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Great Recession Roundup — March 11, 2009

Items of Interest:

L.A. Times:
Freddie Mac seeks $30.8 billion in aid after massive 2008 loss -- The government-controlled mortgage company also announced a replacement chief executive. Freddie Mac, facing mounting damage from the U.S. housing crisis, said Wednesday it will ask the government for nearly $31 billion in additional aid after posting a gargantuan loss of more than $50 billion last year...

Freddie Mac Reports Fourth Quarter and Full-Year '08 Financial Results — Fourth quarter 2008 net loss of $23.9 billion, or $7.37 per diluted common share, compared to a net loss of $25.3 billion, or $19.44 per diluted common share, in the third quarter of 2008. Losses were driven primarily by net mark-to-market declines on the company’s derivative portfolio, guarantee asset and trading securities; increased ...

Freddie Mac: $23.9 Billion Loss, Asks for $30.8 billion in funding

Phil Izzo / Wall Street Journal:
Obama, Geithner Get Low Grades From Economists — U.S. President Barack Obama and Treasury Secretary Timothy Geithner received failing grades for their efforts to revive the economy from participants in the latest Wall Street Journal forecasting survey. — The economists' assessment stands …

Tom Maguire / JustOneMinute: So Many Numbers — What are the odds of the US economy entering a depression?
Fox News: Obama, Geithner Receive Failing Grades From Economists in Survey
Taegan Goddard's Political Wire: Obama, Geithner Get Low Marks from Economists

Don Surber:
“There is nobody there” — Barack Obama is too busy posing …

AMERICAN DIGEST: “It's 3 AM, the phone is ringing...”
David Harsanyi / Reason: Now You Own It, Mr. President

Brad Setzer / Council on Foreign Relations:
The fall in China’s exports has now caught up with the fall in China’s imports -- China has now released its February trade data. Andrew Batson of the Wall Street Journal summarizes:

China’s customs agency said Wednesday that merchandise exports in February plunged 25.7% from a year earlier. That is one of the biggest drops on record, and extends the 17.5% fall in January for a fourth straight monthly decline. Imports declined by a slightly less dramatic 24.1%, thanks in part to government spending, which other data also issued Wednesday showed picking up in February. That left a monthly trade surplus of $4.84 billion – the smallest in three years. The number was just a fraction of January’s $39.11 billion, reversing a string of record surpluses in recent months...

David Leonhardt /NY Times:
The Looting of America’s Coffers -- Sixteen years ago, two economists published a research paper with a delightfully simple title: “Looting.”

The investors “acted as if future losses were somebody else’s problem,” the economists wrote. “They were right.” ...

SSRN: Looting: The Economic Underworld of Bankruptcy for Profit

Al, put a sock in it. Alan Greenspan / Wall Street Journal:
The Fed Didn't Cause the Housing Bubble — Any new regulations should help direct savings toward productive investments. — We are in the midst of a global crisis that will unquestionably rank as the most virulent since the 1930s. It will eventually subside and pass into history...

David Fiderer / The Huffington Post: How Dumb Does Alan Greenspan Think We Are? Very
Bruce McQuain / QandO: Hayek, Greenspan And The Designs Of Men
Peter Boockvar / The Big Picture: Greenspan's Denial — Since I've been critical of the unstable …
Myglesias / Matthew Yglesias: Greenspan: Greenspan is Not to Blame for the Housing Bubble
Larisa Alexandrovna / At-Largely: Comrade Greenspan says that the Ministry of $$ didn't do it...
Michael Barone: Alan Greenspan Responds to My Yesterday Blog Post on the Financial Crisis

Cafe Hayek: Greenspan vs. Taylor -- The former Maestro (now demoted to Mouse) defends himself. Madoff's Refusal to Admit Conspiracy Said to Have Scuttled Deal – Bernard Madoff didn’t agree to a plea deal with U.S. prosecutors because of their demand that he admit to a conspiracy, a charge that would require him to say he worked with others in the largest Ponzi scheme in history, according to people familiar with the matter.

Madoff’s decision not to negotiate a deal means the government won’t have his help in determining whether his employees assisted in the fraud, the people said. Madoff, 70, will plead guilty tomorrow to all 11 counts he faces without any promise of leniency or anything else in return. He could receive 150 years in prison at sentencing on charges including fraud, perjury and money laundering...

Jeralyn / TalkLeft: Madoff and Bail Pending Sentencing

NY Times -- Madoff Faces Life in Prison for Vast Swindle — Federal agents and court security officers surrounded Bernard L. Madoff on Tuesday as he left the federal courthouse in Lower Manhattan. Prosecutors say Mr. Madoff is facing 150 years in prison...

Michael Kranish / Boston Globe:
Now-needy FDIC collected little in premiums — With fund going strong, banks didn't pay for decade — WASHINGTON - The federal agency that insures bank deposits, which is asking for emergency powers to borrow up to $500 billion to take over failed banks, is facing a potential major shortfall …

Myglesias / Matthew Yglesias: Department of WTF — One of the best ideas to come out of the New Deal was the FDIC.
John Cole / Balloon Juice: Ralph Nader's Revenge
Dday / Hullabaloo: Big Bank Strikes Again
Mary Kane / The Washington Independent: FDIC Strapped Because It Quit Collecting Premiums in Good Times

Buffett's Unmentionable Bank Solution -- Last week's post mortem on the Fannie and Freddie takeover was received better than we might have expected. A few readers assumed Eddie Lampert and Bill Miller, fund managers who lost money when Fan and Fred were seized, and whose letters to their own investors we quoted, were engaged in special pleading.

In fact, the nationalization of Fannie and Freddie is water over the dam. The men's perspective may be one of pain, but it is historical pain.

Joseph Lawler / AmSpecBlog: Mark-to-Market Update — Holman Jenkins's article in today's WSJ …
David Henderson / EconLog: Buffett on Mark to Market

David Goldman / Inner Workings:
Warren Buffett: Leave the Banks Alone! -- BUFFETT: Yeah, the interesting thing is that the toxic assets [of American banks is] if they’re priced at market, are probably the best assets the banks has, because those toxic assets presently are being priced based on unleveraged buyers buying a fairly speculative asset. So the returns from this market value are probably better than almost anything else, assuming they’ve got a market-to-market value, you know, they have the best prospects for return going forward of anything the banks own...

Neil Cavuto / Fox News:
Rep. Ron Paul Defends His Earmarks in Spending Bill — This is a rush transcript from “Your World With Neil Cavuto,” March 10, 2009. This copy may not be in its final form and may be updated. — NEIL CAVUTO, HOST: Speaking of a lot of money, the battle about the money they're spending …

Johanna Neuman / Top of the Ticket: Ron Paul defends earmarks, says anti-pork McCain is just grandstanding
Doug Mataconis / The Liberty Papers: Is Ron Paul Right About Earmarks ?
The Raw Story: Ron Paul: McCain's earmark opposition just ‘grandstanding’
