Write your own federal rescue press release
Wake up and good morning. If these morning blog postings have a familiar ring, they do. Call it the calamity du jour. Let's make it easier. You can choose whichever underlined words make best sense to you in this first report. And yes, this is a spoof, folks -- it's Friday:
WASHINGTON -- The U.S. Treasury, acknowledging its (inability) (ham handedness) thus far to take control of the downward-spiraling economy, agreed Friday to (guarantee) (once again stick the taxpayer with) the (bad assets) (CEO golden parachutes) of every (U.S. corporation) (U.S. bank)) (oh heck, everybody everywhere) in an attempt to stabilize the (global stock markets) (presidential polls). "I am taking this action because our (demanding financial times) (sagging resume) (place in history) is under attack," said Treasury Secretary Henry Paulson. Added Federal Reserve Chairman Ben Bernanke: "It is time to bring some (sobriety) (Bud Lite) to our American party built on (debt binges) (predatory lending) (comatose regulators). It is the consensus of this Administration that guaranteeing our (free market system) (nationalized economy) is necessary to prevent further loss of (this financial crisis) (my job)."
Back to Oct. 10 reality now (I think). "U.S. officials are discussing temporarily backing all U.S. bank deposits if economic conditions continue to worsen, a move that would mark another unprecedented step as the government struggles to stem the sprawling financial crisis." That's the front page story from today's Wall Street Journal. I have only one question. Who's going to guarantee the U.S. government? It's not a knee-jerk idea. Check out this analysis in the Washington Post today headlined "The End of American Capitalism?" We are, the analysis suggests, becoming the global example of comeuppance for national excess. Here's one view cited:
"Derivatives and hedge funds are like casino gambling," said South Korean Finance Minister Kang Man-soo. "A lot of Koreans are asking, how can the United States be so weak?"
Time to check in on the future of Wachovia. Watch for an official word sometime this morning that Wachovia will, indeed, be purchased by Wells Fargo. That's the good news. Citigroup, which tried to buy some of Wachovia with FDIC backing, now seems willing to walk away, lick its wounds and demand damages (pay us, says Citi) in court. If this is an accurate if messy scenario, it will ultimately mean good things for Florida with the arrival of a new competitor in California-based Wells (a reasonably healthy one so far, one of the few) to the Sunshine State.
Some very good lessons for Florida in this USA Today story about the debate over Gulf Coast (Mississippi) communities rebuilding over and over in the wake of repeated strikes by hurricanes. Does it make sense? From the story:
"Locals and officials throughout the Gulf Coast continue to press for more stringent building requirements and stronger levees and floodwalls to prevent floods. But some coastal analysts argue that coastal erosion is growing too fast and some Gulf Coast towns need to depopulate and move to higher ground.The debate could be repeated in coastal communities in Florida, Louisiana, Alabama, Mississippi and elsewhere throughout the USA, said Robert Young, professor of coastal geology at Western Carolina University.
"It's hard to see how the federal government can continue pumping billions of dollars in protecting coastal communities. At some point within the next two decades, some of these vulnerable communities may need to relocate."
An early warning for tourism? "The plunging stock market, big bank failures, falling home values and other scary economic news could signal trouble for travel," says this USA Today report. I'm not convinced Florida's tourism industry is in too much trouble. Gas prices are starting to drop under $3 at some gas stations, which will ease some of the pressures on driving. And some tourist destinations are discounting heavily. Example: Cypress Gardens offers a special promotion for today, Oct. 10, and next Friday, and Oct. 17. The first 10,000 visitors will receive admission into the park for just $10. Hey, it beats throwing $10 into the stock market these days.
-- Robert Trigaux, Times Business Columnist