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With the financial bailout package still undefined and House Republicans, in particular, opposed to the present draft, financial markets almost certainly will fall during the day. How far they fall, and for how long, will depend on White House-congressional progress toward a package which can pass and President Bush can sign.
WaMu's failure Thursday was no surprise. Many, including myself, had predicted it for weeks. But few in Seattle were prepared for the reality of it when it came. Other weak institutions could follow.
Things to watch:
Many analysts and economists have pointed out gaping holes in the Paulson-Bernanke plan that remains at the center of discussion. The central unresolved point: What will taxpayers get in return for their $700 billion bailout of the industry?
Will Sens. John McCain and Barack Obama participate constructively in bailout discussions? McCain, at this point, is being painted a spoiler by Democratic critics for flying back to the capital, joining House Republicans in their criticism of the package, and thus far refusing to debate Obama tonight in Mississippi unless the package is first resolved. Obama, thus far, has mainly been a spectator in discussions but almost surely will sharpen his criticism of McCain's role today. This is, in particular, a defining political moment for McCain. He can come away from this as a spoiler who helped bring down financial markets. Or he could end up as a hero who saved taxpayers from an expensive fiasco engineered by bureacrats and politicos.
Will discussions take a constructive turn today? Or will mutual recriminations dominate the news? All parties need to make this a constructive day. If not, this truly could be Black Friday as global investors conclude that we can't get important business done, even in a crisis.
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Comments:
Posted Fri, Sep 26, 10:21 a.m. Inappropriate
Black Friday, for Whom?: "Equal justice under the law" means we put the assets of the corporate officers into bankruptcy receivership.
Some evidence, in that regard:
Fame game: Guess who's about to enter the Hall of Fame? The University of Idaho Alumni Association has named Seattle attorney Judith Runstad one of four distinguished alums for 2001. She'll be inducted into the U of I's Hall of Fame on May 17.
Runstad has been a prominent player on the Seattle scene - as a land-use lawyer with Foster Pepper and Shefelman, an active force in the development of Seattle's downtown and a former Federal Reserve Bank director.
Modest to a fault about her term as a federal "banker," Runstad once joked that she owed her tennis game to the U of I professor who taught Econ 101.
She said, "It was very boring, and I attended none of it, except for the final exam."
ALSO
Some deep concerns were voiced by the panelists, who responded to questions from New York Times reporter Tim Egan. Among them:
-- Transportation. Land-use attorney Judy Runstad said, "The voters walked off the cliff when they rejected a measure to fix potholes and approved a (pause for emphasis) monorail." She said the business community must develop transportation solutions and "hold the 1999 Legislature's feet to the fire." Her priority: a higher gas tax.
Payne introduced Judy Runstad, a land-use attorney known for her work on the 55-story Washington Mutual Tower, saying that, "If Judy had built the Space Needle, it would have a child-care facility at the base, two setbacks and would be 6,000 feet tall."
Runstad, in turn, kidded Royer, calling him one of "the best local politicians, which is like being named one of the 10 best-dressed men in Renton."