Should the Federal Reserve Bank be held accountable for the current financial melt down? Yes.

There are a number of factors leading up to this. The term seen repeatedly is “the housing bubble burst.”   What caused this to burst?  Chiefly, lax regulations and low interest rates.  Practically any American could buy a house, regardless of income or credit history. This is where the most debt was accrued.  Therefore, it’s the key factor leading up to the $24 trillion-dollar bailout. That’s since caused an economic quagmire.

In an article published by the Cato Institute, Gerald P. O’Driscoll Jr, a former vice President and Economic Adviser at the Federal Reserve Bank of Dallas, wrote:

The Biggest Policy failure was the decision by [Former Chairman] Alan Greenspan’s Federal Reserve to hold interest rates too low for too long.  That led to a tsunami of credit that inundated the economy with cheap money.  Mortgage lenders in particular were flush with funds and searched for deals wherever they could be found.  Heretofore unqualified borrowers suddenly “qualified” as underwriting standards relaxed and then disappeared.

Egged on by statements from Chairman Greenspan, market participants came to believe the era of low interest rates would last indefinitely.  But the era did come to an end as the Fed was forced to begin raising interest rates.  Faced with the prospect of paying higher rates on their mortgages in the future, borrowers began defaulting.

This led to millions of, one time, homeowners having to either sell their property or declare bankruptcy. Bankruptcy means the state has to pay off the debt.

Michael Gannon, managing editor for TheStreet.com writes:

The main criticism of Alan Greenspan has centered on his decision to aggressively lower interest rates in the wake of the dot-com bubble’s bursting in 2000, and keep them low too long.  As the country battled recession, the Fed cut rates to 1% in June 2003, and did not begin to raise them until a year later.

The result of this cheap availability of credit was money pouring in to the housing market, which wall street was only too happy to securitize—allowing banks to spread out the risks of making new loans and free up capital to make even more.

Declan McCullagh, a senior correspondent for cbsnews.com in an article titled “Ex-Bush Economist:  Blame the Federal Reserve for the Crash.”  Cites Stanford economics professor, John Taylor (creator of the Taylor Rule—an infamous business equation that suggests how high or low central banks should set interest rates) who in a recent book entitled, Getting off Track:  How government actions and interventions caused, prolonged, and worsened the financial crises. He, also, blames primarily the Federal Reserve’s unquestionably low interest rates for much of the last decade.

McCullagh writes,  “Interest rates that are too low tend to encourage people to load up on debt, including adjustable rate mortgages, yielding a speculative bubble and then a crash.”

Alan Greenspan, now retired, continues to defend his actions, saying:  “It was our job to unfreeze the American banking system if we wanted the economy to function.  This required we keep interest rates modestly low.”

The opposition to the blame being placed on Greenspan and the Fed was in an op-ed article for the Wall Street Journal titled, “Did the Fed Cause the Housing Bubble? Don’t Blame Greenspan” by David Henderson, a economics professor at the Naval Postgraduate School. He claims the Fed doesn’t hold enough authority to be held, solely, accountable for the housing bubble.  He writes, “Virtually every commentator who blames Mr. Greenspan points to the low interest rates during his last few years at the Fed.” He continues with:

Everyone knows the fed can drive interest rates by pumping more money in to the economy, right?  Well, yes.  But it doesn’t follow that’s rates were so low in the early 2000s.  Other factors affect interest rates too.  In particular, a sudden increase in savings will drive down interest rates.

He attributes this shift to there being, at the time, a surge in savings from other countries such as: China and especially oil rich Middle Eastern countries.

Even though Mr. Henderson makes a valid point:  That, Greenspan and the Fed felt safer due to countries our economy depends on having more money. Does this still let them off the hook? Especially after the government had to save them with a bailout so high that no one (not even George W.Bush who ratified it or the Obama administration) knows how the American people will pay it off?

Evan Justin Fox of Time Magazine, writer for The Economy column, stated in an article titled “The Bailout’s Biggest Flaw,” wrote:

By keeping the recession from spiraling in to a depression, the bailouts kept many people from ruin.  But this success may have made it impossible to fix what ailed the financial system in the first place, which could eventually bring ruin to even more millions.

We’re doomed to repeat this mess unless we hold those responsible, accountable.  That’s why I support congressmen Ron Paul’s (R-Texas) H.R.1207, to Audit the Fed.  This would call for a full Government Accountability Office (GAO) audit of the central bank to be completed before the end of 2010 and submitted to Congress for review.  It would also eliminate barriers of government access to the Fed such as: (1) not being allowed to view transactions for or with a foreign central bank, government of a foreign country, or non-private international financing organization; (2) Transactions made under the direction of the Federal Open Market Committee, etc.

Over the past year the Federal Reserve has given banks more than $2 trillion in loan guarantees.  Information on where all the money has gone is unavailable.  Passage of 1207 would let the public know how their tax money was spent.

Objection to this bill has come from current Treasury Secretary Timothy Geithner.  He claims an auditing of the Federal Reserve is a “line we don’t want to cross.” Claiming it would give politicians dangerous control over American Monetary Policy.”

1) Corbett, James “Geithner:  Auditing the Fed is a ‘line we don’t want to cross’” 25 August 2009. <http://www.corbettreport.com/articles/20090825_geithner_audit.htm>

The Corbett Report provides: “podcasts, interviews, articles and videos about breaking news and important issues from 9/11 Truth and false flag terror to the Big Brother police state, eugenics, geopolitics, the central banking fraud and more.”  It’s akin to other conspiracy theory sites such as Alex Jones’ Infowars.com and Prisonplanet.  All three sites have had extensive coverage on the current movement to End the Fed.  They’re meant for conspiracy buffs.  However, they also explain complex, serpentine subjects in a very non –pretentious way.  The Federal Reserve fall’s in to this category with all the different key-players involved.

James Corbett summarizes a recent interview with Treasury Secretary Timothy Geithner released by Digg.com and the Wall Street Journal.  He tells of a “visibly uncomfortable” Geithner attempting to dismiss questions about auditing the Federal Reserve. “I’m sure you want people to understand that you want to keep politics out of monetary policy,” he says.  Later, he says, it’s a “line we don’t want to cross,” and would be “problematic for the country.”

Corbett claims Geithner’s response that auditing the Fed would give politicians dangerous control over American monetary policy is “mistaken at best and a deliberate lie at worst.”  The public has a right to know what happened to the $24 trillion in bail out money.

2) Fox, Justin.  “The Bailout’s Biggest Flaw.”  Time Magazine 28 September 2009, 44-45.

Journalism article.  Mr. Fox is a business and economics reporter for Time. He claims there is three chief lessons to be learned from the aftermath of the $64 trillion bail out:

a) “The lightly regulated global financial system that has evolved over the past three decades is dangerously fragile.”

b)  “The U.S. government is capable of keeping a financial panic from snowballing in to a complete economic disaster.”

c) “The government has not shown itself to be capable of doing much of anything to make the financial system less collapse-prone in the future.”

Fox uses Herbert Hoover’s handling of banks during the Great Depression as the archetype.  That “powerful voices” at the Treasury and Fed helped bring America out of this:

[“Liquidate labor, liquidate stocks, liquidate the farmers, liquidate real estate,” Treasury Secretary Andrew Mellom advised Herbert Hoover.  “It will purge the rottenness out of the system.”]

Fox writes, “This time around after Lehman [Brothers] went under, no one at the Treasury or Fed talked that way.”  It was the trillion dollar stimulus, instead of the old way of paying off debt (through liquidation), that’s worked temporarily but might put us at greater risk in the future.

3) Government document HR 833.

This was brought to the House of Representatives on February 3, 2009.  The first bill Ron Paul (R-Texas) introduced to audit the Federal Reserve Bank.  It’s purpose:

“To abolish the Board of Governors of the Federal Reserve System and the Federal Reserve banks, to repeal the Federal Reserve Act, and for other purposes.”

Paul’s latest bill, HR 1207 is the watered down version.  I found this on the site opencongress.org.  They state their mission as:

“OpenCongress brings together official government data with news coverage, blog posts, public comments, and more to give you the real story behind what’s happening in Congress. Small groups of political insiders and lobbyists already know what’s really going on in Congress. Now, everyone can be an insider.”

This document was introduced during the “11^th Congress 1^st Session.”   It’s divided in to two sections.  The first, “Section 1.  Short Title,” states:

“This Act may be cited as the “Federal Reserve Board Abolition Act.”

Section 2.  Federal Reserve Board Abolished is the three-page plan.

It’s meant to be read aloud to congress.  It doesn’t function as a literary document.  It’s important in that it’s the genesis of Ron Paul’s movement to End the Fed.

4) Government Document HR 1207:

This was brought to the House of Representatives on February 26, 2009.  This was the second bill Ron Paul (R-Texas) introduced to audit the Federal Reserve Bank.  It’s, basically, a more accessible version of HR 833.  It’s purpose:

“To amend Title 31, United States Code, to reform the manner in which the board of governors of the Federal Reserve System is audited by the Comptroller General of the United States and the manner in which such audits are reported, and for other purposes.”

“Section 1. Short Title”, states:  “This act may be cited as the Federal Reserve Transparency Act of 2009.”

Notice the use of the word “transparency” as opposed to “Abolition.”

“Section 2.  Audit Reform and Transparency for the Board of Governors of the Federal Reserve System.”  This is split in to five sections. It states what the bill would demand:  That by 2010 a report shall be completed by the Comptroller General (i.e. the director of the Government Accountability Office or GAO) that includes the details and conclusions with “respect to the audit that is the subject of the report.”

Again, this is a government document.  It’s meant to be read aloud to congress.  Understanding the terms used requires research among other, more readable, sources.

5) Gannon,Michael.  “Who’s to Blame?  The Fed.” Mainstreet.com 16 March.2009

http://www.mainstreet.com/print/11342.

Commentary article.  Mr. Gannon is the managing editor of TheStreet.com.  This site features articles about “Financial Markets, Stock Quotes and Investments.”  Mr. Gannon explains why the Federal Reserve, specifically ex-Chairman Alan Greenspan, is to blame for the “current credit crisis and ensuing economic meltdown.”  The article begins with. “Alan Greenspan was lauded by Wall Street as the maestro for his role in the presiding over a 9,000 point rally on the Dow Jones Industrial Average over his 18 years as chairman of the Federal Reserve.”  He goes on to explain he isn’t ignoring other key factors:  Homeowners biting off mortgages larger than they could chew, they were “aided and abetted by an overzealous congress,’ while banks were “only too eager to make home loans to consumers who couldn’t afford them, then profit off securitizing and trading them.”

It’s Greenspan’s “stewardship of the Fed,” however, that was ‘the most significant constant in the nearly 20 years preceding housing prices hitting their apex in 2006.”  He cites the aggressive lowering of interest rates in 2000 to 1% in the midst of the dot.com boom.  Then the cutting of interest rates to 1% in 2003 as the country battled recession.  Certainly written for people involved in the stock market.

6) Henderson, Davis. “Did the Fed Cause the Housing Bubble?” Opinion.  The Wall

Street Journal 27 March 2009.http://online.wsj.com/article/SB123811225716453243.html

Op-ed piece in the Wall Street Journal On-line. Mr. Henderson is a research fellow with the Hoover Institution, an economics professor at the Naval Postgraduate School, and the editor of “The Concise Encyclopedia of Economics.”

In what’s certainly an alternate view for who’s to blame for the current financial meltdown, Henderson writes, “Don’t Blame Greenspan.”  He claims that “virtually every commentator who blames Mr.Greenspan points to the low interest rates during his last few years at the Fed.”

Henderson says he understands the reasoning:  “Everyone knows the Fed can drive interest rates lower by pumping more money in to the economy, right?’

He, simply, claims it doesn’t all add up.  He writes,  ‘it doesn’t follow that that’s why interest rates were so low in the early 2000s.  Other factors affect interest rates too.  In particular, a sudden increase in savings will drive down interest rates. And such a shift did occur. ”  Mr. Greenspan attributed this to a “surge in savings from other countries.” This includes China and Middle Eastern oil-producing countries.  Henderson wraps this up with a standard lesson in Economics:  “Shift the supply curve to the right and, wonder of wonders, the price falls.  In this case the price of saving and lending is the interest rate.”

7)  McCullagh, Declan.  “Ex-Bush Economist:  Blame the Fed For the Crash” Econwatch CBS News.com 27 February.  2009.http://www.cbsnews.com/blogs/2009/02/27/business/econwatch/entry4833695.shtml

Commentary Article found in the Econwatch section of the CBS News on-line blog.  In this post Dean McCullagh reviews a new book by John Taylor, a professor of economics at Stanford University and a senior fellow at Stanford’s Hoover Institution, called Getting Off Track:  How Government actions and Interventions caused, prolonged and worsened the financial crises.  McCullaugh uses the text to answer the following:  What caused the crash of 2008?  What went wrong?  Who’s to blame?

He writes, “Taylor concludes that blame lies primarily with the Federal Reserve’s unreasonably low interest rates for much of the last decade.” Then tells us more about Taylor’s background.  He was Treasury Department undersecretary during the Bush Administration. Has held the title of Vice-President of the American Economic Association and was a former-member of President Carter’s and President George H.W.  Bush’s economic advisory boards.  He’s most famous, however, for publishing a “landmark paper in 1993” called the Taylor Rule that suggests how high or low central banks should set interest rates.

McCulagh explains this “Interest rates that are too low tend to encourage people to load up on debt, including adjustable rate mortgages, yielding a speculative bubble and then a crash.”

Morgenson, Gretchen.  “But who is Watching Regulators?” New York Times 13 September 2009, Late Ed;  Money and Business/Financial Desk; Fair Game; Pg.1

This is a commentary article that certainly lives up to its title.  The article seems geared towards anyone.  It’s in the New York Times as opposed to the Wall Street Journal.  Therefore, it doesn’t require previous knowledge of business and economics.   Morgenson cites who’s responsible for the current financial meltdown and asks the forbidden question:  Why are they being let off the hook?

She starts out this article with the saying “nothing succeeds like failure.”  She continues with, “And nowhere is this more important than in out financial regulatory system, one year after the bankruptcy filing of Lehman Brothers.”  From here she builds her case:

“Even though calamitous lending practices laid waste to the nation’s economy, surprisingly little has changed about how the financial arena operates and is supervised.  Sure, a couple of venerable brokerage firms have vanished, but many of the same players remain on the scene, in the same positions of power.”

She keeps a sardonic, infuriated tone throughout.  For example:  “Here’s a novel thought.  Instead of creating more regulations to try to prevent this kind of mess from recurring, why not figure out how to hold regulators accountable when they perform as poorly as they did in recent years.”

9) O’ Driscoll Jr., Gerald P. “Blame the Fed” Cato.org 5 May. 2008.  http://www.cato.org/pub_display.php?pub_id=9379.

Commentary article.  Gerald P. O’Driscoll, jr is a former vice president and economic adviser at the Federal Reserve Bank of Dallas.  He now works as a senior fellow at The Cato Institute:

“The Cato Institute was founded in 1977 by Edward H. Crane. It is a non-profit public policy research foundation headquartered in Washington, D.C. The Institute is named for Cato’s Letters, a series of libertarian pamphlets that helped lay the philosophical foundation for the American Revolution.”

They are an independent organization that accepts no government funding.  The information is on-line and, therefore, accessible to the public.  This might be why the articles are easier to read than (i.e. less Wall Street abbreviations) most business sites. The site seems geared towards those holding a stake in the financial world.

Mr. O’Driscoll jr. claims the current “old style credit crunch” was brought about by “bad policies and an incredibly lax underwriting standards at financial institutions.”  The most significant failure however was, “the decision by Alan Greenspan’s Federal Reserve to hold interest rates too low for too long.  That led to a tsunami that inundated the economy with cheap money.”  This is another article pointing an accusatory finger at Greenspan who convinced market participants to “believe the era of low interest rates would last indefinitely.”

10) http://www.opencongress.org/articles/view/953-Audit-the-Fed

Opencongress.org is a site that “brings together official government data with news and blog coverage to give you the real story behind each bill.”

It’s an Institutional source.  It’s been a blessing all through my research.  It takes the more arcane language used in government documents and places it in layman’s terms.  This is a summary of HR 1207:  its history, who sponsors it and what passage of the bill would entail.

The site explains that Rep. Ron Paul’s (R-Texas) original bill to “abolish the Fed” had a dedicated niche of citizen supporters.  Yet, it’s never made legislative progress or gained a co-sponsor.

The introduction of HR 1207 or “a toned down version” has gained a “strongly bipartisan” group of co-sponsors, including many progressive democrats and conservatives.

HR 1207 is “Far from ending the Fed, the bill calls for full Government Accountability Office audit of the central Bank to be completed before the end of 2010 and submitted to Congress for Review.  It would also break down current, shady US codes that protect the Feds secrecy.

It then explains that the $2 trillion the Federal Reserve had given to banks hasn’t been scrutinized as to where all the money’s gone.

 2) http://bentoncrane.net/2009/02/02/who-to-blame-how-about-the-federal-reserve

Opinion piece on Benton Crane’s blog.  He explains why, he feels, the Federal Reserve is to blame for the current financial crises. He begins by explaining, “I do not believe this mess was caused by evil men on Wall Street and Incompetent CEOS running corporate America.”  He then quotes prominent 20th Century economist Milton Friedman:  

“During the roaring 20s the Federal Reserve was busy pumping “easy money” in to the nation’s banking system, distorting price signals, and sending a false message of prosperity to Wall Street tycoons, who responded by engaging in highly speculative lending practices.”

Crane goes on to explain how Mr. Friedman’s quote is all to relevant to the financial sector of today.

3)  http://www.pbs.org/fmc/timeline/estockmktcrash.htm The public broadcasting site gives a succinct description of the factors which led to the stock market crash of 1929.  To quote it’s reason for this:

“Capital is the tools needed to produce things of value out of raw materials. Buildings and machines are common examples of capital. A factory is a building with machines for making valued goods. Throughout the twentieth century, most of the capital in the United States was represented by stocks. A corporation owned capital. Ownership of the corporation in turn took the form of shares of stock. Each share of stock represented a proportionate share of the corporation. The stocks were bought and sold on stock exchanges, of which the most important was the New York Stock Exchange located on Wall Street in Manhattan.”

The site also links to a time which spans from 1870-2000, tracing the history of US Currency.  It’s divided in three categories: People/ Events/ Data.  This is a Informative/Journalism piece. 

4)  http://timeline.stlouisfed.org/index.cfm?p=timeline The Bank of St. Louis web site offers a Financial Crises Time Line, documenting the factors from February 27, 2007 with: “The Federal Home Loan Mortgage Corporation (Freddie Mac) announces that it will no longer buy the most risky subprime mortgages and mortgage-related securities.” To the present.  Their homepage is very informative.  It contains consistent publications by:  The Federal Reserve, Fannie Mae, CIT Banruptcy Filing, etc. that keeps you up to date on the financial strife of today’s market.  A multimedia/ business site.  

Their  stated mission is:

s:

5)  http://news.bbc.co.uk/2/hi/7521250.stm As usual,the BBC is brilliantly informative.  Their site explains, through diagrams and illustrations, the poor financial practices performed by banks, leading to the financial crises.   There’s a Follow The Money  link that, interactively, traces how the $11 trillion bail out money’s been spent.  Using layman’s terms and easy to follow diagrams such as:  ”$10.8 trillion Total Cost to governments of the bail out so far= $10,000 per person for each of the 1bn people in the world’s richest countries.  This is a Journalism site.

6)  http://www.cfr.org/publication/18709/ The Council on Foreign Relation site has an interactive menu divided in three sections:  (1)Meltdown (2007-present) (2) Regulation and Deregulation and (3) Capitalism in theory and practice.  Like the BBC site this one also places these complex issues in simple, layman’s terms.  A well illustrated, fun and informative site.  There’s many links to the Federal Reserve and what it’s currently dealing with such as this video.  Multimedia/ Journalism.

7)  http://money.cnn.com/2009/10/08/news/economy/bernanke_fed_balance_sheet/?postversion=2009100818 Good, recent article about Ben Bernanke and the Federal Reserve’s 2.3 trillion dollar balance sheet.   The author, David Goldman, explains how after the Fed dropped its interest rates to zero in December 2008 to avoid another Depression, it brought about a “three-fold” solution:

“It lent funds to companies and investors, bought up treasury bonds, and purchased Wall Street’s unwanted asset.”  All three factors are given their own section.  He finishes by explaining it’s time for the Federal Reserve to pay up for the “2.2 trillion dollar fire hose” they’ve been lent. Journalism site.

 Fox, John.  ”The Bailout’s Biggest Flaw.”  Time Magazine 28 September. 2009:  44-45.

This article explains what ‘ailed the financial market in the first place.”  Fox states the three main “lessons” we should’ve learned:

1)  The global financial system that’s evolved over the past three decades is “fragile” and dangerous.

2) “The U.S. government is capable of keeping a financial panic from snowballing into a complete economic disaster.”

3) “The government has not yet shown itself  to be capable of doing much of anything make the financial system less collapse-prone in the future.”

These three factors are explained throughly.  Similar to the Benton Crane blog, he explains how in the months following Franklin D. Roosevelt taking office in 1933,  congress legislated a complete transformation of the financial sector. This created the Federal Deposit Insurance Corporation while segregating commercial banks from Wall Street.  Fox states, “It’s not obvious that we need such a drastic overhaul now, but the contrast with the 1930s is stark.”  Journalism site.

9)  Sorkin, Andrew Ross.  ”Wall Street’s Near-Death Experience” Vanity Fair November 2009:  173-181, 206-210.  In what’s soon to be part of a novel, Sorkin tells of the panic faced by the CEOs of major banks on the morning of Wednesday, September 17, 2008.  Key players include:  Tim Geithner, president of the Federal Reserve Bank of New York; former Wachovia CEO Robert Steel;former Treasury secretary and Goldman CEO Henry Paulson; Fed governor Kevin Warsh and current Treasury secretary Timothy Geithner.  This article is a good who’s who of the bigwigs involved in the 10.8 trillion dollar bail out.   Journalism site.

10) http://www.infowars.com/rep-kanjorski-550-billion-disappeared-in-electronic-run-on-the-banks/

Everyone’s favorite conspiracy theorist Alex Jones, of Infowars.com, presents a 2 min, 20 sec clip featuring Rep. Paul Kanjorski of Pennsylvania on CNN.  Kanjorski explains that the Federal Reserve recently told congress members about a “tremendous draw-down of money market accounts in the United States to the tune of $550 billion dollars.”  Supposedly, this transaction took place over an hour or two.

This further proves Mr. Jones’ hypothesis that the Federal Reserve is a satanic Organization who, through frivolous spending, are trying to depreciate the value of the dollar.  This, eventual, valueless currency will lead to a one-world currency under a one-world government.  Scary.

This video was produced by Braedon Wilkerson a “Ron Paul Revolutionary,” in association with America Restored:  The Libertarian Party’s YouTube Channel.  It was posted on April 6, 2009.  

I’d categorize it as an Institutional image.  It’s iconic to the niche who want to portray Congressman Ron Paul as the avatar to preserve our Constitutional liberties.  The footage pans from the, more professional, CNN to the, more amateur footage of Ron Paul Rallies.  At the start an air of menace is created by ambient background music while Keith Olbermann delivers a speech stating, “We have lived as if in a trance.  We have lived as people in fear and now our freedom’s in peril.”  The camera cuts away and pans to a billboard  advertisement for Ron Paul’s book “The Revolution.”  This features his quote, “Truth is treason in the empire of lies.”  Then the music changes to The Killer’s “All the things that I’ve done.”  Giving a feeling of hope.

http://www.adpulp.com/archives/2008/02/26/BARACK-hope-POSTER.jpg

This is the, now ubiquitous, poster by Shepherd Fairey featuring President Barack Obama’s handsome, yet earnest, mug highlighted with flag colors, underneath there’s written: “HOPE.”  This is certainly an iconic image.  I’d classify it as a citizen image, seeing as how it was created by a now famous street artist.  Years ago, Mr. Fairey’s sticker work adorned various delinquents’ skateboards.  The sticker usually featured, the late,  Andre the Giant’s scowling mug.  Underneath it would say:  ”Andre the Giant has a posse.”  Fairey eventually became renown for this guerilla art campaign.  In various cities the image would be posted along the sides of buildings and freeway billboards.  This gave Fairey’s work an air of subversion.

The fact that Fairey created a poster endorsing Obama already furthers Obama’s street cred.  Plus how many times it’s been copied and put on t-shirts and stickers. This contributes to Obama’s image as proletariat.

Iris, herself, plays in a band in Buffalo, New York called Daisy Flower.  One night, after a show playing “punk covers and good original material.” A  ”tall, hansome [sic] stranger” with “blue eyes so blue that I kept staring at him and he laughed.”  Guess what? (spoiler alert) Turns out the stranger is none other than, you guessed it, Johnny R. of Goo-Goo dolls fame.  They elope on a romantic evening consisting of a spaghetti dinner, an eponymous song title and no sex.

First off, I doubt this is real.  It’s so ridiculous.  If it were written for a class higher than a fifth grade level, including special ed, I’d be seriously worried for the author.  Maybe she’s  misdiagnosed.   If a teacher gave this paper anything more than an F, they’d have  to be fired on grounds of incompetence.  Then again, how many kindergarten-fifth graders play in a punk band?  Even in Buffalo.

From the first sentence on, you know  Iris isn’t the sharpest tool in the shed.  First off, she has to explain she’s a girl.  How many guys do you know named Iris?Maybe a few drag queens.  Then she tries her hand at the maudlin: eyes like the ocean.  Thanks for the poetry, I’m crying already.  The problems with this are too numerous to mention.  If you really want to know more. Get a life and e-mail me.  Peace.

• 1929-Stock Market Crash.
• 1933-Months after Franklin D. Roosevelt takes office, Congress legislates a transformation of the financial sector, establishing a new regime of securities regulaton.  Thereby creating the Federal Deposit Insurance Corporation and segregating commercial banks from Wall Street.
• Early 1970s-During the New York fiscal crises, the rights of bondholders were abrogated.  This led to larger costs of borrowing being imposed across the municipal sector.
• Early 1980s-The thrift industry was having troubles, Freddie Mac designs a stock dividend to be distributed as a mechanism to bolster earnings and net worth.  The Financial Accounting Standards Board (FASB) board challenged the stock dividends as not representing earnings because the thrifts already owned Freddie Mac (since they controlled the 12 regional Federal Home Loan Banks that set up the agency in 1980).  Succumbing to pressures, the FASB permitted the income treatment.
• June 30, 1993-FASB proposed a Statement of Financial Accounting Standards, titled: “Accounting for Stock-Based Compensation.”  This contends the following:  employee stock options have reasonable estimable value, represent compensation, and should be recognized in the income statement.  However, the October 1995 final statement merely encouraged recognition, requiring only disclosure of compensation expense and various earnings-per-share-effects.  This result stemmed from government’s intent to otherwise override FASB and, eventually, close it down.

• September 10, 2008-Wall Street bank Lehman Brothers posts a loss of 3.9 billion for the three months of August.
• September 15, 2008-Lehman Brothers file for Chapter 11 bankruptcy.  Shares in Lehman’s had sunk to dollars 3.65 earlier that day, down 96 per cent on their 2007 peak of dollars 82.  Thereby making Lehman Brothers the first major bank to collapse since the start of the credit crises.  The race was on to find a new buyer.  John Thain, former executive of Merrill Lynch, had approached Bank of America to agree to a 50 billion dollar takeover. 

• September 16, 2008- The US Federal Reserve announces an 85 billion dollar rescue package for AIG insurance company.  AIG gets the loan for an 80 per cent stake in the firm.
• September 14, 2009-In a speech on Wall Street, President Barack Obama warns “normalcy cannot lead to complacency.”

The Obama Administration works to push through congress a creation of Consumer Financial Protection Agency.  This gives the Federal Reserve the job of systematic risk regulator and establishing a “resolution regime” to wind down troubled non-bank financial institutions (Like Lehman) and complex bank holding companies.

August 2009- Rep. Ron Paul, R-Texas, member of the House Financial Services Committee introduces his bill: The Federal Reserve Transparency Act.  This would eliminate restrictions on Government Accountability Office audits of the Federal Reserve and mandate that a thorough audit be completed by the end of 2010.

http://www.pbs.org/fmc/timeline/estockmktcrash.htm

The public broadcasting site gives a succinct description of the factors which led to the stock market crash of 1929.

http://timeline.stlouisfed.org/index.cfm?p=timeline

The Bank of St. Louis web site offers a Financial Crises Time Line, documenting the factors from February 2007 to present, leading to the current financial meltdown.  Very informative as far as current events.

http://news.bbc.co.uk/2/hi/7521250.stm

As usual,the BBC is brilliantly informative.  Their site explains, through diagrams and illustrations, the poor financial practices performed by banks, leading to the financial crises.

http://www.cfr.org/publication/18709/

The Council on Foreign Relation site has an interactive menu divided in three sections:  (1)Meltdown (2007-present)

(2) Regulation and Deregulation and (3) Capitalism in theory and practice.  A well illustrated, fun and informative site.

http://money.cnn.com/2009/10/08/news/economy/bernanke_fed_balance_sheet/?postversion=2009100818

Good, recent article about Ben Bernanke and the Federal Reserve’s 2.3 trillion dollar balance sheet.

Personally, I’m interested in the movement to audit the federal reserve.  I want to learn the correlation between this and the current financial crises.

http://www.whitehouse.gov/issues/fiscal/

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