Wall Street is allegedly melting as we speak. Barack Obama has called it “the most serious financial crisis since the Great Depression.” And yet an MSNBC analyst said this morning that one Wall Street analyst feels that this morning’s 200-point Dow drop is a kind of “victory,” considering what might have happened.
As this morning’s N.Y. Times story reports, “Lehman Brothers, the 158-year-old investment bank, is in liquidation; Merrill Lynch, the premier brokerage, has been subsumed into rival Bank of America. One of the world’s largest insurance companies, American International Group, is in a dash to shore up confidence after its stock price dropped 50 percent just after the open.”
“Senior Treasury officials, Wall Street banking bosses and the Federal Reserve are pulling out all stops to avert a collapse of the global banking system,” the Sydney Morning Herald reported last night.”
“A measure of this desperation is the announcement from the Fed issued a short time ago that it will allow Wall Street banks to swap their unsaleable ‘mortgage backed securities’ for Treasury bonds.
“As it was the Fed’s appeasement of Wall Street and the reckless speculation and product-pumping of the Street’s investment banks which landed markets in this predicament in the first place, the recriminations will be endless.”
N.Y. Times columnist Paul Krugman wrote yesterday that “to understand the problem, you need to know that the old world of banking, in which institutions housed in big marble buildings accepted deposits and lent the money out to long-term clients, has largely vanished, replaced by what is widely called the ‘shadow banking system.’
“Depository banks, the guys in the marble buildings, now play only a minor role in channeling funds from savers to borrowers; most of the business of finance is carried out through complex deals arranged by ‘nondepository’ institutions, institutions like the late lamented Bear Stearns — and Lehman.
“The new system was supposed to do a better job of spreading and reducing risk. But in the aftermath of the housing bust and the resulting mortgage crisis, it seems apparent that risk wasn’t so much reduced as hidden: all too many investors had no idea how exposed they were.”
Obama’s analysis: “The challenges facing our financial system today are more evidence that too many folks in Washington and on Wall Street weren’t minding the store. Eight years of policies…have shredded consumer protections, loosened oversight and regulation, and encouraged outsized bonuses to CEOs while ignoring middle-class Americans.”
McCain’s analysis: The fundamentals of our economy are strong.”
MSNBC’s “First Read” guys wrote this morning that “one can clearly see that Obama would be an interventionist on the economy — much more so than McCain. This is going to be a tricky issue for McCain, since most folks want government involved when there is a crisis; they don’t want government involved when things are going well. McCain’s going up with a new TV ad on the economy, acknowledging the crisis. But this is one that may be harder for him to distance from than other issues.”

HD trailer for John Patrick Shanley‘s Doubt (Miramax, 12.12), with Meryl Streep, Phillip Seymour Hoffman and Amy Adams in the lead roles. The culture has been making pederast Catholic priest jokes for so long that generating curiosity about who the bad guy is in this film, what he’s probably done and what will (most likely) happen in the end seems like a challenge. So it will all come down to the the craft of it, including, of course, the potential for at least two great performances.

One question: why in the name of God (and that expression obviously has a literal meaning in this context) would old-crow nuns in any parish or sector of the country wear those laughable Pilgrim-women bonnets? The 19th Century anachronism effect is bizarre. They look like Norweigan immigrant women escaping from “Giants of the Earth.”