after a curious and mind-altering day away from watching the wall street has a seizure show...
first off, what's with this investigation being launched at this particular moment?
Quote:
FBI investigates four Wall Street firms over sub-prime meltdown
* Julia Kollewe
The FBI is investigating four Wall Street institutions at the heart of the financial crisis over their role in the sub-prime mortgage meltdown, it emerged today.
Reports said preliminary investigations into potential corporate fraud at the US mortgage finance giants Fannie Mae and Freddie Mac, the insurer American International Group and the investment bank Lehman Brothers had been opened.
They are among 26 companies being scrutinised by the FBI. Freddie Mac, Fannie Mae and AIG were bailed out by the government in the last fortnight, while Lehman Brothers filed for bankruptcy.
Senior executives at the companies are also believed to be in the FBI's sights, while the securities and exchange commission is also reportedly assessing possible civil fraud claims against the four firms.
"The FBI continues to investigate a number of companies for sub-prime lending practices, but the department brings criminal prosecutions based solely on the facts and the law," Brian Roehrkasse, a Justice Department spokesman, said.
"Where we find evidence of criminal wrongdoing, we will prosecute."
Several California institutions, including IndyMac Bank of Pasadena, which collapsed in July at a cost of $8.9bn (£4.7bn), are reported to be under investigation.
Countrywide, formerly the largest mortgage lender in the US and now owned by Bank of America, is also under scrutiny.
The investigations come as Congress considers a $700bn bailout package for the financial industry.
The Bush administration's plan would allow the Treasury to buy toxic bad debts from troubled financial institutions.
Congressmen yesterday demanded safeguards, additional details and more time to scrutinise the way in which the Treasury intends to spend the money.
In the past two weeks, the government has taken over Fannie Mae and Freddie Mac to prevent their collapse.
Last week, the Federal Reserve provided an emergency $85bn loan to AIG to save it from bankruptcy, but refused to bail out Lehman Brothers.
Eight months ago, the FBI began an investigation into the sub-prime mortgage market, in which loans were given to people who were not in a position to repay them.
This prompted the credit crunch as bad debts were bundled together with higher quality assets and sold on by banks.
The FBI is known to have demanded information from Goldman Sachs, Morgan Stanley and - prior to its collapse - Bear Stearns.
In June, two Bear Stearns executives were arrested over charges that they misled investors as the subprime market began to disintegrate.
|
FBI investigates four Wall Street firms over sub-prime meltdown | Business | guardian.co.uk
this seems to me transparently theater. what it does is reinforce the damage-control tack within the main discourses about this mess, the ones that amount to variations on the "bad apples" thesis. the implication: the system is neutral, distortions the results of particular Actions done by Bad People.
meanwhile, this morning, in another sector of the bizarre-o discursive world inside neoliberalism, which is still the trojan horse with no name:
Quote:
Stress on Markets Threatens Economy, Bernanke Says
By REUTERS
WASHINGTON — The Federal Reserve Chairman Ben S. Bernanke on Wednesday told lawmakers on Wednesday that global financial markets were under “extraordinary stress” and were threatening an already weak economy.
“The intensification of financial stress in recent weeks, which will make lenders still more cautious about extending credit to households and business, could prove a significant further drag on growth,” Mr. Bernanke said in comments prepared for delivery to the congressional Joint Economic Committee.
“The downside risks to the outlook thus remain a significant concern,” he said. “Action by Congress is urgently required to stabilize the situation and avert what otherwise could be very serious consequences for our financial markets and for our economy.”
Mr. Bernanke ticked off areas of the economy that are struggling or have been hit by financial turmoil, which in recent weeks felled investment bank Lehman Brothers and forced the government to take over mortgage finance firms Fannie Mae and Freddie Mac and rescue of the insurance giant the American International Group.
“More recently, economic activity appears to have decelerated broadly,” he said, speaking on the second day of testimony aimed at persuading skeptical lawmakers of the need for the government’s $700 billion rescue plan.
Labor markets are weak and unemployment is high, he said. Despite an easing of oil and gas prices since the summer, consumer spending is likely to remain sluggish, he added.
In addition, slower growth around the world is likely to blunt demand for U.S. exports, which had been helping buoy the economy.
While news on inflation has been more favorable, Mr. Bernanke said, the outlook remains highly uncertain.
Falling oil and commodity prices and the dollar’s rebound from lows hit this summer have eased pressures, but it is difficult to predict the course of commodity prices, he said.
“The upside risks to inflation remain a significant concern as well,” he added.
|
http://www.nytimes.com/2008/09/25/bu...gewanted=print
the center of which is on the one hand an anthropomorphic staging of markets as Giant Brains which react like we do, human beings with smaller brains. i was thinking about this while being forced to listen to some nimrod "news radio" show on my way back from deep ruralia, through thickets of mc-cain signs in what i take to be a particularly reactionary part of a particularly reactionary state---the routine usage of subjective qualities to gloss the actions of markets, the dow jones industrial average as the basis for a new astrology, worth about as much as jeanne dixon's columns, really, but somehow confused with meaningful statements, and so as "news" elements.
beyond this, it is interesting to see bernake starting to try to widen the framework in the context of which this latest financial disaster is to be situated---when attempting to sell it on the basis of panic itself did not work, and faced with growing opposition to the vagueness of the wording, the sweeping power afforded to treasury, the lack of substance/design in the plan itself, the narrowness of it's purview, the political difficulties that accompany it---bernake now presents a quick image of the american economy in general as tottering.
does this square with how you're seeing this?
what are the reactions like to this theater in your everyday life?
so far, here in tiny town, it is treated mostly as a giant tv show. things go on as if it is not happening, like it's something that can be tuned in on if the red sox game is not in question late, or during the day if a distraction from work is in order...