The Fed is Asked To Deliver Us From Financial Evil. Can It?
March 31st, 2008 - by: danny
WAS THIS AN APRIL FOOLS DAY PRESENT?
What goes around comes around – and in my case ends up on CNBC. Guess what? The rant I delivered about CNBC to a CNBC reporter while watching the protest at Bear Stearns last week, the one still on Mediachannel.org (via YouTube) was picked by CNBC’s Power Lunch program yesterday, I guess, to show me and the world how open they are to all points of view.
I wrote to them suggesting they have me on to debate. I doubt they will, but, as this bit of media agitation shows, anything can happen and often does. This reminds me of a speech I gave eons ago accepting my first Emmy in Boston. I told the audience that I had just been denouncing the Emmys, but now considered them exemplary. Everyone laughed, including myself.
FED DAY ON WALL STREET AGAIN!
MORE OIL DISCOVERED IN, SHOCK , IRAQ
MANY STATES BLAME CREDIT SQUEEZE FOR CUTBACKS
MONDAY was not just the end of March. It was the end of the first quarter. It was also Fed day on Wall Street, or should I, along with Floyd Norris of the NY Times , say another Fed day in the government’s effort to put a damper on the danger of a deeper financial collapse..
“I count six separate days in the first quarter, which ended today, when the Fed announced actions. They are:
Jan. 22, when it cut the discount rate. Jan. 30, when it cut the discount and Fed funds rates. March 7, when it announced plans to inject money into financial markets March 11, when the Fed and other central banks announced plans to inject more credit into markets. March 16, when it financed the rescue of Bear Stearns and cut the discount rate March 18, when it cut the Fed funds and discount rates.”
There were 2538 new stories on Google today all about the Fed.
Most of the Wall Street firms welcomed the Paulson Plan to use the Fed to impose new rules on an unruly market, even as many fear it will cut into profits. Nobody seems to be in a hurry to make changes either since everyone recognizes that any real proposed changes will take time, and drag on.
Congress was relived by that, according to Dow Jones’ Market Watch:
WASHINGTON (MarketWatch) — Members of Congress, with a few notable exceptions, reacted calmly to Treasury Secretary Henry Paulson’s blueprint to overhaul the nation’s regulatory structure on Monday.
Why wouldn’t they, a cynic might ask. The Paulson plan doesn’t ask Congress to tackle many controversial and sensitive topics until after the November election. Therefore, campaign contributions from threatened interests can safely roll in until the election, and no oxen will have to be gored.
I have a piece up on Mediachannel, Huffington Post on other sites explaining why I don’t think the new plan will work, if it was ever intended to. Nomi Prinz, a former Goldman Sachs banker feels the same way. Her take is on Salon:
Here’s how to think about the proposed reform of financial oversight unveiled by Treasury Secretary Henry Paulson on Monday: The Federal Reserve Bank, whose job already includes regulating a large component of the financial system, has failed pretty badly at its tasks. The proposed solution – to give it more responsibility – seems ridiculous and hazardous.
Yet that’s the plan. Having ignored or been unduly confused by the complexity of the banks already under its jurisdiction, the new, improved Fed would get more books to examine for undue risk, adding in brokers and insurance companies.
WALL ST JOURNAL OP-ED
“The Fed responds to the credit crunch by cutting interest rates, which would be the seemingly correct textbook strategy if the economy were closed and the foreign exchanges could be ignored. But the economy is open, and capital flies out of the country. Because of the unique position of the U.S. at the center of the world dollar standard, the drain of Treasurys — the prime collateral in impacted credit markets — exacerbates the credit crunch, and monetary expansion abroad worsens world-wide inflation. The Fed then further expands in response to the tightening of U.S. credit markets.”
Paulson’s Financial Markets Reform Will Do Little for Current Crisis
KNIGHT RIDDER WASHINGTON BUREAU
WASHINGTON _ Treasury Secretary Henry Paulson makes public on Monday a new blueprint for regulation of the turbulent financial markets, one that has plenty to do with the future and little to fix what ails the economy right now.The plan would merge some federal bank regulators, weaken the agency that regulates the stock market and broaden the shoulders of the Federal Reserve, which will become the chief regulator for the safety and soundness of financial markets.The idea of modernizing the regulation of financial markets predated today’s current turmoil, and it was one of the reasons Paulson left his post as CEO of investment bank Goldman Sachs & Co. to take what many two years ago saw as a dead-end job.
INVESTMENT NEWS: Dodd looking into Dimon’s Fed connection
J.P. Morgan CEO also sits on board of New York Fed – which brokered bank’s bid for Bear Stearns
The chairman of the Senate Banking Committee has expressed concern about a conflict of interest of J.P. Morgan chief executive Jamie Dimon. Specifically, Mr. Dimon held a Federal Reserve Bank of New York board seat while his bank was talking with the Fed about The Bear Stearns takeover.
“[Mr. Dimon] also sits on the board of directors at the Federal Reserve in New York. Having decisions being made over the weekend with an institution where its leader is also a member of that board raises some serious issues,” Sen. Christopher J. Dodd, D-Conn., said in a National Public Radio interview.
When asked if he suspects that Mr. Dimon’s New York Fed board seat might have been a conflict of interest, Mr. Dodd said:
“This is what we needed to talk about.”
Senate Finance Committee Chairman Max Baucus, D-Mont., and Senator Charles Grassley, R-Iowa, said they are seeking details on how J.P. Morgan’s buyout of Bear Stearns was negotiated.
BUSINESS WIRE.COM
Corporate homebuilders — including those responsible for the mortgage and housing crisis — would receive billions of dollars in tax breaks under a provision of the Foreclosure Prevention Act currently pending in Congress, according to a report released today.’
AP: WILL THINGS GET WORSE?:
“It’s been almost an article of faith: Any recession this year will be mild and brief.But now the stunning meltdown of a top Wall Street investment bank and stubbornly persistent financial market turbulence has called that into question, raising fears that severe problems in housing and the nation’s bedrock financial system could cripple the economy and wallop many millions of Americans.But the severe credit crisis that erupted last August – and claimed its biggest victim two weeks ago with the forced sale of Bear Stearns Co. – is raising doubts about those mild forecasts. ”
AN OPED IN THE BOSTON GLOBE SAYS RATING AGENCIES NEED TO BE REFORMED TO REESTABLISH TRUST – OR ELSE
Scott Burns and Laurence J. Kotlikoff write:
“Are we over-dramatizing? We don’t think so. With the Bear Stearns bailout, the Fed has pledged $330 billion to shore up banks, investment companies, hedge funds, and quasi-governmental lenders. This is a pittance measured against the $10 trillion in mortgages or mortgage-backed securities held by these institutions.
If home prices keep falling and delinquencies keep rising, the Fed will have a terrible choice: Let these institutions fail or print trillions of dollars. The first course could leave the financial system and economy in free fall. The second could spell hyperinflation.
AND TO MY FRIENDS IN NY WHO THINK WE ARE INSULATED
2008-03-31 – Bloomberg.com
‘New York City’s residential real estate market is showing the first signs of fallout as U.S. banks and securities firms cut the most jobs in seven years.’
WP: STATES HARD HIT BY CREDIT COLLAPSE
NEW YORK — In Illinois’ Cook County, women in poor neighborhoods no longer have access to free mammograms from two mobile vans testing for breast cancer.
In Michigan, hikers will find about 20 campgrounds closed, and scientists are ending their studies of fish populations in the Great Lakes.
In New Jersey, state workers are being laid off, and at least one town is canceling its traditional Fourth of July fireworks.
And in California’s San Fernando Valley, Everardo Orozco, 53, who has AIDS, exhausted his medical benefits and can no longer afford the drugs that are keeping him alive.
“I don’t know which ones I can afford every month,” Orozco said, explaining how his supply is dwindling and his share of the payments has skyrocketed from $400 to $3,200 per month. He now injects himself with some medications once a day instead of twice — not enough to keep his T-cell count from dropping or to prevent his body from becoming resistant to treatment. And he fears that there will be more cuts.
State budgets have been hit hard by a worsening national economy, including rising costs for energy and health care. In addition, fallout from the subprime mortgage crisis — declining home sales, deflated property values and mounting foreclosures — has caused a slide in states’ anticipated tax receipts. Revenue from property taxes, sales taxes and real estate transfer taxes is affected.
At least half of the nation’s states are facing budget shortfalls, some of them severe, and policymakers in most of the states affected are proposing and passing often-painful measures to trim costs and close the gaps. Spending on schools is being slashed, after-school programs are being curtailed and teachers are being notified of potential layoffs. Health-care assistance is being cut for the elderly, the disabled and the poor. Some government offices, such as motor vehicle department locations, will start closing on weekends, and some state workers are receiving pink slips.
THE D WORD IS OUT OF THE CLOSET
A VIEW FROM THE UK: USA 2008: The Great Depression
We knew things were bad on Wall Street, but on Main Street it may be worse. Startling official statistics show that as a new economic recession stalks the United States, a record number of Americans will shortly be depending on food stamps just to feed themselves and their families.
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Obama Snags Texas, Zimbabwe Vote A ‘Dead Heat;’ Sadr’s Smart
March 31st, 2008 - by: danny
In Our election news, issues page: http://www.truthout.org/issues.shtml
TO: Obama Wins Most Texas Delegates
The Associated Press reports: “Sen. Barack Obama has won the overall delegate race in Texas thanks to a strong showing in Democratic county conventions this past weekend.” Obama reportedly is out spending Hillary on the airwaves in Pennslylvania. In Zimbabwe’s election, there is a “dead heat.”
BUSH’S HUD SECRETARY OUT, FACES CRIMINAL PROBE
WASHINGTON (March 31) – The Bush administration’s top housing official, under criminal investigation and intense pressure from Democratic critics, announced Monday he is quitting.
Housing and Urban Development Secretary Alphonso Jackson said his resignation will take effect on April 18. The move comes at a shaky time for the economy and the Bush administration, as the housing industry’s crisis has imperiled the nation’s credit markets and led to a major economic slowdown.
PENTAGON SPY FOR CHINA CAUGHT
WASHINGTON (AFP) – A Pentagon official pleaded guilty Monday to passing US military secrets to an agent working for China after being showered with gifts and gambling money, the Department of Justice said. Gregg William Bergersen, 51, faces up to 10 years in jail after admitting to one count of conspiracy to disclose national defense information to persons not entitled to receive it, the department said in a statement.
Steve Soto-ICH: Al-Sadr’s Clever “Retreat”
Al-Sadr knows that he and his forces cannot win a face-to-face battle with American forces and air power, and that attempting to engage in such a prolonged battle is a recipe for decimation and destruction of Iraqi cities.
YOU ARE GOING TO WANT TO SEE THIS MOVIE: Errol Morris’s Take on Abu Ghraib. Powerful.
RELEASE: 60 Minutes interviewed a German resident held by the US for almost five years in Afghanistan. He claims American troops tortured him by holding his head underwater, administering electric shocks to the soles of his feet, and suspending him from the ceiling of an aircraft hangar while being kept alive by doctors. These shocking allegations harken back to abuses at Abu Ghraib and the scandal that ensued.
“Standard Operating Procedure,” a documentary out April 25 from Errol Morris (“The Fog of War”, “The Thin Blue Line”), examines the events at Abu Ghraib through the photographs taken and interviews with the soldiers involved. It is the story of how a small group of lowly soldiers were blamed for policy decisions and a war out of control.
BLOOD FOR OIL?
Can you believe that just now, just yesterday it was reported publically that Iraq has more oil than anyone thought. I am sure that everyone did not include the Oil Industry and the CIA. They must have known but kept the news to themselves lest anyone think. Heavens to Betsy as Donald Rumsfeld may have said that this war was about oil. Perish the thought.
A WP op-ed by Steven Mufson, the Post’s energy correspondent, titled “A Crude Case for War?”:
It’s hard to miss the point of the “Blood for Oil” Web site. It features one poster of an American flag with “Blood for oil?” in white block letters where the stars should be and two dripping red handprints across the stripes. Another shows a photo of President Bush with a thin black line on his upper lip. “Got oil?” the headline asks wryly.
Five years after the United States invaded Iraq, plenty of people believe that the war was waged chiefly to secure U.S. petroleum supplies and to make Iraq safe — and lucrative — for the U.S. oil industry.
We may not know the real motivations behind the Iraq war for years, but it remains difficult to distill oil from all the possibilities. That’s because our society and economy have been nursed on cheap oil, and the idea that oil security is a right as well as a necessity has become part of our foreign policy DNA, handed down from Franklin D. Roosevelt to Jimmy Carter to George H.W. Bush. And the war and its untidy aftermath have, in fact, swelled the coffers of the world’s biggest oil companies
FT story titled ”Iraq may hold twice as much oil”:
Iraq could hold almost twice as much oil in its reserves as had been thought, according to the most comprehensive independent study of its resources since the US-led invasion in 2003.
The potential presence of a further 100bn barrels in the western desert highlights the opportunity for Iraq to be one of the world’s biggest oil suppliers, and its attractions for international oil companies — if the conflict in the country can be resolved.
If confirmed, it would raise Iraq from the world’s third largest source of oil reserves with 116bn barrels to second place, behind Saudi Arabia and overtaking Iran.
The study from IHS, a consultancy, also estimates that Iraq’s production could be increased from its current rate of less than 2m barrels a day to 4m b/d within five years, if international investment begins to flow.
That would put Iraq in the top five oil-producing countries in the world, at current rates.
THE PRICE OF GAS – UP!
WASHINGTON (Reuters) – The U.S. retail price for gasoline set a new high of $3.29 a gallon after rising 3.1 cents over the last week, the federal Energy Information The national price for regular, self-service gasoline is up 58 cents from a year ago as expensive crude oil continued to be passed on to consumers at the pump, the Energy Department’s analytical arm said in its weekly survey of service stations.
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Media:Rendell on Fox, Rovics on Art Bell, Reader onSupporting US
March 31st, 2008 - by: danny
LEADING DEM PRAISES FOX
Jerry Policoff sends this along:
Pennsylvania governor and former DNC chairman Ed Rendell appeared this morning on Fox & Friends, and complimented the network for its “very balanced” coverage.
“Fox has done the fairest job, has remained most objective of all the cable networks – you hate both our candidates,” Rendell said. “No, I’m only kidding, but you actually have done a very balanced job of reporting the news.”
Rendell, who is a supporter of Sen. Hillary Clinton, also mentioned how FNC has not gotten “caught up with Senator Obama” (maybe he didn’t mind those “two hours of Obama bashing” a couple weeks ago).
BBC Redesigns News Site With Video Push
The BBC is rolling out a new look for its news Web site as part of an ongoing redesign of bbc.co.uk. The news and sport pages will now feature an embedded video service. The site will also include more promotion of the video services around breaking news and live events.
SINGER DAVID ROVICS ON ART BELL AND HIS PEOPLE
For over a decade I’ve made a living as a touring musician. As a hardcore news junkie, when satellite radio came into existence I was one of its very first customers, and since I got one I’ve been able to saturate myself with BBC World Service and the English-language broadcasts of public radio from around the world to my heart’s content. But for the many years before satellite radio, during my many late-night drives across the plains, deserts and corn fields of the US, choices were much slimmer.
In the early morning or late afternoon there was usually an NPR (Nationalist Petroleum Radio) station to be found, or, very occasionally, a Pacifica affiliate where I might listen to my favorite radio news programs, Democracy Now! and Free Speech Radio News. (At the very beginning, these programs could be heard on satellite radio via the Hispanic Radio Network, but that channel soon vanished from the satellite airwaves — over one hundred choices offered, but no news channel to the left of Al Franken…)
But late at night, there were four choices. On the FM airwaves, commercial pop anti-music of various prefabricated genres brought to you by ClearChannel. On AM, you could choose from rightwing Christian evangelists, Rush Limbaugh and Art Bell. The evangelists don’t really do anything for me, but when I was getting sleepy, I’d listen to Rush, because he’s always good for waking me up — the powerful desire to strangle someone tends to keep you alert. But most of the time, if I wasn’t tired, I’d tune in to Art Bell.
For those unfamiliar with Art Bell’s show, it was a corporate-sponsored, nightly, several-hour-long show that has since been passed on to other hosts last I heard, and can generally be found on at least two different AM signals anywhere in the country every weeknight, starting sometime after midnight, as I recall. He apparently broadcast from somewhere in Nevada near the infamous Area 51, where he and many of his guests seemed to believe the US military was experimenting with space aliens who had landed there some time ago.
His guests tended to be authors who had written books or made documentaries about aliens from outer space, telepathy, what all the ghosts are up to these days, Hitler being alive and living in the Antarctic, crop circles, and so on. Being a science fiction fan and one who has had personal experiences that have led me to at least consider the possibility that there is validity in some of these claims, about what Art called the paranormal, I listened with interest to Art and his guests, although usually it was fairly evident they were full of shit.
Listening to Art’s guests and to the men (and very occasionally women) who called in, I remembered the excitement I felt as a child, before I developed a more three-dimensional understanding of the world around me, before I developed a fairly solid capability for critical thinking, before I began to understand how to read between the lines of the biases of the various authorities, experts and pundits out there in the textbooks, newspapers and airwaves. I remembered the excitement of having secrets with certain friends that only we “knew.” My own pet theories as a child included the notion that cows were not as stupid as they looked, standing around chewing cud, that they were actually engaged in astral travel, using their apparent stupidity as a grand cover of some kind. I fairly well convinced myself in the existence of dragons and elves and other mythical creatures, long after I had realized there was no Santa Claus.
But the fantasy life of children can become very odd when practiced by grown men. Many, if not most, of Art’s guests and callers seemed to believe that the things they “knew,” such as their prevalent idea that the US military was hiding space aliens in Area 51, were phenomenae that only people like them and Art were being honest about. The rest of the media, society, and the powers-that-be were either ignorant about these realities, or, at least as often, were engaging in a huge, X-Files kind of coverup.
SARAH MEYER ON AL JAZEERA
Sarah Meyer writes from England:
ref Al Jazeera. I learn more about Iraq from my twice-daily viewing of al Jazeera news than on any US / UK corporate media programme. Al Jazeera also has a superb discussion program Inside Iraq:
I also regularly watch 101 East,and and Rageh Omaar’s ‘Witness:’
So perhaps Al Jazeera’s policy is changing, but I have not yet noticed anything restrictive which would stop me watching this program. Jazeera still puts the western media to shame – which is why, I guess, it is banned in much of the U.S. of Terror.”
TAX WINDFALL COMING? SUPPORTING MEDIA CHANNEL SAYS READER
Dan Beach writes from Florida
Hi Danny -
I’ve been thinking about what the best use would be for the $600 check which our government is dispensing to me in May.
I sure as hell am not spending it at WalMart (though an extra supply of duct tape and plastic might prove useful).
Your dissection of the financial crisis in this country has been groundbreaking and brilliant.
So in May, to help our economy, I can think of no better way than to pass my government check on to you.I can think of no better use. And I would like to urge others to do the same.
Keep up the great work!
Thank you for thinking of us. Happy to hear what the rest of you think. Emails to Dissector @medachannel.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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