Daily Archives: 15 September 2008

The End of the Illusion that the Worst is Behind Us

“Frantic Day on Wall Street as Banks Teeter

By Andrew Ross Sorkin, Ben White and Jenny Anderson

In one of the most extraordinary days in Wall Street’s history, Merrill Lynch is near an 11th-hour deal to avert a deepening financial crisis while another storied securities firm, Lehman Brothers, hurtled toward liquidation, according to people briefed on the deal.
The dramatic turn of events was prompted by the cataclysm of losses that has shaken the American financial industry over the last 14 months.

The moves came after a weekend of frantic negotiations between U.S. government officials and Wall Street executives over how to avert a downward spiral in the markets. Questions still remain about how the market will react and whether other firms may still falter like AIG, the large insurer, and Washington Mutual, both of whose stocks fell precipitously last week.

Coming just a week after the government took control of mortgage lenders Fannie Mae and Freddie Mac, the magnitude of the industry’s reshaping is staggering: two of the most powerful firms on Wall Street, Merrill Lynch and Lehman, will disappear.” (Read more from campaignforliberty.com)

McBama: More Regulation Needed to Solve Financial Crisis

“Obama says the ongoing crisis is the result of ‘[e]ight years of policies that have shredded consumer protections, loosened oversight and regulation, and encouraged outsized bonuses to CEOs while ignoring middle-class Americans’; the obvious solution is more regulations.

McCain, on the other hand, says the problem is ‘the outdated and ineffective patchwork quilt of regulatory oversight in Washington,’ for which he promises reform, not abolition. Furthermore, he wants to ‘bring transparency and accountability to Wall Street,’ which can only mean additional regulations.

Once again an election promises to offer an echo, not a choice.” (Read more from lewrockwell.com)

Neither candidate demonstrates the courage and integrity to bring up the money-printing Fed’s role in creating artificial bubbles which lead to busts, or the obscene quantities of money spent on our wars of choice.