[Anyone] FW: Progress Report: Feeling The Credit Crunch (fwd)

[Thos Myers]

Where is the NRA when we REALLY need them?
In China they execute cretins like Prince.  Here we reward them for
destroying corporations.






                        ECONOMY
                        Feeling The Credit Crunch
                        Charles Prince III resigned yesterday as chairman
and CEO of Citigroup, the world's largest bank, after the corporation
sustained massive losses due to "large exposure to bad loans." Robert Rubin,
who served as Treasury Secretary during the Clinton administration, will
take over for Prince to "reassure Wall Street" in the wake of Citigroup's
announcement that it will write-down, or acknowledge the depreciation of its
assets, by between $8 and $11 billion. This amount comes on top of the $5
billion in losses that Citigroup has already suffered in the subprime
mortgage crisis. In return for overseeing Citigroup during a year in which
its stock value dropped by 31 percent, Prince will receive a severance
package worth an estimated $40 million. Merrill Lynch also announced
recently that it was incurring a $7.9 billion, subprime-related write-down.
These write-downs -- admissions that banks "woefully overestimated the value
of assets on [their] books" -- are evidence of the expanding shadow that the
sup-prime mortgage crisis is casting over the economy. Initially thought to
be a problem for only a few overly-aggressive hedge funds, the subprime
crisis has since spread to the world's largest banks, the American housing
market, and gradually, the entire American economy.

                        THE SUBPRIME'S CRUNCH: Recently, Federal Reserve
Chairman Ben Bernanke said that the housing slump will continue be a
"significant drag" on U.S. growth. While the United States is not yet in a
recession, there are some troubling economic indicators. "Spending on new
homes and renovations dropped by 20.1 percent in the third quarter -- the
largest decrease in a year, and the seventh quarterly decline in a row."
Wage growth remained low, while the amount of debt looming over the average
American family has continued to rise. President Bush has pointed to recent
job growth as an indicator of a sound economy, however, "job growth is still
weak by historical standards and perhaps most importantly, remains
concentrated in just a few industries." The subprime housing bust has
already lead to massive losses for U.S. home owners, with total losses in
"real estate wealth expected to range from $2 trillion to $4 trillion."

                        ADMINISTRATION'S RESPONSE: Members of the Bush
administration have displayed a lack of understanding about the breadth and
seriousness of the subprime crisis. There are more than 2.8 million families
with mortgages that reset in 2007 or 2008. The average family could see
their mortgage payments rise an additional $10,000. When trouble was first
noticed in March, Bernake dismissed the potential ramifications of the
looming problems: "The impact on the broader economy and financial markets
of the problems in the subprime market seems likely to be contained." In
July, Treasury Secretary Henry Paulson echoed Bernake, saying, "I don't
think it [the subprime mess] poses any threat to the overall economy." As
recently as September, the Federal Reserve was reporting that "outside of
real estate, reports that the turmoil in financial markets had affected
economic activity during the survey period were limited." Yet the massive
loses sustained by Citigroup and Merrill Lynch are proof that the affects of
the subprime crisis have extended beyond the small group of lenders
initially thought to be affected. Paulson recently stepped up the
administration's rhetoric, declaring that we must ensure "yesterday's
excesses" aren't repeated. Yet during his tenure as CEO of Goldman Sachs,
Paulson profited by gorging on subprime bonds. "He should admit to having
been involved in creating the problem that we have now," said Rep. Brad
Miller (D-NC).

                        IMPACT ON MINORITIES: While the administration was
ignoring the emerging subprime crisis and continuing to claim the economy
was strong, large numbers of low-income families and minorities were
suffering its affects. "[S]ubprime loans have been particularly prevalent in
predominantly black and Hispanic neighborhoods" in recent years. "Nearly
half of blacks who bought a house in 2005 or 2006 ended up with a
high-interest mortgage, compared with 13 percent of white home buyers,
according to an Atlanta Journal-Constitution analysis of federal mortgage
data." Correspondingly, "[s]ixty-nine percent of black Americans feel the
United States is in a recession, while only 42 percent of white Americans
feel the same way." Among black home buyers "making more than $100,000 a
year, 41 percent got a subprime mortgage, compared with 7 percent of whites
in the same income category." While the subprime crisis has been expanding
for more than six months, only in the last few weeks -- as the problem has
increasingly afflicted corporate America -- has the administration started
to take appropriate steps to remedy the situation.


                              HUMAN RIGHTS -- RICE'S TOP LEGAL ADVISER
REFUSES TO CALL WATERBOARDING TORTURE, EVEN ON U.S. CITIZENS: During a
debate on international law at University College London last month, John
Bellinger, the senior adviser on international law to Secretary of State
Condoleezza Rice, "declined to rule out the use of the interrogation
technique known as waterboarding even if it were applied by foreign
intelligence services on US citizens." Asked by University College London
international law professor Philipe Sands if he could "imagine any
circumstances in which the use of water boarding on an American national by
a foreign intelligence service could be justified," Bellinger hedged, saying
"one would have to apply the facts to the law, the law to the facts, to
determine whether any technique, whatever it happened to be, would cause
severe physical pain or suffering." Sands reacted with bewilderment, saying
"that just strikes me as very curious." Bellinger did acknowledge that the
U.S. government's evasiveness on whether waterboarding is torture "makes it
very difficult to explain to the world and to provide the important
assurance" that America's post-9/11 policies are within the confines of
international law.