Credit Crunch is getting deeper in US

(10 am – promoted by ek hornbeck)

I was doing my usual perusing of the foreign newspaper and media websites (this is how I get the real news without that well known BushCo bias) and I came across an article at BBC.co.uk that caught my attention.

The credit crunch has hit the US economy hard. From Wall Street to Main Street, loans that looked rock-solid a year ago now look shaky.

And the US central bank, the Federal Reserve, is throwing away the rule book to contain the effects.

  My emphasis.

That is a pretty strong statement.  The Federal Reserve is Throwing Away The Rule Book to contain the effects.

There is more.

Kevin Logan of Dresdner Kleinwort, one of the less gloomy New York economists, summarises the state of play as the credit crunch has spread to different types of assets as follows: “We’re all sub-prime now”.

Another strong statement!  Sure, it is absolutely true, but why am I reading about this at BBC instead of WSJ?

The Fed did cut its main interest rate on Tuesday for the sixth time since September – by three quarters of one percentage point, to 2.25%.

This means that interest rates are now very close to going negative in real terms – once inflation is taken into account.

But amid the drama of the past few weeks, it almost seems par for the course.

Whether it’s rate cuts or special funding arrangements for Wall Street, the more the Fed does, the more the markets seem to need.

The more the markets seem to need, huh?  

I rather intrepret this statement as a bit of British politeness that allows the reader to replace the word “need” with the word “take” at their own discretion.

Moral hazard

There are some who say that the Fed should let all these institutions suffer the consequences – to the point of bankruptcy if need be.

The trouble is, the Fed Chairman, Ben Bernanke, knows that financial markets are now all too interconnected.

The big fear is that in over-estimating the losses out there in the housing market, the financial institutions will make those estimates a self-fulfilling prophesy.

That is because the more mortgage assets get marked down, the greater the hit to banks’ balance sheets, and the less they can lend to firms and households at decent rates.

That reduction in lending would take house prices down further, leading to more losses and the whole vicious cycle starting again.

Ben Bernanke is looking for the magic solution that will stop that dangerous dynamic taking hold.

He hasn’t found it yet.

Bold, unadulterated and to the point, the author of this piece, Stephanie Flanders, isn’t afraid to tell the story without the usual “but the underlying fundamentals of the economy are still strong” like we always see as the BushCo disclaimer in any story in the US media.

Take a look for yourself.  It ain’t pretty, but it is real.

http://news.bbc.co.uk/2/hi/bus…

Xposted at EENRblog.com

Pony Party, Back in 5

…days, that is…

Today is ‘thing 1’s surgery…and she’ll be doing the overnight thing, so i wont be here tomorrow, either.  You’ll have to pony on without me…

I’m not expecting any complications, etc…so I should be back to the ‘grind’ on Monday…

An Inconvenient Protest, and More Details of Riots in Lhasa, Tibet

( – promoted by buhdydharma )

In the midst of China’s carefully stage-managed PR tour with select western journalists, a small group of Tibetan monks seizes the moment:

The outburst by a group of 30 monks in red robes came as the journalists, including an Associated Press reporter, were being shown around the Jokhang Temple – one of Tibet’s holiest shrines – by government handlers in Lhasa.

“Tibet is not free! Tibet is not free!” yelled one young Buddhist monk, who started to cry.

snip

“They want us to crush the Dalai Lama and that is not right,” one monk said during the 15-minute outburst.

“This had nothing to do with the Dalai Lama,” said another.

link: http://ap.google.com/article/A…

The AP also reports that the monks knew the Chinese authorities would punish them for their actions but were willing to accept those consequences.

Another interesting revelation from the monks who spoke to the Associated Press:

They said troops who had been guarding the temple since March 14 were removed the night before the visit by the reporters. One monk said they were upset by what he said were some monks planted in the monastery to talk to the journalists, calling them “not true believers but … Communist Party members.”

“They are all officials, they (the government) arranged for them to come in. And we aren’t allowed to go out because they say we could destroy things but we never did anything,” another monk said.

The Washington Post attempts to analyze more of what happened on the day of the riots in Lhasa:

Interviews with nine eyewitnesses, some of whom spoke only on condition of anonymity, confirm that tensions began building in Lhasa on Monday, March 10. That’s when police blocked monks from Drepung Monastery, a few miles outside Lhasa, from marching into the city to mark the anniversary of the failed 1959 uprising that sent the Dalai Lama into exile.

When protesters shouted Tibetan independence slogans and unfurled a homemade Tibetan flag, they were quickly hustled away by police, who detained at least 15 people. The police response was fairly typical for such protests — public dissent against Chinese rule is not allowed — but this time the incidents were not quickly snuffed out.

Rather, rumors began circulating among Tibetans that some monks had been beaten. “A lot of Tibetans on Monday night were distraught by the arrest of the monks,” said Chris Johnson, a novelist who was in Lhasa on a two-week vacation.

On that Tuesday, police stopped another protest march, this one by monks from nearby Sera Monastery. By Wednesday, tourists said, the roads to the monasteries outside town had been blocked by police vehicles. One tour agent said he was told to tell his clients that “the monasteries were closed for renovation.”

link: http://www.washingtonpost.com/…

And probably the most interesting account comes from the owner of a local hostel, who was watching the riots progress from where he was standing on the roof of his building:

Then, about 3 p.m., he heard a “strange, high-pitched sound.” He looked down to see a gang of 30 to 40 people swing into his street, howling. He was surprised to see that most in the mob were young women, who had masks over their mouths and were wearing backpacks. “They were attacking even more fiercely than the boys,” he said.

The mob began kicking down doors and wrenching open shops, including the offices of the state-run Tibet Daily newspaper and the local bureau of the official New China News Agency. Zhang saw a man in his 30s shouting into a megaphone and a woman nearby, pointing. They appeared to be directing the mob where to attack, he said.

snip

Zhang’s street remained quiet the next day. A few riot police officers appeared and positioned themselves in front of the news bureaus. Zhang said the police ordered him and his guests to stay inside. They did, discussing Friday’s chaos and swapping stories of rioters they felt certain could not have been local Tibetans; many of the guests said they had heard different dialects. They questioned how the government could have allowed the city to get so out of control.

There’s enough fodder for any conspiracy theory.

I’m sure any good soldier in the Chinese government’s PR office would point to that statement as prima facie evidence that the “the Dalai Lama clique” was responsible for these riots. Outside agitators = Dalai Lama.

However, one could just as easily bolster many competing conspiracy theories, not the least of which is that the Chinese government, in an attempt to discredit the Dalai Lama, decided to allow the riots to escalate and turn violent so they could then justify a harsh crack-down of a traditional trouble spot.

The truth of what happened and why may be completely different from any proposed conspiracy theories floating around.

That’s why it is vitally important that an independent commission, similar to the Christopher Commission in Los Angeles, be established to take an unbiased look at the evidence, investigate the facts and get to the bottom of what occurred. I have little faith of that happening with a government like the one in China has shown itself to be: fearful, paranoid and adamently opposed to any outside investigation of what at least remains a failure of local officials to manage this explosive situation.

But one can always hope.

Please keep all sides of this conflict in your thoughts, prayers and meditations.

And consider this: to show solidarity with the Dalai Lama’s calls for dialogue and a peaceful resolution to this conflict, consider wearing a saffron-colored arm band. Saffron is the color of the robes the Tibetan monks wear. (H/T to OklahomaVoter for this simple, cost-effective idea).

Small Retailers Being Forced Out By Government Subsidies to Big Chains w/poll