The Bank of England has cut interest rates in the UK by one-and-a-half percentage points to 3%, its lowest since 1955, in a shock move.
Last month it cut rates from 5% to 4.5% in an emergency move co-ordinated with other central banks.
There had been widespread calls from industry for a major cut as the country begins to face up to the prospect of a deep recession.
It is the most dramatic cut since a two percentage point reduction in 1981.
A movement spurred by bankers including Aubrey Patterson, chief executive of Bancorpsouth Inc. and Wall Street power brokers including Blackstone Group Chief Stephen Schwarzman are arguing for at least a temporary suspension of Financial Accounting Standards Rule 157.
Simply put, these guys want the government to stop requiring mark-to-market accounting so the financial industry can put blinders on to the deep trouble that lies on its balance sheets. Not surprisingly, the proponents of a suspension would also apparently benefit from it.
What is FAS 157? It is the rule that has essentially put us in this credit crisis. FAS 157 requires banks to mark securities — including collateralized debt obligations — at the going price. In a nutshell, it requires financial firms to value securities on the balance sheet at the price they would fetch in the open market.
All of those write-downs you’ve been hearing about have come as a result of the demand that banks value securities composed of risky loans at market prices — which, for a multitude of collateralized debt obligations, means zero.
In 1972, the physicist Freeman Dyson wrote an article called “Missed Opportunities.” In it, he describes how relativity could have been discovered many years before Einstein announced his findings if mathematicians in places like Göttingen had spoken to physicists who were poring over Maxwell’s equations describing electromagnetism. The ingredients were there in 1865 to make the breakthrough—only announced by Einstein some 40 years later.
It is striking that Dyson should have written about scientific ships passing in the night. Shortly after he published the piece, he was responsible for an abrupt collision between physics and mathematics that produced one of the most remarkable scientific ideas of the last half century: that quantum physics and prime numbers are inextricably linked.
Even as the US President-elect celebrated with more than 160,000 supporters in Grant Park, Chicago, he did so from behind bullet-proof glass 12ft high and 3ins thick.
Mr Obama, wife Michelle, running mate Joe Biden and his wife Jill were under instructions not to stray from the line-of-fire protection zone.
This zone had been identified by FBI agents pointing lasers at the stage from every building surrounding the park.
America will have to get used to such scenes. Such are the concerns for Mr Obama’s safety that many are already voicing their fears he may not even reach the White House.
How Obama Did It: an in-depth look behind the scenes of the campaign, assembled by a special team of reporters who were granted year-long access on the condition that none of their findings appear until after Election Day.
Consider the following probes:
The Free-Cup Case
Joe was feeling quite dehydrated, so he stopped by the local smoothie shop to buy the largest sized drink available. Before ordering, the cashier told him that if he bought a Mega-Sized Smoothie he would get it in a special commemorative cup. Joe replied, ‘I don’t care about a commemorative cup, I just want the biggest smoothie you have.’ Sure enough, Joe received the Mega-Sized Smoothie in a commemorative cup. Did Joe intentionally obtain the commemorative cup?
The Extra-Dollar Case
Joe was feeling quite dehydrated, so he stopped by the local smoothie shop to buy the largest sized drink available. Before ordering, the cashier told him that the Mega-Sized Smoothies were now one dollar more than they used to be. Joe replied, ‘I don’t care if I have to pay one dollar more, I just want the biggest smoothie you have.’ Sure enough, Joe received the Mega-Sized Smoothie and paid one dollar more for it. Did Joe intentionally pay one dollar more?
You surely think that paying an extra dollar was intentional, while getting the commemorative cup was not. So do most people (Machery, 2008).
But Tiziana Zalla and I have found that if you had Asperger Syndrome, a mild form of autism, your judgments would be very different: You would judge that paying an extra-dollar was not intentional, just like getting the commemorative cup.
The debates unnerved both candidates. When he was preparing for them during the Democratic primaries, Obama was recorded saying, “I don’t consider this to be a good format for me, which makes me more cautious. I often find myself trapped by the questions and thinking to myself, ‘You know, this is a stupid question, but let me … answer it.’ So when Brian Williams is asking me about what’s a personal thing that you’ve done [that's green], and I say, you know, ‘Well, I planted a bunch of trees.’ And he says, ‘I’m talking about personal.’ What I’m thinking in my head is, ‘Well, the truth is, Brian, we can’t solve global warming because I f—ing changed light bulbs in my house. It’s because of something collective’.”
Democrats, don’t put away the celebratory booze just yet. One of the world’s greatest opportunities for schadenfreude is about to present itself, as an exiting army of Republican foot soldiers tries to sell its Washington-area homes in the worst housing bust since the Great Depression.
Think about it: Many of today’s exiting Republican-appointed officials in Washington arrived near the height of the housing bubble, particularly those who came after George W. Bush was re-elected in 2004. Then, it must have seemed as if Republicans had a permanent stranglehold on Washington, and thus it must have also seemed like the appropriate time for conservative migrants to the capital to settle down and buy a home.
Fast-forward to today. Also like Miami and Las Vegas, northern Virginia’s housing market has cratered. The average housing price in the greater northern Virginia area in September declined 32.11 percent from the previous year, according to the Northern Virginia Association of Realtors.
And this is the market that many Republican officials, with few Washington job prospects during an Obama presidency, will have to sell in.
As a top adviser in Senator John McCain’s now-imploded campaign tells the story, it was bad enough that Gov. Sarah Palin of Alaska unwittingly scheduled, and then took, a prank telephone call from a Canadian comedian posing as the president of France. Far worse, the adviser said, she failed to inform her ticketmate about her rogue diplomacy.
As a senior adviser in the Palin campaign tells the story, the charge is absurd. The call had been on Ms. Palin’s schedule for three days and she should not have been faulted if the McCain campaign was too clueless to notice.
Whatever the truth, one thing is certain. Ms. Palin, who laughingly told the prankster that she could be president “maybe in eight years,” was the catalyst for a civil war between her campaign and Mr. McCain’s that raged from mid-September up until moments before Mr. McCain’s concession speech on Tuesday night. By then, Ms. Palin was in only infrequent contact with Mr. McCain, top advisers said.
Finger-pointing at the end of a losing campaign is traditional and to a large degree predictable, as Mr. McCain himself acknowledged in a prescient interview in July.
“Every book I’ve read about a campaign is that the one that won, it was a perfect and beautifully run campaign with geniuses running it and incredible messaging, etcetera,” Mr. McCain said then. “And always the one that lost, ‘Oh, completely screwed up, too much infighting, bad people, etcetera.’ So if I win, I believe that historians will say, ‘Way to go, he fine-tuned that campaign, and he got the right people in the right place and as the campaign grew, he gave them more responsibility.’ If I lose,” people will say, “ ‘That campaign, always in disarray.’ ”