No turning the page yet
Good Tuesday morning and welcome to The Huddle, where we’re definitely not ready to turn the page on the financial crisis, not with Barney Frank playing the race card on the bailout, Hill Republicans angry about Henry Waxman’s “partisan” investigation into Wall Street and the looming possibility that Congress might come back for another round of battles over the economy.
In the pre-dawn darkness this autumn morning, Washington is looking at indicators like the Asian markets, where Hong Kong’s Hang Seng market was down 5 percent and the Nikkei was down 4 percent in Tuesday trading.
The Wall Street Journal opens with another depressing lede for the ages: “The global financial crisis has taken a perilous turn: As government efforts to tame it grow more aggressive, markets are becoming less confident those efforts will succeed.”
New York Times business scribes Edmund Andrews and Michael Grynbaum report on the next big government intervention under way: “Under a proposal being discussed with the Treasury Department, the Fed could buy vast amounts of the unsecured short-term debt that companies rely on to finance their day-to-day activities, according to officials familiar with the discussions. If this were to happen, the central bank would come closer than ever to lending directly to businesses.”
With all this activity, it’s hard to believe that final gavel last Friday was a real adjournment. Indeed, the House may have “adjourned” until Jan. 3, but if the financial crisis continues through the fall, Speaker Nancy Pelosi may call the House back to work on an economic stimulus package, according to Roll Call’s Steven Dennis. Alexander Bolton of The Hill adds that some economists have “suggested Democratic leaders might have to call the Senate and House back into session for emergency action to prevent a severe recession.”
But will a lame duck session produce bipartisan results? It’s not looking good.
Republicans dismissed Henry Waxman’s Oversight and Government Reformm Committee hearing yesterday as a partisan whack at Wall Street that avoiding touching the sacred cow known as Fannie and Freddie. As CongressDaily reports: “The hearings were 'organized to deflect from Congress any blame and put it on Wall Street,' said Rep. John Mica (R-Fla.)”
And bailout architect Barney Frank (D-Mass.) plays the race card, post bailout: “Republican criticism of Democrats over the nation's housing crisis is a veiled attack on the poor that's racially motivated,” AP’s Glenn Johnson writes from Boston. “They get to take things out on poor people," Frank said at a mortgage foreclosure symposium in Boston. “Let's be honest: The fact that some of the poor people are black doesn't hurt them either, from their standpoint. This is an effort, I believe, to appeal to a kind of anger in people.”
Did you sleep well last night? Apparently Lehman CEO Richard Fuld does not, but he could buy plenty of sleep aids with the $60 million he earned from the company as he drove it into the ground.
“Fuld told lawmakers he hasn't been sleeping well at all,” the Post’s Annys Shin reports from the hearing room. “Not that anybody on this committee cares about this, but I wake up every single night thinking what I could have done different,” he said. “This is a pain that will stay with me for the rest of my life.”
More from the Post story: “But during more than an hour of questioning, Fuld did not admit any specific mistakes. He blamed investors looking to make money from a fall in Lehman's share price for spreading false rumors that made it harder for Lehman to raise money. That, he said, created a liquidity problem and a crisis of confidence, leading to a run on the bank.”
HOMETOWN BAILOUT POLITICS: Politico’s Patrick O’Connor takes in the Georgia State Fair while visiting Macon, Ga., home of reluctant bailout backer Jim Marshall, who openly discusses the threat to his political career. From O’Connor’s dispatch: “Jim Marshall was willing to risk his congressional career on a single vote. Now he has 28 days to explain to voters why he backed the $700 billion bailout when so many voters in this sprawling central Georgia congressional district called the Democrat and told him to oppose it.”
No turning the page yet
Brad Haynes of the Wall Street Journal, meanwhile, checks in on Oregon Senate politics, finding Sen. Gordon Smith (R-Ore.), who voted for the financial rescue plan, trying to leverage the bailout against his opponent. “A new television ad running in Oregon and paid for by the Senate GOP capitalizes on voter resentment over the $700 billion plan passed by Congress on Friday. A narrator ties voter anger over "Wall Street and Washington, gambling with our money, piling up more government debt" to state finances under Mr. Merkley. ‘A billion in additional debt under Merkley — he just keeps borrowing,’ the ad says.”
STEVENS TRIAL UPDATE: On Monday the jury heard Ted Stevens on a wiretap, openly fretting about the Alaska corruption trial in a phone call with Veco Corp. executive Bill Allen. Per the L.A. Times’ Richard Schmitt, what the jury hard was Stevens being “both combative and pragmatic, denying in sometimes coarse language that he and a friend had done anything wrong but also acknowledging that they might face fines or even prison.”
QUID PRO QUO? Politico’s Ryan Grim looks ahead to the 111th Congress, when all those promises for people who flipped their votes on the bailout will come due, saying that there’s “a trail of expensive IOUs that will come due in the next Congress. Whether it’s for bridges, highways, levees, foreclosure help, bankruptcy or aid to debt-ridden states, lawmakers who flipped their votes are going to want to cash in next year.”
“This is politics,” Rep. Joseph Knollenberg (R-Mich.) summed up to reporters after switching his vote.”
TSUNAMI BUILDING? Roll Call does its own series of House polls in battleground districts and finds Democrats leading in all seven races, another ugly sign of how badly damaged the GOP brand is back home. Josh Kurtz reports: “In Illinois’ 10th district, marketing consultant Dan Seals (D) led Rep. Mark Kirk (R) 52 percent to 44 percent. In Indiana’s 9th, Rep. Baron Hill (D) led ex-Rep. Mike Sodrel (R) 53 percent to 38 percent. In New Hampshire’s 1st, Rep. Carol Shea-Porter (D) led ex-Rep. Jeb Bradley (R) 50 percent to 41 percent. In New York’s 29th, retired Navy officer Eric Massa (D) led Rep. Randy Kuhl (R) 51 percent to 44 percent. In North Carolina’s 8th district, teacher Larry Kissell (D) led Rep. Robin Hayes (R) 49 percent to 41 percent. In Pennsylvania’s 4th district, Rep. Jason Altmire (D) led ex-Rep. Melissa Hart (R) 54 percent to 42 percent. And in Wisconsin’s 8th district, Rep. Steve Kagen (D) topped former state Speaker John Gard (R) 54 percent to 43 percent.”
SERIES OF TUBES: Washington Post’s Carol Leonnig finds that House members are now allowed to use “Web sites such as YouTube on their own official sites. It's a colossal step into the 21st-century world of online communication that came after leaders recognized that new technology was overtaking the rules of an 18th-century-vintage congressional commission that long governed how lawmakers may talk to their constituents.”
WJLA Washington weather: Tuesday will feature mostly sunny skies with highs in the mid to upper 60s. Wednesday will be a bit warmer with highs near the 70 degree mark by afternoon under partly cloudy skies. An area of low pressure will track to the south of the region Thursday into Friday which will allow for mostly cloudy skies and a chance for showers each day. Highs should reach the lower 70s.
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Replies: 3
default avatar for user peterclarke
peterclarke
Party: Independent
Reply #1
Date: Oct. 7, 2008 - 8:32 AM EST
Democrats failure to pass S190 back in 2005 caused this mess. Now Junior Senator B.H.O. says that he will forgive all these people who can not afford or will not pay their debts at the direct expense of hard working Americans. Obama, wants America to become a socialized form of government, where people; corporations who get themselves into trouble do not have to take any responsibility for their actions.No More Democrats
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default avatar for user UCDshep
UCDshep
Party: NA
Reply #2
Date: Oct. 7, 2008 - 9:34 AM EST
What I want to know is- why does anyone still own stocks? OK- if you have to own a chunk to keep a seat on The Board of some corp., or you are a tightly tied in financial institution who wants to keep a corp.'s business (or else!), or if its been in the family for a century and the dividends pay property taxes...but everyone else should sell. Put that moolah in an insured bank (help that liquidity crunch!) and wait out the storm. Selling at the top of a downswing (which helps drop prices further) then buying in at the bottom and riding the wave of other people's money back to the top again is what the Big Boys (and Girls) do to get and stay rich. What you have with "experts" telling you to sit tight, ride it out for the long term, is the same sort of "advice" the lower orders got as they were given Oysters and Champagne and told to listen to the band on the faintail on The Titanic as the First Class and crew rowed off in all the lifeboats. What DC needs to do is stop saving the "grasshopper fiddlers" with the hard working ants tax cash. The focus of "rescue" efforts must be aimed at the real economy- the making of things that people must but to get by, and the employment and paychecks so needed for that not to stop. In as far as saving the fat cats- and buying unsecured "securities" only gives them the rescue bucks- the paper "persons" of the corp world, who have gamed ever more IOUs into rabbit litters exploding with more paper fictions, can not be saved, only staved off long enough for the "grasshoppers" to get the lifeboats. How many trillions of $$$ woulkd it take to "stabilize" the default swap market of $62 Trillions? 10%. 20% good money lost, and the ship will still sink. It would be better to put a match to all that fiction paper, let the legal fictions of corporate persons go the way of those fiddlin 'hoppers in the first snow, and save those below. You know, save the "ant", save the world...UCDshep
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default avatar for user scrivener
scrivener
Party: Independent
Reply #3
Date: Oct. 7, 2008 - 10:11 AM EST
HOW CAN THEY THINK IT WAS A 'SOLUTION' WHEN THEY STILL DON'T KNOW THE CAUSE? TARGETING OF AMERICANS BY GOV'T AGENCIES A ROOT CAUSE OF WALL STREET MELTDOWN? Once again, Congress rushed through emergency legislation -- socializing the capital markets, ceding effective control of the economy to the government. Officials continue to blame lax lending policies on the part of the mortgage industry for spawning this crisis. But were lenders ORDERED to offer "easy credit" to people "targeted" by government agencies? Is government "extra-judicial targeting" of American citizens a root cause of the mortgage meltdown that spawned the broader financial crisis? And is there a disinformation campaign underway to blame the Democrats, instead of ideologues who have hijacked federal agencies as their tool of "social engineering." Consider this: http://www.nowpublic.com/world... OR members.nowpublic.com/scrivener
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