8:30 AM This is a time sensitive post; I'm sure the links here will look differently in a few hours.
But right now we've got a spectacular example of how the Mainstream Media is indeed in cahoots with the "financial sector"- they're not just reporting the news- they do tweak it, a bit.
Right now their action is perhaps admirable- so they think, anyway. They are trying to fight off a real full-blown PANIC in the stock markets.
It's all about how the two huge quasi-governmental mortgage corporations, known as Freddie Mac and Fannie Mae; crashed so hard on the stock market yesterday that the US federal government was hours away from "nationalizing" them- (though we don't call it that here, of course). And trumpeting how this disaster was avoided. (Teresa, you'll find more than you want to know about Fannie and Freddie there.)
Do you see, anywhere, any mention of another huge mortgage company; Indy Mac?
Shortly after the stock markets closed on Friday - it WAS "seized" by the government, as being completely insolvent and dysfunctional-
According to Reuters, "The bank is the largest regulated thrift to fail and the second largest financial institution to close in U.S. history, regulators said."
Golly, that sounds like a headline to me. But it's totally buried under the constant reassurances that "all is well! don't panic! NO REALLY!! DON'T PANIC!!"
Golly, that sounds like a headline to me. But it's totally buried under the constant reassurances that "all is well! don't panic! NO REALLY!! DON'T PANIC!!"
Maybe we should panic?
But you can't find a trace of this story on the front pages of the major US newspapers- yet. Though it happened last night.
(And, sure enough; shortly after I posted this; if you really dig, you now CAN find the story on the front page of the NYT - in the tiniest font they use, a link elsewhere, not a story.)
(ah, and now, 15 minutes later, the Washington Post; likewise, tiny font link on front page; to a nice reassuring story: "But John M. Reich, director of the Office of Thrift Supervision, said IndyMac's failure was a 'unique' incident that 'does not signal a direction for the industry as a whole.' ")
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1:30PM (CDT) - the BBC has finally put the story up as an "Other Top Stories"; in middle font; still following "Pope to apologize for sex scandal", though.
The whole story has now disappeared from the NYT front page- it's not only inobvious, but if you search for "indy" the result is - 0; it's not there at all. It's barely visible in Business; tiniest font, very obscure, as "mortgage lender seized"; which is also the language of The Washington Post.
The Google News compiler has been varying all day- right this second- the story is NOT findable; but it was a half hour ago.
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2PM - FINALLY! CNN- headlines it in the Business section, though still not screaming on the main front page- "may be the most expensive bank failure ever..." nah, what story?
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4PM - Story is now gone from BBC front page, though the Pope is still apologizing for Australian pedophile priests in exactly the same place; the collapse of Indymac is now only to be found on the Business page; replaced in "Other Top Stories" by: "France Rejects Veiled Muslim Wife". Cute eyes.
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Next day- CNN wins the spin prize! NOW, it's the top front page feature; big photgraph- "Back in Business: IndyMac Reopens Monday!" No, it's not back in business, it's still in collapse. Yes, the doors will reopen, but it's mostly going to be for the Federal Deposit Insurance Corporation to start paying newly printed money to depositors- since IndyMac was broke. The FDIC wants to find a buyer for IndyMac within 90 days- but at the moment, no one is offering a dime for it.
BBC now has "Key US mortgage lender collapses" as a subheading under Business.
NYT - no mention at all on front page; no mention at all on Business, to my astonishment; but if you go to the "whole paper" Most Popular page; under Most Blogged - it's #1 - and I don't think that's my fault. :-)
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12 comments:
And the headlines I am seeing, usually buried in the business section, say something like "Feds take over troubled mortgage lender." So, y'know, it's not like a bank failure at all. Nothing to see here, folks.
Terrifying. My mother just told me she's going to the bank to take out a good chunk of her cash assets...and I have a feeling that many others will do the same thing, which, of course, will lead to further crisis.
So many seem blissfully ignorant of this recent turn of events, and I'm not sure doing what I want to do (bullhorn...bicycle) will help the problem get any better. :/
"But John M. Reich, director of the Office of Thrift Supervision, said IndyMac's failure was a 'unique' incident that 'does not signal a direction for the industry as a whole.' ")
And by the way, we have this excellent bridge right over here that we have a special deal on, just for you, to sell cheap.
Here it comes.
Market fairies couldn't hold this one together... they were trying to keep it quiet, but once spotlight of publicity from Schumer's letter was focused on them, they withered away...
The optimist in me says people won't let everything fall apart - but the pessimist in me says that our country doesn't have communities strong enough to stand alone anymore...
Eric
MSNBC has a link on their front page at the moment:
http://www.msnbc.msn.com/id/25644988/
It's a small print link but in the upper half/center of the screen, right under the medium print link for "Newsweek: Why We Can't Let Fannie and Freddie Fail".
This was a prominent story on PBS News Hour. What good does panic do? Should we rush the banks? What are you advising, screaming in the streets?
So it's all ticketty boo right?
riiiiiiight :)
Sometimes I'm glad to be somewhere else where hopefully the waves will be a little diminished although I'm not counting on it.
viv in nz
Equa Yona- sure; good question. It's a bad situation all around, I don't see ANY "good" responses; just some that might, possibly, be less disastrous for us small folk.
What I would like is some actual honesty about the overall financial situation. Granted that's hard to come by- but I think folks like The Automatic Earth are doing a far better job than our alleged government/business folks.
Everything is very much NOT ticketty-boo (thank you, Knutty!) out there, but the biz world cheerleaders keep insisting it is. "We've hit bottom; it's all going to get better from here! STAY THE COURSE!"
I guess what I'd advise for small investors is that you NOT stay the course- "it", meaning the stock market, is going much further down- it's a bit of a game with doomsayers to guess how far; my own guess is that the Dow could go back to around 5,000; maybe next year.
Panic hurts everyone- but it hurts the big players too; unlike the "no, no, leave your money in the market! keep adding to your retirement fund!" nonsense. The small players can lose every dime they have that way. Where do those dimes go? Into the pockets of the big boys- who are selling short, as long as the market doesn't drop too fast and too hard; they're making money, all the way down.
I don't think there's any reason to take money out of an FDIC insured bank account. But money left in the stock market is evaporating fast- and will likely evaporate faster. Literally, at this point, burying cash in the backyard would be a better idea. Or silver.
I think. :-)
Panic is a disaster. But- it IS a disaster- and pretending all's swell does more damage than acknowledging where we are. Maybe us little folk can get out with a few pennies yet, before it all disappears completely.
Knutty- you might like to hear this story- decades ago ('60's!) I was at a speech by Paul Ehrlich (yeah, "The Population Bomb" guy), and we were doing questions and answers at the end. It was all sounding dismal.
Somebody asked: "Ok; so what would you do if they gave you $100 million to tackle the problem?" (that was a lot of money, back then)
And Ehrlich just blurted out, without thinking- "I'd buy New Zealand, and put a fence around it." Got a good laugh. Obviously not a solution for anything, but it gives a good idea of his opinion of NZ. I don't remember his real answer; just that bit.
You do have a nice place there, problems and all, compared to the rest of the world.
Well, so another all time low is being approached. Do we grow more vegetables? Chop more wood? Get a horse?
I know burying paper money won't help you very much.
I am going to brush up on my iguana and pigeon shooting skills and work on some good surfcasting spots and buy some basic and tough equipment for those activities. I'm lame in one arm, can't pull the bow or slingshot any more. I've begun to warehouse mesquite charcoal and am getting a small and efficient charcoal cooker now, recycled, nothing from a far off manufacturer. Probably from a steel drum. No heating here, not a worry with that.
So can we have some more posts on where to go from here? The economy is melting down, the only question left is how far and how long. That we know. It's lemonade time. Know what I mean?
The Fed is now stepping in to support Fannie Mae and Freddie Mac:
http://www.nytimes.com/2008/07/14/washington/14fannieweb.html
I wonder how much this is going to hurt... Bush has never been one to ask for sacrifice - but I think his time is coming...
Eric
In a way, we are staying the course. Living frugal and waiting for the insurance settlement so we can replace our roof. My parents who grew up during the Great Depression and World War II, always taught me to take care of my belongings so they last, be debt free, grow a garden, have an emergency food storage. Whenever the recessions (and Savings and Loan crisis) came, they always told me not to worry because either their loan was so small and up-to-date on the payments that it would be one of the last that the bank came for, or else paid for.
We do keep putting money in our retirement accounts because we feel that we will be no worse than anyone else should the system crash and if it recovers we will be that much better off. I forget who said it but, it was the people who had money to invest during the Great Depression who came out the other side better off.
--Ave
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