Notes from the Editors, Monthly Review
Just over a year since the beginning of the worst U.S. financial crisis since the Great Depression, and only six months after the federal bailout of Bear Stearns, the seizing up of credit markets continues. The failure of eight U.S. banks this year, including IndyMac, and the recent instability that struck the two government-sponsored mortgage giants, Fannie Mae and Freddie Mac, requiring a special government rescue operation, has had the entire financial world on edge.

How the Masters of the Universe Ran Amok and Cost us the Earth
By Bill Jamieson
SLAM. Slam. Slam. Slam. Like a scene from a gathering of Mafia dons, the doors of 30 black Lincolns slammed shut as their besuited occupants stepped out into a Manhattan downpour – and into a global financial storm. That storm broke yesterday, with stock markets tumbling around the world. In London, the FTSE 100 plunged almost 4 per cent to 5204.2. – In the US, the Dow Jones industrial average suffered its biggest fall since 9/11.
www.informationclearinghouse.info/article20778.htm

Bank of America, Merrill Bailout Disguised as Buyout?
By: Mike Stathis
It appears as if we are witnessing government bailouts using taxpayer money that are being deceitfully disguised as buyouts. Not just with the Merrill buyout but also this newly established $70 billion emergency bank fund, set aside to help out banks with future problems. Where do you think this money is coming from?
www.informationclearinghouse.info/article20777.htm

US Economy: Rudderless and Reeling From Direct Hits
A raid on private pensions?
By Paul Craig Roberts
Most Americans, including the presidential candidates and the media, are unaware that the US government today, now at this minute, is unable to finance its day to operations and must rely on foreigners to purchase its bonds. The government pays the interest to foreigners by selling more bonds, and when the bonds come due, the government redeems the bonds by selling new bonds. The day the foreigners do not buy is the day the American people and their government are brought to reality.
www.informationclearinghouse.info/article20771.htm

Fed Funds Spread Signals Crash
By iTulip Administrator
The Fed tries to manage the economy and inflation by influencing short term interest rates. It does that by buying and selling government bonds in the bond market in what are called “open market operations.” They set a target rate, such as 2%, then buy or sell bonds as needed until the effective rate in the bond market matches the target rate objective. Problem is, this process does not always work in times of crisis because the bond markets themselves may be dis-functional, as is the case today.
www.informationclearinghouse.info/article20773.htm

How Safe Is Your Bank?
Top Economist: Americans Should Worry About Bank Deposits if Congress Doesn’t Act
By Aaron Task
Americans are justified to be worried, says Nouriel Roubini, of NYU’s Stern School and RGE Monitor, who notes there is already a “slow-motion run on retail banks” occurring nationwide.
www.informationclearinghouse.info/article20779.htm

In Case You Missed It
The Pentagon Strangles Our Economy:
Why the U.S. Has Gone Broke
By Chalmers Johnson
 
The neoconservatives in the White House and the Pentagon outsmarted themselves. They failed even to address the problem of how to finance their schemes of imperialist wars and global domination.
www.informationclearinghouse.info/article19817.htm

Capital Punishment: Lehman on its way to the Gallows?
By Mike Whitney
The funny thing about capitalism is that you need capital to play. When the bank-vault is full of nothing but worthless mortgage-backed securities (MBS) and overvalued junk bonds; the whole thing goes belly-up fast.
www.informationclearinghouse.info/article20765.htm

`Tectonic’ Shift on Wall Street as Lehman Fails, Merrill Sold
By Christine Harper
In the biggest reshaping of the financial industry since the Great Depression, two of Wall Street’s most storied firms, Merrill Lynch & Co. and Lehman Brothers Holdings Inc., headed toward extinction.
www.informationclearinghouse.info/article20760.htm

Financial Russian Roulette
By PAUL KRUGMAN
2008 could be 1931 revisited.
www.informationclearinghouse.info/article20766.htm

The Crash of Western Capitalist Civilization?
By Richard_C_Cook
“Train-wreck” doesn’t even begin to describe what is starting to happen to the U.S. today with the financial crisis, an onrushing depression, and the failure of George W. Bush’s war policy as he is faced down by Iran and the Russian bear. But in an even broader sense, the West, as a civilization, after a century of world war and the utter failure of global finance capitalism, may have reached its limits.
www.informationclearinghouse.info/article20764.htm

Nader on bank woes: ‘I predicted this’, September 16, 2008
dandelionsalad.wordpress.com/2008/09/
16/nader-on-bank-woes-i-predicted-this/

Countdown: Paul Krugman on the Economic Crisis Video
dandelionsalad.wordpress.com/2008/09/16/
countdown-paul-krugman-on-the-econimic-crisis/

The Wall Street crisis and the failure of American capitalism By Barry Grey, September 16, 2008
dandelionsalad.wordpress.com/2008/09/16/the
-wall-street-crisis-and-the-failure-of-american-capitalism/

Lehman, Bear, Freddie, Fannie: What Does It All Mean??? by Josh Sidman
dandelionsalad.wordpress.com/2008/09/15/lehman-
bear-freddie-fannie-what-does-it-all-mean-by-josh-sidman/

Marc Faber about Lehman Brothers bankruptcy
dandelionsalad.wordpress.com/2008/09/15/
marc-faber-about-lehman-brothers-bankruptcy/

Merrill now in shorts’ sights as Lehman crumbles
dandelionsalad.wordpress.com/2008/09/15/
merrill-now-in-shorts-sights-as-lehman-crumbles/

Lehman Workers Clear Desks, Weep After Bankruptcy:
Lehman Brothers Holdings Inc.’s employees worldwide are clearing their desks, waiting to hear if they’ll be paid, and starting to look for work after the investment bank filed for the biggest bankruptcy in history.
tinyurl.com/69anwy

Wake-Up Call: Lehman’s Mortgage Marks:
Anyone else holding large amounts of tainted mortgages has to worry. Lehman’s potential unwinding, along with any aggressive actions by Merrill and AIG to offload mortgage assets, could mean widespread losses as other banks mark down their own holdings.
online.wsj.com/article/SB122144512332634941.html

10 Banks Form $70B Fund to Stave Off Crash:
Ten of the world’s largest banks have formed a massive liquidity fund to mitigate the effects of the Lehman Brothers meltdown, reports the Financial Times. All the investment banks will be able to borrow up to a third of the $70 billion fund in order to reduce volatility and stay in business while Lehman is being wound down. They will also be able to borrow from the Fed under newly relaxed terms
www.newser.com/story/37467/10-banks-
form-70b-fund-to-stave-off-crash.html

S&P cuts BofA rating, may cut again, Moody’s may cut:
Moody’s Investors Service also placed the bank on review for downgrade after it said it will purchase Merrill Lynch (MER.N: Quote, Profile, Research, Stock Buzz) for $50 billion.
www.reuters.com/article/rbssFinancialServices
AndRealEstateNews/idUSN1551490520080915

China Cuts Rates as U.S. Turmoil Adds to Global Risks:
China cut interest rates for the first time in six years and allowed most banks to set aside smaller reserves as worsening credit-market turmoil and weakening export demand dimmed the outlook for economic growth.
www.bloomberg.com/apps/news?pid=2060
1068&sid=aPOjpkRwklGQ&refer=home

The next big bang is private equity:
Wall Street is in crisis, undoubtedly the worst in history, as one tarnished giant after another topples. The real problem, though, is no one can tell where it will end.
business.smh.com.au/business/the-next-big
-bang-is-private-equity-20080915-4h1g.html

Wilbur Ross: Possibly a Thousand Banks Will Close:
In an exclusive interview with CNBC.com, Wilbur Ross, chairman and CEO of WL Ross & Co., says he sees possibly as many as a thousand bank closures in the coming months.
www.cnbc.com/id/26710362

Industrial Production in U.S. Fell More Than Forecast:
Industrial production in the U.S. fell in August by the most in almost three years as the slowdown in consumer spending prompted automakers to cut back.
tinyurl.com/6ex97d