bore push for European-style economic policies…

Obama will try to straddle the two camps ”” he seems to sympathize with both sides ”” but the liberals will win. Over the past decade, liberals have mounted a campaign against Robert Rubin-style economic policies, and they control the Congressional power centers. Even if he’s so inclined, it’s difficult for a president to overrule the committee chairmen of his own party. It is more difficult to do that when the president is a Washington novice and the chairmen are skilled political hands. It is most difficult when the president has no record of confronting his own party elders. It’s completely impossible when the economy is in a steep recession, and an air of economic crisis pervades the nation.

What we’re going to see, in short, is the Gingrich revolution in reverse and on steroids. There will be a big increase in spending and deficits. In normal times, moderates could have restrained the zeal on the left. In an economic crisis, not a chance. The over-reach is coming. The backlash is next.

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Fifth, partnership. Most of our churches have engaged in formal evangelism over the years. The difference this time is that we are all involved in doing it together. It is a co-ordinated campaign, with local variations, but the same aims. This provides us with an opportunity to partner with each other in this important work – to ask the parish next door for ideas or for help, for example. I have had a dream that churches may even offer each other teams of people to help to do some of the necessary work. The team itself will return rejoicing and so much better equipped for gospel work than when they left. We also have great resources in this Diocese in organisations like Anglicare, ARV, Youthworks, Moore College, the Schools Corporation and the Secretariat. I have been excited by the way that the leadership of these organisations have been excited by Connect 09. They are true partners.

Sixth, preparation. I mean by this preparing our churches for new people to join. Many churches would say that there are already between 100 and 200 such people per year, or three or four a week. For some there are fewer; for others many more, in some cases over a thousand. In most cases Rectors have plans about what to do with new people in order to integrate them. But this cannot be the Rector’s job alone. We must all be aware of the phenomenon of the visitor and ask ourselves what we intend to do to make people welcome and feel that they can come back.

How seriously do we take this? Have we already begun a thorough shaking up of our welcome, our facilities, our signage, our seating, our cry-rooms, our morning tea, the temperature in the building, our music, our follow-up, our lighting, our accessibility to the disabled”¦ the list is endless. Sometimes we need to look again at what we do in church, our reading, our prayers, our preaching. Sometimes ministers want to do these things but are discouraged by lay resistance; sometimes ministers are the problem. Can I urge you to work together on this?

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Three Anglican congregations that split from the Vancouver-area diocese over its support for same-sex blessings have gone to court to avoid being kicked out of their churches.

The three congregations – St. John’s Shaughnessy in Vancouver, St. Matthias/St. Luke in Vancouver and St. Matthew’s in Abbotsford – argue in court documents that they should be allowed to remain because their opposition to same-sex blessings is consistent with “historic, orthodox Anglican doctrine.”

However, the Diocese of New Westminster and its bishop, Michael Ingham, argue that church doctrine evolves and there is no legal basis for congregations that leave the diocese to take church property with them.

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As in all past crises, at the root of the problem is a loss of confidence by investors and the public in the strength of key financial institutions and markets. This has had cascading and unwelcome effects on credit availability for households and businesses, and on the value of savings. Under these circumstances, steps to restore confidence in our institutions and markets will go far toward resolving the current market stress. Our economy will not be able to function at its best unless and until financial market stability returns. The bold actions taken by the Congress, the Treasury, the Federal Reserve, the Federal Deposit Insurance Corporation and other agencies, together with the normal recuperative powers of the financial markets, will lay the groundwork for financial and economic recovery.

The most immediate responsibility of policy makers and elected officials is to restore confidence in our credit markets. Even as we do this, we must begin to consider long-term reforms that will mitigate similar crises in the future. A comprehensive review of our regulatory structures is an essential task in the coming year. The events of the past year or two have highlighted regulatory gaps and deficiencies that we must address to improve the structure of our markets and the resiliency of our economy. As we recover from the current crisis, it will be important to address these issues as soon as possible, to develop a regulatory structure that will better respond to future economic challenges.

Policy makers here and around the globe have taken a series of extraordinary steps. Americans can be confident that every resource is being brought to bear: historical understanding, technical expertise, economic analysis and political leadership.

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This is exactly what the Taliban want, to split off our allies and create a sense of desperation among those willing to stay. The Canadians are also getting hit hard. And the Brits as well. By picking off our allies, and undermining the domestic support crucial to supporting the war effort, our enemies in Afghanistan and Pakistan are trying to isolate the U.S. so that they can eventually force us to leave.

Is this war winnable? I don’t know, but my gut instinct is that Afghanistan/Pakistan will devolve into something worse than Iraq ever was.

Afghanistan is considered “The Good War” only by people who don’t realize (or refuse to acknowledge) how difficult the situation is. The road to hell is paved with good intentions. And that seems to be the road we’re on in Afghanistan.

But for the moment, let’s forget geopolitics, and remember the soldiers who gave their lives not just for their country, or Afghanistan, but also for us.

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This past summer, from evangelical churches nationwide, more than one million of the faithful departed for the mission field, taking up Jesus’ “Great Commission” to “go and make disciples of all nations.” The churchgoers hoped to convert souls, establish churches and meet other human needs. But they did not intend to serve for years or whole lifetimes, like such pioneers as Jim Elliott, who was killed in Ecuador in 1956 evangelizing to native people; or Hudson Taylor, the founder of the China Inland Mission; or even the awful fictional caricatures of African missionaries in Barbara Kingsolver’s novel “The Poisonwood Bible.” These new missionaries came home after only a week or two.

Short-term mission trips to Africa, South America and Southeast Asia have become very popular in the past few years. They are a keystone strategy of evangelical pastor Rick Warren’s plans to help Rwanda. These trips, like Christian missionary endeavors overall, encompass a wide variety of activities, from evangelization and “church planting” to health care and economic development. The billion-dollar question, however, is whether they’re worth the cost. Are short-term missions the best way to achieve the goals of Christians? Critics argue that sightseeing often takes up too much of the itinerary, leading some to call short-termers “vacationaries.”

It’s hard to judge the fairness of this characterization, since almost no one runs the numbers. Estimates of how much churches spend on short-term missions go as high as $4 billion a year, according to the Capital Research Center. The literature is sparse, most of it focusing on the spiritual aspects, for the missionaries themselves. And these aspects are sometimes oversold.

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‘It’s 3 a.m. and your children are safe and asleep. But there’s a phone in the White House and it’s ringing.” Those lines from a Hillary Rodham Clinton campaign commercial invoked images of a president responding in the dead of night to “evil” forces threatening Americans’ safety. These days, however, the 3 a.m. phone call to the White House is just as likely to come from the secretary of the Treasury, warning of an Asian stock market plummeting or a European government taking over another major bank. That’s not a political scare tactic; it’s an all-too-real consequence of the subprime mortgage fiasco.

The deepening problems in the financial markets have shifted the public’s — and the candidates’ — focus from homeland security to economic security. Rising unemployment, slowing production and stubbornly tight credit are all signs of a recession that’s not likely to be cured by the time either John McCain or Barack Obama takes the oath of office in January. As we’ve seen in recent months, even dramatic action by the Bush administration and the Federal Reserve hasn’t been able to stop the stock market from falling and credit from evaporating. We need a president with the grit and credibility to force harsh medicine into the financial system, identifying which banks are too troubled to save and making temporary, taxpayer-friendly investments in healthier institutions to jump-start lending. These efforts are fraught with risk, and they’ll inflict more pain in the short term. But it’s better to endure that pain now than to pretend the banks’ illiquid assets are worth more than the market will pay for them, as some have advocated.

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So what did happen at convention? Actually quite a bit happened, and some of it was pretty positive. First, our bishop, though obviously quite contemplative during the convention Eucharist and the opening business session (and clearly focused upon what he was going to include in his convention address) quite boldly stood squarely on the side of “doing the right thing” and standing firm in upholding the constitution and canons of TEC against the blatant abuses of power by the Presiding Bishop of TEC, her chancellor and the House of Bishops. Knowing full well that the PB’s eyes and ears were present in our convention hall, your bishop stood tall and not only outlined the abuses of power that have occurred in three recent depositions of orthodox bishops, but declared that these types of abuses must be opposed and stopped. In the Alice in Wonderland world that is TEC at this time, this action is no small thing.

Four resolutions were proposed for consideration, three of which were approved by large margins. Two of the resolutions addressed the Communion Partners Plan which +MacPherson favors as a structure for the support of orthodox Episcopalians during the completion of the Windsor Process and pending a vote on the anticipated Anglican Covenant. Both passed overwhelmingly. The other two addressed the deposition of Bishop Robert Duncan of the Diocese of Pittsburgh. One of the resolutions dealt directly with the Duncan deposition and the abuse of constitutional and canonical process in securing the deposition. I had the pleasure of speaking in favor of that resolution and it passed. The second Duncan resolution did not pass and it appears to me that it did not pass principally because it sought to cite a statement by the Primates Council of GAFCON that condemned the Duncan deposition but that also called for the establishment of a separate province in North America for orthodox Anglicans (I also voted for that resolution). At this point in the life of our diocese, the overwhelming view of both the clergy and the lay orders is that we are not willing to speculate about a new province and, for now at least, our diocese prefers to work within the existing Anglican structures and particularly toward our consideration of an Anglican covenant.

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A general instruction on homilies and a jubilee year dedicated to the art of preaching were two ideas that emerged from the world Synod of Bishops after several prelates voiced a concern regarding the poor quality of sermons.

The theme was addressed Monday by Cardinal Marc Ouellet, the archbishop of Quebec and relator-general of the synod on the Word of God, under way in Rome through the end of October.

“Despite […] that the homily was made subject of the [Second Vatican Council], we still feel great lack of satisfaction on the part of many faithful with regard to the ministry of preaching,” said the cardinal.

He said this “lack of satisfaction explains why many Catholics turned toward other groups and religions.”

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The Bush administration is expected to take stakes in the nation’s top financial institutions as part of a wide-ranging effort to restore confidence to the battered banking system, following similar moves by European governments that sent global stock markets soaring.

As part of its new plan, the government is set to buy preferred equity stakes in nine top financial institutions, according to people familiar with the situation. It’s unclear how much would be invested in each institution. The move is designed to remove any stigma that might come with a government investment.

Banks receiving government funds include Goldman Sachs Group Inc., Morgan Stanley, J.P. Morgan Chase & Co., Bank of America Corp., Citigroup Inc., Wells Fargo & Co. and Bank of New York Mellon.

Not all of the banks involved are happy with the move, but agreed under pressure from the government.

Read it all. Also, note that Nouriel Roubini is still concerned.

A Benton County father found in contempt for violating a custody agreement that barred him from promoting Mormonism to his two sons lost his appeal at the Arkansas Court of Appeals on Wednesday.

Joel Mark Rownak and Lisa Monette Rownak agreed in their 2005 divorce to raise their children “in the Protestant faith.” The decree bars them from promoting another religion without the other’s consent.

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One does not like to play fast and loose with Scripture, but imagine if, after John had baptised Jesus, a man in a peaked cap with a leather satchel slung on his shoulder had come down from the banks of the Jordan and presented the Baptist with a bill for the water he had used. That is what is suddenly happening to churches in England.

They are having to pay water bills for the first time, even though some of them use no water. Where churches are struggling to survive, the extra expense may tip the scales and make them close. This is the prospect faced by Park Lane Unitarian Chapel at Bryn, near Wigan, which was founded in 1697.

“If suddenly you propose something like a 20 per cent increase on our outgoings, we would very quickly find ourselves eating into our very limited resources,” commented Ian Lowe, a trustee of the chapel. “It is unthinkable, but we could go out of existence.”

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Is it ever justifiable to intentionally target innocent civilians in order to achieve political or military ends? Eighty, 81 and 86 percent of British, Canadian and American citizens say never. But only 46 percent of Iranians say never. A striking 24 percent of Iranians say attacks on civilians are often or sometimes justified, and 6 percent say such attacks are completely justified.

The previous sentences are lies, dangerous lies.

The fact that these lies nestle so easily into our presumed knowledge suggests why we need to reconsider what many of us think we know about Islam””and ourselves. This important new book is a great place to begin such a rethinking.

If Americans who aim to follow the way of Jesus are indeed interested in removing the planks from our own outlook before surgically removing the splinters from the perspectives of others, Who Speaks for Islam? provides a mirror to help us compare our crude stereotypes and rough-cut assumptions with a much more nuanced and surprising reality.

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What’s your advice to the remnant of evangelicals still in the Episcopal Church about giving up church property?

Their property isn’t worth their souls’ health. While our property is precious and important, if it becomes an overwhelming aim, it’s probably good to let go of it. But having said that, the principle thing I would say is that we’re very hopeful that the spirit that we’ve been blessed with here in Pittsburgh will produce a settlement that will [make] a better way forward across the country. We’re also hopeful that the Episcopal Church, in losing battle after battle, will finally just decide that these property battles aren’t worth fighting.

So three things: First, I hope that the way we go through this will provide a precedent both moral and legal for the way other situations might be settled across the country. Second, I hope that the continued failure of the Episcopal Church in its litigation might help it wake up and cease the litigation. And third, in any place where the property has become an overwhelming issue, it might be better for evangelicals to let go of it. Trust the Lord that he’s got the cattle on 10,000 hills. He’s able to restore to us what we lost.

Do you have any second thoughts about creation of this new province for conservative Anglicans?

No second thoughts about it. I would have hoped that the Anglican Communion might simply recognize us as the legitimate bearers of the Anglican franchise here. But that’s not likely to happen in the short run. The significance of the Episcopal Church deposing me is much greater than what most people would assume in this battle for a province. For the worldwide Anglican Communion to see me deposed has been absolutely sobering, and even moderates are shocked and stunned by it.

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Surveys show that cheating in school ”” plagiarism, forbidden collaboration on assignments, copying homework and cheating on exams ”” has soared since researchers first measured the phenomenon on a broad scale at 99 colleges in the mid-1960s.

The percentage of students who copied from another student during tests grew from 26 percent in 1963 to 52 percent in 1993, and the use of crib notes during exams went from 6 percent to 27 percent, according to a study conducted by Dr. Donald McCabe of Rutgers. By the mid-1990s, only a small minority said they had never cheated, meaning that cheating had become part of the acceptable status quo.

Dr. McCabe’s later national survey of 25,000 high school students from 2001 to 2008 yielded equally depressing results: more than 90 percent said they had cheated in one way or another.

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Rhythm is the longest English word without a vowel ”” though it has to be admitted that “y” acts as a sort of vowel. It is also basic to our enjoyment in life. We breathe, walk and swim rhythmically, usually without noticing it. We appreciate music, poetry and drama. We become more balanced in our quality of life when rhythms develop naturally.

A man of wisdom once wrote: “Hurry is actually a form of violence exercised upon God’s time in order to make it ”˜my time’.” (Donald Nicholl, Holiness.) In reordering our lives in moments of turmoil, it may be worth considering the rhythm of a year, rather than just of a day or a month. Imagine the year ahead of you. What comes to mind? When does that year begin? Whose year is it? An intriguing question is how do you make God smile? One answer may be that you tell Him your plans.

God sees farther and wider than you see, knows you better than you know yourself and loves you more than you have ever been loved.

Read the whole piece.

It is pure guesswork whether last night’s European measures will create stability or trigger a further rout in financial markets when they open this morning. But two things are fairly clear about this surprisingly strong and cohesive package. First, while short-term stock market reactions are unpredictable, there can be reasonable confidence about the package’s economic impact ”” it will avert a catastrophic economic collapse or long-term depression. Secondly, the ability of European governments to launch their own financial rescue without waiting for US leadership represents a fundamental shift in global economic relations.

Let me begin with this second point. Since the creation of the Bretton Woods monetary system in 1944 every global financial initiative of any significance has been devised, led and co-ordinated by the US Government. This US leadership did not mean that America always got its way in financial affairs ”” nor that US co-ordination always succeeded, as exemplified by the breakdown of Bretton Woods in 1971. But it did mean that international financial initiatives were never attempted until ideas and the leadership came from Washington. The sole exception to this rule in the past 30 years was the creation of the euro; but this was viewed in Washington as an intra-European affair with limited global consequences.

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In 2000, a united financial services industry persuaded Congress to allow a vast, unregulated market in derivatives, which are contracts in which investors essentially bet on the future price of a stock, commodity, mortgage-backed security or other thing of value.

Derivatives ”” so named because their value derives from something else ”” also are known as hedges, swaps and futures. They are designed to lower risks for buyers and sellers, but in some cases, economists now say, they gave investors a false sense of security.

Today, derivatives are compounding the risks to a shaky economy because they are tied to complex mortgage securities that have plummeted in value. Instruments called credit default swaps, for example, were supposed to insure investors against default of mortgage-backed securities. With a mass collapse of those bonds, it’s not clear how the swaps can pay off….

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Catholics feel so at home in the United States that they can joke about the times when their faith was a severe impediment to high national office. After Al Smith’s Catholicism played a major role in his defeat in the 1928 presidential election, or so the old Catholic joke goes, he sent a one-word telegram to Pope Pius XI ”” “Unpack.” By the same token, however, it’s perfectly natural for Catholics to hear echoes of anti-Catholic prejudice when others ask, “What are Catholic politicians supposed to do if public policy is in conflict with Catholic doctrine? Where’s the bright line between faith and public service?” After all, virtually no one else gets asked those questions in American public life.

Still, the questions are there. So are the confusions, some of them caused by Catholic intellectuals who don’t get the logic of the Church’s social doctrine, and others by Catholic politicians who muddy the waters by suggesting that the moral teaching of popes and bishops is “sectarian.” In the hope of answering the questions and clarifying the confusions, I offer the following “small catechism” on the responsibilities of the Catholic politician.

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Americans spent nearly twice as much on first-day sales of the video game Grand Theft Auto IV as would be needed by the Southern Baptist Convention to share the gospel with all the world’s “unreached people groups” by 2010, according to a new report on church giving.

The annual report, by the Illinois-based group Empty Tomb Inc., found a general downward trend in church member giving through 2006, which led authors to propose a “global triage to treat what ails the church.”

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Many people who turned out to worship at the Rev. William Payne Memorial Anglican Church, Benin, were prevented from participating in the usual Sunday service by youths protesting alleged ethnicity in the church.

The church situated at 121 A, Mission Road, Benin, was shut down by ministers and worshippers were prevented from gaining access to the complex to prevent a break down of order.

The church is said to have been plagued by disaffection caused by alleged ethnic disenchantment between Igbo speaking worshippers and other ethnic groups.

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Take the time to listen to it all or, if you prefer read the transcript provided by Jill Woodliff here.

There was much debate over the rightness, or better stated, the wrongness of this entire allegation, and there was considerable opposition to the charge against Bishop Duncan. The resistance to the action being taken was centered more on what was seen as pre-emptive action pertaining to the interpretation of the Constitution and Canons of General Convention [2006] and failure to provide due process. The pre-emptive action as applied to the Canons, and failure for proper process, rest in the fact that Bishop Duncan was never inhibited, nor did he have the right of a trial made available to him.

The ruling to place this before the House for deposition was made by the Presiding Bishop, and as I have previously written to the diocese, I was one of the bishops that challenged the ruling based upon the irregularities stated above. This required a two-thirds majority to overrule, and thus did not carry. This was subsequently followed by a request for a roll call vote being asked for by nine bishops, myself included. These things were not carried out in the form of a rebellious mood, but rather, with deep concern for the direction the Church is moving with total disregard for proper order, adherence to the Constitution and Canons, and a precedent being set that will enable the disruption of any bishop or diocese that does not subscribe to the present direction of General Convention or the Office of the Presiding Bishop.

Some, I am certain, will argue about the actions of Bishop Duncan and some of the people of the Diocese of Pittsburgh, and seek to justify the action of the Presiding Bishop and the House of Bishops. My argument is not whether or not he did something, but the fact that we have a new rule of order that has evolved, and it has not been brought about by the Councils of the Church nor is in keeping with Canonical structure. As I have shared before, this is a precedent that is a danger to the dignified order of The Episcopal Church as we have known it, and this must be corrected.

Read it all carefully.

The average price of a gallon of gasoline in the United States recorded its largest drop ever as consumer demand continued to wane and oil prices slid, a prominent industry analyst said on Sunday.

The national average price for self-serve, regular unleaded gas fell 35.03 cents to $3.3079 a gallon on October 10 from $3.6582 two weeks earlier, according to the nationwide Lundberg Survey.

It was the lowest national average price since March 21, 2008. Since peaking at $4.1124 on July 11, the average cost of a gallon of gas has receded by 80.45 cents. Diesel fuel fell 21 cents to $3.95 a gallon, the first time since March that it has been below $4.00 a gallon.

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After a whirl of emergency weekend meetings on both sides of the Atlantic aimed at rescuing the global financial system, Britain began propping up three banks Monday with taxpayer funds while the Federal Reserve and three European central banks announced that they will offer financial institutions unlimited dollars to ease the banking crisis.

Before markets opened in Europe, a statement from the Federal Reserve in Washington said that it, along with the Bank of England, the European Central Bank and the Swiss National Bank would provide funds at a fixed interest rate in advance of each operation “against the appropriate collateral in each jurisdiction.”

The Federal Reserve said it would increase its swap lines with those central banks “to accommodate whatever quantity of U.S. dollar funding” institutions demand. The Bank of Japan was considering joining the plan, the Federal Reserve said in a statement.

In anticipation of an array of banking-related announcements on Monday, Asian markets seemed to have steadied and registered significant gains compared to sharp declines of last week as chaos battered global stocks. European markets opened higher while stock futures in the United States ”” which are bets on the direction of the market before its opening ””rose.

Read it all. The full Fed announcement is well worth noting in full:

:In order to provide broad access to liquidity and funding to financial institutions, the Bank of England (BoE), the European Central Bank (ECB), the Federal Reserve, the Bank of Japan, and the Swiss National Bank (SNB) are jointly announcing further measures to improve liquidity in short-term U.S. dollar funding markets.

The BoE, ECB, and SNB will conduct tenders of U.S. dollar funding at 7-day, 28-day, and 84-day maturities at fixed interest rates for full allotment. Funds will be provided at a fixed interest rate, set in advance of each operation. Counterparties in these operations will be able to borrow any amount they wish against the appropriate collateral in each jurisdiction. Accordingly, sizes of the reciprocal currency arrangements (swap lines) between the Federal Reserve and the BoE, the ECB, and the SNB will be increased to accommodate whatever quantity of U.S. dollar funding is demanded. The Bank of Japan will be considering the introduction of similar measures.

Central banks will continue to work together and are prepared to take whatever measures are necessary to provide sufficient liquidity in short-term funding markets.

Federal Reserve Actions
To assist in the expansion of these operations, the Federal Open Market Committee has authorized increases in the sizes of its temporary swap facilities with the BoE, the ECB, and the SNB, so that these central banks can provide U.S. dollar funding in quantities sufficient to meet demand.

These arrangements have been authorized through April 30, 2009.

The government’s plan to buy equity in financial institutions, announced Friday by Treasury Secretary Henry Paulson, is an idea that many academic economists have championed from the start of the crisis.

Many economists believed that the heart of the government’s initial plan to pay $700 billion for toxic assets was aimed at the wrong target. Purchasing mortgage securities from banks wouldn’t do anything to kick-start lending and get credit flowing again, they said. Rather, banks would use the proceeds they got from the Treasury to pay off debtors, and those debtors would use the proceeds to buy safe assets.

They said a wiser course — the one the Treasury now seems to have come around to — was for government to rebuild the badly depleted cash levels on bank balance sheets. That would cushion institutions against future losses, giving them the wherewithal to lend again. Other hitches in the original plan include coming up with a price for mortgage securities that is above the “fire sale” level they would draw on the open market, but not so high that taxpayers end up getting taken for a ride.

Read it all.