A fall of 50% in [valuations on residential housing].- Maybe not so nonsensical after all - Econbrowser
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Why Did the Fed Raise Rates in October 1931? - … Some commentators have referred to the Chinese and Saudi pegging of their currencies to the U.S. dollar as “Bretton Woods II.” We wonder if the demise of Bretton Woods II is not close at hand. If it is, the greenback could plunge, U.S. consumer inflation could spike, and the Fed would have little choice but to stop cutting its policy interest rate, and, perhaps, even have to raise it, as it did in October 1931. … Paul Kasriel - Northern Trust

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1.  from Department of the Treasury - Blueprint for a Modernized Financial Regulatory Structure - Treas.gov 

2.  Paulson’s Legacy - Brian Wingfield - The treasury secretary knows his plan to overhaul the financial regulatory system is going nowhere soon. And he’s OK with that. -  Forbes 

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Consumers Stop Shopping, Save Money - Lisa LaMotta  - Forbes 

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Denial, Hope, and Panic  - John H. Makin - We are probably at a point, however, where we need to choose between two approaches to putting a floor on house prices. Either have the Fed print so much money that a return to inflation eventually stabilizes house prices and then pushes them back up-the radical monetize approach-or, alternatively, employ the nationalize approach, whereby a federally funded agency steps in to buy mortgages at less than their current face value to help stabilize the credit markets. The Fed’s commitment to ensure price stability makes the nationalize approach the only realistic option, however unattractive it may be. - AEI 

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JOHN M. BERRY - Playing Politics at the Corner of Wall and Main - Some politicians seem determined to undermine the Federal Reserve’s credibility by questioning whether the Fed should have acted to ward off the failure of Bear Stearns Cos.  - Bloomberg 

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Redlining’ Law’s Reach May Expand - The Atlanta Journal-Constitution - knowledegeplex

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Does Recession Mean Doom for Restaurants? - NY Times

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What Congress and Investors Should Understand About the Bear Stearns Deal - The effect of the Fed’s guarantee is not to protect the public, but to protect Bear Stearns’ bondholders. During the upcoming hearings, Congress can improve public confidence about the U.S. financial system by clarifying the distinction between “failure” of a company’s obligations to customers, and the “failure” of a company’s own securities. - John P. Hussman - Hussman Investment Trust 

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Kamakura Credit Index Shows Recession Is Underway - Kamakura Troubled Company Index Rates 13.6% of Corporates in Distress - thanks Ira Artman - MarketWire.com 

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How To Fix It -  This week we will look at what will be a fairly controversial essay by good friend Michael Lewitt of HCM. In light of today’s speech by Treasury Secretary Henry Paulson of the re-organization of the regulatory system in the US, Michael suggest we look at what the real problems are before we begin the process of re-arranging the deck chairs on the Titanic.  - Mauldin’s Outside The Box  

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Proposed Fed overhaul is broadest since Great Depression - AP - Houston Chronicle

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If Only I Could Get the Fed’s Help When I’m Bad - Ann Woolner - Bloomberg 

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AWESOME INTERACTIVE MAPS:  Federal Reserve System announces the availability of maps and data illustrating subprime and alt-A loan mortgage conditions across the United States - Board of Governors of the Federal Reserve System
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Time to Go on a Liquid Diet - BEN STEIN - NY Times
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San Diego: Homeowners suing agent over high purchase price - SD Union Tribune

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1.  Manhattan Home Market Slows as Wall Street Cuts Jobs - Bloomberg

2.  Housing slump comes to the Hamptons -  … FT specifically mentioned several properties owned or rented by Bear Stearns executives that are back on the market. Agents said the rental market is off 10%, after several years of double digit gains. … - The Big Picture

posted by Bill Coppedge