Tuesday, July 15, 2008

Banking panic


Okay, the above is an article in the NYT about the ripples coming from all the worry about Fannie Mae and Freddie Mac. I'm not going to do a long analysis or anything because really there's nothing for me to analyze (maybe there would be if I knew more about financial markets). I'm posting it because I think it's important that people understand what's going on in the world around them, and please believe me when I say this is in fact important for everyone to know.

We live in an economic system. Failure to understand what's going on in times of economic trouble is just dumb.

Basically, what's up is that Fannie and Freddie, as I wrote a while ago, are looking shaky. The government is bailing them out, but all the nerves, as well as some bleak quarterly returns for a number of smaller and regional banks, are having a nasty effect. The government had to seize IndyMac, a CA bank, today as it turned out to be insolvent. Consumers are getting very nervous, though there have been no bank runs yet (unless you count Wall Street, where investors have been getting out of bank stocks awful fast). A lot of experts are definitely freaking. Comparisons to the Depression are definitely being bruited about, despite the fact that the SEC (Securities and Exchange Comission) has threatened to "crack down" (whatever that means) on traders who spread false rumors.

In other news, the arrest of President Omar Hassan al-Bashir of Sudan has been formally requested by the International Criminal Court on charges of genocide, war crimes, and crimes against humanity.

This is particularly noteworthy because it's the first time the prosecutor of the ICC has brought genocide charges. Against anyone. Also the first time bringing charges against a head of state (other heads of state like Milosevic were tried by other interanational entities). What's also interesting will be to see how the various factions in the civil war handle this--one already has said it will never negotiate with the government because it won't negotiate with war criminals. I can see good outcomes--he (allegedly) started it, after all, and instating a government committed to ending the war could only be good--but I can see bad ones too. Increased chaos, loyalists refusing to talk, opposition refusing to talk because they see it as an opportunity to keep doing what they're doing.

And for a totally mindboggling fact: The ICC has already issued arrest warrants for two people high up in the Sudanese government. Not only did al-Bashir scoff at the warrants, he promoted one of the men to minister of humanitarian affairs. Talk about a macabre fucking sense of humor.

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