Clem’s Chronicles:Stox continue swoon/Obama and Fiscal Responsibility/

By Tom Johnson

Feb 23, 2009 9:23pm

Clem Lane here with another ABC NEWS Evening Editorial Note.

ANOTHER CRUMMY DAY ON WALL STREET-This is getting old. O-L-D. Charlie Herman tells us " The Dow Jones and the S&P500 both closed at lows not seen in 12 years.  The Dow continued its losing streak from last week and today fell 250.89 points (3.41%) to close at 7,114.78.  The S&P 500 dropped below 750 to close at today 743.33, losing 26.72 points (3.47%).  The Nasdaq dropped 53.51 points (3.71%) to close at 1,387.72."  Betsy Stark, filing for WORLD NEWS, tells us "one of the biggest fears is what will become of the country’s biggest banks…will things get so bad they will have to be nationalized?" Government take-overs. Not the free market’s idea of a good time. We should start to get a sense of just how extensive a temporary take-over of troubled banks might be. Stark: "The Treasury Department said today that starting Wednesday it will begin subjecting about 20 of the nation’s largest banks to stress tests." Stark adds that "analysts say first up is likely to be Citigroup, which has already received $45 billion in government aid. Today there are reports that Citi has asked the government to take as much as a 40 percent stake in the company." So what’s with the Wall Street freak-out concerning nationalization? Charles Gibson asked Betsy Stark about it on WORLD NEWS and Stark told him "One of the things is just about money. If banks are taken over by the government, then private investors could see the value of their shares either severely diluted or wiped out altogether. The other thing is philosophical. Wall Street is the bastion of free market capitalization and nationalization….it’s something that happens in other countries, not the US."

FISCAL RESPONSIBILITY SUMMIT-President Obama announced his plans to cut the nation’s deficit in half within the next four years at the start of the fiscal responsibility summit today.  “The 2010 budget Obama will announce on Thursday will – he says – set the nation down the path towards cutting the deficit in half by the end of his first term…from $1.3 trillion this year to $533 billion in 2013,” Jake Tapper reported on WORLD NEWS.  “He will do this,” Tapper continues, “by drawing down the war in Iraq, though that relies on that conflict ending according to plans.  Another source of revenue being proposed:  Allowing the Bush tax cuts for families earning over $250,000 to expire in 2011…increasing their tax rate from 35% to 39.6%.”  Continuing with his ominous rhetoric, Obama warned “If we confront this crisis without also confronting the deficits that helped cause it, we risk sinking into another crisis down the road. As our interest payments rise, our obligations come due, confidence in our economy erodes and our children and our grandchildren are unable to pursue their dreams because they’re saddled with our debts.”  Sunlen Miller reports that President Obama “admitted that his $787 billion recovery package will add to the deficit in the short term, but the investments that the country receives back in turn will help lower the total amount by tackling the underlying problems of health care, energy and education.” (thanks to Marisa Bramwell for this entry)

ABC NEWS POLL/PRESIDENT OBAMA’S FIRST MONTH IN OFFICE-So how has President Obama done in his first month in office? It depends on your party affiliation. The results of our ABCNEWS/ WASHINGTON POST poll show an approval rating of 90% from Democrats. Republicans on the other hand gave the President a 37% approval rating. George Stephanopoulos discussed the poll with Charles Gibson on WORLD NEWS and said that Americans are very worried about the federal deficit. Steph: "The President said in that summit today that 87% of the country is worried about that deficit, 59% very worried." And who best to handle the economy? "Right now the President is winning this battle, Charlie by a very wide margin. 61% trust the President to handle the economy. Only 26% trust the Republicans."

PRESIDENT OBAMA READING REAL PEOPLE LETTERS-Guess what? Your letter to the President may actually be read, and not just by the deputy assistant secretary of letter-opening services. Jake Tapper tells us that the President, in his first week in office, requested that he see 10 letters a day "representative of people’s concerns". So every day the President receives a purple folder with 10 letters. Charles Gibson told us on WORLD NEWS  that "these days (the letters) are mostly about the economy." Gibson adds that "the idea of a president reading mail from citizens isn’t new. Ronald Reagan would spend hours reading and answering mail and we know FDR also read his mail during the last economic meltdown."

PROGRAM NOTE/PRESIDENT ADDRESSES JOINT SESSION OF CONGRESS-President Obama addresses a joint session of Congress tomorrow night. ABC NEWS will provide live coverage from 9-10:30pm ET. Charles Gibson and George Stephanopoulos will anchor ABC’s coverage from the Capitol. They will be joined by Senior White House Correspondent Jake Tapper and Senior Congressional Correspondent Jonathan Karl. ABC News commentators George Will and Donna Brazile will also contribute. ABC NEWS RADIO and ABC NEWS NOW will also have live anchored coverage.

CHANDRA LEVY-Pierre Thomas provides the following update: " Two sources familiar with the case tell ABC NEWS that charges against ingmar guandique will not be coming today. Prosecutors are reviewing the evidence and will likely file the charges later this week possibly as early as Tuesday—but could fall to Wednesday. Sources say officials are confident in the evidence–but that the case is undergoing typical processing and review—although one of the officials did allow that given the publicity on this case—everyone wants to be meticulous. There will be a presser when the charges are announced. (one source said there is no rush, because in this case, the suspect is in jail.)"

WHAT FINANCIAL CRISIS? SALE OF THE CENTURY TRUMPS BAD TIMES-Today was the first of a three-day auction of the artwork from the  Paris estate of French fashion icon Yves Saint-Laurent. Christophe Schpoliansky says that " More than 206 million euros ($261 million) worth of works of art were sold in 3 hours tonight in Paris… the total estimation for the 3-day sale was between $253 million and $380 million… so, after just one night, the sale is close to reaching this estimation. Picasso’s « Instruments de musique sur un guéridon », was not sold. The most expensive piece estimated of the entire collection ($40 million) did not reach its minimum price and the auctioned ended at $26 million. Several other pieces beat world records. A sculpture of Romanian Constantin Brancusi, “Madame L.R” was sold at $33 million before tax. Piet Mondrian’s painting "Composition avec bleu, rouge, jaune et noir" went for $24 million and James Ensor’s "Le désespoir de Pierrot" was sold $5.5 million. Auction sale continues tomorrow."

–Jake Tapper reports that former Washington Governor GARY LOCKE is the "likely pick" to be President Obama’s pick for Commerce Secretary.
–Remember all the hullabaloo surrounding UBS’ recent deal with the US government that involved naming some 300 clients in exchange for a deferral in criminal prosecutions? Well the IRS wanted more. So they filed a lawsuit last week seeking information about an additional 52 thousand accounts held by US citizens. Don’t hold your breath waiting for that to happen. U.S. District Judge Alan S. Gold set a July 13 hearing on the IRS lawsuit, unless an agreement is reached first. UBS claims that turning over the account names would violate Swiss privacy law and jeopardize the bank’s license to stay in business.
–Will he or won’t he? A federal judge in San Francisco has set an unusual hearing in the BARRY BONDS perjury trial Wednesday. Greg Anderson, Barry Bonds’ personal trainer, has been ordered to appear Wednesday to tell the judge whether or not he will testify. At stake-basically the prosecution’s entire case. The prosecution has said that Anderson can directly link Bonds to three positive drug tests. But if he won’t testify? The judge has barred prosecutors from showing the jury the test results because Anderson is refusing to testify. Anderson is alleged to have collected the urine samples for drug testing at the lab. Without his testimony confirming the collection, Illston has said there is no way to prove the samples belong to Bonds. Similarly, the judge said calendars that prosecutors say chart Bonds’ use of performance-enhancing drugs can’t be introduced without Anderson’s testimony that he created them. Reminder that Anderson has already spent a year in prison on contempt charges for refusing to testify about Bonds to a 2006 grand jury.

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