An Example for George Bush and Dick Cheney to Follow

As I have opined awhile ago, Messrs. Bush and Cheney should have the courage of their convictions to take a lesson from the suicide of Mr. Roh. I'll make it known that the worst is yet to come for this economy as businesses of all kinds shed jobs. As a result, extraordinarily qualified people with GREAT credit ratings are getting laid off. While some will be fortunate enough to land jobs, many will not, and we are going to see a spike, as is noted, in foreclosures and bankruptcies of people who hitherto kept their finances in perfect harmony with the mantra "live within your means" and are going to watch what they have done by following all the rules go to the shitter. I don't mean to sound defeatist, but we have yet to see the worst from what Messrs Bush and Cheney and company did to this economy, not to mention our moral standing in the world through the "pay Halliburton on the public teat" war in Iraq and the atrocities that they sought and received legality for from attorneys who would legalize the guillotine if that was what King George and Queen Dick (or do I have that backward --somebody has to be the bitch, right?) Maybe we will read a headline like this for our own responsible parties for the calamity that, if I am reading the tea leaves correctly, is yet to come.

Randy Shiner

SKoreans mourn death, pay respects to ex-president

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AP – Women cry in front of a picture of former South Korean President Roh Moo-hyun during a funeral service …

By YOUNG-JOON AHN, Associated Press Writer – 22 mins ago

BONGHA, South Korea – Bowing deeply and laying white chrysanthemums before his portrait, tens of thousands of mourners journeyed Sunday to the southern village where former President Roh Moo-hyun killed himself by jumping off a rocky cliff overlooking his home.

But several top officials, including the prime minister, were turned away from the mourning rites for the liberal ex-leader, who had a fractious relationship with conservative opponents his supporters accuse of driving Roh to his death. They pelted a bus carrying conservative politicians with eggs and doused lawmakers with water.

The 62-year-old Roh, who relied on pluck and hard work to rise from his impoverished youth in rural Gimhae to become president in 2003, died Saturday after jumping from a promontory known as Owl's Rock that overlooks his home. He left behind a note describing his suffering over corruption allegations and asking to be cremated.

The government and Roh's family agreed to hold a public "people's funeral" after a seven-day mourning period, most likely on Friday, former Roh aide Han Hyung-min said.

Roh's suicide, just 15 months after he left office, came as he and his family faced intense questioning about $6 million given to the Rohs during his presidency by a Seoul businessman implicated in a number of bribery scandals.

The allegations weighed heavily on a man who prided himself on his "clean" record in a country struggling to shake a tradition of corruption. Prosecutors had been grilling Roh, his wife and their two children since last month.

"What's left for me for the rest of my life is just to be a burden to others," Roh wrote in a note on his computer minutes before leaving for the final hike to Owl's Rock with a security guard. "Don't be too sad. Aren't life and death both part of nature? Don't feel sorry. Don't blame anybody. It's destiny."

Roh's suicide stunned the nation of 49 million, which was divided during his presidency between those critical of his outspoken, antiestablishment ways and others who rallied around his efforts to promote democracy, fight corruption and facilitate rapprochement with North Korea.

Braving a downpour, nearly 80,000 trekked Sunday to Bongha, the village 280 miles (450 kilometers) south ofSeoul where Roh had lived since leaving office, to pay their respects at mourning tents erected at the community center, police said. Hundreds of Buddhist monks in gray robes and wide-brimmed hats held a solemn prayer service.

But not all visitors were welcomed. Roh supporters accuse South Korea's conservative right, led by President Lee Myung-bak and the Grand National Party, of pushing the corruption probe believed to have driven Roh to despair.

Prime Minister Han Seung-soo was turned away. Roh backers hurled eggs at a bus carrying Lee Hoi-chang, the conservative who lost the presidential election to Roh in 2002.

Supporters also reviled National Assembly Speaker Kim Hyong-o, dousing him with water. His aides tried to protect him from the angry onslaught with their umbrellas. Former Grand National Party leader Park Geun-hye, daughter of former President Park Chung-hee, also tried to pay her respects but wasn't able to reach the mourning site.

The mood Sunday in Seoul was somber. A line at Chogye Temple snaked around the lawn and into the street as Seoulites, many dressed in black and bearing flowers, waited to pay their respects. Many sobbed as they knelt before his smiling portrait.

At a mourning site outside Seoul's 16th-century Deoksu Palace, more than 16,000 waited in long lines to place white flowers, cigarettes — Roh had recently started smoking — and melons before portraits of the ex-leader.

"I'm really sad. I can feel how much pressure he had been suffering," said Moon Hye-kyung, a 47-year-old businesswoman, wiping away tears with a handkerchief. "I think he could have endured the pressure if it was leveled against only him, not his family members and aides."

She, like many others, blamed conservatives for Roh's suicide.

"The current government pushed this man into death. No doubt about that," said Moon.

But Hong Young-sik, 71, said the government wasn't to blame.

"Why are you guys gathering here? Did he do anything to be praised?" Hong, a former government official, shouted at the crowd. "He only killed himself because he was shamed out of the fact that his and his family's wrongdoing was revealed."

Scuffles broke out between riot police and Roh supporters collecting signatures for a petition calling for Lee's impeachment.

Along Seoul streets, mourners affixed yellow ribbons wishing Roh peace.

"We love you. We've been happy with you," some of the messages said. "Please go to heaven and live freely."

___

Associated Press writer Hyung-jin Kim in Seoul contributed to this report.

24 September 2008
Bush's Speech: Honor US Mr. President
Dear Mr. Bush:

I did not need to sit through a 14 minute speech for me to understand the lecture in macroeconomics that you gave just now to understand that this country, if you described it accurately, is fucked. And you and your so-called "administration" fucked it up. Now you are appointing Commissars who want unlimited power with NO review by ANYONE? This is what you support? Perhaps it was a sick joke by Commissar Paulson to come up with a three page "plan" whose contents contained little in the way of specifics, with the exception of section eight of the document, which of course is that very large paragraph in which Mr. Paulson presumably with your knowledge and consent, included in this document. Sir, I am hoping that that was a joke by your inner ruling circle, because you wanted to pass it off to Congress and let the next guy worry about it. Like YOU give a shit? You're all set. I'm sitting here uncertain about everything, including my health, and you get to retire back to Texas and Connecticut for a life of ease. Or maybe not. Perhaps the stench of your Presidence will haunt you forever. It would me, and I will never forget having to write the words I am writing here.

My knowledge of the Japanese culture stems in large measure as a consequence of a friend that I had in high school, Ronald Nakai, who was Nisei - second generation Japanese and with whom I stayed in touch until about 14 years ago for no particular reason. Whenever I would go to his house, I was treated with dignity, respect and honor, even though I was only a 12 0r 16 year old punk kid. Theirs, like mine, is a system of reverence for the past. Ron and I were famous fishing buddies, having the good fortune to be living in Chicago in the 1970s atttending Sullivan High School and when not in school or weekends, when the weather was nice, of course, fishing. But I especially remember a time when we went to his house, and they shared an ancient Japanese ritual that celebrated the rice harvest, as I recall. We each had a big mallet, which we used to strike a big, big ball of rice-dough, that we would smash into a pancake that would appear on the log-like thing that we were hitting. They took it very seriously and I was more than happy to participate. I remember the feeling of "hey, this is cool" when I was doing it, even though I only now realize the grander significance of the act. They were giving thanks to God for rice. Reverentially. Because they and I realize that the path to true holiness is through honor of the past and honor for the future as well. Wiithout honor, one cannot be truly holy.

The other part of Japanese culture that I only now see the grander significance of is the concept of hari-kiri, which is the most famous form of seppuku. Here is the Wikipedia definition of Seppuku:

Seppuku (切腹? "stomach-cutting") is a form of Japanese ritual suicide by disembowelment. Seppuku was originally reserved only for samurai. Part of the samurai honor code, seppuku has been used voluntarily by samurai to die with honor rather than fall into the hands of their enemies, as a form of capital punishment for samurai who have committed serious offenses, and for reasons that shamed them. Seppuku is performed by plunging a sword into the abdomen and moving the sword left to right in a slicing motion. The practice of committing seppuku at the death of one's master, known as oibara (追腹 or 追い腹, the kun'yomi or Japanese reading) or tsuifuku (追腹, the on'yomi or Chinese reading), follows a similar ritual.

I would contend that if you are half the soldier you crowed about in 2000 and again in 2004, you would want, I would hope, to be able to call yourself a samurai and proceed forthwith to commit seppuku. Between all the calamities that you have caused this country in the name of politics and money, you should be so ashamed of yourself that I at least hope you are man enough to have considered that this would be a perfectly legitemate way out of this life.

Then again, sir, I am sure that you have rationalized the whole thing as somehow being perhaps beyond even your office's power to affect. I am sorry, but your presidency has been marked by a string of failures so long that it can only mean one thing: the management of it is and has been utterly and completely disfunctional at its core. And in the job of this country's highest office, you simply failed to heed too many warnings, time and time again. About so many things. And you blindly insisted that things were OK, even though those of us in the hinterlands of the West Coast could already feel, via "for sale" signs in too many front lawns reading "bank foreclosure, that things were going to get this bad. There were those of us who knew things were bad, but I ascribed those more to personal failings of my own, some within my control, but many not. But this has been coming on for some time and still you persisted in denying the severity of the program that you laid out before the country tonight as necessary.

More like, I had to laugh in your face, sir. Because you were giving me a rationale for a socialist solution to capitalism's inherent woes. Sir, I hope you can laugh with me, (since seppuku is really out of the question in reality, I know) because if this isn't the most absurd situation you have ever seen, I don't know what is. But I can tell you this with some sincerity: Nelson Rockefeller is spinning in his grave and so are all the rest of the dead (and those alive) Wall Street barons rolling over in their graves and homes, because you have gone against everything they stood for in order to maintain the status quo. I suggest that you familiarize yourself with this article in Wikipedia: http://en.wikipedia.org/wiki/History_of_socialism_in_Great_Britain#Socialism_and_nationalism

The History of Socialism in Great Britain is essential reading for anyone wanting to know what to expect next, I predict, to the present economy. It cannot help but take this route, because, as some politican or other said this week, borrowing from "we've gone down the rabbit hole", borrowing of course from Alice in Wonderland And if there is one law that everyone, furtive socialists and fervent capitalists alike have to obey, regardless, is that of gravity. And once we are down the rabbit hole, we can only go, accordingly, down.

Well done. Messrs. Jefferson, Hamilton, Adams and Washington salute you, of course, I am sure. What a horrible day in history, not necessarily because socialism is all that bad, I hope, but it puts a question mark after the American Dream. The American dream is to "make it to the top" or at least not legally let anyone stand in your way but, essentially, you. This shatters that conception, because the government that you were President of that supported the American Dream as it previously existed, had a failure of leadership. I'm sorry the dreams of the American Forefathers had to end so ignominiously. They would have died in vain.

Whooooosssssssssshhhhhhhhhhhhh.................



Randy Shiner
Posted by Randy Shiner at 6:15 PM 0 comments Links to this post
Labels: 2008 race, Birth of Socialism, Breaking Media News, Bush's speech on economy September 24, Japanese culture, Ronald Nakai, seppuku, seppuku for George Bush, US Economy

The Day After

The Day After

Even though the stock market took another dump today, down 490 points, it didn't seem to faze me as much as other dumps that it has taken over the course of the last couple of months. Because, and forgive me if this is more liberal delusion, I feel like there is, might be, could be, a decent future for this country if President Obama can provide the kind of leadership that I know that he and his team are capable of.

As I've written in this space before, he is going to have a long time to be able to prove his mettle. This country is at present so screwed up financially and foreign policy-wise that Solomon himself would have trouble arriving at a solution that 300,000,000 people can live with and prosper under. Which is of course not to say it's impossible. Clearly it's not impossible. If it can be wrecked, it can be reconstructed, better than before. But not, as Einstein says, with the same level of awareness that created the problems themselves. There has to be, and is, a higher level of awareness that is going to come out of the Obama White House. It is what I am hoping from an Obama administration.

Yesterday evening, I commented to my son Mitchell that this election really wasn't about people like me, but was really about people like him - the teenagers and 20-somethings that are going to have to dig deep into their souls and come up with thoughtful, workable solutions for the problems that this country will face on an ongoing basis. And judging from the participation in the election of young people, they are chomping at the bit to make a difference, something that, frankly, my generation, which came of age in the 80s and 90s, did not have the chance to do, as we were all about making money and impressing the neighbors with our new cars and mansions, not with living within our means and spending what we could afford, as opposed to what we thought we'd make at some point in the future. Surely there is something to the notion that if the government is acting irresponsibly by spending more than it was taking in -- deficit spending - then it must, perforce be an acceptable way to live. Of course, that is completely a false notion but I think that there must be something to it anyway, because now, in the middle of the shitstorm that "voodoo economics" has wrought, we know what the answers are going to have to be: pay as you go, acting in a fiscally responsible way, saving money, not spending every dime you make and above all making sure that we all act responsibly otherwise. We are all colllectively paying right now for our collective irresponsibility, but let there be no doubt that we had some help in the development of our attitudes about "the way things are". It's not all able to be foisted off on external factors; we are all blessed and cursed with free will. But leadership, or a lack of it, on a national level, in my view, led us all down the road to ruin that we find ourselves too far down along right about now. And is the reason why, thank God, we got our collective acts together at the voting booth yesterday (with the notable exception of the hateful Proposition 8 here in California that passed, banning gay marriage) with the election of Barack Obama.

Positive change seems like a real possibility now that the news is not dominated by Sarah Palin, whose name I hope never to have to write again, or John McCain, who, I have to think at 72 years old, is thanking his lucky stars that he lost. Fixing this country is a young man's game. A young man with ideas and energy to make sure that we all do the right thing by each other and by our country.

Randy Shiner

Bush's Speech: Honor US Mr. President

Dear Mr. Bush:

I did not need to sit through a 14 minute speech for me to understand the lecture in macroeconomics that you gave just now to understand that this country, if you described it accurately, is fucked. And you and your so-called "administration" fucked it up. Now you are appointing Commissars who want unlimited power with NO review by ANYONE? This is what you support? Perhaps it was a sick joke by Commissar Paulson to come up with a three page "plan" whose contents contained little in the way of specifics, with the exception of section eight of the document, which of course is that very large paragraph in which Mr. Paulson presumably with your knowledge and consent, included in this document. Sir, I am hoping that that was a joke by your inner ruling circle, because you wanted to pass it off to Congress and let the next guy worry about it. Like YOU give a shit? You're all set. I'm sitting here uncertain about everything, including my health, and you get to retire back to Texas and Connecticut for a life of ease. Or maybe not. Perhaps the stench of your Presidence will haunt you forever. It would me, and I will never forget having to write the words I am writing here.

My knowledge of the Japanese culture stems in large measure as a consequence of a friend that I had in high school, Ronald Nakai, who was Nisei - second generation Japanese and with whom I stayed in touch until about 14 years ago for no particular reason. Whenever I would go to his house, I was treated with dignity, respect and honor, even though I was only a 12 0r 16 year old punk kid. Theirs, like mine, is a system of reverence for the past. Ron and I were famous fishing buddies, having the good fortune to be living in Chicago in the 1970s atttending Sullivan High School and when not in school or weekends, when the weather was nice, of course, fishing. But I especially remember a time when we went to his house, and they shared an ancient Japanese ritual that celebrated the rice harvest, as I recall. We each had a big mallet, which we used to strike a big, big ball of rice-dough, that we would smash into a pancake that would appear on the log-like thing that we were hitting. They took it very seriously and I was more than happy to participate. I remember the feeling of "hey, this is cool" when I was doing it, even though I only now realize the grander significance of the act. They were giving thanks to God for rice. Reverentially. Because they and I realize that the path to true holiness is through honor of the past and honor for the future as well. Wiithout honor, one cannot be truly holy.

The other part of Japanese culture that I only now see the grander significance of is the concept of hari-kiri, which is the most famous form of seppuku. Here is the Wikipedia definition of Seppuku:

Seppuku (切腹, Seppuku^? "stomach-cutting") is a form of Japanese ritual suicide by disembowelment. Seppuku was originally reserved only for samurai. Part of the samurai honor code, seppuku has been used voluntarily by samurai to die with honor rather than fall into the hands of their enemies, as a form of capital punishment for samurai who have committed serious offenses, and for reasons that shamed them. Seppuku is performed by plunging a sword into the abdomen and moving the sword left to right in a slicing motion. The practice of committing seppuku at the death of one's master, known as oibara (追腹 or 追い腹, the kun'yomi or Japanese reading) or tsuifuku (追腹, the on'yomi or Chinese reading), follows a similar ritual.

I would contend that if you are half the soldier you crowed about in 2000 and again in 2004, you would want, I would hope, to be able to call yourself a samurai and proceed forthwith to commit seppuku. Between all the calamities that you have caused this country in the name of politics and money, you should be so ashamed of yourself that I at least hope you are man enough to have considered that this would be a perfectly legitemate way out of this life.

Then again, sir, I am sure that you have rationalized the whole thing as somehow being perhaps beyond even your office's power to affect. I am sorry, but your presidency has been marked by a string of failures so long that it can only mean one thing: the management of it is and has been utterly and completely disfunctional at its core. And in the job of this country's highest office, you simply failed to heed too many warnings, time and time again. About so many things. And you blindly insisted that things were OK, even though those of us in the hinterlands of the West Coast could already feel, via "for sale" signs in too many front lawns reading "bank foreclosure, that things were going to get this bad. There were those of us who knew things were bad, but I ascribed those more to personal failings of my own, some within my control, but many not. But this has been coming on for some time and still you persisted in denying the severity of the program that you laid out before the country tonight as necessary.

More like, I had to laugh in your face, sir. Because you were giving me a rationale for a socialist solution to capitalism's inherent woes. Sir, I hope you can laugh with me, (since seppuku is really out of the question in reality, I know) because if this isn't the most absurd situation you have ever seen, I don't know what is. But I can tell you this with some sincerity: Nelson Rockefeller is spinning in his grave and so are all the rest of the dead (and those alive) Wall Street barons rolling over in their graves and homes, because you have gone against everything they stood for in order to maintain the status quo. I suggest that you familiarize yourself with this article in Wikipedia: http://en.wikipedia.org/wiki/History_of_socialism_in_Great_Britain#Socialism_and_nationalism

The History of Socialism in Great Britain is essential reading for anyone wanting to know what to expect next, I predict, to the present economy. It cannot help but take this route, because, as some politican or other said this week, borrowing from "we've gone down the rabbit hole", borrowing of course from Alice in Wonderland And if there is one law that everyone, furtive socialists and fervent capitalists alike have to obey, regardless, is that of gravity. And once we are down the rabbit hole, we can only go, accordingly, down.

Well done. Messrs. Jefferson, Hamilton, Adams and Washington salute you, of course, I am sure. What a horrible day in history, not necessarily because socialism is all that bad, I hope, but it puts a question mark after the American Dream. The American dream is to "make it to the top" or at least not legally let anyone stand in your way but, essentially, you. This shatters that conception, because the government that you were President of that supported the American Dream as it previously existed, had a failure of leadership. I'm sorry the dreams of the American Forefathers had to end so ignominiously. They would have died in vain.

Whooooosssssssssshhhhhhhhhhhhh.................



Randy Shiner

U.S. Launches All - Out Attack on Credit Crisis

View from a booth:

What's to say about a week like the one that is drawing to a close? For the first time since 9/11, President Bush has shown the ability to put aside the politics and show true leadership in decisively following the advice of his highest CFOs, Messrs. Paulson and Bernanke, in helping the banking system start to recover. But this is not far enough. This is treating the symptoms and is not curative. What will be curative is if there are sufficient regulations in place that will not allow banks to get themselves into the fix they are in now. A brand new regulatory scheme has to be put into place by President Obama to avert what is now a stopgap measure. Socializing the banks is not the American way. It defies free market principles. A free market in a country and economy so complex has to have rules that everyone plays by so to avert a crisis like this one from ever happening again. I know that Mr. Obama has the people on his team to take the bull by the horns and truly reform the regulatory scheme which has been systematically dismantled not just by Mr. Bush by by every Republican President before him, especially and including Ronald Reagan. President Bush did the only responsible thing here: follow sound advice, even if the medicine is more Lenin than Reagan. God save us all. Shabbat Shalom from San Diego.

Randy Shiner

By REUTERS

Published: September 19, 2008

Filed at 8:08 p.m. ET

Skip to next paragraph

(corrects spelling of Steny Hoyers name in paragraph 7)

By Kevin Drawbaugh and David Lawder

WASHINGTON (Reuters) - The United States surged into action on Friday to launch an all-out attack against the worst financial crisis since the Great Depression, readying a plan to tap hundreds of billions of dollars in taxpayer funds to buy up toxic mortgage-related debt.

Capping a week that has reshaped Wall Street, U.S. Treasury Secretary Henry Paulson urged Congress to quickly agree on a program for huge purchases of bad debts held by banks and other financial institutions. Lawmakers promised fast action.

Losses on these debts have choked the financial system, forced lenders into bankruptcy and led the economy to what U.S. President George W. Bush called a "pivotal" moment.

"America's economy is facing unprecedented challenges, and we are responding with unprecedented action," Bush told reporters in the White House Rose Garden.

After having taken a series of other emergency steps that failed to erect a firewall against the spreading credit turmoil, U.S. authorities turned their attention to the underlying problem -- the rising tide of bad mortgage debt.

Paulson offered few details on Treasury's evolving plan but said he would work through the weekend and next week with Congress to get a program put in place. Congressional aides said they expected to see more details within 24 hours.

Rep. Steny Hoyer, the Democratic leader in the House of Representatives, said the chamber would likely take up a bill to implement the plan early next week. House Speaker Nancy Pelosi said lawmakers would stay in town past their hoped-for adjournment next Friday if needed to pass it.

"We must now take further, decisive action to fundamentally and comprehensively address the root cause of our financial system's stresses," Paulson said at a news conference. "We're talking hundreds of billions. This needs to be big enough to make a real difference and get at the heart of the problem."

U.S. stocks, which chalked up their best day in six years on Thursday as talk of the more aggressive approach spread, soared again on Friday. The blue chip Dow Jones industrial average <.DJI> closed up 368 points, or about 3.4 percent.

The news also caused waves in the U.S. presidential campaign. Republican hopeful Sen. John McCain knocked the Treasury for taking a haphazard approach to the crisis, while rival Democrat, Sen. Barack Obama, supported the latest moves.

$1 TRILLION

Paulson and Federal Reserve Chairman Ben Bernanke have already put close to $1 trillion of taxpayer money on the line to try to keep credit flowing, and the new effort could double that amount.

At a meeting with congressional leaders on Thursday night, Paulson and Bernanke made the case for aggressive action to get ahead of events that could devastate the already weak U.S. economy.

"When I heard his description of what might happen to our economy if we failed to act, I gulped," Democratic Sen. Charles Schumer of New York said, referring to Bernanke's appraisal.

At his news conference on Friday, Paulson said the latest plan was the best hope of ultimately protecting the public purse and avoiding a grave recession.

"I am convinced that this bold approach will cost American families far less than the alternative -- a continuing series of financial institution failures and frozen credit markets unable to fund economic expansion," he said.

The White House said it was too soon to say how the plan would impact the nation's debt, and said it was possible many of the funds could be recovered as markets stabilize and currently bad assets are sold off.

Massachusetts Democratic Rep. Barney Frank, chairman of the U.S. House of Representatives Financial Services Committee, said the effort should help bring the crisis to a close.

"Done right it should begin to ease things," he said.

One congressional aide said Treasury's proposal would likely make suggestions on what kind of debt should be purchased under the program. The aide said the proposal may also call for locating the program initially within the Treasury and then possibly migrating it later into an independent entity, as long as that could be done without slowing the market rescue process.

It was still unclear who might be in charge of the program and how much taxpayer money it will likely cost, aides said.

Sen. Richard Shelby of Alabama, the top Republican on the U.S. Senate Banking Committee, said on ABC's "Good Morning America" the asset-purchase plan could cost anywhere from $500 billion to $1 trillion.

The plan is reminiscent of the Resolution Trust Corp, a government agency set up to help the nation out of the savings and loan crisis in the 1980s. The RTC, however, took whole institutions under its wing whereas the new fund under discussion would remove bad assets from the balance sheets of financial institutions to help revitalize them.

EMERGENCY ACTIONS

The major effort marked the latest dramatic government bid to prevent credit markets from freezing up over huge losses on subprime and other mortgage debt.

These have forced U.S. investment bank Lehman Brothers Holdings Inc into bankruptcy, Merrill Lynch into a hasty marriage with Bank of America , the Fed to bail out troubled insurer American International Group , and the government to seize control of mortgage finance giants Fannie Mae and Freddie Mac .

"The federal government must implement a program to remove these illiquid assets that are weighing down our financial institutions and threatening our economy," Paulson said.

The Treasury also said on Friday that it would siphon up to $50 billion from a fund established in the 1930s to conduct foreign exchange market intervention to backstop the rattled U.S. money market mutual fund industry.

This long-safe corner of financial markets, home to some $3.5 trillion of deposits, has increasingly appeared at risk of falling victim to the year-old credit crunch. Money market fund assets dropped by a record $169.03 billion in the week ended September 17 as jittery investors pulled money out.

The Treasury said it would back money market funds whose asset values fall below $1 a share. Separately, the Fed said it would lend money to banks to finance purchases of certain assets from money market funds.

"They are absolutely petrified of ... a run on financial assets," said Boris Schlossberg at GFT Forex in New York.

A panic in money markets set in on Tuesday, when the Reserve Primary Fund, a fund whose assets had tumbled 65 percent in recent weeks, fell below $1 a share in net asset value because of losses on debt issued by Lehman Brothers.

The Treasury also said it would step up a program announced this month to directly buy mortgage-backed securities in the market, and said Fannie Mae and Freddie Mac would also increase their buying -- a further effort to get credit flowing.

(Additional reporting by David Lawder, Emily Kaiser and Donna Smith in Washington, Lucia Mutikani in New York, Jeff Mason in Green Bay, Wisconsin; Writing by Dan Burns, Burton Frierson and Alister Bull; Editing by James Dalgleish)

Fed Readies A.I.G. Loan of $85 Billion for an 80% Stake

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By MICHAEL J. de la MERCED and ERIC DASH

Published: September 16, 2008

In an extraordinary turn, the Federal Reserve was close to a deal Tuesday night to take a nearly 80 percent stake in the troubled giant insurance company, the American International Group, in exchange for an $85 billion loan, according to people briefed on the negotiations.

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Enlarge This Image

Richard Perry/The New York Times

The scene Tuesday outside American International Group's building in Lower Manhattan.

Related

Video Analysis: Joe Nocera on the Importance of A.I.G.

All of A.I.G.’s assets would be pledged to secure the loan, these people said, and in return, the Fed would receive warrants that would give it an ownership stake. Stock of existing shareholders would be diluted, but not wiped out.

If the Fed takes a controlling stake, it is likely that it would want to replace A.I.G.’s board as well as its chief executive and chairman, Robert B. Willumstad.

The Fed’s action came after Treasury Secretary Henry M. Paulson and Ben S. Bernanke, president of the Federal Reserve, went to Capitol Hill on Tuesday night to meet with House and Senate leaders. Mr. Paulson called the Senate majority leader, Harry Reid, Democrat of Nevada, about 5 p.m. and asked for a meeting in the Senate leader’s office, which began about 6:30 p.m.

The Federal Reserve and Goldman Sachs and JPMorgan Chase had been trying to arrange a $75 billion loan for A.I.G. to stave off the financial crisis caused by complex debt securities and credit default swaps. The Federal Reserve stepped in after it became clear Tuesday afternoon that the banking consortium would not be able to complete the deal.

Without the help, A.I.G. was expected to be forced to file for bankruptcy protection.

The need for the loans became necessary after the major credit ratings agencies downgraded A.I.G. late Monday, a move that likely to have forced the company to turn over billions of dollars in collateral to its derivatives trading partners worsening its financial health.

Until this week, it would have been unthinkable for the Federal Reserve to bail out an insurance company, and A.I.G.’s request for help from the Fed of just a few days ago was rebuffed.

But with the prospect of a giant bankruptcy looming — one with unpredictable consequences for the world financial system — the Fed abandoned precedent and agreed to let the money flow.

What Economy ARE You Talking About, John McCain?

McCain says the economy is fundamentally sound. Alan Greenspan, a Republican, says today that this is the worst he's seen in HIS career, and that the economy is in a once-in-a-hundred-year financial crisis. http://news.yahoo.com/s/afp/20080914/bs_afp/useconomygreenspan_080914181841

Is John McCain really that detached from reality? Ya THINK?!

Candidates on Wall Street Turmoil

By Jeff Zeleny

Senators John McCain and Barack Obama on the campaign trail Monday. (Photo: John Raoux/Associated Press; Emmanuel Dunand/Agence France-Presse — Getty Images)

Updated: GRAND JUNCTION, Colo. – Hours after Senator John McCain said “the fundamentals of our economy are strong,” Senator Barack Obama seized upon the remark on Monday and offered a blistering critique of the Republican Party’s stewardship of the economy as the Wall Street turmoil created ripples in the presidential campaign.

“We just woke up to news of financial disaster and this morning and he said that the fundamentals of the economy are still strong?” Mr. Obama told voters at an afternoon rally here. “Senator McCain, what economy are you talking about?”

As he campaigned in Florida on Monday, Mr. McCain cautioned against panic as the stock market fell, Lehman Brothers filed for bankruptcy protection and Merrill Lynch was abruptly acquired. He acknowledged “tremendous turmoil in our financial markets” but said taxpayers should not be forced to pay for a government bailout.

“People are frightened by these events,” Mr. McCain said at a rally in Jacksonville. “Our economy, I think still, the fundamentals of our economy are strong. But these are very, very difficult times.”

Mr. Obama’s campaign pounced on the remarks, pointing to them as the latest evidence that Mr. McCain did not appreciate the severity of the crisis.

“I could walk from here to Lansing and I wouldn’t run into a single person who thought our economy was doing well, unless I ran into John McCain,” Mr. Obama’s running mate, Senator Joseph R. Biden Jr., said during a campaign stop in St. Clair Shores, Mich.

At Mr. McCain’s next campaign stop in Orlando, he opened a town meeting by clarifying what he meant when he said the fundamentals of the economy are strong, saying he was referring to workers and small business owners.

“My opponents may disagree, but those fundamentals – the American worker, the innovation, the entrepreneurship, the small business – are the fundamentals of America and I think they are strong,” Mr. McCain said. “But today, are being threatened today – those fundamentals are being threatened today because of the greed by some based in Wall Street and we have got to fix it.”

With 50 days remaining before Election Day, the disturbance in the nation’s financial markets shaped the debate, and the points of disagreement, between the two presidential candidates as they campaigned in different regions of the country.

Mr. Obama, who began a three-day Western campaign swing on Monday, was already intending to focus on the economy. But the news of Wall Street – and Mr. McCain’s remarks in Florida – added a fresh measure of intensity to a speech here in Grand Junction.

Mr. Obama characterized the situation on Wall Street as “the most serious financial crisis since the Great Depression,” blaming the policies employed during the last eight years of a Republican-controlled White House for the upheaval.

“I certainly don’t fault Senator McCain for these problems, but I do fault the economic philosophy he subscribes to,” Mr. Obama told several hundred people who gathered for an outdoor rally on the Western Slope of the Rocky Mountains. “It’s a philosophy we’ve had for the last eight years – one that says we should give more and more to those with the most and hope that prosperity trickles down to everyone else.”

He added, “This country can’t afford another four years of this failed philosophy.”

While both presidential contenders released statements, advertisements and comments about the financial downturn on Wall Street, neither offered immediate solutions or new proposals.

“The challenges facing our financial system today are more evidence that too many folks in Washington and on Wall Street weren’t minding the store,” Mr. Obama said. “Eight years of policies that have shredded consumer protections, loosened oversight and regulation, and encouraged outsized bonuses to C.E.O.’s while ignoring middle-class Americans have brought us to the most serious financial crisis since the Great Depression.”

The McCain-Palin campaign released a television commercial earlier Monday, titled “Crisis” that focused on the troubled economy, citing foreclosures and job losses. It also repeated the candidate’s pronouncement that there would be no “special interest giveaways,” were the Republicans elected, as the site of Lehman Brothers in downtown Manhattan flashed upon the screen. In the advertisement, he promised to shore up protections for voters’ savings.

Bill Burton, a spokesman for the Obama campaign, responded to the advertisement in a statement: “John McCain has been in Washington for twenty-six years and hasn’t lifted a finger to reform the regulations that could’ve prevented this crisis. In fact, his campaign is run by some of the very same lobbyists who fought against these regulations and worked to put special interest giveaways in our federal budget. Now he’s proposing $200 billion in tax breaks for the biggest corporations in America but not one penny of relief to more than 100 million Americans who are worried about their life savings and their ability to make their mortgage payments.”

While the Obama campaign sought to keep the conversation trained on the economy, Mr. Obama also unveiled a new television commercial called “Honor” that is intended to challenge his Republican rival’s credibility by pointing a series of editorials that have scolded Mr. McCain for recent statements and charges made against Mr. Obama.

“What happened to John McCain?” an announcer says at the beginning of the commercial. “It seems deception is all he’s got left.”

Tucker Bounds, a spokesman for Mr. McCain, said the advertisement was inappropriate “as Americans face economic uncertainty.”

“This latest ad by Barack Obama is a desperate effort to move away from talking about his thin, but alarming record on the issues,” Mr. Bounds said, “and it isn’t going to reform Washington or strengthen our economy.”

Crisis on Wall Street as Lehman Totters,
Merrill Is Sold, AIG Seeks to Raise Cash

Fed Will Expand Its Lending Arsenal in a Bid to Calm Markets;
Moves Cap a Momentous Weekend for American Finance

By CARRICK MOLLENKAMP, SUSANNE CRAIG, SERENA NG and AARON LUCCHETTI
September 15, 2008 12:15 p.m.

NEW YORK -- The American financial system was shaken to its core on Sunday. Lehman Brothers Holdings Inc. filed for bankruptcy protection, and Merrill Lynch & Co. agreed to be sold to Bank of America Corp.

It was a gut-wrenching weekend for Wall Street, with Lehman Brothers headed toward possible liquidation, Merrill Lynch about to be taken over and AIG facing shareholder wrath. WSJ's Dennis Berman and Matthew Karnitschnig look at what's ahead.

The U.S. government, which bailed out Fannie Mae and Freddie Mac a week ago and orchestrated the sale of Bear Stearns Cos. to J.P. Morgan Chase & Co. in March, played much tougher with Lehman. It refused to provide a financial backstop to potential buyers. Without such support, Barclays PLC and Bank of America, the two most interested buyers, walked away. Barclays said Monday it pulled out of the potential deal after deciding it wasn't in the best interest of shareholders.

Early Monday morning, Lehman filed for protection under Chapter 11 of the U.S. Bankruptcy Code with the United States Bankruptcy Court for the Southern District of New York. Lehman said none of the broker-dealer subsidiaries or other subsidiaries of LBHI will be included in the Chapter 11 filing and all of the broker-dealers will continue to operate. Customers of Lehman Brothers, including customers of its wholly owned subsidiary, Neuberger Berman Holdings LLC, may continue to trade or take other actions with respect to their accounts, Lehman said.

On Sunday night, Bank of America struck an all-stock deal to buy Merrill Lynch for $29 a share, or $50 billion. (See related article.)

Bank of America Chief Executive Ken Lewis said on Monday that he felt "no pressure" from federal government regulators to sign a deal to acquire Merrill Lynch.

Merrill Chief Executive John Thain said he began to look for an acquisition partner for Merrill after exploring "the implications for a Lehman bankruptcy."

Though the Federal Reserve steered clear of a bailout, it is expected to take new steps to stabilize the broader financial system. These steps, expected to be temporary, would make it easier for banks and securities firms to borrow from the central bank by using a wider range of collateral. Bankers say these financial institutions might need short-term funds as they unwind their many trading positions with Lehman. (See related article.)

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COMPLETE COVERAGE

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The Lehman board authorized the filing of the Chapter 11 petition in order to protect its assets and maximize value, the firm said. In conjunction with the filing, Lehman intends to file a variety of first-day motions that will allow it to continue to manage operations in the ordinary course. Those motions include requests to make wage and salary payments and continue other benefits to its employees.

However, employees at the Lehman units that filed for insolvency in the U.K. may not be paid, said Tony Lomas, a partner at PricewaterhouseCoopers assigned to help manage the proceedings for four Lehman companies there. The four companies in administration are: Lehman Bros International Europe, Lehman Brothers Ltd, Lehman Brothers Holdings plc and Lehman Brothers UK R.E., which holds real estate assets, he said.

Not in administration and continuing to function are Lehman Brothers Europe and Lehman Brothers Asset Management, Mr. Lomas told a news briefing Monday. There are dozens of PricewaterhouseCoopers people inside the Lehman building on Canary Wharf trying to come to grips with the company's affairs, he said.

"When we were appointed this morning, quite bluntly there was no cash because of the group treasury function," Mr. Lomas said, adding that his team would tell employees as soon as possible "whether or not there are funds enough to pay." Mr. Lomas said "a couple of dozen" of Lehman employees in London have been told definitely that they no longer have jobs. The rest should know by Wednesday, he said. The Lehman insolvency will be "larger and more complex" than similar proceedings for Enron and MG Rover, Mr. Lomas said.

Lehman said it is exploring the sale of its broker-dealer operations and, as previously announced, is in advanced discussions with a number of potential purchasers to sell its Investment Management Division. Lehman said it intends to pursue those discussions as well as a number of other strategic alternatives. Neuberger Berman LLC and Lehman Brothers Asset Management will continue to conduct business as usual and will not be subject to the bankruptcy case of the parent company, and its portfolio management, research and operating functions remain intact. In addition, fully paid securities of customers of Neuberger Berman are segregated from the assets of Lehman Brothers and aren't subject to the claims of Lehman Brothers Holdings' creditors, Lehman said.

The damage on Wall Street is the latest consequence of a storm that began last year with the sharp decline in American housing prices and losses on loans and other assets tied to home values. Massive capital infusions have failed to stem write-offs and losses, and financial firms are running out of options to escape the damage.

Regulators and others were preparing for a hectic Monday. The New York Stock Exchange prepared contingency plans over the weekend to reassign the approximately 200 blue-chip stocks that Lehman's specialist unit trades, according to people familiar with the matter. If Lehman is forced into liquidation, the exchange will likely transfer the stocks to one or more of the remaining specialist firms, most likely using the same technology and staff that currently trade the stocks.

Dozens of Wall Street desks have trades with Lehman. As word spread that the Barclays deal was falling apart, worries that the company could be thrown into bankruptcy mounted, and traders labored to get out of those contracts.

At approximately 2:30 p.m., government officials hosted a call, and a trading session was opened to ease fears. One trader said it was agreed that other brokers would pick up contracts that trading desks have with Lehman. If Lehman does open on Monday, the deals struck on Sunday, often at a worse price, would be void. "It is utter chaos here," the trader said.

At many Wall Street firms, traders of credit-default swaps -- contracts that act as insurance against debt defaults -- were told to come to work immediately. Concerned investors were rushing to buy swaps tied to other brokerages and corporations, sending the cost of protection on investment banks such as Goldman Sachs and others sharply higher.

In a statement Sunday, the International Swaps and Derivatives Association, a trade group whose members include many large dealers, said a "netting trading session" took place between 2 p.m. and 6 p.m. on Sunday. The idea was to allow firms to try to unwind their derivatives transactions with Lehman by finding other parties to step into Lehman's shoes.

"The purpose of this session is to reduce risk associated with a potential Lehman Brothers Holdings Inc. bankruptcy filing," it said. It added that trades conducted during this period "are contingent on a bankruptcy filing on or before 11:59 p.m. New York time" on Sunday. If no filing takes place, the trades will be canceled, ISDA said.

Some traders said it was difficult to find new counterparties for many of their outstanding trades with Lehman. The snags included different terms and maturity dates on derivatives contracts, and market prices changed rapidly Sunday afternoon. "People were screaming at each other over the phone, asking: How can this work?" one trader said.

William Gross, chief investment officer at bond-fund giant Pacific Investment Management Co., said very few Lehman trades were offset. "There's an immediate risk related to the unwind of these positions," he said.

Many Wall Street firms concluded that a liquidation of Lehman's assets likely would proceed in an orderly fashion, people familiar with the situation said. That means other firms could quickly buy real estate, securities and other investments, preventing the assets from flooding the market. Because of that, these people said, some participants in the New York Fed talks decided that liquidation was no worse an option than selling Lehman to a buyer such as Barclays.

"There will be an orderly wind down," said one banker involved in the matter. "This was the default option. It happens when you have no buyer."

The outside firms decided that instead of making guarantees for Barclays or some other purchaser of Lehman, they would prefer to pool their resources and buy the assets themselves, taking on the risks and carrying costs, along with the possibility of profiting down the road.

Those firms would likely then buy assets such as mortgage-backed securities, leveraged loans, private-equity positions and investments in real estate or hedge funds.

Roger Freeman, a nine-year Lehman employee who analyzes brokerage firms, spent the weekend gathering cellphone numbers and email addresses from colleagues who also are likely to lose their jobs. He plans to clean out his desk Monday morning. "We worked long hours here, we've made some of our best friends here. We're suddenly being ripped apart," he said. "It's just unbelievable."

--Jon Hilsenrath, Jeffrey McCracken, David Enrich and Jeanne Whalen contributed to this article.

Write to Carrick Mollenkamp at carrick.mollenkamp@wsj.com, Susanne Craig at susanne.craig@wsj.com, Serena Ng at serena.ng@wsj.com and Aaron Lucchetti at aaron.lucchetti@wsj.com

Nation’s Financial Industry Gripped by Fear

Let me see: Wall Street is continuing to melt, and people are even considering voting for a Republican for President? I do not understand how anyone with a brain or a conscience could vote for McCain/Palin. Obama/Biden are clearly the most qualified to try to get a rational grip on things, instead of relying on gravity to supply the energy for "trickle down" economics.

Randy Shiner

Nation’s Financial Industry Gripped by Fear

By BEN WHITE and JENNY ANDERSON

Published: September 14, 2008

Fear and greed are the stuff that Wall Street is made of. But inside the great banking houses, those high temples of capitalism, fear came to the fore this weekend.

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As Lehman Brothers, one of oldest names on Wall Street, appeared to unravel on Sunday, anxiety over the bank’s fate — and over what might happen next — gripped the nation’s financial industry. By Sunday night, Merrill Lynch, under mounting pressure, had reached a deal to sell itself to Bank of America for $29 a share or about $50 billion, according to people with knowledge of the deal.

Dinner parties were canceled. Weekend getaways were postponed. All of Wall Street, it seemed, was on high alert.

In skyscrapers across Manhattan, banking executives were holed up inside their headquarters, within cocoons of soft rugs and wood-paneled walls, desperately trying to assess their company’s exposure to the stricken Lehman. It was, by all accounts, a day unlike anything Wall Street had ever seen.

In the financial district, bond traders, anxious about how the markets would react on Monday, sought refuge in ultrasafe Treasury bills. Greenwich, Conn., that leafy realm of hedge fund millionaires and corporate chieftains, felt like a ghost town. Greenwich Avenue, which usually bustles on Sundays, was eerily quiet.

A year into the financial crisis, few dreamed that the situation would spiral down so far, so fast. Only a week ago, the Bush administration took control of Fannie Mae and Freddie Mac, the nation’s two largest mortgage finance companies. Then, before anyone could sigh a breath of relief after that crisis, Lehman was on the brink.

As details of Lehman’s plight began to trickle out on Sunday, the worries deepened that big financial companies might topple like dominoes. Bank of America began discussions to buy Merrill Lynch, the nation’s largest brokerage.

“I spent last weekend watching Fannie and Freddie die. This weekend it was Lehman,” said one longtime Wall Street executive.

By late Sunday, a consortium of banks, working with government officials, announced a $70 billion pool of funds to lend to troubled financial companies.

The rat-a-tat-tat of bad news has frayed nerves up and down Wall Street. “People are just weary,” said another executive. And even more ill tidings loom. Thousands of employees at Lehman are likely to be laid off, casting them into one of the worst Wall Street job markets in years. Other banks are cutting back, too.

Even employees who manage to hold on are likely to make a lot less money this year. Bonuses are not only going to decrease; for many, they will evaporate completely.

While people were stunned by the near collapse of Bear Stearns in March, they were flabbergasted that Lehman, a respected firm with a 158-year history, could be brought to its knees. Many were equally shocked by the downfall of Richard S. Fuld Jr., Lehman’s chairman and chief executive.

“Everyone thought Bear Stearns was a bunch of cowboys; it made sense what happened,” said another executive. “But this is the great Dick Fuld. This is not supposed to happen to Lehman Brothers.”

Many Wall Street executives struggled to draw parallels to the current crisis. The collapse of the junk bond powerhouse Drexel Burnham Lambert in 1991 seems small by comparison, as does the 1998 failure of the big hedge fund Long Term Capital Management.

On Sunday, as the heads of major Wall Street banks huddled for a third day of emergency meetings at the Federal Reserve Bank of New York, many rank-and-file employees were at work in their offices.

“It’s all hands on deck,” said one senior banker.

At hedge funds, analysts worried that investors would rush to withdraw their money.

As a precaution, Wall Street banks have taken the extraordinary step of hiring advisers to assess the impact of the possible bankruptcies of other big financial institutions.

The mood could darken even further this week as several big Wall Street banks report what are expected to be grim quarterly results.

The problems the industry faces are myriad. Mortgage assets that both commercial and investment banks hold on their balance sheets continue to decline in value as potential buyers wait for prices to fall even further and sellers balk at prices being offered. At the same time, revenues from bread and butter Wall Street businesses like debt and equity underwriting and proprietary trading are sliding in a softening economy at home and abroad.

“I have not seen a quarter like this since 2001,” said Meredith Whitney, analyst at Oppenheimer. “And the expense bases at the banks are still built for 2006-style revenues. So the clash of these two things is going to produce the kind of quarter we have not seen in some time.”

Some thought that Merrill Lynch’s sale of $30.6 billion worth of mortgage-related securities in July to the private equity group Lone Star for $6.7 billion (75 percent of which was provided as a loan by Merrill) would unleash a torrent of similar sales. That has not happened.

Big investment groups like Pacific Investment Management Company have put together “vulture” funds worth at least $70 billion to buy distressed assets. So far, not many sales have happened amid a buyer’s strike.

Part of the fear gripping Wall Street is the “who’s next” game. After the collapse of Bear Stearns it was Lehman. After Lehman, many worry about who might be next.

Those who bet on a rebound in financials are getting clobbered. In March, O’Shaughnessy Asset Management, a $9 billion quantitative money management group, started investing in financials and the group continues to add to its portfolio. “We’re patient and we keep buying,” said Jim O’Shaughnessy, chairman and chief executive of the firm.

Mr. O’Shaughnessy created a proxy index of financials to test the performance of previous financial stock routs and recoveries dating back to 1964. The average return for the 20 worst 12 month periods was -34.96 percent. In the last year, through June 30, his proxy index was down 31 percent.

But Mr. O’Shaughnessy is betting on the rally.

In the subsequent one- and three-year periods after those drastic declines, his index rose an average 30.5 percent and an annualized 19.7 percent. “Financials falling out of bed has happened in the past,” he said. “I’m interested in what happens after they crash and burn.”

That strategy has not yet panned out this year. The O’Shaughnessy Dividend fund, which heavily invests in financials, is down 17.2 percent through July 30 compared with a 15.2 percent drop in the Russell 1000 value index. The three-year compounded return through July 30 is 6.5 percent, compared with 2.4 percent for the Russell 1000.

By contrast, hedge funds that continue to short financials (betting their prices will fall) are still performing well. Goshen Investments, a $200 million fund seeded by Tiger Management, is up 35 percent through the end of August, according to one investor. The fund has large short positions in American brokerage firms, European banks and American exchanges. Christopher Burn, founder of the fund, declined to comment.