Photos of our trip to Washington, DC
I took the opportunity to visit a good friend and explore our nation’s capitol for the first time in late April. We missed the cherry blossoms, but new spring growth made for a nice visit.
The Atlantic has a an interesting article posted called How a New Jobless Era Will Transform America. Don Peck has taken an in depth look at the mental and cultural changes that are likely for those coming of age in this time or particularly hard hit areas. We all know that economic times leave their imprint on your personality – the depression era generation for example – but it is quite disturbing to see how harshly this recession will hit many men’s minds and stay with them for decades.
We are separated from the 1930s by decades of profound economic, technological, and political change, and a modern landscape of scarcity would reflect that…
By looking at what we know about how society and commerce would slow down, and how people respond, it’s possible to envision what we might face. Unlike the 1930s, when food and clothing were far more expensive, today we spend much of our money on healthcare, child care, and education, and we’d see uncomfortable changes in those parts of our lives. The lines wouldn’t be outside soup kitchens but at emergency rooms, and rather than itinerant farmers we could see waves of laid-off office workers leaving homes to foreclosure and heading for areas of the country where there’s more work – or just a relative with a free room over the garage.
The LA Times reports “Tensions between McCain and Palin camps come to light“. Might be interesting, let’s take a look:
“…aides to John McCain disclosed new details about her expensive wardrobe purchases and revealed that a Republican Party lawyer would be dispatched to Alaska to inventory and retrieve the clothes still in her possession.”
That’s pretty damned funny.
“Fox News reported Wednesday that Palin’s lack of knowledge on some topics also strained relations. Carl Cameron reported that campaign sources told him Palin had resisted coaching before her faltering Katie Couric interviews; did not understand that Africa was a continent rather than a country; and could not name the three nations that are part of the North American Free Trade Agreement — the United States, Canada and Mexico.”
That’s pretty damned sad.
Best of luck, Obama. You are going to need it to deal with the mess that has been left for you.
I have not yet listened to Another Frightening Show About the Economy from This American Life. Since it is from the guys that brought us The Giant Pool of Money (the excellent show about the housing crisis), I have very high hopes. Give it a listen if you want to learn about the credit market freeze.
Update: They did another excellent job on this one. What are credit default swaps? What is the commercial paper market? Why do these things matter to me? Why did the market freak out? What does the future hold?
You have got to be kidding me. You are a pretty funny guy, Paulson.
The way Bernanke sees the auction working, however, it’s the other way around: the banks would tender their assets for sale, and then Treasury would put in a bid at what it considers “close to the hold to maturity price”
Which means that the Treasury would have no idea what the market rate is on this toxic debt, and would probably end up paying whatever the original price was. This is simply crazy.
As Rich says:
2. I hope there is going to be some sort of accountability among all the regulators who first denied the risks and are now throwing our money at fixing their aftermath. If all the same people stay in charge, this kind of stuff will just keep happening.
I’d also add a third point: If taxpayers are on the hook for recapitalizing the institutions, there needs to be equity participation for taxpayers.
The whole thing is eerily similar to the last time we heard “trust us”.
Wall Street rallied in a stunning late-session turnaround Thursday, shooting higher and hurtling the Dow Jones industrials up 400 points following a report that the federal government might create an entity to absorb banks’ bad debt. The report also cooled investors’ fervor for safe investments like government debt that were in demand for much of the day.
The report that Treasury Secretary Henry Paulson is considering the formation of a vehicle like the Resolution Trust Corp. that was set up during the savings and loan crisis of the late 1980s and early 1990s left previously solemn investors ebullient. Wall Street hoped a huge federal intervention could help financial institutions jettison bad mortgage debt and stop the drain on capital that has already taken down companies including Bear Stearns Cos. and Lehman Brothers Holdings Inc.
It is sadly amusing that those that made fortunes on deregulated markets are now pushing for socialism (and tax payer money) to save their investments. The issue here is not capital. The issue is insolvency.
As a side note, the article says that the report cooled the fervor for govt debt. Some seem to think this is a good thing, that people aren’t harboring cash in “safe” investments. But I see it slightly differently. Would you buy bonds from an instituation that wants to use its customer’s money to buy the worst assets of other companies? Once again, insolvency seems to come to mind.