Ball point pen on the morning newsprint

Many believe the Federal Reserve contributed to the housing bubble by keeping interest rates too low for too long following the 2001 recession. Yesterday, Ben Bernanke pointed a finger at regulators, not interest rates as the guilty party responsible for reckless lending, the housing bubble and subsequent financial meltdown. The Fed now seeks greater regulatory authority.

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Ball point pen on the morning newsprint

AIG's stock price two years ago was 69.00 per share, one year ago it was 42.00. Liddy took over the helm in June of last year with the stock in the 30's. Later that year, while Lehman Brothers and other giants were going bankrupt, AIG was deemed too big to fail and received $85 billion in bailout money. A month later Liddy defended spending $440,000 of that money on a retreat at a luxurious California resort saying it was "standard practice in our industry" Today the stock is at 0.42 a share and AIG is receiving another 30 Billion in taxpayers dollars. What started as as a mortgage crisis is now a crisis in confidence. Since shinning a light on the "standard practices" of corporate America, investors have no confidence that this current crop of CEO's know the value of our hard earned dollars. Yesterday the Dow dropped below 7,000 for the first time in twelve years.

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It seems that besides the presidential campaign, the biggest stoiry of 08 is shaping up to be the state of financial institutions. Lehman Brothers, in existance for 150 years, has filed for bankruptcy, and following a rash of bailouts and more trouble on the horizon, Wall Street is content to let the market shake this one out...we could be in for a bumpy ride.

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Last year 2.2 million Americans filed for foreclosure. Predator lenders were making risky loans at a level never before seen. Wall Street was packaging said loans into securities and spreading the risk across the entire economy. The CEO of Counrtywide, the nations largest mortgage lender, sold 138 million dollars of Countrywide stock in an eight month period right before the price of the stock tanked by 80%. Were our leaders looking the other way? Last week the story of how Jim Johnson, as CEO of the Federal National Mortgage Association (Fannie Mae for short) accepted millions of dollars in sweetheart loans from Countrywide Mortgage at below market interest rates. Now Senator Kent Conrad, head of the Senate Budget Committee admits he unknowingly accepted a sweetheart loan from Countrywide and wants to atone by giving 10,500 dollars to charity.

Counrtywide is being tight lipped about the VIP program citing customer privacy, but already we know the list included Chris Dodd, Barbara Boxer, Son of House Speaker Pelosi, former secretary of Housing and Urban Development Alphonso Jackson, former secretary of of Health and Human Services Donna Shalala and former UN ambassador and assistant secretary of state Richard Holbrooke.

I think we're just beginning to scratch the surface of a very big story.

PS..last night I watched a program on CSPAN about the use of new technologies to cover the 2008 campaign, moderated by Judy Woodruff. The panel discussion was mainly about old vs. new media (newspapers & magazines vs. youtube & bloggers). Many bloggers have risen to the point where they think of themselves as equal to, or greater than, those in traditional media. I am not in that camp. I am an illustrator. I spend my days drawing pictures and I have no time, budget or inclination to venture out and dig up a story. I love old Media and support it by buying papers, magazines and watching informative television. As the above story shows, elected officials often don't have the public interest in mind and while our nation is busy watching Obama Girl and skateboarding pets on Youtube, it's real reporters that dig up the stories that help inform us as a nation.

A big thanks to journalists.

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