The irrepressible Larry Kudlow sees no trouble on the horizon, none at all:
A great old firm got bought out today for peanuts. I was a partner before and after the Reagan administration. A sub-prime credit casualty. Paulson and Bernanke have done exactly the right thing. It was a run on the bank. The Fed stopped it right there. No banking crisis. The big Wall Street banks are in good shape, even with earnings losses they’re still well capitalized, profitable and solvent. Fed stopped it from spreading on Friday; JPMorgan takes them over tomorrow.
The Fed cut the discount rate today by a quarter point. It will reduce target the fed-funds rate on Tuesday. The banking system will function fine.
I’m just disappointed that he didn’t use the word “masterful”. I always enjoyed listening to senators and congressman perform their humble obeisance before the shining wonderfulness of Sir Greenspan. Meanwhile, like a good neocon, David Frum doesn’t hesitate to stab his one-time hero in the back:
Now the Bush administration has been stamped with the mark of indelible failure – even as, brutal irony, Iraq seems at last to be taking the upward path. This mark is not wholly just, but it is not wholly unjust either. The administration bears some of the responsibility for the gathering economic crisis at home. In order to claim the distinction of raising home ownership to an all-time high, the Bush administration favored and supported the loose home-mortgage lending practices that are now convulsing global financial markets.
You always knew the neocons were going to turn on Bush once his administration’s failures became apparent to everyone. Apparently, that time is now. And needless to say, it was that crazy Ron Paul who was the only one in Washington protesting the Fed’s madness in pushing ARM-based home ownership on those who couldn’t afford it, and the only presidential candidate who understands what is going on and how it could have been avoided. America is getting the government it deserves.