February 13, 2012 Binyamin Rose: Back to the Bunker: How a life-risking act by a Christian family during the Holocaust saved a family and built a thriving community a world away Danielle Kurtzleben: The Peace Process is over. Finally Susan Johnston: The Myth of Economic Inequality Menachem Wecker: Business Schools Teach Real Estate Despite Troubled Housing Market The Kosher Gourmet by Diane Rossen Worthington: Farro Salad: An ancient grain is now new again as the base of a tasty tangle of flavorsome vegetables, chickpeas and salami February 10, 2012 Rabbi Nathan Lopes Cardozo: The biblical case against small-mindedness involved diminishing His precious prophet Caroline B. Glick: The Peace Process is over. Finally Lisa M. Krieger: Man with defibrillator demands access to his own heart's information David G. Savage: Why activists may not be in a hurry to have High Court rule on alternative marriage Rachel Koning Beals: Gen X Women Continue to Shrink Gender Investing Gap The Kosher Gourmet by Faith Durand: Who Says You Can't Make Restaurant Favorites at Home?: MANGO AND STICKY RICE February 9, 2012 Jeff Strickler: An argument a day keeps the divorce away, they say Clifford D. May: CAIR's Crusade against The Third Jihad Melissa Healy: Study finds jolt to the brain boosts memory Laura McMullen: 10 Least Expensive Public Schools for Out-of-State Students Kimberly Palmer: How to actually enjoy -- relaxing, financially -- your vacation Emily Brandon: 10 Necessities for a Great Retirement Spot The Kosher Gourmet by Diane Rossen Worthington: Winter Squash and Red Swiss Chard Risotto is Colorful Cozy Cold Weather Fare (includes detailed dos and don'ts) February 8, 2012 Rivy Poupko Kletenik: Tree hostility: The auspicious history of the evolution of Tu B'Shevat Steven Emerson: Planting Trees is Racist?! Warren Richey: Why momentous Prop. 8 ruling might not satisfy gay-rights groups Anne Applebaum: Russia's Potemkin democracy Menachem Wecker: Though Controversial, LL.M.'s Can Lead to Specialized Legal Jobs Emily Brandon: 10 Necessities for a Great Retirement Spot The Kosher Gourmet byDana Velden: Going to the bother of making soup? You know it better be good. This CREAM OF TOMATO SOUP certainly is! And it's a cinch to make, too (Includes techinques and serving secrets) February 7, 2012 Kathleen Hennessey and Christi Parsons: Obama not worried that birth-control move will hurt his re-election chances with Catholics, other faithful Caroline B. Glick: Obama's rhetorical storm Frank J. Gaffney, Jr.: Caught off-guard? President's Super Bowl interview with Matt Lauer gives those who need a reason not to vote for him, a darn good one Suzanne Bohan: Leaping lizards! Tiny reptiles advancing robot design David Francis: How to Avoid an IRS Audit The Kosher Gourmet by Emma Christensen: These homemade energy bars (3 recipes) are far better workout fuel than commercial ones, packing power and taste February 6, 2012 Scott Peterson: Iran's top ayatollah: We're trumping the West Jonathan Tobin: Iran Threatens Israel With Destruction, But the New York Times Doesn't Hear It Jeffrey Fleishman: In newly democratic Egypt, tens of democracy activists jailed, to stand trial; their groups are 'threatening the stability of the homeland' Julie Deardorff : Researchers say antioxidants may not be that effective and could do more harm than good Philip Moeller: Where Smart Investors Put Their Money Mark Clayton: How did Anonymous hackers eavesdrop on FBI and Scotland Yard? The Kosher Gourmet by Joseph Erdos: Vegetable Frittata --- leftovers never tasted so scrumptious February 3, 2012 Rabbi Dr. Warren Goldstein: Living with ideals --- in reality Caroline B. Glick: Fool me twice Jonathan Tobin : Adelsonphobia Strikes in Nevada Caucus Edmund Sanders : Israeli official says Iran is creating missile that could reach East Coast of US Kimberly Palmer : 8 Ways to Get Ready for Retirement Now Victoria Kim: Immigrant-smuggling ring used black drivers to avoid racial profiling The Kosher Gourmet by Faith Durand: A quick cookie recipe: Hazelnut and Olive Oil Shortbread: Sweet, Nutty, and Savory February 2, 2012 Rabbi Yaakov Rosenblatt : Welcome Home, Governor Perry Jim Carney: Wrong number call may have saved her life Reza Kahlili : Ex-CIA spy in Iran's Revolutionary Guard: What Obama doesn't grasp about striking deals with Tehran Kelsey Sheehy : 5 Tips for Choosing an M.B.A. Concentration Rachel Koning Beals : Investors Increasingly Tap Social Media for Stock Tips Tina Susman: For woodchuck rescuer, every day is Groundhog Day The Kosher Gourmet by Leela Cyd Ross : Savory vegetable pie is a taste of European bistro with minimal effort and maximal flavor February 1, 2012 Nara Schoenberg: What to do when you've been dissed Michelle Malkin: First, They Came for the Catholics Brian Bennett: US officials see increasing threat of domestic attack from Iran Lisa M. Krieger: Possible breakthrough in preventing Alzheimer's Emily Brandon: How to Take Advantage of New 401(k) Fee Disclosures Susan Johnston: 5 Apps for Organizing Your Expenses at Tax Time The Kosher Gourmet by Mario Batali: The famed chef's Broccoli and White Bean Soup can easily be a lunch in itself, or a nice antipasto --- and is hard to mess up January 31, 2012 Paul Greenberg: Separation of Church and State works two ways Caroline B. Glick: Hamas and the Washington establishment Frank J. Gaffney Jr.: Uncle Sam is joining in efforts to crack down on Islamists' critics Danielle Kurtzleben: The 10 Worst Cities for Finding a Job Laura McMullen: 3 Tips to Overcome a Bad Grade in College The Kosher Gourmet by Faith Durand: Orzo dish mixes plump, chewy grains with caramelized onions, garlic, mushrooms and sweet potato January 30, 2012 Rabbi Avi Shafran: Blind faith and physics Paul Richter and Ramin Mostaghim: Misreading Teheran's limits -- deadly and economically devastating as they may be -- is a risk administration, Europe seem willing to take Suzanne Bohan: Warning: Nap-deprived tots missing more than sleep, study finds Meg Handley: Banks Revamping Rewards Programs to Woo Customers Menachem Wecker: 3 Do's and Don'ts for Healthy Studying in College The Kosher Gourmet by Diane Rossen Worthington: Butternut Squash Gratin with Tomato Fondue is a combination of the sweet and creamy January 27, 2012 Rabbi Berel Wein: What Pharaoh can teach us sophisticates about being stubborn Caroline B. Glick: Obama: Of course I intend to prevent a nuclear holocaust . . . in a few months Yochonon Donn: In liberal New York City, fervently-Orthodox Jews may soon be getting a district to call their own Jeannine Stein: An inflated ego and thinking you're 'all that' doesn't just make others sick of you, it can make you ill Katy Hopkins: New budget rules may affect how much money you get for college The Kosher Gourmet by Emma Christensen: Barigoule is a light and tangy dish of artichoke hearts stewed in white wine January 26, 2012 Jonathan Tobin: Newt the closet anti-Semite? Ed Koch: To the New York Times, calling for the murder of Jews by those capable of having their incitement taken seriously isn't news Martin Peretz: One Year Later: The Failure of the Arab Spring Rachel Koning Beals: Need to Know info before investing in Muni Bonds this year Jeannine Stein: Mental illness struck one in five U.S. adults in 2010: Report The Kosher Gourmet by Leela Cyd Ross: Curried Coconut Carrot Soup. Need we say more? January 25, 2012 Andrew Silow-Carroll: Speak politics the Jewish way! Richard Simon: House passes two bills endorsing the use of religious symbols at military memorials Fred Weir: Putin: Multiethnic Russia cannot survive as a US-style 'melting pot'; must find its own way Susan Johnston: 5 Sneaky Coupon Strategies Consumers Should Watch Out For Menachem Wecker: Adding an extra 'm' -- marriage -- to that M.B.A. Melissa Healy: Harnessing shrooms' magic The Kosher Gourmet by Hilary Meyer: 3 Secrets Leave All of the Comfort in this 'Comfort Food', but few of the Calories January 24, 2012 Carol Clark: The price of your soul: How your brain decides whether to 'sell out' Caroline B. Glick: America lost most in 'Arab Spring'. Sadly, many voters still don't grasp the extent Warren Richey: Drug criminal scores win in GPS ruling from conservative-leaning high court Jada A. Graves: 6 Careers to Watch in 2012 Jason Koebler: Who Should Have Access to Student Records? Erika Bolstad: Black conservatives gather to talk about gaining strength The Kosher Gourmet by Diane Rossen Worthington: This luscious fruit bread marries toasted pecans with juicy pears. Perfect with a pot of tea January 23, 2012 Melissa Dribben: Jewish voters to play a key role in Florida's Republican primary Stephanie Hanes: Toddlers to tweens: Relearning how to play Jack Kelly : Still ignoring history Rachel Koning Beals: Awkward Questions You Must Ask Your Financial Adviser Jordan Rau: In quest to grow, Catholic hospital system will announce this morning its break from church Ali Safi: U.S. envoy gives Taliban terms for peace talks The Kosher Gourmet by Emma Christensen: Spanakopita is a golden pie that manages to be healthy yet still taste indulgent January 19, 2012 Clifford D. May: How terrorists lose their stigma Suzanne Bohan: Vanquishing social anxieties without drugs Lisa Fernandez and Sean Webby: In alternative lifestyle, domestic violence means men as victims and women being abusers Danielle Kurtzleben: The 10 Best Cities for Finding a Job The Kosher Gourmet by Diane Rossen Worthington: Three bean soup with gremolata January 18, 2012 Edward I. Koch: Why the Crocodile Tears, Hillary? David G. Savage: Supreme Court to Principals: You have been warned George Friedman of Stratfor: Iran, the U.S. and the Strait of Hormuz Crisis Jason Koebler: 'Holy Grail' of Flu Vaccines by Next Year Alex M. Parker: The Off-the-Radar Congressional Targets of 2012 The Kosher Gourmet by Susan Russo: Got soft apples? Make Apple-Maple Walnut Breakfast Quinoa January 17, 2012 Frank J. Gaffney Jr.: No-kidding red lines: U.S. response to an Iranian nuke may be bluster, but Israel's won't be David G. Savage: They sued their principals after slandering them online --- now the cases are headed to the Supreme Court Sharon Palmer, R.D.: Believe it or not, your cuppa joe offers potential health perks David Francis: Where to Invest in 2012: With stocks expected to rebound, opportunity abounds for investors Confronting the Car Nerds on their home turf --- the Detroit Auto Show (VIDEO; 3 minutes) The Kosher Gourmet by Emma Christensen: Eleventh-Hour Freezer Pasta, Made Interesting: Ravioli with romesco sauce; Tortellini salad with apples and walnuts January 13, 2012 Chief Rabbi Dr. Warren Goldstein: Expansion Of Spirit (PROFOUND yet UPLIFTING) Ben Lynfield: Israeli lawmakers move to annex Jewish Judea, one museum at a time Rachel Koning Beals:Top Complaints About Daily Deal Sites --- how to avoid missteps Alexia Elejalde-Ruiz: Thriving through touch: Gentle massage helps older people with low mobility improve in mind and body The Kosher Gourmet by Diane Rossen Worthington: Braised Oxtail Stew with Olives January 12, 2012 Warren Richey: Landmark Supreme Court ruling a 'resounding win' for religious groups Warren Richey: Supreme Court says no to new rule on eyewitness testimony Ken Dilanian and David S. Cloud: In secret study, CIA and 15 other U.S. intelligence agencies warn Obama against leaving Afghanistan too soon John Fauber : Statins found to raise diabetes risk in postmenopausal women Katy Hopkins : Consider This Before You Pay for an Online Degree Menachem Wecker : 4 Technology Must Haves for Online Students The Kosher Gourmet by Joseph Erdos: This mushroom and barley soup has an intense -- almost nutty -- flavor that mixes robust with Middle East. It has creaminess without cream January 11, 2012 Shari Roan: Millions of atrial fibrillation sufferers at risk for devastating, but preventable, stroke Tom Hussain: Pakistan -- recipient of more than $21 billion in civilian and military aid -- speeds pursuit of Iranian pipeline, defying US David G. Savage: High court signals it won't be loosening TV's 'indecency' rules Stephen Ceasar: Oklahoma's Islamic law amendment can't go into effect, court rules Rachel Koning Beals: Should You Invest in Bond Funds or Individual Issues? The Kosher Gourmet by Faith Durand : Colorful Lentil Salad with Walnuts and Herbs January 10, 2012 Reza Kahlili: From an ex-CIA spy: US must exploit new split in Iran's Revolutionary Guard Karen Kaplan: Study: Nicotine replacement products ineffective when used in real-life situations Paul Bedard: Study: Is Fox Too Balanced? Rachel Koning Beals: Is it Time to Move into Homebuilder Stocks? The Kosher Gourmet by Carolyn Malcoun: Brothy Chinese Noodles Half the Sodium (and More Than Twice the Fiber!) January 9, 2012 Caroline B. Glick: The land-for-peace hoax (MUST-READ/FORWARD/SHARE) Michael Doyle: Put through legal hell over dream home, couple fought back hard --- all the way to Supreme Court Bonnie Miller Rubin: The new college-admission essay: Short and tweet(ish) Rachel Koning Beals: Why Mid-Caps Stand Out in This Slow-Growth Stretch The Kosher Gourmet by Diane Rossen Worthington: Cumin seed roasted cauliflower with salted yogurt, mint and pomegranate seeds January 6, 2012 Jonathan Rosenblum: Greatness --- and those who sully it Clifford D. May: The Historian, the Diplomat, and the Spy Paul Bedard: Study: Obama Is Late Night's Biggest Joke Rachel Koning Beals: An Investing Guide to Closed-End Funds The Kosher Gourmet by Faith Durand: Slow Cooker Peppered Beef Shank in Red Wine

Jewish World Review Feb. 4, 2008 / 28 Shevat 5768 Preventing a Panic By Mort Zuckerman http://www.JewishWorldReview.com | The fireworks of the primary season, climaxing on February 5, are like having a carnival on a beach while a tsunami gathers force offshore. "Hope" and "Change" as slogans may make people feel good, but they have the same relevance to the financial complexities threatening us as the clueless castaways on Lost, the quirky ABC melodrama. The castaways are truly lost because they don't understand their new world. Understanding our new world should be the first requirement of all the White House hopefuls because what we are facing is a credit crisis so severe that it threatens the working of the economy. And so deep that it may take as long as two years to unwind — even assuming the top policymakers understand how the new world works. The problem is so complex that nobody can give the right answers before knowing the right questions and gathering the right information. This is a much tougher task than Congress applying band-aids of tax and investment relief. The financial community itself is bewildered, unsure of its risks and liabilities and taken by surprise almost daily. The story of the 31-year-old trader at Société Générale, one of France's largest banks, reads like the script of a movie thriller. He bet $73 billion of the bank's money that European and German stock indexes would go up. When they turned down, the bank discovered the unauthorized trades and unraveled them — at the stupefying cost of $7.2 billion. Questions: How could one junior trader have bet so much without senior management knowing? How could the bank fail to monitor properly the sophisticated trading techniques and the computerized analyses that underscored the bets? How could it not be aware of the risks inherent in the incredible leverage by which banks borrow 80 to 90 percent of every $1 they invest? Oversight failure. These failures are shared by many American investment and commercial banks. Merrill Lynch held subprime mortgages exceeding the net worth of the firm. Citigroup had $80 billion of sub-prime mortgages held off its balance sheet in so-called structured investment vehicles. In effect, this meant Citibank had guaranteed the financing to support a massive investment literally unknown to the financial community and much of its management. This at the same time it was holding an additional $50 billion of subprime paper on its balance sheet. These and other banks invested heavily in all this paper because big profits come from borrowing inexpensively in the short term and reaping higher returns from longer-term securities (many of which earned AAA and AA from the rating agencies). Nice, but just as profits are magnified by leverage, the 1-to-9 ratio of cash equity to borrowing, so are the losses. If the price of the longer-term securities grew by 5 percent when the security had been financed to the tune of 90 percent credit, the result was a 50 percent return on the equity. But if the prices fell by 5 percent, there was a loss 10 times greater in the value of the equity. Your original dollar was worth 50 cents. In many cases, the equity was wiped out. The way up is also the way down. The markets provided easy, almost unlimited financing to buy securities. But this bubble depended primarily on another bubble — the one in housing. The assumption had been that house prices would continue to rise, enabling overextended borrowers to refinance the growing equity value in their homes. But when prices began to fall in 2007, mortgagees went into default. Bad enough — it was the first time house prices had fallen year over year since the Great Depression. But worse, the defaulters, like falling dominoes, took down with them the institutions that had invested in subprime mortgages bundled into bondlike securities (collateralized debt obligations or CDOs). The risk in these securities was supposed to be reduced and dispersed by a variety of bond insurance mechanisms (credit default swaps or CDS) — but the rising tide of defaults in CDOs and corporate bonds has imposed heavy burdens on the insurers. The insurers can get the bond they guaranteed, but it is now worth much less than its face value. If the insurer can't afford these losses or goes bust, the bond bounces back to the "original" holders of the CDOs, who bear the losses they thought were guaranteed not to happen. The result can be a fire sale of billions of dollars or securities. It is now clear that the assumptions underlying the pricing of CDOs and the like were based on over-optimistic computer-based evaluation models or on untested historical patterns — especially during periods of acute market distress. Computers can make fast, accurate mistakes: garbage in, garbage out. The rating agencies too often relied on the information provided by the companies issuing these new securities. Now it is clear that this was a blunder, even by the rating companies themselves, a top official at Moody's rating service acknowledged. The net effect is that instead of transforming risks and disbursing them widely, the derivatives have turned out to be a liability. Banks have had to take back tens of billions of dollars of lending onto their balance sheets — bonds that are declining in value, either because the credit of the guarantor has declined or in response to market expectations of more defaults as equities continue to evaporate in home prices. Quite simply, a lot of smart people took a lot of foolish risks. The result has been a bursting of the credit bubble and a dramatic tightening of credit in the financial system. Nobody runs faster than a sophisticated banker who gets scared. Banks are calling in loans or boosting the amount of collateral required to secure financing. Even interbank lending, the core of the financial system, was hobbled because banks had to preserve their liquidity and had lost confidence in the finances of other banks. So, today, the credit system has been virtually frozen. Lending across the economy is plummeting as banks undergo a huge deleveraging, with central banks almost powerless to control this contraction. This poses a grave risk to our financial system since few people even know where the liabilities and losses are concentrated, and they may not know until it is too late. Everybody fears more skeletons will be coming out of the banks' closets. Fed limits. Lower interest rates promoted by the Federal Reserve Bank cannot fully counter the forces of credit and liquidity contraction created by these large losses, which in the case of banks may require them to reduce their loan portfolios by a multiple of 10 times those losses. Further, lenders are disinclined to lend when credit markets are in turmoil. Many companies, especially small and midsize companies, will now find it much harder to get the money they need to fuel their businesses as banks seek higher rates and more collateral. This freeze will not be corrected until the bad debts and losses work themselves through the financial system. In other countries where a banking crisis was transmitted through to the economy, it took an average of at least two years for growth to return to normal trend lines, and sometimes even longer. It is hard to see how the U.S. economy will bounce back more quickly. The crisis has prompted the president and the House of Representatives to agree to a package of stimulants. By no means will it be adequate to the hour. The depreciation allowances will help only at the margins since lack of demand is the issue, not lack of capacity. Businesses won't develop more capacity until they know their customers are capable of purchasing their products. The tax rebates won't have effect until the summer, and then are most likely to be used to pay off debt rather than be spent in the marketplace. Many older people, having lost substantial equity in their homes, and who will lose more as home values continue to shrink, will now begin to save out of income and thus reduce their consumer spending. The December unemployment rate hit 5 percent, the clearest harbinger of the future. Other labor market indicators are similarly negative, including initial and continuing job layoffs and the assessment of job availability. Now some 23 states are estimated to be in a recession, and seven more are verging on a recession. Quite simply, this financial crisis is the worst since the panic that led to the Great Depression. As a result, the recession may well be deeper and/or longer than any since the end of WWII. No one knows where the bottom is. That is why the level of confidence in both consumers and producers has declined — and must be restored if the financial fiasco is not to turn into a crisis for the broader economy. The first pressing issue — and there is no time to lose — is to get more equity into the bond insurers before the rating agencies downgrade them, or they go bust, and create a devastating financial panic. As former Secretary of the Treasury Lawrence Summers pointed out in the Financial Times, "Their failure or loss of an AAA rating is a potential source of systemic risk." The prime official responsibility for getting the repairs started swiftly falls on state insurance regulators. The New York state insurance superintendent, Eric Dinallo, has led the way in asking banks and big investors like Warren Buffett to inject fresh equity. But clearly there should be a national policy with the Fed involved. The second pressing issue is to see what more can be done to rebuild confidence in the financial system. There is one imperative that should drive these reviews. The amount of bank borrowing and leveraging and its inevitable deleveraging must never be allowed again to convert a banking crisis into an economic crisis. The Federal Reserve and the Congress will have to improve, directly or indirectly, scrutiny of the activities of the financial industry that migrated outside normal review. New financial instruments, including default swaps, will have to be regulated and so, too, will the rating agencies that almost literally took the place of the Federal Reserve in controlling lending capacity through securitized obligations. We have yet to see the problems emerging from the securitization of credit card debt, auto loans, and consumer debt, which will also have to be reviewed and incorporated into a reasonable regulatory system. It would be revealing to see — before February 5 — how the candidates in either party respond to the knotty issues. Our perilous times require expert knowledge and managerial abilities, in addition to uplifting rhetoric. Every weekday JewishWorldReview.com publishes what many in in the media and Washington consider "must-reading". Sign up for the daily JWR update. It's free. Just click here. JWR contributor Mort Zuckerman is editor-in-chief and publisher of U.S. News and World Report. Send your comments to him by clicking here. ARCHIVES © 2005, Mortimer Zuckerman

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