Bernanke: We’re Laying the Groundwork for Recovery · The necessary policy tools are in place. by Ben S. Bernanke As Americans well know, the challenges we now face in the financial markets and in the economy are both extraordinarily complex and historic in scope. I firmly believe, however, that with the actions policy makers are announcing today, we will be able to meet those challenges.

Raj Desai: On the Politics of Financial Meltdowns · by Raj M. Desai. Recent economic events in the United States have provided a not-so-subtle reminder that a financial crisis is first and foremost a political phenomenon. Prof. Raj M. Desai of the Brookings Institution, World Bank, and Georgetown University, explores what the United States can learn from the political economy of the financial crises that have roiled emerging markets.

U.S. Bank Reserves & Borrowings, 1958-2008 · Two graphs from the Federal Reserve Bank of St. Louis illustrate how far out of line the current banking situation is from historical norms. Banks' non-borrowed reserves are at an historical low and their borrowings from the Fed are at a all-time high.  The change from previous decades is stark: ------------------------------------------- Click on each graph for more details. The financial crisis -- with its roots in the residential real-estate boom and subsequent slump, securitized mortgages, and Federal Reserve policies -- continues to impact the U.S. economy. See related posts on Fannie Mae, Freddie Mac, Bear Stearns, Lehman Brothers, Merrill Lynch, AIG, and bank closures.

Election polling, Electoral College · The best, quick stop on the web for Presidential, Gubernatorial and Senate polling data is www.pollster.com. It graphs all polls by state, over time, with a list and links to those polls. Click on a state to see its graph and data. (In the upper-left, one can switch to Governor or Senate races.) The Presidential race depends on Electoral College votes (viz. the 2000 election). Three of the best sites offering Electoral College analysis are: RealClearPolitics, FiveThirtyEight, and 270toWin. Each site displays the consensus outcome based on current polling, and allows users to play "what if" scenarios by clicking on states and changing the consensus. 270 votes are needed to win the Electoral College. Maine and Nevada tally results by Congressional District, so they could split Electoral College votes among these Districts (5 for Nevada and 4 for Maine), although they have never done so. If no candidate receives an outright majority (270 of 538 votes), pursuant to the 12th Amendment the US House of Representatives would choose among the top three presidential candidates, with each state delegation getting only one vote. The Senate would choose the vice president, in roughly similar manner.

The American Economy · Background & Analysis

The Mortgage & Credit Crisis · Background & Analysis An excellent introduction to the subject for non-experts is in this Wikipedia entry. For experts and professionals, the four most perceptive and outspoken analysts of the crisis have been Nouriel Roubini, Paul Krugman, and Robert Shiller, all economists, and Charles Morris, a writer and former banker. The best single overview of the crisis, still relevant, is Charles Morris’ book The Trillion Dollar Meltdown, which was published in February 2008 and predicted total losses of $1 trillion. You can purchase the book here. A review from the Economist summarizes the book well. The Economist Morris’ estimate of $1 trillion in losses was recently confirmed by the IMF’s April 2008 Global Financial Stability Report. An excellent summary of the study is found at The Housing Wire The full text of the IMF report is at The IMF Nouriel Roubini tends to be the most pessimistic of the principal analysts, predicting total losses could reach $3 trillion, a number far higher than most believe plausible. He has written extensively on the subject on his economics website and blog, www.rgemonitor.com. Details on Fannie and Freddie can found on James Hamilton's blog (reprinted at RGEmonitor). Paul Krugman has written about the mortgage problem repeatedly in his New York Times op-ed column, most recently here. In a March 2008 interview in Fortune, found here, he predicted a drop of 25% in U.S. home prices by the time the crisis bottoms out. This interview is on CNN