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Are Traasdahl of Norway describes his approach to hiring, management practice and culture.

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Sara Korshid, a Egyptian journalist, laments the wasted last two and a half years in which the military was ousted only to have the Muslim Brotherhood take office under a flawed and rushed road map set by the then military leaders, without a clear allocation of powers between the judiciary, parliament and the executive branches of government. The failure of the Muslim Brotherhood led by older authoritarian leaders to reach out to accomodate liberals -who supported Morsi and helped him get elected with 51% of the vote- leading to the ouster of president Morsi brings the Egyptian people back to square one. Real misgivings about having the military intervene are shared by liberals like Korshid, who are yet determined to start the process over to get it right.

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Only 1.9 million hourly workers in manufacturing now earn more than $20 per hour, its down 60% since 1979, according to the Bureau of Labor Statistics. Of all hourly workers in every sector of the economy the percentage of people earning more than $20 per hour shrunk to 18% in 2008 from 23% in 1979, thus losing some of the gains the US made since World War II which helped build the American middle class. One can see this unwinding clearly in the auto industry as wages are being reduced to match nonunion Japanese plants, and the industry itself is going through a huge downsizing fast. The hourly work force totals 76 million or 52% of all workers ranging from managers and professionals to factory and construction workers to technicians, educators and sales people. The wages of salaried workers show a similiar trend but are not converted into hourly amounts. As the numbers for 2007 are at the point where the economy was still booming, the path ahead as things go through a steep downturn can only have serious implications such as a slow recovery for demand in 2010. If a number of trends converge, employers shift to part time employment, auto related workers downshift to lower wages and benefits, shift to nonunion plants in the south or the midwest, and work is offshored or outsourced, this could worsen effects on consumption for years ahead especially with the credit remaining tight and consumers paying off old debt. Frank Levy, a labor economist at MIT, says that all this is happening wihtout a political debate or discussion, as people are worried more about having a job, and only secondly about what it pays and whether they are losing ground. Even the Pennsylvania primary debate, says Levy, between Hillary Clinton and Obama was conducted without quantifying the decline, and no one mentioned the eroding of the $20 per hour wage. What happened to support the consumption and support imports, was to pay for consumption by going into debt or refinancing the home. This has implications that range from the future of export industries in China's booming coastal sector, to how long the recovery drags on, and to what the future would look like....

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Why so many GE alumnus have had difficult experiences as the needs of the marketplace and competitive environment and global markets change. Apple and the innovation it has brought from its products its design and its imagination is now where the results are showing up. Google hearkens back to 3M in some of its practices. This doesn't mean that quality is not important but quality in terms of reliability of product can still be part of the new design and innovation scheme of things.

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S&P must be in some kind of disconnect if it doesn't get whats happening about its ratings mess with all the storm around it from here to Germany (calls to nationalize the ratings services). Ms Kathleen Corbett is leaving to spend more time with her family- in Japan company executives have a meeting where they are seen bowing to show their apologies to the public after something bad the company had done and accept complete responsibility, thats the first thought that comes to mind.

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The battle in Congress over the Puerto Rico bankruptcy bill. Hedge funds are financing the campaigns of many candidates including Marco Rubio, leading to stalled efforts on the bill. Speaker Ryan has put the issue off till March 2016 by sending it for further discussion to committee chairmen. Senator Orrin Hatch and other Republicans oppose the bill.

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Former U.S. Defense Secretary Robert Gates points out in this intervew with Holman Jenkins of the WSJ, that Iraq's prime minister, Nouri al-Maliki, who worsened Shiite-Sunni relations, was the principal cause of the unraveling that happened in Iraq during the first term of U.S. president Obama. He says President Obama failed to do what was done by president Bush to persist and obtain Status of Forces Agreement with Iraq, to maintain a U.S. foce presence in Iraq. Presence of U.S. forces would have prevented the spread of Islamic State in Iraq and Syria. U.S. force presence would have provided a more even handed treatment of Sunnis in the region, creating the conditions for peace by having Sunnis, Kurds and Shiites continue talks about the future of Iraq. Gates grew up in Kansas in the 1950's, attended the College of William and Mary for undergraduate studies, studied Russian and Soviet history in grad school at Indiana University and Georgetown University, before joining the CIA. Gates was selected by Brzezinski to work in the White House, worked under Brent Snowcroft, and as head of the CIA (1991-1993) during the elder Bush administration. He was Secretary of Defense from 2006-2011, under presidents George Bush and Barack Obama, succeeding Donald Rumsfeld. He was succeeded by Leon Panetta, Chuck Hagel, and Ashton Carter. ...

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Support for the centre right Moderate Party of Mr. Reinfeldt declined to 23.2% in Sweden's 2014 parliamentary elections. A trade union leader, Mr. Lofven, led the coalition of centre Left parties including the Green Party to a narrow win over the centre right parties, with 43.7% of the vote. Votes to an antiracism and womens issues party Feminist Initiative was expected to go above the 4% needed to enter parliament and provide support to the centre left parties, yet reached 3.1%. The strain on funding for schools and other public spending, as a result of immigration support spending on Middle East refugees by the Reinfeldt government, led to a siphoning off of significant voter support to a far right anti-immigration Sweden Democrats Party which doubled its vote to 13%.

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A fight in the U.S. Congress with an unusual alliance between the Obama administration, the Judiciary Committee, and Speaker Boehner up against Senate Majority leader Mitch McConnell ends with the passage of the USA Freedom Act, which requires court approval for government to look at collected bulk data in phone calls. Republican Rand Paul fought hard against both factions to end the bulk surveillance altogether. The Act was passed in the House earlier. It cleared the Senate June 2nd 2015 with 67 in favor and 32 opposed.

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The new J.D. Powers Quality Survey put out in Feb 2013 showed the Lexus, Toyota, Mercedes, Buick, Chevrolet, Lincoln and Dodge Ram brands performing at the top level in number of problems reported by owners of 3 year old vehicles. Land Rover, Jeep and VW brands did poorly. Most of the Chrysler Dodge cars performed poorly. The redesign of vehicles initiated by Fiat Chrysler CEO Marchionne does not show up in this study. The redesigned Jeep and other vehicles will show in next years study. The study also showed buyers of economy vehicles were likely to switch easily when buying another car. New models are showing fewer problems and are more dependable compared to previous years, with the average number of problems declining from 170 per 100 vehicles in 2009, to 132 in 2011, and 126 in 2012.

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Instead of "ring fencing" bad loans one bank at a time, which is what is being done for Bank of America and Citigroup by the government , Bair, Bernanke and others favor something like the Resolution Trust Corporation, which would contain all bad assets of banks. Bair in an interview said she would like to see them priced at what they would get in today's market, meaning that the steep discounts issue would be faced squarely. What this will need is a lot of government money to restore confidence so that investors are willing to put their private money in the banks. And Senator Schumer says he is hearing the number of $1 trillion or more. This would let banks take these bad assets off their balance sheets, like they did with the Brady bonds for bad Latin American assets and with the Resolution Trust Corporation for bad assets in the savings and loan crisis. It was the original intent of TARP but two things happened, first the pricing of these assets was in limbo, with nobody willing to say how steep the discount should be. The auction process proposed was a vague and shaky one. Second, things deteriorated so quickly that it became urgent to instead do bank recapitalizations for $250 billion. Now the same issue has to be addressed directly by another administration with control of Congress, so that the big bucks funding of $1 trillion can be possible to do. Something like a separate institution that holds all bad bank assets. And the government taking on a big part of the burden, and with it some ownership of the banks that hopefully could payback some of this $ 1 trillion....

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Toyota moves back to its utilitarian roots, where costs matter and pricing matters. Higher cost technological advances are being rejected in favor of older approaches that accomplish the same thing in the manufacturing process at alower cost. And pricier features like the solar ventilation system option on the new Prius are being rejected so that the price can be made more competitive with American cars. Even the idea of pricing Toyota's cars at apremium of $1000 or $1500 over American cars is being questioned in this market. The new Prius mad due to come out this year, developed at a time when Toyota was coasting as it emerged as the most profitable and the largest auto manufacturer in the world, has a price tag of $28,000 versus the $22,000 for the current Prius. This has alarmed some of the bigger Toyota dealers so much that Akio Toyoda the new CEO visited Southern California to talk to these dealers about what has gone wrong with the pricing. These dealers told him that they were worried about that price when they were drastically discounting current Prius models to maintain their sales rate. This is also happening when Toyotas are piling up unsold on car lots at most ports in the US. As Toyota competed with GM for top spot in sales Toyota's management of Watanabe and Kinoshita, the outgoing CEO and his assistant, say critics inside Toyota, lost sight of the need for caution as the company's manufacturing capacity expanded in Japan and overseas. Now with the selection of Akio Toyoda to succeed Watanabe as new CEO, the decision has been made to make a shift to anew generation of managers, with the retirement of 3 executives including Kinoshita and Watanabe. ...

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Under the Volcker Rule setup during the global financial crisis of 2008-2009, banks total investments in private equity, hedge funds and similar higher risk funds cannot exceed 3% of high quality capital. During the financial crisis investment banks were highly leveraged leading to the collapse of Bear Stearns and Lehman Brothers, and the precarious financial condition of other banks. Goldman has pared down about 60% of such investments. Remaining are $4.8 billion in private equity investments, $1.2 billion in real estate, and about $1.1 billion in both credit and hedge funds. Regulators have given the bank till July 2017 to comply. As banks recovered from the impact of the crisis, the tearing of the social fabric that happened with high unemployment in some groups especially older white men, has remained six years after the crisis- as evident in the U.S. election campaigns this year. As a result the mood has shifted for tighter regulation and both party platforms, Republican and Democratic, now call for reinstatement of the Glass Steagall Act, which separated commercial banking from investment banking as part of the lessons learned from the Great Depression. Volcker, was chairman of the U.S. Federal Reserve during the Carter administration, known for taking a tough line against inflation. He was the principal driver of the move to restrict banks from risky activity, and faced considerable opposition from banks during the 2009-2013 period when the rule was being formulated.  ...

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Attorney General Sessions says the driver of the car who drove into protesters could be prosecuted in a number of ways including for a hate crime. The protest was against a white supremacist rally in Charlottesville. A car driven by 20 year old James Alex Fields drove into protesters injuring 19 and killing one woman. The local charges being made are for hit and run, malicious wounding, and the Justice Department is conducting its own probe. The comments by Sessions contrasted with the statement blaming both sides by president Trump, which led to strong criticism in the media and by the business community.

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Note the description of SIV's or structured investment vehicles, and SIV lites which have borrowings of 40-70 times collateral and less restrictions so very highly leveraged. About 23% of SIV assets are in residential morgage securities and half in American ones. These have very little bank credit line support in a liquidity crunch. Deutsche Bank RBS and HSBC were very active in this as well as the Landesbanken which had state guarantees. Compounding the entire problem is that no one trusts the ratings of the ratings agencies anymore. See related article on this.

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Overheard about Bair and Citigroup CEO Vikram Pandit.

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Greece's GDP will decline by 10% and unemployment go up from 16% to 26%, according to the IMF. Yet Greece is coming out of the crisis better having acted early in mid March 26 days after the first case on Feb 26 to impose a lockdown. The country had Day 50 with 2,192 cases and 102 deaths. Greece will reopen gradually on May 4.

Greece's long economic crisis actually helped as people realizing the weak condition of the public health system after cuts in spending, were keen on cooperating with government action. Some family members are elderly in every family and this also played a part with Greek culture placing importance on protecting the older members of society.

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The government bailout of Fannie and Freddie was expected to cost hundreds of billions of dollars according to some estimates during the financial crisis in 2008-2009. The costs peaked at $187 billion in 2011. The transfer of $59.4 billion by Fannie Mae to the U.S. Treasury in 2013 lowers the net cost to $60.5 billion. The net cost of the Troubled Asset Relief Program or TARP has decreased to less than $23 billion. At one point the cost of TARP reached $419 billion for the U.S. Treasury. The government sold the last of its shares in private insurance company AIG and made $22.7 billion in gains. Treasury and Fed loaned $182 billion to AIG and at one point owned 90% of the company. Chrysler exited the TARP bailout program in 2011 at a net cost to the U.S. government of $1.2 billion. So far in May 2013 the GM bailout cost $19.6 billion, this would come down to about $11.82 billion if the U.S. government sold its GM shares at the price in May 2013. The U.S. Federal Reserve says it has not lost money in any of its emergency lending facilities, even though some loans are outstanding. The FDIC says its fees from rescue programs exceed losses....

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Wang Lequan, who is the party leader for Xinjiang, is aprotege of Chinese President Hu . He was pulled into the party from Hu's days in the Chinese Communist Youth League. He is from Shadong province China's industrial and petroleum capital. Because of his familiarity with the oil industry Wang may have beeen transferred to Xinjiang province. He arrived in Xinjiang just as the Soviet Union was dissolving, and the central Asian administrative regions that were formed inside the Soviet Union were becoming independent countries. China's army had occupied Xinjiang in 1949 under Mao. Millions of Chinese were leaving the Xinjiang area and the thinking was that the Uighur Muslims of Xinjiang would also form their own country. What happened was that Wang reestablished the Chinese presence in Xinjiang province. He opened the Xinjiang region's oil and gas fields to drilling, laid pipelines east to China and west to Kazakhstan. A Production and Construction Corps was formed so that Chinese soldiers leaving the army service could find work, and this was later listed on the Shanghai Stock Exchange. With growing industry and government jobs, many Chinese were attracted back to Xinjiang. In the 1990's 2 million Chinese went back to Xinjiang. At the same time his policies may have had the effect of making the local Uighur people feel that their culture and language weere being threatened and they needed to fight for its survival. Wang acting with dictatorial powers tightly constrained Uighur culture and religion. He substituted Mandarin for Uighur in primary schools, saying minority languages were "out of step with the 21st century," and banned or restricted Islamic practices among government workers, including the wearing of beards and head scarves and religious practice like fasting and praying while at work. He has been Communist party leader in Xinjiang for 15 years, which is unusually long, such jobs usually only lasting 10 years. SInce 9/11 Wang has fought hard to limit the influence of separatism, and the East Turkestan Islamic Movement, an Uighur group, and he has swept up thousands of Uighurs accused of terrorism or religious extremism. He worked to have the East Tukestan group listed as Al Quaeda allies by the Bush administration in 2002. He is closely allied to President Hu who supported Wang, giving him a seat on the Politburo. Wang's protege in Xinjiang has been placed in charge in Tibet. There is a sense with Wang and Hu, that a failure now in Xinjiang and in Tibet to control unrest would lead others in the Chinese leadership who think differently on theses issues to bring a different leadership to succeed them. The difficulty here is that the Han who now comprise 40% of the population in Xinjiang, and are heavily involved in the oil and gas industry, have brough a modernizing influence to Xinjiang but may not be received by the Uighurs as apositive influence. First any government that is in power for as long as 15-20 years tends to lose support over time. This happened with the Congress in Kashmir. Too powerful or corrupt, and lose touch with the young people. But compared to India the democratic ways of that country have helped it recognize the need for respecting the language, religion and culture of the people of each region. The British did the same, so it was something that went back to British times. With the monopoly of power of the Communist party, lack of precedent and amodel to follow that respected different culture and languages, the intolerance of Uighur and Tibetan language, religion and culture, creates a different situation in China. Elections were held in Kashmir recently and an effort is being made for reconciliation with different groups, the media is open and different voices are heard. No such prospect remains for Tibet and Xinjiang. ...

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Hardy and Merced take an inside look at what happened at Autonomy Inc that resulted in the charge of $8.8 billion by H-P in Nov. 2012. The problems start with the hiring of Lee Apotheker, a former CEO of German software maker SAP, as H-P's new CEO in the beginning of 2011. This comes after CEO Mark Hurd is fired over relations with a female employee. Apotheker starts out within months of joining H-P with some precipitious moves that raise questions about his decisions- he dumps the new H-P tablet within weeks of joining, and follows this with a move to shift H-P out of its PC business and focus on software. To do this he pays ten times revenue for Autonomy Inc., a British software maker which has grown through acquisitions and not invested enough in advancements for its software, according to a piece by Al Lewis in the WSJ in August 2011. Autonomy's business is software that analyzes and finds patterns in voluminious data like e-mails, online data, web surfing. The tech community and analysts sees this as a risky investment from the start with Apotheker overpaying for Autonomy. Apotheker has failed to look at H-P's record in acquisitions with the failed Palm acquisition costing H-P over a billion dollars. H-P has a poor record of integrating companies. This proves to be especially true with Autonomy with founder Mike Lynch keeping a distance from Palo Alto headquarters by staying mostly in his London office. Apotheker is fired by the H-P Board within months of taking office and the Autonomy managers including Lynch leave H-P in the following months. Alarmed by a falloff in Autonomy sales, H-P's new CEO Meg Whitman sent a team in May 2012 to review the books of Autonomy. This results in finding "serious accounting improprieties." The problems are caught when a senior finance official at the London Autonomy offices points them out. What Autonomy did before selling out to H-P is to sell low end hardware servers at a loss, and disguise the loss by inflating marketing expense, resulting in marketing expenses going up just as it was trying to sell the company as a pure software company. Middle men who sold the Autonomy software reported sales that were made up and licensing revenue was taken before it was received. Analysts at Forrester Research say Autonomy had not invested in R&D, and did not make regular software releases, had poor customer relations, no regular customer feedback, and lacked transparency on future product plans. The question goes back to how did Apotheker make such decisions without giving enough time, with the due diligence reported to the head of strategy Robison and not the CFO as is normal, and how did he fail to catch the obvious failure to invest in the company R&D? Apotheker described his approach in a February 18, 2011 interview with the WSJ's Ben Worthen. He told Worthen a joke about the Swedish parliament where members discuss a proposal to move driving from the left to driving on the right, by doing this gradually. Apotheker's analogy turns out to be misplaced, his approach brash and dangerous, and the H-P's Board's confidence in their new hire misplaced. It turns out that H-P's previous CEO Mark Hurd came in for criticism for not investing enough in R&D. The money wasted in these acquisitions leaves H-P at a severe disadvantage for increasing investments in R&D when margins and sales are declining in the printer and PC business. On Nov. 20, 2012, H-P share price dropped 12% to under $12. H-P reported a $6.9 billion loss in third quarter 2012. Revenue for the full fiscal year declined 5% to $120.4 billon, and earnings declined 23% to $8 billion. ...

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The best that can be said about all the efforts to stabilize the housing markets is that they help in the context of the credit crisis that hit the economy hard with the Bear Stearns crisis and help to provide an orderly retreat for housing prices and ways to soften the blow to homeowners and lenders caught up in the wave of foreclosures. But housing prices themselves have not declined anywhere near what one would expect. In fact BW, p17, April 7, 2008 shws percentage changes for existing homes from Feb 2007 to Feb 2008 with data from the National Association of Realtors. And they are surprising when you consider sales for the northeast down 26% and prices up slightly 0.4%. Elsewhere the sales are down 29% in the Western states for a 13% price decline, sales down 20% for a 7% price decline in the Midwestern states, and sales are down 22% for a 9% decline in the Southern states. Jobless rates are 3.9% in Austin, Texas and Birmingham, Alabama and only Detroit, St Louis and Cleveland have jobless rates above 6%. What this suggests is that the unemployment situation has not seen the brunt of this credit tightening and drop in capital investment. As house prices have not declined much declines over 10% mostly in the western states and places like Detroit but not in the northeast and across the south, and unemployment still low across many regional communities, consumption spending has not seen the brunt of this credit tightening. Once tightened credit conditions hit payrolls as companies cut their workforce and unemployment moves up then expect to see greater housing price declines as more houses go into foreclosures, and then expect consumption spending to feel the impact which would reduce sales and further trim payrolls as companies run their factories at less and less production capacity. This sequence would continue and bring the economic crisis to more and more parts of the country in a manner that we have hardly see upto this point. What we have seen is the unfolding of a collapse of mortgage securities firms and of mortgage securites insurance providers like ACA, and with it the huge writedowns about $150 billion taken by the investment houses and the banks. And this has happened as a wave of foreclosures took place in 2006. And the collapse of Bear Stearns with the effects felt in global stock markets. In the communities themselves in the areas of consumption spending and in jobs the conditions will only now begin to be felt and the real impact not felt till the end of 2008 and into 2009 with the Fed action to shore up confidence adding several months in slowing the process. See the link to BW, Bernanke the Reluctant Revolutionary, where the BW estimate is that Americans took on about $3 trillion in additional debt between 2000 and 2006 from what they would have taken if they had followed the trajectory of spending patterns that had prevailed upto that point, with their recent free spending ways. It would take abot 3 to 4 years conservatively for Americans to work down all that debt. Another way of saying this is that consumption spending is going to take a big hit and with it sales of companies and consequently higher unemployment and more part time labor force with less benefits, which would tend to depress consumption even more. The winds of housing, credit, consumption and unemployment would all hit the economy in about 12 months time. Credit will further tighten as BW estimates about $130 billion of additional writedowns still expected....

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Bret Stephens on the foreign policy debate about supporting or not supporting dictators. On the big one today of Iraq after the large gains with Maliki in Iraq it could be said that its not an easy path either way with each path fraught with dangers, but in the long run if one perseveres and again in the spirit of democracy and with the people in the region themselves and their leaders having good sense and good judgement and putting the interests of the whole region before their personal interests, given this you are always going to do better by your people and the people in the region affected, by respecting democratic ideals and principles. Pakistan is not a good example because its leaders have put their personal interests before the interests of their people but even there things are changing. Zardari's dirtier and clumsier hands are mentioned by Stephens but even here this time the opposition led by Nawas Sharif decided that its more important to respect the electoral process and democratic ideals and let Zardari run Pakistan. Administrations like the Bhuttos and Zardari's have alway been corrupt so there are no high expectations but even here the people of Pakistan will find a way to make the progress they desperately need and find the leadership that can provide it. The military muffling and jailing dissent and not respecting the independent judiciary may not affect the person on the street in Des Moines or Delaware but for people in Pakistan who have suffered under military rule this may be a different story. And in the Middle East things were not that much better with dictators in power either in Palestine and its an area where the conditional part of leadership in the region having good sense and judgement should be considered as well as history. In Iran its not between the Ayatollah and the Shah, before the Shah an elected government in Iran was overthrown when its anti western oil company stance was seen in the light of the cold war. It was the overthrow of that government that brought the Shah in. Had it continued the internal politics of Iran would have been resolved by the people there. In other words western oil interests and lobbies and the cold war distorted the process there. Without the two Iran's politics would not be of much interest to people in the USA and governments there also would have no reason to be especially friendly or especially hostile to the USA. So once one removes the distorting factors and takes out the countries which cannot be used as good example like Palestine and Iran, on the big one Iraq where the people and the leadership in the region did not fail even in very difficult situation and the US persevered, respecting democratic ideals and principles was the best course with the best results. The improved Libyan relations should not be chalked off as a point in favor of dealing with dictators. With better or worse relations with Libya it made little noticeable difference or probably no difference to the people in Des Moines or Delaware. For Iraq it makes a big difference to get it right by both peoples. Libya which had closed itself off from western technology and ideas now opens itself up because this way it can improve life for people in the region, this may be the only thing that has changed. And Stephens puts it another way its more sustainable. But why is it more sustainable to respect democratic ideals and principles given that the leadership of people in the region affected and the people themselves have good sense and judgement? Because in doing so one is respecting oneself one is more true to one's own people's idea of a good and just society and one is respecting other people....

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The Bush administration's and Paulson's thinking that letting the government buy parts of the banking system was unthinkable, as recently as late September, may have led to squandering of valuable time. Now Paulson is following Gordon Brown's lead in planning an injection of capital in banks in return for equity stakes, using much of the $700 billion Congress has authorized, and Paulson says the package that passed Congress gives Treasury all the authority it needs to do so. The failure to be open to this thinking earlier may have cost valuable time in addressing this crisis. And now there are second thoughts on whether it was wise to let Lehman fall into bankruptcy, because the Administration had not correctly anticipated or calculated the true cost of the Lehmann bankruptcy in terms of the way it created a crisis in the rest of the financial system. Paulson has still not taken Gordon Brown's lead in guaranteeing lending between the banks which the British are doing as part of their plan. Is the administration too slow in its response and a bit wrongheaded or stubborn headed as each step of the crisis has moved faster than its ability to respond, and its response being one step behind. Frederic Mishkin of Columbia University a former Fed Governor says, "if you delay and create uncertainty, the amount of money you have to put up goes up." It appears from Paulson's remarks over time first turning down proposals for capital injection into banks for equity stakes, and now in making that route central to his plan, that Paulson and Bernanke simply did not anticipate the shutting down of credit markets and the collapse of stock market prices that occurred, and they had no backup plan prepared for a situation such as this. And on top of this the backup plan they went out to sell to Congress turned out to be short on details and in this sense naive for the amount requested. And then by refusing to consider alternatives such as capital injection for equity stakes, it was wrong headed, if not closed minded. William Poole who retired in August as President of the Federal Reserve Bank of St. Louis, says that " I am not aware that Treasury presented any evidence on auctions that have been successful when they are used for assets that are so heterogenous", referring to the reverse auctions that would take weeks to set up and would be terribly complicated to buy up troubled assets, as part of the plan presented to Congress in but 3 pages. Now the plan appears to be to let Fannie and Freddie, which were given $100 billion by the Treasury as authorized by Congress, to move ahead with the purchase of troubled mortgage securities, something for which Fannie and Freddie have the capabilities. In the end the crisis in confidence and near panic generated in the markets and the climate of fear may go way beyond the actual losses incurred from debt securities, and some of this may be the result of a clumsy and poorly thought out approach by Bernanke and Paulson. The cost of fixing the problem will be higher and the recession more prolonged because of this. It is a situation of capable people blinded by ideological reasons to see what is happening and in Bernanke's case not making enough of a case to Treasury about his reservations and his own thinking that capital injection was the right approach, as people familiar with the early planning say Bernanke argued that it would be easier and more efficient to inject capital directly into banks. ...