Wall Street as Black Hole
The mortgage mess, it now appears, is a black hole that can swallow up the Fed without a trace.
The mortgage mess, it now appears, is a black hole that can swallow up the Fed without a trace.
The Fed normally does not raise interest rates preceding a national election. This time they are a beleaguered body and threatened by politics unlike in any recent period of history.
America has become a country of people that waste too much. We have gotten away from exactly what made this country great in the first place -- production!
I'm proposing a radical shift in rhetoric: Any stimulus package should focus on the poor and the unemployed, not because they spend more, but because they are most in need of help.
In an election focused on the economy, and, more precisely, an ailing economy that needs major surgery, selecting Bob Rubin powerfully sends that message.
The Clinton candidacy must confront how to deal with the looming disaster in the financial markets. My friend Max Keiser has a valuable take on what Clinton and Obama's economic plans might look like.
While I am not condoning Spitzer's use of prostitutes, what I am suggesting is that perhaps we should not be so quick to celebrate Eliot Spitzer leaving the American stage.
It began with the bursting of the bubble in residential real estate here in the United States. It quickly spread to other hot real estate markets around the world. Complex debt instruments that were linked to sub-prime mortgages, both here and abroad, imploded in value.
The acrobatics of the Bear rescue suggest the depths of the abyss that our financial leadership has dug for us. Does anyone believe that this is the last time we will hear Fed sirens wailing in the night?
If you want to understand why the US dollar is doomed and what drives current Fed policy, keep in mind Hitchcock's Psycho, but with financial derivatives instead of carving knifes.
Given the depth of the credit crisis and the ongoing fall in house prices, there is a far bigger risk of worldwide economic cataclysm than there was in the 1970s.
In taking over Bear Stearns just hours before it would have been forced into bankruptcy, JP Morgan CEO Jamie Dimon took on a broad public responsibility to keep financial markets from unraveling.
Bernanke -- like a good priest -- is responding to acts of contrition with the monetary equivalent of three "Hail Mary's and an Our Father." He is granting absolution all over the place.
Is Bernanke ready for a new round of 1932-style talk about abolishing the Fed or impeaching its leaders? Because at least three aspects of his Fed chairmanship have generated major controversy.
Too much of what is going on today resembles the 1920s, when speculation was rampant, conflicts of interest the order of the day, and borrowing was unconscionably high.
Hopefully, citizens won't buy into the ridiculous belief that 20,000 lost jobs is a good thing -- a sunny turnaround -- a surge, if you will. The economy, like the war, is toast.
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