As The Economic Crisis Deepens, Fed Cuts Rates AGAIN And Stocks Fall
January 31st, 2008 - by: danny
BANKS IN THE NEWS: “VENEZUELAN police have swooped on a getaway ambulance used by robbers escaping from a dramatic two-day bank siege. They arrested four bandits affected by drink and drugs and freed the last of the hostages after a marathon ordeal.”
WHITE HOUSE OPTIMISTIC AS FED CUTS RATES AGAIN
STOCKS FALL, CRISIS DEEPENS
RALPH NADER “EXPLORING” ANOTHER RUN FOR THE WHITE HOUSE
The word from 37,000 feet and Denial Central is nothing to worry about. Reuters reports from high in the sky:
ABOARD AIR FORCE ONE (Reuters) – The White House played down talk that the United States might be headed for a recession and said a report on fourth-quarter gross domestic product released earlier on Wednesday did not change its outlook.
“I have not heard at all that we have changed our outlook, and we are not forecasting a recession,” White House spokesman Tony Fratto told reporters traveling with President George W. Bush to California for the start of a tour of western states.
U.S. GDP in the fourth-quarter grew at a meager annual rate of 0.6 percent, the Commerce Department said. That reading was weaker than 1.2 percent rate forecast by private economists.
And meanwhile, the Federal Reserve bank cut the interest rate AGAIN, the second time in 8 days. You have to realize that this is not done unless they are really worried. They cited “considerable stress in financial markets.” Yahoo reported:
“The Fed action pushed the funds rate to 3 percent… The half-point cut Wednesday followed news that the economy had slowed significantly in the final three months of last year with the gross domestic product expanding at a barely discernible pace of 0.6 percent, less than half what had been expected. The report came amid increased concern from several quarters about a possible recession.” — Possible, or begun a year ago?”
So what happened. Did the economy bounce back? NOPE. Actually, stocks fell, as the Age reported in Australia:
A volatile night in US trading ended with stocks turning negative late in the session despite the Federal Reserve’s decision to slash a key interest rate for the second time in nine days in a bid to stave off recession.”
Note that word again” “Stave Off.” It is now the Dissector’s choice for the most overused cliché of the week
WHO BENEFITS FROM RATE CUTS?
Dean Baker raises this question on the American Prospect website: “Is the Fed Bailing Out the Economy or the Banks?”
That is the question that reporters covering the latest rate reduction should be asking. When the Fed announced its 0.5 percentage point rate cut this afternoon, something very interesting happened: long-term interest rates rose. The 10-year treasury rate jumped by about 5 basis point when the Fed announced its rate cut. The current rate of 3.72 percent is about 34 basis points higher than the low hit earlier this year.
….“The long-term rate matters much more for the economy than the short-term rate since it affects the rate that people will pay on mortgages, car loans and most other important sources of credit. If the Fed’s rate cuts lead to higher long-term rates, then it is possible that it is actually slowing growth by cutting rates.”
SUBPRIME LENDERS REWARDED
And meanwhile, Bloomberg reports that the suboprime lenders are getting a big break on accounting rules:
By following new guidelines issued last month by a banking- industry group called the American Securitization Forum, Hewitt said servicers will be allowed to modify subprime mortgages where defaults are “reasonably foreseeable,” without jeopardizing the trusts’ off-balance-sheet treatment.
Of course, you can’t make money out of nothing, so this just means the losses will bleed in over a long period of time where investors will be “surprised” by earnings shortfalls.
This is of course DISGUSTING – but only the business press is reporting it. It was this “forum” that wrote the Bush mortgage relief plan which got so much press and helped very few. And read this Zogby poll:
Zogby/South Florida CEO Poll: Housing Market a Major Concern More than one-quarter of residents know someone whose home was foreclosed upon.
HOME OWNERSHIP IN RECORD PLUNGE
MORTGAGE CRISIS CREATES GHOST TOWN
Besides the fact that asset strippers are having a field day in such neighborhoods, the prophet, James Howard Kunstler has been validated: The suburbs are the slums of the future
A WEBSITE TO HELP PEOPLE JUST WALK AWAY FROM THEIR HOMES
ALSO SEE MY MEMO TO THE FBI URGING MORE INVESTIGATIONS OF WHITE COLLAR CRIMINALS ON MEDIACHANNEL.ORG
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Katrina Suit Against Army Corps Of Engineers Dismissed; World News Briefs
January 31st, 2008 - by: danny
KATRINA VICTIMS SUE, SUIT DISMISSED
NEW ORLEANS – A federal judge threw out a key class-action lawsuit Wednesday against the U.S. Army Corps of Engineers over levee breaches after Hurricane Katrina, saying that the agency failed to protect the city but that his hands were tied by the law.
U.S. District Judge Stanwood Duval ruled that the Corps should be held immune over failures in drainage canals that caused much of the flooding of New Orleans in August 2005.
The ruling relies on the Flood Control Act of 1928, which made the federal government immune when flood control projects like levees break.
By Matt Wade Herald Correspondent in Islamabad and agencies
A FORMER head of Pakistan’s military intelligence says Australia’s troop deployment in Afghanistan is doomed to failure and has urged the Government to withdraw its forces as quickly as possible.
NYT: Power Failures Outrage South Africa
Electricity shortages, now expected to be a fact of life for the next five years, are threatening economic growth.
ISRAEL COMMISSION CRITICIZES WAR CONDUCT
NYT: JERUSALEM – In a widely anticipated judgment, a formal inquiry released Wednesday found “grave failings” among Israel’s political and military leaders in the 2006 Lebanon war, especially in their failure to decide what kind of war to fight.
But the inquiry was less scathing than many had expected in evaluating the performance and motivations of Prime Minister Ehud Olmert, and he seemed likely to keep his post.
The war against Hezbollah was “a serious missed opportunity,” the inquiry concluded, in which “a semi-military organization of a few thousand men resisted, for a few weeks, the strongest army in the Middle East, which enjoyed full air superiority and size and technological advantages.”
NOTE: THE WORDS CLUSTER BOMBS DOES NOT APPEAR IN THE ENGLISH SUMMARY, Israel dropped over a million bomblets on Southern Lebanon after a cease fire accord was reached.
AOL/AP: HAITIANS HUNGRY, HAVE TO EAT DIRT
Hungry Haitians Resort to Eating Dirt
PORT-AU-PRINCE, Haiti (Jan. 29) – It was lunchtime in one of Haiti’s worst slums, and Charlene Dumas was eating mud.
With food prices rising, Haiti’s poorest can’t afford even a daily plate of rice, and some take desperate measures to fill their bellies….
Merchants truck the dirt from the central town of Hinche to the La Saline market, a maze of tables of vegetables and meat swarming with flies. Women buy the dirt, then process it into mud cookies in places such as Fort Dimanche, a nearby shanty town.
Carrying buckets of dirt and water up ladders to the roof of the former prison for which the slum is named, they strain out rocks and clumps on a sheet, and stir in shortening and salt. Then they pat the mixture into mud cookies and leave them to dry under the scorching sun
Why Lovers of Israel Should Vote for McCain (according to Joe Lieberman)
By Shmuel Rosner, Haaretz Correspondent
In an interview with Haaretz, Lieberman says he believes McCain is the candidate most likely to thwart a nuclear Iran.
DECEPTION EXERCISES Margaret Thatcher told Royal Navy to Raid Swedish Coast
By Pelle Neroth, MilitaryForums (UK) Jan/27, 2008
MARGARET THATCHER ordered the Royal Navy to land Special Boat Service (SBS) frogmen on the coast of Sweden from British submarines pretending to be Soviet vessels, a new book has claimed.
The deception involved numerous incursions by British forces into Swedish territorial waters in the 1980s and early 1990s, designed to heighten the impression around the world of the Soviet Union as an aggressive superpower.
Sometimes the boats landed commandos, but often their job was to fool the Swedes by mimicking the sonar signals given off by the Soviet vessels that stalked the same waters.
The Swedish government, neutral in the cold war, is not believed to have known about the deceptions, which were carried out by the British and American navies.
See the whole Post / →
RALPH NADER RUNNING AGAIN, RIGHT WING RADIO DETESTS MCCAIN
January 31st, 2008 - by: danny
CNN reports Ralph is running… again:
NADER SEES A VACUUM, JUMPS IN
WASHINGTON (CNN) — Ralph Nader, the longtime consumer advocate who was blamed by many Democrats for Al Gore ¹s loss in the 2000 presidential election, launched an exploratory committee Wednesday for another White
House bid, and told CNN he is likely to get in the race if he can put the resources in place.
“John Edwards, the banner of Democratic Party populism, is dropping out, and Dennis Kucinich dropped out earlier, so in terms of voters who are at least interested in having major areas of injustice, depravations, and solutions
discussed in a presidential campaign, they might be interested in my exploratory effort,” Nader said.
Nader has launched an official exploratory committee Web site, and said he will formally make a decision in about a month. He said he is certain to ge in the race if he can demonstrate the ability to raise $10 million and
recruit enough lawyers to deal with ballot access issues. He also said he has formally filed paperwork with the Federal Elections Committee, though the FEC said it has yet to receive anything from him.
Nader said he finds Democrats Hillary Clinton and Barack Obama both unacceptable candidates, and he said whichever wins the party’s presidential nomination will not have an impact on his decision to run.
INTERSTING–THERE IS NO MENTION OF THE GREEN PARTY IN THIS REPORT!
ITS OFFICIAL: ALSO ON CNN—- Rudy Giuliani says he is ending his bid for GOP presidential nomination, endorsing Sen. John McCain. Mcain was also endorsed by Governor Arnold S.
And Get this – from the Fishbowl Blog – Conservative Talk Radio Is Not Happy with McCain:
One of the curious side narratives of this wide open election season is the way that talk radio has injected itself onto the Republicn presidential primary process. Here in New York City there is a radio station — the influential WABC — in which virtually every host is virulently opposed to Senator John McCain receiving the nomination. Lisetening to the conservative station is not unlike listening to a continuous 24-hour anti-John McCain ad. What effect, however, this has on the primary process in the tri-state area on Super Duper Tuesday is not immediately apparent.
From the AP: ”John McCain heads into Tuesday’s Florida primary facing resistance from not only his fellow candidates, but also from the leaders of conservative talk radio, who some suggest have put their reputations on the line, as well.
”Talk radio pioneer Rush Limbaugh said that if McCain or Mike Huckabee are nominated, ‘it’s going to destroy the Republican Party.’ Mark Levin calls the senator ‘John McLame.’ On Monday, Laura Ingraham said she was “concerned about the mental stability of the McCain campaign” and had cuckoo-clock sound effects accompany his words.
”Radio host Michael Medved said that the big loser in South Carolina was talk radio, ‘a medium that has unmistakably collapsed in terms of impact, influence and credibility because of its hysterical and one-dimensional involvement in the GOP nomination fight.”’
OTHER MEDIA NEWS
I WANT MEDIA.COM Google Exec: We Won’t Become a Media Company
David Eun, the head of Google’s content partnerships, insists that the Internet behemoth won’t be a competitor to traditional media. Producing content is “not our business,” he says. “Journalists, news bureaus — that’s not what we do.”
Survey: Google, Murdoch Are ‘Media Sensations’
Search giant Google, its mobile developer platform Android, and rising News Corp. exec James Murdoch are the “media sensations to watch” in 2008, according to a survey of media execs by the Guardian Media Group. Of those canvassed, 44% say they read a print newspaper every day.
And that’s the Dissector blog for today. Comments to dissector@mediachannel.org
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About Danny Schechter
Danny Schechter is an Emmy award winning journalist, television producer and independent filmmaker who also writes, blogs and speaks about media issues.
His latest film is PLUNDER The Crime Of Our Time.
Mr. Schechter is NOT the Godfather of Soul.
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