Today's News

Credit rating agencies put the global financial system at risk because they had to be lapdogs, not watchdogs, to survive, Moody's CEO Raymond McDaniel testified on Capitol Hill yesterday. The three major agencies were caught in a race to bottom, forced to lower their standards in an attempt to maintain their market share. That race to the bottom was very lucrative in the short-run for the companies, but disastrous for the global economy in the long haul.

So exactly why isn't Mr. McDaniel in jail for fraud? Or at the very least forced out of his company in disgrace? Why is he still the CEO of anything? Disgraceful! Disgusting!

Desperate to preserve its currency peg to the euro, Hungary raised its interest rate by 3 percentage points to 11.5%, raising the possibility that other Eastern European states will have to follow to head off collapse of their currencies.

Of course, they may save their currencies at the cost of very deep recessions. Now is not the time to be raising rates.

Greenspan testified today before Congress. I see a lot of finger-pointing in an attempt to preserve his legacy. Well, sorry, Mr. Greenspan, but the jury is in. You are an idiot. To think that once upon a time I admired the job he was doing. I -- unlike him -- am not afraid to admit that I made a mistake. Have a Coke and a smile and STFU and let the rest of us figure out how to clean up the mess you left us.

Wachovia had a $23.9 billion third-quarter loss, essentially eviscerating four years of earnings. They took took an $18.8 billion goodwill impairment. Together with last quarter's goodwill impairment, they have essentially written down their 2005 Golden West acquisition to zero. What a bonehead move! The bank also added $6.6 billion in provisions for credit losses. This combined with last quarters credit loss provision increase is approximately equal to the "profits" for all of 2006 and 2007 proving that those year's profits were almost completely illusory accounting artifacts.

Merrill Lynch CEO John Thain said he expects "thousands'' of job losses from the bank's takeover by Bank of America. Most of the cuts will fall in information technology, operations , and finance, Thain said in a Bloomberg Television interview. "We haven't mapped it out in terms of actual number of people, but we are committed to saving $7 billion across the combined platforms, and that will be a challenge,'' Thain said. "Between our two companies it will be clearly thousands of jobs.''

Goldman Sachs is preparing to cut about 10% of its 32,500 employees.