It’s a Bird! It’s a Plane! No, it’s SuperFed!

It seems we’ve entered the age of the the super fed. Able to engineer and finance take overs like

 JP Morgan’s purchase of Bear Sterns. Able to take over Fannie Mae and Freddie Mac at a liability of trillions, able to broker a line of credit to AIG for 80 billion dollars.

 

At the heart of Super Fed are two men. Federal Reserve chairman Ben Bernanke

and Treasury Secretary Hank Paulson. Together they have done a remarkable job of keeping the economy afloat in a sea of turmoil while doing their best to avoid moral hazard on wall street.

This crisis is plenty scary and we haven’t seen bottom yet, but super fed has done an excellent job navigating a crisis that in another era would have caused a national depression.

Banks in Crisis

ThinkPOP is on the move this morning, but I didn’t want to wait to post on the financial crisis spreading through the banking industry. Over the course of the weekend we learned Merril Lynch will sell itself for $50 billion ( 1/2 of what it was worth last year) Lehman is filing Chapter 11 after it was unable to find a buyer, Washington Mutual has lost some $50 billion of value, and AIG is seeking a bridge loan from the Federal Reserve as it braces for a devaluation from the street. The markets in Europe and Asia are already down, and US stocks are set to tumble.

The federal reserve and treasury finally drew the line on further rescue measures apparently only willing to rial tax-payer dollars on Bear Sterns, Fannie Mae and Freddie Mac.

I’m not an economist or an expert on the financial markets, but from a layman’s point of view this seems like the kind of brutal, rapid correction the market needed to determine how deep the subprime lending crisis goes.

I am desperate to hear from Senators Obama and McCain on what actions they see as necessary to bridge this disaster. Their reactions to this domestic financial crisis will be as telling as their reactions to the Russian invasion of Georgia.

Campaign coverage=garbage

So says Chris Lehman, Senior editor of CQ and a co-editor at Bookforum in this interview piece for Harper’s. His take of the current state of political coverage is right on point. Some of my favorites quotes:

The reporters and editors who are composing these inane pieces are pretty much talking to each other. I saw a Washington Post headline the other day, “Who’s No. 2? Obama Keeps Everybody Guessing.” No—the “everybody” in that construction is you. Imagine if you were covering the baseball playoffs and you wrote that there was massive speculation about who was going to win. It’s manifestly moronic because you’re writing about a scheduled event that is going to take place on a known timeline. You’re contributing nothing. It’s the opposite of news….

On Saddleback….

…unless you believe that political campaigns have a platonic existence completely outside of reality. It’s the same thing with all the discussion about who won the Saddleback debate. The only important issue about Saddleback is that the Constitution specifically forbids any religious test for office, so why are you having an evangelical minister asking the two candidates about their relationship to Christ? But the people who are in charge of delivering useful information to the public about the process have no historical frame of reference. They literally don’t know what they’re doing. 

On the John Edwards mess…

If you’re a cable news director, you’re just not going to devote ten minutes to a major address about the subprime crisis, but if John Edwards confesses to an extramarital affair, even though he’s not even a candidate and holds no public office, it will lead to an orgy of coverage.

Asked if anything relevant was going on…

…Not to be too conspiratorial, but there is an economic interest at stake because you want people to come back and watch the same drivel the next day, in the same way that I obsessively check the sports section to see how the Cubs did. That’s why the VP speculation is so perfect for cable; you can fill up all that airtime without any reporting…

Asked if there are narratives already constructed…

First of all the media wants it to be as close of a race as possible. New York magazine recently had an idiotic cover story on race and the election, saying that everything was trending Democratic so why wasn’t Obama up by 10 or 15 percent? All sorts of other stories have asked the same question. The problem with that analysis is that it’s August and no one but the press has such an intense interest in the campaign at this stage. Historically this has not been a time when a presidential candidate pulls away, and even if someone does it will be meaningless because it’s August. You could call that type of reporting irresponsible but that connotes a level of intelligence to the coverage that isn’t there. The narrative with McCain is the flip side of this–what can he do to derail the Obama juggernaut? Never mind that these narratives are contradictory. Obama is vulnerable in the one instance, but in the other, he’s evidently unstoppable. Logic just doesn’t count in these things…..

Do these narratives become self-fulfilling?

….the media largely defeated Al Gore. They burrowed in with these idiotic memes about him being uncomfortable in his own skin and about his claiming to have invented the Internet and Naomi Wolf advising him on how to be a he-man. Most of it wasn’t even true, but that didn’t matter because the press is so invested in its own narrative that it all becomes self-fulfilling; these things are repeated like mantras…