Happy New Year!

According to tales and legends, the beginning of Chinese New Year started with the fight against a mythical beast called the Nian or "Year" in Chinese. Nian would come on the first day of New Year to devour livestock, crops, and even villagers, especially children. To protect themselves, the villagers would put food in front of their doors at the beginning of every year. It was believed that after the Nian ate the food they prepared, it wouldn’t attack any more people. One time, people saw that the Nian was scared away by a little child wearing red. The villagers then understood that the Nian was afraid of the color red. Hence, every time when the New Year was about to come, the villagers would hang red lanterns and red spring scrolls on windows and doors. People also used firecrackers to frighten away the Nian. From then on, the Nian never came to the village again. The Nian was eventually captured by Hongjun Laozu, an ancient Taoist monk. The Nian became Hongjun Laozu's mount.

The world according to Wiki ^ up there. It is the year of the Ox, Earth Ox, to be exact.

Inaugural Eve

Carlos Sim is not known for making bad investments. Yet he's, alledgely, investing in the New York Times (former employer of mine). I'm lefting shaking my head, wondering why. See Gawker (I know, I know) for some details.

The Sulzbergers have done a piss-poor job of running the Grey Lady for at least two decades now and I'd be happy to see a reputable journalist take over (not Murdoch). But Slim? He's apt to leave the biggest loser, Art, in charge - unless he completely takes over and brings in someone new and I'm not sure who that could be at this point.

~ ~ ~

The Swamp, aka Washington DC, has become the center of the known Universe. At least until Wednesday morning.

Media executives must have been paying attention last week when President Bush declared a state of emergency for Tuesday's inaugural.

CNN's Washington bureau chief David Bohrman, for one, issued a "news emergency" of his own.

While Bush freed up federal funds, Bohrman made available satellite phones in the event of rolling cell phone blackouts. There will be cots and air mattresses for staffers camping out in the newsroom on Monday night, along with shower arrangements at a nearby health club. Staffers will be treated to a pancake breakfast prior to braving the bitter cold and bulging crowds.

"It's the biggest event any of us have ever had to cover," Bohrman said.

While this is an important and historic inauguration, once again the media have gone bat-shit crazy. And not in a good way. I wish we could give the totality of the Fourth Estate a large sedative, a blankie and a teddy bear and send them off for a good, long nap. Gods knows they need it. They've been running hysterically amuck since the Bronco incident with OJ Simpson... in 1994? Something like that - nearly 15 years of a never-ending adrenaline rush. Poor things must be exhausted.

Long time no post

Real life gets in the way.

Let see, what's new... survived Thanksgiving and Christmas, though I had the stomach bug from Hell the week before Christmas. Not fun. My godson turned four on the 5th; the twins will be 15 on the 26th (gawds I'm so old!) and it's colder than sin outside right now

Mr. Obama got elected in November. Let's see where this leads. I wish him well. It can't get any worse, right?

Right?

Ah well... I'm not going to complain about Bush, the economy, the war, politics...

crickets

only in this cold snap all the crickets are dead.


Ah, weather! One can always complain about the weather!

Not much point though, huh?


Good news: "Miracle on the Hudson" - everyone survived, with some injuries, from the plane crash yesterday. NYT follow-up story this afternoon: Left Engine Missing From Downed Plane

“The left engine is not there; it’s somewhere,” Ms. Higgins said. "We’ve got to go find that.”

Birds are now and have always been a severe problem for airports and it's amazing there aren't more crashes attributed to birds.

Since 2000, at least 486 commercial aircraft have collided with birds, according to the Federal Aviation Administration. Of those incidents, 166 led to emergency landings and 66 resulted in aborted takeoffs.

Canada geese, a frequent visitor to golf courses and open spaces in the metropolitan New York area during the winter, pose a particular danger to planes because of their size. The impact of a 12 pound bird hitting a plane traveling at 150 miles per hour is equal to that of a 1,000 pound weight dropped from a height of 10 feet, according to experts on bird strikes.

A butterfly rests on a flower at the Nehru Zoological Park

Spotted this picture on Yahoo! this morning and figured it was a better way to start a three-day holiday weekend.

Three day weekends

Are Awesome!

Well, for most people... I'm cleaning, sorting, changing drapes, getting rid of boxes I have been storing in the closet since my move in APRIL! Fun, no? Ah well... it has to be done.

Came across an excellent article at Gawker.com this morning, on why 2008 is 1932 all over again. Two of the comments I really liked were:

Our eagerness for change may be the death of us, if this is 1976. Can domeocrats for once just promise to give this 2 years to stick, and stop eating each other's young?

and

This is 2008. We have C+ student whom God elected invade a sovereign country, spend all the surplus in our treasury while cutting taxes and printing more money than any other President, plus the mass extinction of the middle-class and we wonder what it is all about? This is none of the above. These 8 years will go down in history and finally end trick-le down economics. Rome invented coins and became a empire, Britain invented paper money and became an empire, America invented plastic money and became an empire. What we are seeing is an empire in retraction. Blame the internets

Looking at the insanity of global markets over the past couple of days I keep remembering FDR's first inaugural address:

I am certain that my fellow Americans expect that on my induction into the Presidency I will address them with a candor and a decision which the present situation of our people impel. This is preeminently the time to speak the truth, the whole truth, frankly and boldly. Nor need we shrink from honestly facing conditions in our country today. This great Nation will endure as it has endured, will revive and will prosper. So, first of all, let me assert my firm belief that the only thing we have to fear is fear itself—nameless, unreasoning, unjustified terror which paralyzes needed efforts to convert retreat into advance. In every dark hour of our national life a leadership of frankness and vigor has met with that understanding and support of the people themselves which is essential to victory. I am convinced that you will again give that support to leadership in these critical days.

In such a spirit on my part and on yours we face our common difficulties. They concern, thank God, only material things. Values have shrunken to fantastic levels; taxes have risen; our ability to pay has fallen; government of all kinds is faced by serious curtailment of income; the means of exchange are frozen in the currents of trade; the withered leaves of industrial enterprise lie on every side; farmers find no markets for their produce; the savings of many years in thousands of families are gone.

More important, a host of unemployed citizens face the grim problem of existence, and an equally great number toil with little return. Only a foolish optimist can deny the dark realities of the moment.

Yet our distress comes from no failure of substance. We are stricken by no plague of locusts. Compared with the perils which our forefathers conquered because they believed and were not afraid, we have still much to be thankful for. Nature still offers her bounty and human efforts have multiplied it. Plenty is at our doorstep, but a generous use of it languishes in the very sight of the supply. Primarily this is because the rulers of the exchange of mankind’s goods have failed, through their own stubbornness and their own incompetence, have admitted their failure, and abdicated. Practices of the unscrupulous money changers stand indicted in the court of public opinion, rejected by the hearts and minds of men.

True they have tried, but their efforts have been cast in the pattern of an outworn tradition. Faced by failure of credit they have proposed only the lending of more money. Stripped of the lure of profit by which to induce our people to follow their false leadership, they have resorted to exhortations, pleading tearfully for restored confidence. They know only the rules of a generation of self-seekers. They have no vision, and when there is no vision the people perish.

The money changers have fled from their high seats in the temple of our civilization. We may now restore that temple to the ancient truths. The measure of the restoration lies in the extent to which we apply social values more noble than mere monetary profit.

Happiness lies not in the mere possession of money; it lies in the joy of achievement, in the thrill of creative effort. The joy and moral stimulation of work no longer must be forgotten in the mad chase of evanescent profits. These dark days will be worth all they cost us if they teach us that our true destiny is not to be ministered unto but to minister to ourselves and to our fellow men.

Recognition of the falsity of material wealth as the standard of success goes hand in hand with the abandonment of the false belief that public office and high political position are to be valued only by the standards of pride of place and personal profit; and there must be an end to a conduct in banking and in business which too often has given to a sacred trust the likeness of callous and selfish wrongdoing. Small wonder that confidence languishes, for it thrives only on honesty, on honor, on the sacredness of obligations, on faithful protection, on unselfish performance; without them it cannot live.

Restoration calls, however, not for changes in ethics alone. This Nation asks for action, and action now.

Our greatest primary task is to put people to work. This is no unsolvable problem if we face it wisely and courageously. It can be accomplished in part by direct recruiting by the Government itself, treating the task as we would treat the emergency of a war, but at the same time, through this employment, accomplishing greatly needed projects to stimulate and reorganize the use of our natural resources.

Hand in hand with this we must frankly recognize the overbalance of population in our industrial centers and, by engaging on a national scale in a redistribution, endeavor to provide a better use of the land for those best fitted for the land. The task can be helped by definite efforts to raise the values of agricultural products and with this the power to purchase the output of our cities. It can be helped by preventing realistically the tragedy of the growing loss through foreclosure of our small homes and our farms. It can be helped by insistence that the Federal, State, and local governments act forthwith on the demand that their cost be drastically reduced. It can be helped by the unifying of relief activities which today are often scattered, uneconomical, and unequal. It can be helped by national planning for and supervision of all forms of transportation and of communications and other utilities which have a definitely public character. There are many ways in which it can be helped, but it can never be helped merely by talking about it. We must act and act quickly.

Finally, in our progress toward a resumption of work we require two safeguards against a return of the evils of the old order; there must be a strict supervision of all banking and credits and investments; there must be an end to speculation with other people’s money, and there must be provision for an adequate but sound currency.

There are the lines of attack. I shall presently urge upon a new Congress in special session detailed measures for their fulfillment, and I shall seek the immediate assistance of the several States.

Through this program of action we address ourselves to putting our own national house in order and making income balance outgo. Our international trade relations, though vastly important, are in point of time and necessity secondary to the establishment of a sound national economy. I favor as a practical policy the putting of first things first. I shall spare no effort to restore world trade by international economic readjustment, but the emergency at home cannot wait on that accomplishment.

The basic thought that guides these specific means of national recovery is not narrowly nationalistic. It is the insistence, as a first consideration, upon the interdependence of the various elements in all parts of the United States—a recognition of the old and permanently important manifestation of the American spirit of the pioneer. It is the way to recovery. It is the immediate way. It is the strongest assurance that the recovery will endure.

In the field of world policy I would dedicate this Nation to the policy of the good neighbor—the neighbor who resolutely respects himself and, because he does so, respects the rights of others—the neighbor who respects his obligations and respects the sanctity of his agreements in and with a world of neighbors.

If I read the temper of our people correctly, we now realize as we have never realized before our interdependence on each other; that we can not merely take but we must give as well; that if we are to go forward, we must move as a trained and loyal army willing to sacrifice for the good of a common discipline, because without such discipline no progress is made, no leadership becomes effective. We are, I know, ready and willing to submit our lives and property to such discipline, because it makes possible a leadership which aims at a larger good. This I propose to offer, pledging that the larger purposes will bind upon us all as a sacred obligation with a unity of duty hitherto evoked only in time of armed strife.

With this pledge taken, I assume unhesitatingly the leadership of this great army of our people dedicated to a disciplined attack upon our common problems.

Action in this image and to this end is feasible under the form of government which we have inherited from our ancestors. Our Constitution is so simple and practical that it is possible always to meet extraordinary needs by changes in emphasis and arrangement without loss of essential form. That is why our constitutional system has proved itself the most superbly enduring political mechanism the modern world has produced. It has met every stress of vast expansion of territory, of foreign wars, of bitter internal strife, of world relations.

It is to be hoped that the normal balance of executive and legislative authority may be wholly adequate to meet the unprecedented task before us. But it may be that an unprecedented demand and need for undelayed action may call for temporary departure from that normal balance of public procedure.

I am prepared under my constitutional duty to recommend the measures that a stricken nation in the midst of a stricken world may require. These measures, or such other measures as the Congress may build out of its experience and wisdom, I shall seek, within my constitutional authority, to bring to speedy adoption.

But in the event that the Congress shall fail to take one of these two courses, and in the event that the national emergency is still critical, I shall not evade the clear course of duty that will then confront me. I shall ask the Congress for the one remaining instrument to meet the crisis—broad Executive power to wage a war against the emergency, as great as the power that would be given to me if we were in fact invaded by a foreign foe.

For the trust reposed in me I will return the courage and the devotion that befit the time. I can do no less.

We face the arduous days that lie before us in the warm courage of the national unity; with the clear consciousness of seeking old and precious moral values; with the clean satisfaction that comes from the stern performance of duty by old and young alike. We aim at the assurance of a rounded and permanent national life.

We do not distrust the future of essential democracy. The people of the United States have not failed. In their need they have registered a mandate that they want direct, vigorous action. They have asked for discipline and direction under leadership. They have made me the present instrument of their wishes. In the spirit of the gift I take it.

In this dedication of a Nation we humbly ask the blessing of God. May He protect each and every one of us. May He guide me in the days to come.

Thanks to History Matters, where I found the speech.

Bloggers, pass on the meme. I bitch, whine and moan about the economy, GWB and the evil clown college, and have been doing so for years ~ nothing new here. And, it changes nothing. But it doesn't keep me awake nights, it doesn't interfere with my daily life. I guess I'm lucky. But people are afraid and they need to know we've been here before (and will be here again because human beings never learn from history) and survived. It was painful, unpleasant, difficult... but we survived then and we will survive again.

I just hope we learn something this time.

Remarkable

It wasn't the car wreck I was hoping for; in fact, it was quite interesting. After watching Palin for 1.5 hours I came away thinking "cheerleader" - she's an excellent cheerleader for McCain. Hopefully she'll never end up in the Oval because cheer leaders do not good leaders make. She was extremely well coached and she, for the most part, stayed dead-on script. I can't help but wonder if she's capable of thinking on her own. I'm guessing not.

I must say I was shocked by Senator Biden. Where the hell did he come from? If he had performed like that during primary season he might have made it to the convention. The Senator's performance has made me feel a tad better about the Democrats. The VEEP position, however, is pretty much an empty space. Unless something happens to the President, the VEEP is just marking time. They have no real role, no real job. So Biden's brilliant performance helps Obama but it doesn't really matter in the end.

The Chicago Tribune asks, "Who won the VP debate?" and gives a very good summation of the debate itself. I think the answer is that the Democrats won - but I don't think the Republicans lost. I think the Democrats will win the election in November. I'm hoping they'll have a plan, an idea, a clue on how to fix this country after the last eight years.

I'm not holding my breath.

VEEP Debate

I don't normally watch the VEEP debates but this debate should be, at the very least, funny.

CSI is pre-empted anyway.

Palin vs. Biden: Pitfalls galore

Between Sarah Palin, with her repeated missteps in a series of interviews with CBS anchor Katie Couric over the last week, and gaffe-prone Joe Biden, who also has made for some Maalox moments for Barack Obama’s campaign recently, the two running mates have set the stage for what may be the most anticipated vice presidential debate in history.

With all their potential for pitfalls and insta-classic moments, the pair has made the build up to the showdown, to take place here Thursday night at Washington University, feel more like a NASCAR race than a serious political forum: the audience may be tuning in as much in anticipation of cringe-inducing pile-ups as they are to watch the typical parry-and-thrust of debate.

I don't know about anyone else, but that's exactly why I'm tuning in. Goodness knows we won't learn anything. I have some lovely wine to enjoy, some knitting to do and, as the temperatures have dropped in the great North East, cats who need to snuggle up against me on the couch.

“Voters aren't tuning in for a vice presidential food fight,” said Biden spokesman David Wade. “This debate is about two very different philosophies of where to take the country.”

It's exactly what people want to see. I'm betting Caribou Barbie can whoop Biden's ass without breaking a sweat or putting a single hair out of place. I've believed for years that if presidential candidates would just do one mud wrestling match voter turn out on election day would probably hit 75%.

As difficult as it may seem given her recent public performances, aides to Biden are casting Governor Palin as a knife-fighter who shredded debate foes in Alaska.

"I think Governor Palin will do well. She's good with the proverbial knife and she can deliver a prepared one-liner and quick jab very effectively. She's a former broadcast journalist who excels on television, and she's a career politician who climbed the ladder by out-debating political legends in Alaska," said Biden spokesman David Wade.

"There's a reason they call her barracuda," added another Obama aide, taking the expectation-setting to an even higher level.

Hm. Maybe we should just go all out panem et circenses in this country, starting with this election. The jackass with the highest ratings wins.

BTW: If a monkey and Superman had a knife fight on the Moon, who would win?

Huffington Post

Rich Man's Panic

Investors should expect the Dow Jones Industrial Average to fall below 10,000 points, as the current credit crisis is a repeat of the 'Rich Man's Panic' of 1907, Tom Hougaard, chief market strategist from City Index, told CNBC.

A bit of forgotten financial history:

"We've been here before … About one hundred years ago we had an identical credit crunch," Hougaard said, adding that the Dow lost nearly 50 percent in over two years due to the 1907 crisis, which indicates further downside yet to come for today's markets.

The 'Rich Man's Panic' was caused by a severe lack of liquidity as banks pulled back lending and led to numerous bank runs and eventually the creation of the Federal Reserve in 1913.

"It's most likely to get worse before it's going to get better … I don't think we're really seeing this capitulation just yet, but we're close," Hougaard said, adding that the S&P 500 could take out the low of the 2002 bear market, which was 944.

I think this is acutally worse than the 1907 panic, even though there are more safty measure in place now than at that time. And I don't see any J.P. Morgan's looming on the horizon...

See also: 5 Lessons About What Happened To The Economy You Didn't Learn From CNBC.

This is why I miss the West Wing

BARTLET GET ANGRIER! Call them liars, because that’s what they are. Sarah Palin didn’t say “thanks but no thanks” to the Bridge to Nowhere. She just said “Thanks.” You were raised by a single mother on food stamps — where does a guy with eight houses who was legacied into Annapolis get off calling you an elitist? And by the way, if you do nothing else, take that word back. Elite is a good word, it means well above average. I’d ask them what their problem is with excellence. While you’re at it, I want the word “patriot” back. McCain can say that the transcendent issue of our time is the spread of Islamic fanaticism or he can choose a running mate who doesn’t know the Bush doctrine from the Monroe Doctrine, but he can’t do both at the same time and call it patriotic. They have to lie — the truth isn’t their friend right now. Get angry. Mock them mercilessly; they’ve earned it. McCain decried agents of intolerance, then chose a running mate who had to ask if she was allowed to ban books from a public library. It’s not bad enough she thinks the planet Earth was created in six days 6,000 years ago complete with a man, a woman and a talking snake, she wants schools to teach the rest of our kids to deny geology, anthropology, archaeology and common sense too? It’s not bad enough she’s forcing her own daughter into a loveless marriage to a teenage hood, she wants the rest of us to guide our daughters in that direction too? It’s not enough that a woman shouldn’t have the right to choose, it should be the law of the land that she has to carry and deliver her rapist’s baby too? I don’t know whether or not Governor Palin has the tenacity of a pit bull, but I know for sure she’s got the qualifications of one. And you’re worried about seeming angry? You could eat their lunch, make them cry and tell their mamas about it and God himself would call it restrained. There are times when you are simply required to be impolite. There are times when condescension is called for!

Aaron Sorkin Conjures a Meeting of Obama and Bartlet , Maureen Dowd's Op Ed from LAST WEEK that I just found.

It just gets better and better

WaMu becomes biggest bank to fail in US history.

As the debate over a $700 billion bank bailout rages on in Washington, one of the nation's largest banks — Washington Mutual Inc. — has collapsed under the weight of its enormous bad bets on the mortgage market. The Federal Deposit Insurance Corp. seized WaMu on Thursday, and then sold the thrift's banking assets to JPMorgan Chase & Co. for $1.9 billion.

Seattle-based WaMu, which was founded in 1889, is the largest bank to fail by far in the country's history. Its $307 billion in assets eclipse the $40 billion of Continental Illinois National Bank, which failed in 1984, and the $32 billion of IndyMac, which the government seized in July.

One positive is that the sale of WaMu's assets to JPMorgan Chase prevents the thrift's collapse from depleting the FDIC's insurance fund. But that detail is likely to give only marginal solace to Americans facing tighter lending and watching their stock portfolios plunge in the wake of the nation's most momentous financial crisis since the Great Depression.

Bailout Talks to Resume After Impasse:

In the Roosevelt Room after the session, the Treasury secretary, Henry M. Paulson Jr., literally bent down on one knee as he pleaded with Ms. Pelosi not to “blow it up” by withdrawing her party’s support for the package over what Ms. Pelosi derided as a Republican betrayal.

“I didn’t know you were Catholic,” Ms. Pelosi said, a wry reference to Mr. Paulson’s kneeling, according to someone who observed the exchange. She went on: “It’s not me blowing this up, it’s the Republicans.”

Mr. Paulson sighed. “I know. I know.”

Hm. Didn't know Pelosi was the Pope.

At the White House, Mr. Bush was holding fast to the approach that Mr. Paulson has championed.

“In case there’s any confusion,” Mr. Fratto, the deputy press secretary, wrote in an e-mail message. “The president supports the core of Secretary Paulson’s plan.”

Which doesn't fill me with the warm and fuzzies. I'm not sure this plan is anything more than a band-aide on a gaping wound. However, something must be done and fast (and a chat with Sweden couldn't hurt). WaMu managed to survive a week until buyout, but there are others out there that won't. Chase most likely can't come to the rescue of any other banks and I'm not sure any other banks can either. International intervention is desperately needed - but if I were Canada, China, Japan I'm not sure I'd be willing to risk my nation's assets in the US right now.

~ ~ ~

As if the Financial Tsunami weren't enough, New England is getting hammered with a nor'easter and probably a tropical storm. When it rains, it pours.

Inspiration

"If money isn't loosened up, this sucker could go down,"

Brilliant. This was at the meeting that nearly, may still, implode the bailout plan:

Democrats accused Boehner of acting on behalf of GOP presidential candidate Sen. John McCain in trying to disrupt a developing consensus. The new proposal also displeased White House officials, including Treasury Secretary Henry M. Paulson Jr., who chased after Democrats leaving the meeting and -- half-jokingly -- dropped to one knee and pleaded with them not to "blow up" the $700 billion deal, according to people present at the meeting.

Before the meeting broke up, President Bush had issued a stark warning about the impact on the nation's economy if the measure did not pass. "If money isn't loosened up, this sucker could go down," Bush said, according to one person in the room.

Did you watch the Palin interviews? My sweet lord... Alaska voted for this woman? From the LA Times:

Her third nationally televised interview, with CBS anchor Katie Couric, found Palin rambling, marginally responsive and even more adrift than during her network debut with ABC’s Charles Gibson.

In a 40-minute session with Couric that aired Wednesday and Thursday nights, the Alaska governor defended her puzzling claim that geographic proximity makes her some sort of expert on Russia; went nearly blank when queried about McCain's achievements as a big-business regulator; agreed America "may find itself" on the road to another Great Depression; and, promoting a troop surge in Afghanistan, casually suggested that it "will lead us to victory there, as it has proven to have done in Iraq."

What the hell planet does this woman live on?

"That's why I say I, like every American I'm speaking with, we're ill about this position that we have been put in . . ." Palin began, before meandering off in fruitless pursuit of coherence.

But I'll let the governor speak for herself:

" . . . where it is the taxpayers looking to bail out. But ultimately, what the bailout does is help those who are concerned about the healthcare reform that is needed to help shore up our economy. Um, helping, oh -- it's got to be all about job creation too. Shoring up our economy, and putting it back on the right track. So healthcare reform and reducing taxes and reining in spending has got to accompany tax reductions, and tax relief for Americans, and trade, we've got to see trade as opportunity, not as a competitive, um, scary thing, but 1 in 5 jobs being created in the trade sector today. We've got to look at that as more opportunity. All of those things under the umbrella of job creation. This bailout is a part of that."

I bet republicans are wondering if McCain is a closet Democrat. The whole interview was hysterically funny... but not in a good way. What the hell is McCain thinking in picking this Hockey Mom? No offense to Hocky Mom's across the US, but... hello? Is there a brain there? What the hell does this woman do as Governor of Alaska?

Palin at least kept her answers shorter during a Q&A with reporters Thursday morning, her first such session since McCain unleashed her on the national scene four weeks ago.

Although she didn't really answer two of the four questions, many Americans won't hold that against her. They see someone who understands what it's like in a small town.

Common sense has its value, and commentaries like this one, suggesting Palin's shortcomings, will only confirm to her fans that she is not a pet of the media elite. But it seems only sensible to wonder whether charm and pluck will be enough the next time Putin rears his head.

Yeah... well... Small Town America ain't that stupid.

Or, are they? Hell, they voted for the Moron currently in charge.

It seems I'm back to "we're screwed" again.

How to save the US economy

Sell the Virgin Islands to Richard Branson.

Now it won't completely solve the problem, but it'll go a long way towards paying down our debt. And since he always names everything Virgin anyway... less work for him!

Maybe we should just go whole hog and have him buy the US.

Virgin America, owned by Richard Branson.

I think I'll send him an email.

Will the Japanese come to our rescue again?

Back from the dead, Tokyo banks buy into Wall Street

Once considered too naive and cautious for the high-risk, high-return world of investment banking, cash-rich Japanese firms are once again aggressively pushing abroad.

"The balance of power in the global financial industry has changed dramatically over the past one to two weeks," said Shinichi Ina, banking analyst at Credit Suisse in Tokyo.

"I don't think anyone imagined a few months ago that Mitsubishi would be making Morgan Stanley into a group firm. I don't think they could have imagined it themselves."

~ ~ ~

Not that anyone listened...

Buffett's "time bomb" goes off on Wall Street

On Main Street, insurance protects people from the effects of catastrophes.

But on Wall Street, specialized insurance known as a credit default swaps are turning a bad situation into a catastrophe.

When historians write about the current crisis, much of the blame will go to the slump in the housing and mortgage markets, which triggered the losses, layoffs and liquidations sweeping the financial industry.

But credit default swaps -- complex derivatives originally designed to protect banks from deadbeat borrowers -- are adding to the turmoil.

"This was supposedly a way to hedge risk," says Ellen Brown, the author of the book "Web of Debt."

"I'm sure their predictive models were right as far as the risk of the things they were insuring against. But what they didn't factor in was the risk that the sellers of this protection wouldn't pay ... That's what we're seeing now."

Brown is hardly alone in her criticism of the derivatives. Five years ago, billionaire investor Warren Buffett called them a "time bomb" and "financial weapons of mass destruction" and directed the insurance arm of his Berkshire Hathaway Inc., to exit the business.

It's a fascinating, slighly complex, article which gives some details on the massive shell game played by Wall Street and the Federal Government just in the past couple of years.

~ ~ ~

Someone in China has been reading my mind:

China paper urges new currency order after "financial tsunami"

Financial Tsunami. That's what I keep think of this as, as well as The Perfect (Fiscal) Storm.

Hi, my name is Laura and I'm a big geek.

Threatened by a "financial tsunami," the world must consider building a financial order no longer dependent on the United States, a leading Chinese state newspaper said on Wednesday.

The commentary in the overseas edition of the People's Daily said the collapse of Lehman Brothers Holdings Inc., "may augur an even larger impending global 'financial tsunami'."

The article goes on to state:

China is a major buyer of U.S. Treasury bonds, and through its sovereign wealth fund it has taken stakes in two large U.S. financial institutions.

In July 2005, China revalued the yuan and freed it from a dollar peg to float within managed bands. But the yuan and China's trade remains tightly linked to the fortunes of the dollar.

The commentary suggested China must brace for grave economic fallout and look to alternatives, saying the crisis brings to mind the Great Depression of the 1930s.

"Lehman Brothers announced bankruptcy will not only have a domino effect on the global financial world, it will bring a shock to the world economy," the front-page comment stated.

It's not just a US problem - it's global. We need the rest of the world to help out the US, but after eight years of the Bush administrations horrendous foreign policy I don't see the rest of the world flocking to our side to help out. I can't say that I blame them, but it would be in their best interests to help the US.

I hope the rest of the world sees it that way as well.

"We must all hang together, or assuredly we shall all hang separately."
Benjamin Franklin

By the way...

Juan Cole is brilliant today. Go read: Informed Comment, A Nation of Masochists.

And in the wake of the greatest and most sustained act of systematic plunder since the Mongol hordes appropriated to themselves the riches of everyplace in Asia from Beijing to Isfahan, the reaction of the supine and slave-like American voting public is to scratch their heads and have a hard time deciding if they would like more of the same.

I know I won't be voting republican in November, but I'm still not happy with Obama.

Past is Prologue

Read about former President Herbert Hoover and the Great Depression.

~ ~ ~

How to Save the Financial System

As I write this article, I am seeing proposals by some to create a new Resolution Trust Corp., as we did in the 1990s to clean up the S&L problems. The RTC managed and sold assets from S&Ls that had already failed. It was run by the FDIC, just like the FDIC. We needed to create the RTC in the 1990s only because we could not comingle the assets from failed banks with those of failed thrifts, because we had two separate deposit insurance funds absorbing the respective losses from bank and thrift failures.

I can't imagine why we would want to create another government bureaucracy to handle the assets from bank failures. What we need to do urgently is stop the failures, and an RTC won't do that.

Again, we must take three immediate steps to prevent a further rash of financial failures and taxpayer bailouts. First, the SEC must suspend Fair Value Accounting and require that assets be marked to their true economic value. Second, the SEC needs to immediately clamp down on abusive practices by short sellers. It has taken a first step in reinstituting the prohibition against "naked selling." Finally, the bank regulators need to acknowledge that the Basel II capital rules represent a serious policy mistake and repeal the rules before they do real damage.

We are almost out of time if we hope to eradicate the cancer in our financial system.

Mr. Isaac, chairman of the Federal Deposit Insurance Corp. from 1981-1985, is chairman of the Washington financial services consulting firm The Secura Group, an LECG company.

Last major investment banks change status

Bush, Congress exchange views on relief bill

The mortgage buck stops where?

Americans need to hear a full-throated debate by lawmakers about the range of players in this mortgage maelstrom who either lied, took on too much debt, or failed to check creditworthiness as these loans were issued and then sold up the financial food chain to the point where it has become nearly impossible to determine their value.

They also need to hear about the government's role in encouraging a housing bubble – and that will mean Congress needs to look at itself. No longer should federal support for owning a home be based on the false premise that housing prices will always go up or that taxpayers are the final backstop for mortgage holders.

They had me at the melting cow

Gawker, that is: It's The "Absurd Financial Product Some Rich Person Actually Bought" Contest!, but I stayed for the story.

Today's decision by the Bush administration to stick us with even more debt (to the tune of half a trillion US$) is just insane. Re-inventing the RTC was a semi-decent idea yesterday, but it's morphed into a massive bailout for the entire economy. These idiots are re-financing the United States. Hell, they're re-financing BAD DEBT.

Ye gods and little fishes. Why the hell didn't we impeach the Clown College when they lied and invaded Iraq?

CNN wants to know, Will it work?

Um.

Those securities were backed by home loans, many made to buyers with bad credit or without proof of income. As housing values fell and foreclosures shot to record levels in the past two years, the value of those securities plunged. That in turn caused massive losses in the financial sector.

This week it reached a crisis situation. Banks and investment firms stopped making the loans to each other as they hoarded cash to protect against any sudden liquidity crunch as well from unknown problems on their partners' balance sheets.

No.

"I'm confident this will work," said Mark Zandi, chief economist with Moody's Economy.com. "The federal government is committed to backstopping the nation's financial system and will do whatever is necessary to make sure the system does not unravel. The details are important but secondary."

The Devil's in the detail Mr. Zandi. This bailout is going to cost more the Iraq war, which has already saddled the US with a multi-trillion dollar debt.

"If this doesn't work, we're in trouble, because there's not much more the government can do," said Jaret Seiberg, a financial services analyst at the Stanford Group. "They've left very few arrows in the quiver."

Good point Ms. Seiberg.

I'm a lot less optimistic than I was yesterday.

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Text of Paulson's news conference Friday

Paulson, Bernanke Expand U.S. Power to Rescue Markets

Rescue cost: Hundreds of billions

I was thinking of posting a sign

here, stating that United States was up for bidding

FOR SALE: ONE COUNTRY, BADLY USED, AVAILABLE NOW! CHEAP!!

but then spotted this piece in the LA Times:

Hey U.S., welcome to the Third World!

We thus want to acknowledge the progress you have made in your evolution from economic superpower to economic basket case. Normally, such a process might take 100 years or more. With your oscillation between free-market extremism and nationalization of private companies, however, you have successfully achieved, in a few short years, many of the key hallmarks of Third World economies.

Your policies of irresponsible government deregulation in critical sectors allowed you to rapidly develop an energy crisis, a housing crisis, a credit crisis and a financial market crisis, all at once, and accompanied (and partly caused) by impressive levels of corruption and speculation. Meanwhile, those of your political leaders charged with oversight were either napping or in bed with corporate lobbyists.

I wonder if there is some kind of an award... like the Nobel... for countries who tank fastest. Darwin award wouldn't do... no one has died from this stupidity. Yet. There is the Ig Noble but I think we deserve something better than that.

In any event, I think the US has won, by a land-slide. Seven years, plus a pointless war, is all it took. Seven short years. Of course the underpinnings of this disaster have been there for decades:

Take John McCain, your Republican presidential nominee, whose senior staff includes half a dozen prominent former lobbyists. As he recently put it, "I was chairman of the [Senate] Commerce Committee that oversights every part of the economy." No question about it: Your leaders' failure to notice the damage done by irresponsible deregulation was indeed an oversight of epic proportions.

Please, by all means possible, vote for Mr. Magoo in November. Let's just complete the hat-trick of the past two elections and keep putting greed-mongering, hate-filled useless politicans in office, mkay?? Thankx!

Not that the junior Senator from Illinois is a much better choice come November. At the very least he didn't help lead this country into damnation. No... he's just spent everyday since the last election tryin' to get elected this November. "First do no harm". Well, he did that, at least.

Admittedly, your transition to Third World status is far from over, and it won't be painless. At first, for instance, you may find it hard to get used to the shantytowns that will replace the exurban sprawl of McMansions that helped fuel the real estate speculation bubble. But in time, such shantytowns will simply become part of the landscape. Similarly, as unemployment rates continue to rise, you will initially struggle to find a use for the expanding pool of angry, jobless young men. But you will gradually realize that you can recruit them to fight in a ceaseless round of armed conflicts, a solution that has been utilized by many other Third World states before you. Indeed, with your wars in Iraq and Afghanistan, you are off to an excellent start.

Believe it or not, I actually have more hope than Ms. Brooks. I remember the 1970's recession. I remember when Japan practically bought the United States at fire-sale prices in that decade and how hated they were for doing it. I remember being in New York City in it's darkest hours and no, not 9/11, but the early 1970's recession hit NYC really hard. I remember the S&L meltdown of the 1980's; it was bad for most everyone, but we survived it. The problem is we learned nothing from these experiences.

We have short-term memories in the United States. It looks like it's The End Of Times, but it really isn't. It's bad... really, really bad, but we've been here before and we'll be here again. That's what happens when a people have short-term memory problems - they make the same mistakes over and over again.

Like Yogi said, it's deja vu all over again. Maybe this time the Arabs will buy us out.

~ ~ ~

One of my favorite websites: Improbable Research. Enjoy.

Just when you think America couldn't get any worse

we get Caribou Barbie as VEEP nom to run with Mr. Magoo.

Like Obama and Biden wasn't weird enough.

Is it too late to move to Canada?

Ostrich, meet sand

Financial Crisis Is Absent From Agendas of Parties, Candidates

Many Democrats shy away from tackling the credit crisis because of the party's historical support for Fannie and Freddie. The Republicans, for their part, are reluctant to draw attention to a crisis that occurred on their watch. The subprime meltdown isn't the only item missing from the parties' agendas. The list also includes the Democrats' failure to set out a strategy for countering Russia's assertiveness and the Republicans' silence on income inequality.

I LOVE Schumer's condescending quote:

Senator Charles Schumer, a New York Democrat, said conventions aren't the place to discuss detailed plans for dealing with the markets.

``The conventions are aimed at the average voter,'' he said Aug. 25 in Denver. ``You don't go into Quinlan's bar and ask them what to do about the'' Securities and Exchange Commission.

Of course his job is secure for four more years and then he can retire on his huge pension.

My second favorite quote is:

``We feel like we've taken a big step to stabilize the situation,'' said Senator Tom Carper of Delaware, a Democrat on the Banking Committee.

Seriously? Oy! Senator, you've done jack-all to "stabilize the situation".

``We are in the midst of the worst financial crisis since World War II,'' Stanley Fisher, governor of the Bank of Israel and a former IMF official, told central bankers in Jackson Hole, Wyoming, on Aug. 23.

Not that anyone inside the United States is listening. It's an election year and no politican will listen to, let alone accept, the truth about anything. As the article mentions towards the end, this situation is very similar to the 1930's.

History repeats itself people. I don't think either McCain or Obama have what it takes to deal with what is to come.

Happy Friday

So the Olympics end today.

yawn

I haven't watched any of it. But I bet one thing wasn't clear in the televised events:


Sex and the Olympic City

Ah yes, the swimmers. For some reason the International Olympic Committee insists on bunching the swimming events towards the beginning of the Games with the inevitable consequence that the aquatics folk get going earlier - sexually I mean - than everyone else. So much so that, at the outset of the Sydney Olympics, Jonathan Edwards, a Christian and triple jumper extraordinaire, caused a ripple by telling them publicly to keep a lid on it. Edwards was simply concerned about getting woken up by creaking floorboards, but given his biblical credentials, it became a story about morality. Not that his intervention made a blind bit of difference. There is a famous story from Seoul in 1988 that there were so many used condoms on the roof terrace of the British team's residential block the night after the swimming concluded that the British Olympic Association sent out an edict banning outdoor sex. Here in Beijing, organisers have realised that such prohibitions are about as useful as banning breathing and have, instead, handed out thousands of free condoms to the athletes. If you can't stop 'em, at least make it safe.

Ah, gotta love the hypocrisy, no? The whole article is really interesting.