[Posted by Karl]
The New York Times brings words of woe from Wall Street:
In one of the most dramatic days in Wall Street’s history, Merrill Lynch agreed to sell itself on Sunday to Bank of America for roughly $50 billion to avert a deepening financial crisis, while another prominent securities firm, Lehman Brothers, announced it will file for Chapter 11 bankruptcy.
The humbling moves, which reshape the landscape of American finance, mark the latest chapter in a tumultuous year in which once-proud financial institutions have been brought to their knees as a result of hundreds of billions of dollars in losses because of bad mortgage finance and real estate investments.
The Fed, meantime, broadened the terms of its emergency loan program for Wall Street banks, a move that could ultimately put taxpayers’ money at risk.
OpenSecrets.org helpfully charts donations from those associated with the insolvent Lehman firm:
In the current Congress, 271 lawmakers have collected nearly $3 million since 1989, with 72 percent going to Democrats. Democratic presidential candidates and senators Hillary Clinton and Barack Obama top the list of all-time recipients for the company, collecting $410,000 and $395,600 respectively. Sen. Charles Schumer, D-N.Y., a member of both the Senate Banking, Housing and Urban Affairs Committee and the Senate Finance Committee, hauled in $181,450, while Sen. Chris Dodd, chair of the Senate banking committee, has collected $165,800.
Lehman associates gave only $117,500 to Sen. John McCain, even though he has been in Congress far longer than either Obama or Clinton — as the Obama campaign has been only too eager to remind us.
Lehman’s bankruptcy comes on the heels of the federal government takeover of government-sponsored mortgage buyers Fannie Mae and Freddie Mac, whose associates were also big givers to Obama and Clinton.
Barack Obama has extensive ties to the subprime mortgage industry, starting with his National Finance Chairwoman, Chicago billionaire Penny Pritzker. As I previously noted at Protein Wisdom:
Pritzker was an owner and board member of Superior Bank of Chicago, which went bust in 2001 with over $1 billion in deposits. Timothy Anderson — who obsessively pursued the late Rep. Henry Hyde (R-IL) over his role in the failure of Clyde Federal Savings & Loan — has been quoted as saying that “Superior’s owners were to sub-prime lending what Michael Milken was to junk bonds.”
Coincidentally, Obama’s policy proposals have also been pretty subprime mortgage-friendly, perhaps influenced by advisers like Austan Goolsbee (Economic Man of Mystery).
The establishment media that sought every opportunity to tie the failure of Enron and its executives to George W. Bush has generally failed to note that Barack Obama is neck deep in money from issuers of subprime loans, even as he crusades against predatory mortgage lenders. Maybe they will get to it when their investigators return from scouring the frozen tundra in Alaska for gossip about Sarah Palin’s family. But I would not bet any more money on it than I would invest with Lehman Bros.
Update: As Obama wasted no time in blaming “the last eight years of policy” for the current situation, perhaps he ought to re-read Austan Goolsbee’s defense of the subprime mortgage market. And the media ought to ask whether Obama agrees with one of his top economic advisers about it.
Update x2: Welcome, Malkin readers!
Update x3: McCain, while saying that “these are very, very difficult times,” also said that the “fundamentals of our economy are strong,” which Ben Smith says is “delighting Democrats.” It should delight all Americans that a major party presidential candidate is not helping to incite a financial panic, but that may not explain the Democrats’ reaction.
Update x4: Insta-lanche!