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'Nuthin' but 'Net': Gone-zales, Hello Larry! And Ben Bernanke as 'Captain (Credit) Crunch'

by Chris Colvin, Nightly News writer

Hi. Obsessive? Pedantic? ME? Naaah. And proving it by beginning today's entry with the resignation of Attorney General Alberto Gonzales instead of the dreaded credit crunch CRISIS (which is worrying me more by the day and will take up the bulk of the links...) OK. Maybe a bit obsessive.

Why beat around the Bush? Let's go right to former (Bill) Clinton senior adviser Sidney Blumenthal on how Gonzales had to go because he was nuthin' without his mentor/rabbi/protector Karl Rove.

And Blumenthal's Salon colleague David Cole recounts Gonzales' "dismal legacy."  Glenn Greenwald looks forward to confirmation hearings and the Democratic majority's responsibility to confirm a completely independent figure and not another Bush insider.

Slate's Bazelon and Lithwick take a whack at the same topic.  And their colleague John Dickerson gets psychological. ThinkProgress picks up on former WHU Press Secretary Ari Fleisher's contention that it's Congress that's politicized the Justice Department, a point TP's Faiz refutes with bullet points. And Jonathan Zasloff at the RealityBasedCommunity thinks NYT reporter Sheryl Gay Stolberg is as wacky as Ari Fleisher in her analysis that Gonzales' departure provides a "fresh start" for the President. Ed Morrissey at Captain's Quarters says Gonzales didn't do anything illegal in the U.S. Attorneys matter, but he botched his handling of it and thus, had to go. 

Now to Larry Craig... the conservative Republican Senator from Idaho who, we learned yesterday, pleaded guilty earlier this month to charges of lewd conduct involving a men's room that was a hotbed of gay sexual activity at the Minneapolis airport. Craig's hometown newspaper unloaded a long, long trail of reporting on the subject today. (Hat tip: my colleague Barbara Raab.) 

Greenwald takes on Craig.. and note the quote from Craig who recently signed on as Mitt Romney's Senate co-chair: "Knowing Governor Mitt Romney is knowing someone who, first and foremost, has very strong family values. That is something I grew up with and believe in." BulldogPundit mocks Craig's defensive statement from yesterday.

And this is rich: one of the world's most famous gay conservatives got married yesterday, the same day as the Craig revelation. Andrew Sullivan's guest blogger Jamie  points to this fact as an indicator that a societal sea change is afoot.  Hugh Hewitt has an interesting take -- that if Craig doesn't resign now the Mainstream Media will crank up the "scandal machine." Uhhhh... puzzling.  By the way, that's as close as I could come to a defense of Craig in the right blogosphere today... if you can find something more substantive, leave it in comments. I mean, even the boyz and gurlz at The Corner are posting Craig jokes. (Keep workin' on 'em kids.)

Moving on now to the credit crunch/crisis... (see new icon here!) and the latest bad news: consumer confidence is plummeting, Boston's venerable State Street Bank is said to be on the hook for a serious amount of crappy commercial paper.. the same stuff that sank 2 German banks last week. And the Fed was a lot more worried than it let on at its last meeting, according to the just released minutes.

So let's start with the Fed. Here's the WSJ on the fed minutes. And here's Slate's Daniel Gross' examination of who, exactly, is calling for them to lower the Fed Funds rate and why. (Hint-- it's the rich.)  And Willem Buiter at maverecon writes like an economist (which he is) on the Fed as market maker of last resort and argues against a rate cut. 

We pointed last week to Mega-bond fund manager Bill Gross's proposal that U.S. taxpayers should bailout mortgage holders. (Here's his September market letter, which is quite good until it veers into the horribly bad.) Well, a whole lotta people didn't take too kindly to Gross' idea: Paul Kasriel, Yves Smith at Naked Capitalism (hat tip: Tanta at Calculated Risk), Housingwire And Mike Shedlock at Mish's GlobalEconomicAnalysis peeks into Gross's massive bond fund and sees the real reason for his taxpayer bailout call.

And in case you missed it, here's some recommended reading from the NYT last weekend: Gretchen Morgenson's opus.. "Inside the Countrywide Lending Spree." And Leonhard/Bajaj with Sunday's lead story about home prices falling for the first time.  (Which was borne out today by Case-Schiller.. AP via CalculatedRisk.) Now to the troubled "commercial paper" market which has Boston's State Street Bank in its grip now. Here's Reuters take. A friend of Minyanville paints a scary picture. The London Telegraph looks at the big picture and also sees trouble.

And Mike Shedlock at Mish's Global Economic Forum raises the money market fund conundrum, which came up in this space last week.

Ok, time to get "meta" as they say... Tim Wood of Financial Sense.com says the chickens have come home to roost. (Hat tip opusprime at Tickerforum.org). Jim Kunstler gets really, REALLY dark.  Heather Wokush at the Daily Scare pins it all on Bush. (Hunch: there'll be much more where this came from. And a hat tip: Mortgage implode-o-meter.) And speaking of scary, debt is now scarier than bin Laden, via Peter Morton, Financial Post. But! Gerard Baker in the Times (of London) thinks all us Cassandras are a bunch of idiots. (Perhaps!) And Baker's previous offering is an instant classic... as numerous commenter point out. If you're going to predicate your argument with a Voltaire anecdote, don't undermine your snobbishness by getting said anecdote wrong. (P.S. there's nothing to worry about!) 

And let's end on an even lighter note! Geoffrey Gray at NY Magazine jumps on a trend. Think the markets are about to take a hit? Dump your spouse! (Hat tip NYT Dealbook.)

And this is one funny video (OK maybe I am getting a bit obsessive/pedantic...) (Hat tip: Yal in CalculatedRisk comments):

[Youtube:LWcXLRYXoMg]