Financial Crisis

WASHINGTON -- With his message to the markets not to panic, Federal Reserve Chairman Ben S. Bernanke in effect signaled yesterday that the central bank would again stand ready to try to head off any major financial crisis, analysts say. Bernanke told the House Budget Committee that the economy was in good shape and that the Fed was monitoring the markets in the wake of Tuesday's global stock sell-off. Stock market operations "seem to be working well," he said, adding that "there's a reasonable possibility that we'll see some strengthening of the economy sometime in the middle of the year."

MOSCOW -- Let prime ministers and presidents, and even the Central Bank, promise whatever they like. Let the smart money flee the stock market. Let the financial experts foretell doom. The average Russian hardly cares anymore.Russians know how to survive, so in the uncertain days since Monday, when they were told the ruble could lose up to a third of its value this year, they have been spending whatever money possible.Early in the week, the better-off were snapping up washing machines and refrigerators, trying to get what they could out of the ruble before prices rose.

WASHINGTON -- Sensing weakness at the scandal-scarred White House, congressional Republicans are moving to put their own stamp on some of the most important areas in U.S. foreign policy.With the White House focusing on saving President Clinton from impeachment, GOP lawmakers are blocking or trying to change U.S. policy on a number of fronts, including the global financial crisis and North Korea, and have put a harshly critical spotlight on policy toward Russia and Iraq.In the past week:The House balked at granting the president's request for $18 billion to replenish the International Monetary Fund at a time when the world financial crisis deepens.

Two freighters carrying logs from the Weyerhaeuser Corp. in the Pacific Northwest steam idly at sea near South Korea, their cargoes undelivered -- perhaps undeliverable.Just as the ships approached port, the Korean buyers refused to pay for wood they no longer needed to build homes and furniture they can no longer sell while Asia's financial crisis spreads.Tiffany, enjoying brisk jewelry sales on Fifth Avenue, is hurting in Hawaii; the Japanese tourists who normally visit and buy there are doing neither lately.

For Bernard Evans, the protagonist in Richard Wesley's "The Talented Tenth," reality hasn't lived up to the political ideals he nurtured as a student at Howard University in the 1960s. And no one seems to understand the dissatisfaction he feels.His socially prominent wife tells him, "You can't change anything, Bernard. So why dwell on it?" His mistress believes that keeping a low profile is the way to get by in a white world. One of his oldest friends insists, "I refuse to feel guilty about not feeling guilty."

WASHINGTON -- For a long time now, this capital city has been accustomed to being a national punching bag. "The Crime Capital of America," its critics outside the Beltway take perverse pleasure in calling Washington, D.C. Unhappily, the statistics lend support to the label.The rap against the city isn't merely the crime rate. All the excesses of the federal establishment it houses bring derision, especially now in the anti-politics, anti-government climate that has triggered the Gingrich "revolution."

The financially troubled NAACP has trimmed its debt somewhat, but the organization still is struggling to raise enough money to meet day-to-day expenses, Chairwoman Myrlie Evers-Williams said yesterday."

With fingers tightly crossed, Mexican officials are now saying the worst of their financial crisis is over. The peso is up 25 percent from its early-March lows, the stock market has rebounded 65 percent, exports are zooming 29 percent while imports have dropped 3.4 percent. Finance Minister Guillermo Ortiz fully expects his government will be able to meet its foreign debt obligations through a tough period ending in June.What pulled Mexico back from the brink of bankruptcy was a massive $50 billion international support program, 40 percent of which was pledged by the Clinton administration in an executive power move bypassing Congress.

Washington. -- There is a lot to learn about what went wrong with the Mexican economy -- about how a country that, according to most analysts, did so much right for so long could fall so quickly into financial crisis, and about why virtually no one forecast the speed and magnitude of the crash.Four important lessons have already emerged.The first: Don't throw the baby out with the bathwater. Mexico's crisis cannot be blamed either on its economic strategy of the past decade or on the North American Free Trade Agreement.

WASHINGTON -- President Clinton won approval from top congressional leaders yesterday for what is expected to become an enormous package of loan guarantees to rescue the Mexican economy.The agreement, described by the White House as a significant test of bipartisanship in a foreign financial crisis, is aimed at lTC trying to keep Mexico's growing financial crisis from erupting into a clash with the Republican majority and dissident Democrats.The speaker of the House, Newt Gingrich, and the Senate majority leader, Bob Dole, agreed to a rescue plan put together by the Clinton administration that will require Mexico to pay a fee, similar to an insurance premium, to the United States for taking the risk of guaranteeing Mexico's debts.

SANTA BARBARA, Philippines - -Looking down the main drag of this farm town, Police Chief Eric Noble marvels at the modern conveniences - byproducts of the fierce ties binding Philippine families. Sturdy houses with concrete foundations now replace the thatched huts of a generation ago. There are new cars, washing machines, children attending private schools and former sharecroppers who have purchased the farms where they once worked as lowly laborers. Such economic progress has come from remittances, the staggering $1 billion sent to families nationwide each month by Filipinos working overseas in an attempt to overcome extreme poverty and joblessness in their native land.

WASHINGTON - - 10 Banks get approval to refund TARP funds Ten of the nation's biggest financial companies got a green light Tuesday to return $68 billion in federal bailout money, freeing the banks from limits on executive pay and leaving the government with a small gain on the rescue cash. While the paybacks could be a signal that the banking industry is stabilizing, analysts say it is far from a clean bill of health, and some said it was too soon to let the banks give back the money.

Everybody likes Gary Gensler. President Barack Obama nominated the Baltimore native in December to head an important federal agency that regulates commodities. Mr. Gensler's nomination cleared the Senate Agriculture Committee. He is supported by industry groups such as the Futures Industry Association and consumer groups like Public Citizen - no mean feat. So, if everyone likes him, why isn't Gary Gensler leading the Commodity Futures Trading Commission? Because a single U.S. senator, Bernard Sanders of Vermont, objects to the nomination.

The evidence mounts that the current economic troubles were set in motion because of systemic fraud. I keep thinking about Bernard L. Madoff's comment when F.B.I. agents were about to arrest him. Asked if he could explain what he had done in his Ponzi scheme, he replied, "There is no innocent explanation." Fact is, there is no innocent explanation for the actions of the financial elites and their bought-and-paid-for political lackeys. It's one thing for people like me to speak or write about the crimes that set this collapse in motion, but it's another and far more damaging thing to have well-placed experts in finance point the accusing finger at those responsible for the financial crisis.

Fed chief says strategy to ease crisis working CHARLOTTE, N.C.: While acknowledging that the Federal Reserve was "extremely uncomfortable" about bailouts of big financial companies, Fed Chairman Ben S. Bernanke said Friday that the central bank's strategy to ease the financial crisis is working. Bernanke was referring to the Fed's decisions last year to step in and financially back JPMorgan Chase & Co.'s takeover of investment house Bear Stearns and throw its first of four financial lifelines to insurance giant American International Group Inc. At a Fed conference in Charlotte, Bernanke said it had to act because collapse of those companies would have dealt a serious blow to the financial system and economy.

The Obama administration released the long-awaited details Monday of its plan to cleanse banks of bad home loans and toxic assets, igniting a major Wall Street rally as investors glimpsed what might be the beginning of the end of a problem at the core of the financial crisis. The Dow rocketed nearly 500 points after Treasury Secretary Timothy F. Geithner briefed reporters on the administration's innovative but untested plan, which makes a strategic bet that partnering with private investors to buy the assets will stabilize the crisis while limiting the risk to taxpayers.

Alicia Harding's mother always taught her to set objectives and then go after them. Graduate from college. Check. Get a job. Check. Buy a house by age 25. "That's the last thing in my five-year goal: homeownership," said the 24-year-old Social Security Administration employee. "The house is the dream for me." Yesterday, Harding was one of hundreds who descended on Polytechnic Institute for Money Power Day '09, roaming the halls armed with question after question about how she could pull out of a financial hole and own a home for herself and her 5-year-old daughter by the end of the year.

In announcing that he had asked American International Group employees to return at least half of their controversial bonuses, chief executive Edward M. Liddy tried to defuse the immense public outrage over payments to people who helped cause the financial crisis. Some employees at the insurance giant have volunteered to return their entire bonus, he said yesterday. But Liddy's announcement did not satisfy members of Congress. "Getting half of the money back is not the answer," Georgia Democratic Rep. David Scott told Liddy during a contentious congressional subcommittee hearing.

WASHINGTON -The U.S. economy shrank by a larger-than-expected annualized rate of 6.2 percent during the final three months of 2008, the worst showing in about 25 years, according to a revised government estimate out yesterday. The new estimate of the fourth-quarter gross domestic product from the Commerce Department is far worse than the initial estimate of negative 3.8 percent and also larger than the 5 percent drop in growth most analysts had anticipated. It's the largest contraction in one quarter since the first quarter of 1982, when the economy shrank by 6.4 percent.

President Barack Obama has vowed to reform financial regulations and tighten oversight of banks to prevent a repeat of the financial crisis that has plunged the U.S. economy into deep recession. It's a promise that must be kept because it is vital to re-establishing the trust of the American people in the stability of the financial institutions that provide the lifeblood of commerce. Members of Mr. Obama's economic team are expected to propose stricter federal rules for hedge funds, credit rating agencies and mortgage brokers, and greater oversight of the complex financial instruments that have contributed to the current economic crisis.