Items of Interest:
This is a panic in the way of the fine 19th-century panics, where we all run around like headless chickens — R. Jeremy Grantham, chairman of the Boston-based investment firm GMO
----Wall Street Journal:
Fresh Tumult as Signs of Recession Go Global -- There are no safe havens from the forces battering the global economy any longer.
In rich countries and poor countries alike, markets are plunging, companies are scrambling for credit and cutting their growth plans and consumers are keeping cash in their pockets. The U.S. and some governments in Europe and Asia are spending heavily to stanch the problems in markets and Main Streets globally, but the attempts have not halted the damage.
Fears of a prolonged recession pushed shares down across the world on Friday. The slide started in Asia, where the benchmark Nikkei Stock Average fell 9.6% to a five-year low of 7649.08, and markets in Hong Kong, Mumbai and Seoul registered similar declines. Europe followed next, where the pan-European Dow Jones Stoxx 600 Index fell 4.7% to 198.80, dropping below 200 for the first time since mid 2003. In the U.S., the Dow Jones Industrial Average fell 312 points, or 3.6%, to finish at 8378.95, a 5 1/2-year low...
Tough Session: Stock declines started in AsiaNY Times:
and quickly spread as markets opened around the world
and quickly spread as markets opened around the world
Some Currencies Plunge as Stocks Sink Worldwide -- Fear that the financial crisis is infecting once-healthy economies created another white-knuckle day for investors Friday, causing stocks to tumble from Tokyo to New York.
Uncertainty also roiled currency markets as investors continued to turn to the security of the United States dollar and the Japanese yen and drove down currencies of developing countries like Brazil, Ukraine and South Korea and even of developed countries like Britain...
“This is a panic in the way of the fine 19th-century panics, where we all run around like headless chickens,” said R. Jeremy Grantham, chairman of the Boston-based investment firm GMO, who had predicted stocks would tumble. “I have been in the business for 40 years, and I have never seen anything like this.” ...
----Joe Nocera, New York Times:
So When Will Banks Give Loans? -- It is starting to appear as if one of Treasury’s key rationales for the recapitalization program — namely, that it will cause banks to start lending again — is a fig leaf, Treasury’s version of the weapons of mass destruction.
In fact, Treasury wants banks to acquire each other and is using its power to inject capital to force a new and wrenching round of bank consolidation. As Mark Landler reported in The New York Times earlier this week, “the government wants not only to stabilize the industry, but also to reshape it.” Now they tell us...
---- via calc. risk
----Editorial / Los Angeles Times:
The Real Villains of the Subprime Meltdown -- Low-income borrowers and affordable-housing advocates didn't cause the credit crisis. The real villains are greedy mortgage brokers, lenders and investors.
As the cost of Wall Street's credit crisis has mounted, the hunt for villains has intensified and the accusations of fault have widened. At first the focus was on greedy profiteers among lenders and investment bankers, who were an easy (and deserving) target. Then the finger-pointing became politicized, with Democrats blaming deregulation advocates in the Bush administration and previous GOP-controlled Congresses, and Republicans citing influential Democrats at Fannie Mae and Freddie Mac and their allies on Capitol Hill. Lately, even former Federal Reserve Chairman Alan Greenspan, who once incited hero-worship among lawmakers, has been heaped with blame.
But it's not just the rich and powerful who've been held up for scorn. Some politicians have also started pointing fingers toward the bottom of the economic ladder, associating the problems in the financial markets with irresponsible low-income borrowers and advocates for affordable housing...
- Modest Steps for a New Bretton Woods - Barry Eichengreen, The Guardian
- The Right Insurance Rules - Ted Mathas, Washington Post
- Foreclosures Help Housing Find a Bottom - John Berry, Bloomberg
- Let's Use Fannie To Clean Up the Mess It Made - Wallison & Pinto, WSJ
- Attacking The Credit Crisis at Its Source--US Housing Market - Economist
- Gold Standard Is Wrong Salve for Global Ills - Michael Sesit, Bloomberg
- America Has a Highly Progressive Tax System - Duncan Currie, American
- Greenspan Didn't Bank on Human Nature - Tim Rutten, LA Times
- Alan Greenspan, I Submit, Is a 'Savant Idiot' - Michael Thomas, Forbes
- What New Direction Should Capitalism Take? - Editorial, NY Times
- Whoever Wins Faces a Colossal Mess - Caroline Baum, Bloomberg
- There Are No Easy Fixes for the Housing Mess - Colin Barr, Fortune
- Taiwan Dumps Fan & Fred. And Uncle Sam? - Randall Forsyth, Barron's
- Subprime Mortgages Were Just The Beginning - Editorial, Wall St. Journal
- Should Homeowners Be Bailed-Out? - Brandon Fuller, The Big Money
- Tax Less, Earn More? If Only It Were True! - Editorial, Washington Post
- Statism & Laisser Faire: the New Transatlantic Trade - John Thornhill, FT
- Mark-to-Market Is the Cure - Steve Hanke & John Tatom, Inv. Business Daily
- New Life For the Estate Tax - Floyd Norris, New York Times
- How's Obama Going to Raise $4.3T? - Alan Reynolds, Wall Street Journal
- John McCain's 'Socialist' Fallacy - Kirsten Powers, New York Post
- Curbing Washington's Growing Power - David Malpass, Forbes
- You Lose, George Soros Wins - Richard Rahn, Washington Times
- The Incredible Shrinking Hedge Funds - The Economist
- Cheap Stocks? They're An Illusion - Jim Jubak, MSN Money
- Pendulum Swings, but Capitalism Remains - Irwin Stelzer, Wkly. Standard
- Havoc Awaits Emerging Economies - Anatole Kaletsky, Times of London
- Confidence in Our Markets Needs to Be Restored - Joseph Stiglitz, Guardian
- A Rogue System with Lax Limits on Risk-Taking - John Gapper, FT
- Strategies To End The Crisis - Peter Morici, RealClearMarkets
- Banks' Problems Bigger Than You Think - David Weidner, MarketWatch
- Money Isn't Everything, Even for Equities - Randall Forsyth, Barron's
- The Real Story Behind Unemployment - Daniel Gross, Slate
- Finding Opportunity in a Bear Market - Knowledge@Wharton
- Danger Ahead for Emerging Markets - Carmen & Vincent Reinhart, VoxEU
- The Hedge Fund Contagion - Matthew Goldstein & David Henry, BusinessWk
- Sarkozy of France Summons De Gaulle's Statist, Anti-U.S. Spirit - Bloomberg
- 30-year treasury yields at lowest levels in 30 years - Bloomberg
- Canada goes deeper into deficit - Ottawa Citizen