Bank Bailouts Round 2 and Washington's Challenge

Image via Wikipedia With Bank of America set now to receive a second wave of bailout funds -- $20billion in cash and another $118billion in loan guarantees, I'm struck with the lack of details in the "announcement" that a deal had been struck. Apparently we have to wait until today to find out. A contributor to one of my favorite blogsites, Angry Bear, suggests we may learn details today. It's still notable that the spate of articles everywhere about the beginning of this second round of handouts to institutions too big to fail make little to no note of why such an announcement could be made without knowing that measures to ensure accountability and transparency will be in place.

The New York Times correctly calls a spade a spade in noting that we are seeing the nationalization of our major banks, a political and economic truth which few in Washington would like to admit. As a friend of mine likes to point out, Wall Street has moved to Washington, yet I wonder if we -- citizens and those on the Hill and the White House -- are fully prepared to stomach that reality. I'm not much consoled by the Senate Hearings for Obama's choice for new SEC Chief, Mary Schapiro, which hint at the real challenges of coordinating our regulatory structure in this country. Nor by Ben Bernanke's remarks Tuesday at the London School of Economics that "we need stronger supervisory and regulatory schemes" while backpedalling for those in Wall Street and Washington who still believe in a perfect market that we must take care not to take actions that forfeit the economic benefits of financial innovation and market discipline." I love the comment of one contributor to Angry Bear who tartly observes that this is "an interesting viewpoint, since just about everybody would give their eyeteeth right now if they could indeed 'forfeit the … benefits of financial innovation'”! See a nice summary there of the GAO's recent report on regulation deficiencies of financial markets by rdan with this excellent comments and others.

Enter our hero Paul Volcker -- consistent truthsayer -- riding again to the rescue with the beginnings of a plan to harmonize our own fragment financial regulatory structure both domestically and within the context of the global economy. Towering in stature and viewpoint, and having reached the stage in life where he can afford by reason of age, experience, and accomplishment to say what needs to be done, we begin to see that a two-track domestic and global response to this crisis will be sorely needed in the months ahead.

Time for Warming Split Pea Soup

Image via Wikipedia I've been playing around with split pea soup recipes for several years, and think I've finally got it down. Perfect for the frigid week ahead.

Split Pea Soup Recipe
3 T olive oil
1 large yellow onion, or two medium sized, 1/4" diced.
1 very large fat carrot , or three-four smaller ones, 1/4" diced
4 stalks celery, including leafy tops, 1/4" dice.
3-4 garlic cloves, minced
2 whole star anise
1/4 teaspoon red pepper flakes
1/4 teaspoon cayenne pepper
10-12 stalks of fresh thyme
3 large bay leaves
1 32-oz container chicken stock
1 bottle of beer
3/4 cup dry white wine
2 large smoked ham hocks
6 cups water, more as needed
1 package dried green split peas
salt and black pepper to taste

Sweat onion, carrot, celery, bay leaves, thyme, star anise, red pepper and cayenne pepper over medium heat until translucent. ~10 minutes. Be careful not to brown the vegetables.

Add ham hocks, beer, chicken stock and water and bring to a boil over high heat, stirring occasionally. Reduce to a simmer and partially cover.

Simmer four hours, stirring occasionally and watching bottom of pot doesn't scorch, adding water as necessary.

Remove ham hocks, and pull out usable meat, dice. Remove star anise, thyme stems and bay leaves. Add ham to soup. Season with salt and black pepper to taste. Add white wine and bring soup to simmer for 5 minutes longer.

Makes approximately 6 pints of soup. Soup will last one week in refrigerator, or three months in freezer.