statism watch

Kevin Carmichael, Sinclair Stewart, The Globe and Mail
September 13, 2008

As the toxic cloud surrounding U.S. subprime mortgages continues to waft through the global financial system, banks and governments are seeking guidance from a battle-tested army: former Goldman Sachs executives. And with good reason. The current ‘Goldmanites’ have by and large steered their ship through the storm that still threatens other Wall Street giants. Kevin Carmichael in Ottawa and Sinclair Stewart in New York take a closer look at the investment bank with a six-decade tradition of public service and the reputation for an unparalleled command of risk

OTTAWA AND NEW YORK — Back in his investment banking days at Goldman Sachs Group Inc., Henry Paulson took just three weeks to orchestrate the 2005 takeover of Gillette Co. by Procter & Gamble for $57-billion (U.S.).

Last weekend, as U.S. Treasury Secretary, he engineered one of the biggest financial bailouts in history, putting up as much as $200-billion of taxpayers’ money to seize control of mortgage giants Fannie Mae and Freddie Mac. Now, he’s facing pressure to pull off a deal to save the cratering Lehman Brothers.

Mr. Paulson’s around-the-clock salvage missions to prop up pillars of the U.S. financial system are part of a worldwide scramble to contain the fallout from America’s catastrophic dalliance with subprime mortgages. As the U.S. teeters on the precipice of recession and global economies seek to claw their way out of the grip of the crisis, both the public and private sectors are increasingly turning to one source for help: Goldman.

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Eric Lipton, New York Times
September 13, 2008

WASHINGTON — The Bush administration is pushing through a broad array of foreign weapons deals as it seeks to rearm Iraq and Afghanistan, contain North Korea and Iran, and solidify ties with onetime Russian allies.

From tanks, helicopters and fighter jets to missiles, remotely piloted aircraft and even warships, the Department of Defense has agreed so far this fiscal year to sell or transfer more than $32 billion in weapons and other military equipment to foreign governments, compared with $12 billion in 2005.

The trend, which started in 2006, is most pronounced in the Middle East, but it reaches into northern Africa, Asia, Latin America, Europe and even Canada, through dozens of deals that senior Bush administration officials say they are confident will both tighten military alliances and combat terrorism.

“This is not about being gunrunners,” said Bruce S. Lemkin, the Air Force deputy under secretary who is helping to coordinate many of the biggest sales. “This is about building a more secure world.”

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Jeannine Aversa, Joe Bel Bruno, AP
September 13, 2008

WASHINGTON — The field of possible buyers for Lehman Brothers narrowed Saturday, but the parties involved in the discussions over the wounded investment bank’s future were at loggerheads over how to finance the rescue.

An investment banking official said Bank of America Corp. and Britain’s Barclays Plc have emerged as the front runners for Lehman Brothers after a possible cash injection from its rival Wall Street banks and brokerages.

Top officials from the Federal Reserve and the Treasury Department and executives from several Wall Street banks met at the New York Fed’s downtown Manhattan headquarters Saturday for the second day in a row try to hash out a deal to rescue Lehman Brothers.

The financial world was watching. Failure could prompt skittish investors to unload shares of financial companies, a contagion that might affect stock markets at home and abroad when they reopen Monday.

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CBC News
September 13, 2008

With the school year just two weeks old, some are asking exactly what prompts a lockdown and if they’re becoming more frequent in the Toronto area.

The killing of 18-year-old Stephen Barton on Eglinton Avenue West near Keele Street on Monday forced the lockdown of five nearby schools and a daycare.

An incident in Oakville on Tuesday led to a similar precautionary lockdown of six more schools.

Colin Fleming with the Toronto District School Board says there are varying degrees of lockdown.

“It is unfortunate that the occurrence of these emergencies seems to be increasing at a mind-boggling rate,” said Fleming.

Fleming said lockdowns are initiated by principals, though often recommended by the police. The point, he said, is to keep any threat away from schools and protect children from outside danger.

Schools must go through two lockdown drills a year, Fleming said, though he admits the increased security may be having an effect.

“I don’t think any of us could suggest that it is not impacting on students in an emotional way,” he said.

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