passing GO

We're telling them, "we're not going to regulate you, and we're going to bail you out when you fuck up."

I didn't say it. It was Barry. It was just a few minutes ago. He was replying to my reading outline the Reuters headline, "Bear near announcing sale to JPMorgan: source". Like many others who happened to be noticing what's been going on, I had already been shocked to hear that my government had decided to throw a "financial rescue package"* at Bear Stearns, a quintessential capitalist firm which had failed at capitalism (slapped by "the invisible hand"?). This afternoon we learn that one of its rivals had decided that now Bear Sterns was an attractive investment.

NEW YORK/WASHINGTON (Reuters) - JPMorgan Chase & Co (JPM.N) is close to rescuing the fifth-largest U.S. investment bank, Bear Stearns Cos Inc (BSC.N), a person familiar with the matter said on Sunday, in a deal that could be announced in the next few hours.

Of course none of these people went to jail, but none of them even lost their jobs and none of them lost their ginormous bonuses.

But it's looking like the country's about to lose its shirt. I know these lines are a gross simplification of the economics drama being played in the headlines (and conducted behind our backs), but Gretchen Morgenson's piece in the NYTimes today both explains it in super-lay-person terms and suggests the horror of its potential (likely?) consequences. Here's just a peek:

HERE is the bind the Fed is in: Like the boy who puts his finger in the dike to keep sea water from pouring in, the Fed finds that new leaks keep emerging.

Regulators must do whatever they can to keep the markets open and operating, and much of that relies upon the confidence of investors. But by offering to backstop firms like Bear, who were the very architects of their own — and the market’s — current problems, overseers like the Fed undermine a little bit more of that confidence.

Another worry? How many well-capitalized institutions remain at the ready to take over those firms that may encounter turbulence in the future? Banks just do not have the capital that is needed to rescue troubled firms.

That will leave the taxpayer, alas. As usual.

And this excerpt doesn't even address the consequences of foreign investors losing confidence in our capital markets and our government's ability to keep things together.

Hold on; we're in for a very rough ride.

*
"The size and terms of the credit line were not disclosed. JPMorgan will borrow the money from the Fed and lend it to Bear Stearns, and the Fed will ultimately bear the risk of the loan." [quoted from an earlier NYTimes article, "Run on Big Wall St. Bank Spurs Rescue Backed by U.S."]

[image from Hasbro]

farm foreclosure sale during the Great Depression

My obsession* with this story welcomes further ratiocination: Greg Palast makes some connections which Wall Street, the White House and their joint instrument, a discretionary Justice Department, would prefer to to keep hidden from the rest of us. See the argument in his piece titled "Eliot’s Mess: The $200 billion bail-out for predator banks and Spitzer charges are intimately linked"

*
broadcast in two earlier posts, beginning about one week ago, here and here

[uncredited {Walker Evans or Dorothea Lange?} image from annette on picasaweb]

Stanley Ann Dunham’s 1960 high school graduation picture

Don't miss this beautiful article about a very beautiful woman. I cried from beginning to end.

She had high expectations for her children. In Indonesia, she would wake her son at 4 a.m. for correspondence courses in English before school; she brought home recordings of Mahalia Jackson, speeches by the Rev. Dr. Martin Luther King Jr. And when Mr. Obama asked to stay in Hawaii for high school rather than return to Asia, she accepted living apart — a decision her daughter says was one of the hardest in Ms. Soetoro’s life.

The NYTimes writer is Janny Scott.

[image from KansasPrairie]

William Hogarth Enthusiasm Delineated 1761

This is stupid, if not just evil. No, I'm not talking about Eliot Spitzer. Let him deal with his family; it's not our concern. People are screaming at the Governor about his marital infidelity and announcing or calling for the end of his career. Meanwhile, George Bush's murder count in Iraq, already in the hundreds of thousands, continues to mount and no one will pull the plug or talk about impeachment.

I simply don't care what kind of sex the people I vote for engage in, just as I insist that they not care about my own - or yours either. Murder and other high crimes I care about.

[image from payer.de via fortunecity]

"Certainly the prestige of the office of president must be seriously compromised if a woman has a serious shot at it."

I would add "or a black man" to that conditional clause, but the subject of the article from which this quote was pulled is specifically that of the place of women in American society. The sentence is inserted as a parenthetical reality check inside the penultimate paragraph of Leslie Camhi's Village Voice review of "Wack! Art and the Feminist Revolution" at PS 1. She alludes to the current state of our national political life with this reminder of both how far we have come and how close we still remain to the more benighted environment of the 60's and 70's which inspired the feminist revolution:

Just how far we've traveled since those times might be measured by the fact that the female contender for the Democratic presidential nomination is perceived as the establishment candidate. (Certainly the prestige of the office of president must be seriously compromised if a woman has a serious shot at it.) But some things almost never change: It's nearly impossible, for example, to imagine this show being staged across the river, at P.S. 1's Manhattan affiliate, the Museum of Modern Art.

Instead, the artists of "Wack!" remain in the schoolhouse. But their contemporaries might well take a lesson from them.

[Presidential chart image by Automatic Preference whitosphere blog via Francis L. Holland]