No worries: Vatican money is safe

In case you were wondering, the Vatican isn't going under anytime soon:

top official of the Vatican bank has offered assurances that its deposits are safe from the world financial meltdown, an Italian Catholic magazine said Monday.

Angelo Caloia said in interview released Monday, days ahead of publication in Famiglia Cristiana magazine, that the bank only makes safe investments.

"Our assets are solid and we have no lack of liquidity," said Caloia, president of the supervisory council of the Institute for the Works of Religion—the bank's official name.

The bank's depositors are religious orders, dioceses, Roman Catholic charities, other religious organizations and the Vatican itself.

In a rare interview, Caloia said the bank stayed away from derivatives—the financial instruments blamed for many of the steep loses in the current financial meltdown.

Caloia was also quoted as saying that the bank makes no loans and as a result "we have no uncollectable losses." (AP)

The Catholic Church in America, being the richest in the world, is heavily responsible for the operating expenses of the universal Church:

The Rev. Thomas J. Reese in his book "Inside the Vatican" said a cardinal told him in 1994 the bank had $4 billion in deposits and annual income of $40 million.

The Vatican, in its annual financial statement issued in July, reported it had been hurt by the weak dollar as many of its contributions come from individuals and dioceses in the United States. It listed a deficit of some $14 million in 2007.

The Vatican is very prudent with its investments, overall, and it is my rough guess that many Catholic organizations in America try to practice the same prudence. After all, we're not out here to make money, just cover costs.

So don't expect a Vatican IPO anytime soon, the grace of the Holy Spirit never fails.

Ph/t: AmP sister Catherine.

European and American bishops talk about the financial crisis

An EU perspective:

Members of the Social Affairs Commission of COMECE met in Paris on 8-9 October for their annual meeting. Their exchange of views on the topic of "The future of social protection and social policy in Europe" was marked by the crisis in the financial markets and its consequences for social policy in Europe.

At the end of the meeting, Bishop Reinhard Marx, archbishop of Munich and President of the Commission, said: "At the present time it is the case that the governments of the EU should undertake all possible efforts to end this crisis of confidence which is undermining the financial markets. The social teaching of the Church has for a long time recognised the idea of global governance in order to bring justice, transparency and responsibility into the world's financial markets. Now the time has come to implement this social teaching. It is also important for our governments, as well as for the EU-Institutions, to start caring for the situation of those citizens who - without being responsible - will nevertheless have to carry the social consequences of the financial crisis. We have arrived at the precise moment where the European social model should prove itself in order to avoid turning the financial crisis into a political and social crisis."

Archbishop O'Brien of Baltimore, the first diocese of the United States, talks about the books:

These are uncertain times. Banks are failing, Wall Street is reeling, and the cost of just about everything seems to be through the roof. Talk of bailouts and mergers, record declines and a looming recession – not to mention the fast-approaching presidential election – has much of the nation in a frenzy of uncertainty and worry. Understandably, many people, when not peeking through their hands at their investment account statements, find themselves taking inventory these days. This local Church is, too.

The Gospel and our own Church teaching reminds us that we must be good stewards of those gifts that have been so generously bestowed on us. It is a priority of this local Church – at every level – to ensure that our limited resources are used to the best possible effect.

Sober words as we go into our weekend. Let's take stock, pray and keep moving.

Ph/t: Rocco.

These days are a helpful reminder to America that the ideal of "radical individualism" is a mirage: we are all deeply connected to one another, and must (prudently) help shoulder each others' burdens.

Picture: Economic Readjustments ....

... have happened before:

... and they can be good things.

Video: The current financial woes and the cause of them

I'm sure most people are reading the headlines ("Dow plunges 800 points amid global sell-off").

Considering the importance of the topic, I think this video bears re-posting (yes, it's back up):

McCain has decided to start talking about this history on the campaign trail.

The simple fact of the matter, as I see it, is that Democrat policies led more to this current crisis than Republican ones, and that more government involvement was the cause of this problem, and will not be the solution.

"Pope Benedict: unlike great banks, the Word of God doesn't fail"

Filling-out what he was quoted as saying earlier:

On Monday Pope Benedict XVI briefly remarked on the financial crisis during the opening of the first General Congregation of the Twelfth Ordinary General Assembly of the Synod of Bishops. In the aftermath of the “fall of the great banks,” he reminded synod attendees that money is of “secondary importance” to the Word of God, which he called the “foundation of all reality.”

The Pope referenced Christ’s words at the close of the Sermon on the Mount in which he speaks of building one’s house’s foundation upon sand or upon rock.

“Those who build on sand do so only on visible and tangible things: on success, career and money,” the Pope explained. “These seem to true reality, but one day they will pass away", he continued. (CNA)

I found this metaphor helpful as I attempted to wrap my head around what's happening, though it sometimes feels the quicksand. Of course, it is only by appreciating these things as "secondary" that we are free to understand them better.

Catholic Money funded Obama's political machine

As we attempt to live more frugally, and become better stewards of our resources, I'm sure most folks won't be too pleased to find out that money given to the Catholic Campaign for Human Development has been used, well, to assemble Barack Obama's political machine, as Stephanie Block explains, and Deal Hudson puts into context.

Whatever happened to designated contributions?

Update: MM noticed.

Pope Benedict addresses financial crisis, provides clarification

To set our Monday morning in a little better perspective:

Opening today's first session of the Synod on the Word, the Pope saw fit to throw in a word on the global financial crisis, whose effects have buffeted European markets in recent days.

"We now see in the collapse of the great banks: money disappears, turns to nothing," B16 said in an impromptu meditation at the day's start. "And all these things, which seem like the true reality on which we can count, are realities of a second order."

"One who builds his life on these realities, on objects, success, on everything that's visible, builds on sand," the pontiff added, referring to options of sand or rock cited by Jesus in the Sermon on the Mount. "Only the Word of God is the foundation of every reality, fixed as the heavens and more than the heavens, is the reality."

"So we must change our concept of realism," he continued. "The realist is the one who recognizes in the Word of God, this reality apparently so weak, the foundation of everything. The realist is the one who builds his life on this foundation that remains permanently." - Whispers translation

God's stock never falls.

Related: Pope says world financial system 'built on sand'

Video: The failed vote, and Pelosi's partisanship

Plenty of people (rightly, I would say) are pinning a large part of the blame for today's failed vote in the House on Nancy Pelosi's flagrantly-partisan, bald-faced-profiteering speech given just prior to the vote.

Her beginning:

“Madam Speaker, when was the last time someone asked you for $700 billion? “It is a number that is staggering, but tells us only the costs of the Bush Administration’s failed economic policies—policies built on budgetary recklessness, on an anything goes mentality, with no regulation, no supervision, and no discipline in the system.

Her ending:

“Today, we will act to avert this crisis, but informed by our experience of the past eight years with the failed economic leadership that has left us left capable of meeting the challenges of the future. “We choose a different path. In the new year, with a new Congress and a new president, we will break free with a failed past and take America in a New Direction to a better future.”

The full video:

Worst speaker of the house ever? I'm beginning to think so. Especially when you consider the history I've pointed out. She really should take that retreat in San Francisco which she's been offered, and accepted....

24 Days, 13 Hours, 38 Minutes....

Video: What Caused Our Economic Crisis?

It may generate some heated debate, but this video has become very popular (6ook+ views) and makes the case that the current economic woes can be directly tied to democrat-mandated programs under the Carter and Clinton administrations which forced banks to issue faulty loans to people who could not repay them.

The video, while clearly partisan, does not contradict, for instance, the situation described by this 1999 New York Times article.

A root question about this economic downturn must be "what caused it"? Right now, democrat-proposed legislation to force the availability of "affordable home loans" to those who could not repay them seems high on the list of likely causes. Not the exclusive cause, mind you, but an important one.

Okay, have at it....

On L'O.R. adding its two cents to US economic woes

I'm not sure what all to make of this. But I'm trying to come to terms with it [my comments in brackets]. I'd love to start a conversation about this:

The current financial crisis pummeling the United States and beyond is a sign that the so-called "new economy" and its risky investments have failed, the Vatican newspaper said. [I think what failed was unsound speculation, widely practiced and condoned.]

The booming growth of financial markets did not correspond to real growth or concrete development for society because it created an artificially robust gross national product, said a Sept. 24 article in L'Osservatore Romano. [I don't know about this one way or the other, but I'm prone to admit it.]

The only real growth registered in this crisis has been "the commissions, profits of the banks and bonuses for the managers," it said. [That's fairly obvious.]

The article, with the headline "A costly illusion," was written by Ettore Gotti Tedeschi, an Italian economist and professor of financial ethics at the Catholic University of the Sacred Heart in Milan, Italy.

The U.S. financial meltdown has been blamed on "the greed of managers and lack of regulations. But curiously, no one ever refers to the indirect responsibility of the government's economic policy" which, he wrote, tried to cover the lack of any real economic development with a booming Wall Street. [I agree with this.]

He said the U.S. government's proposed bailout may stave off any worst-case scenario for its troubled financial markets, but it will not repair the root causes of the crisis. [Well sure, that's apparent.]

"Despite various attempts, the Western world does not know how to map out a model of development that is capable of guaranteeing stable wealth," the article said. [I disagree with this. I think we did very well for quite some time. It was departing from free market principles and introducing heavy government regulation that turned things sour.]

The West has "not succeeded with its new economy project, it did not succeed with accelerating growth in Asia by transferring low-cost production (there), and it did not succeed after inventing a boom in the GNP through risky financial models that were poorly conceived and badly regulated," it said. [Sure, but that does not mean the West doesn't know what it's doing, it's just losing its way, and badly.]

"In order to maintain this sham GNP, the banks financed things that were not guaranteed" and that should not have been financed, like the subprime loans, it said. Financial institutions created an "economic growth out of debt and, therefore, (created something) very risky," it added. [Yep, I'm with this.]

The article said the lesson to be learned is that nations cannot build a healthy economy or experience real development if it is not based on "balanced demographic growth." [Ah, now that's an excellent point. Demographics are hugely important - but what would the author say about the situation in Italy/Europe?!]

It said the world economy also needs to be run responsibly and transparently with precise rules. [Sure, sure, but good luck.]

Okay, it's Friday. If anyone has some time on their hands, feel free to educate the rest of us.

Chuck Colson on "God & Wall Street"

Consider these my three quotes of the day, Chuck Colson on the economic downturn and the Christian response:

"Today we have an opportunity to see how the Acts 4 church really works—where Christians help one another through tough times and reach out lovingly to our neighbors."

"Michael Novak, the great theologian, has said that Western democratic capitalism is like a three-legged stool, resting on political freedom, economic freedom, and moral restraint. Take away moral restraint, and the stool collapses."

"Above all, remember this: God is on His throne. Maybe the “eat, drink, and be merry” attitude of Americans needed a little adjustment—as does the spiritually casual attitude of the Church."

Read his full column here.

Pope's new encyclical to be released in a matter of days?!

The report, however unlikely (read: very), comes out of India's Economic Times:

MUMBAI: The Vatican, the seat of the Catholic Church, has decided to lend a helping hand to governments across the globe that are trying to tackle the menace of cross-border tax evasion. It will soon come out with an Encyclical denouncing tax evasion and the tax havens that deprive many governments of resources for social justice.

According to the reports in the foreign media, the Encyclical, an official statement of the Pope issued periodically by the Catholic Church, will be released within a few days. The office of the Archbishop of Mumbai said it will be able to comment on the issue only after the Encyclical is released.

It makes sense that Indian presses would be particularly involved in speculation regarding the new encyclical's subject matter and release date. As I understand it, India is particularly notorious for its problems with tax evasion, where actually paying one's taxes to the government is the exception: most people find some way around the laws ("In fact, money flowing into Swiss bank accounts from India is estimated at $500 billion.")

Tax evasion will also be a political issue during our upcoming elections. The release time of this encyclical, whatever it is, will be interesting in the context of those accompanying debates. The local inspiration for the encyclical could well be the recent crackdown on tax evasion in Italy, led by Romano Prodi [source], himself a practicing Catholic who has called upon the Church to speak out on this issue. 1/3 of Italians, it is known, heavily evade their tax debts, creating a huge deficit problem for the government [source]. The time frame, of course, also coincides nicely with the 40th anniversary of Paul VI's encyclical Populorum Progressio [source].

What do we know for sure about the Encylical? One, that it is being worked on during the Pope's vacation [source: Msgr. Ganswein & Fr. Lombardi] Second, the subject matter will include the topics of globalization, tax evasion and offshore banks, as well as outline just guidelines for world trade, with care for the poor [source].

Already the debate over the wisdom of the Pope's perceived position is getting hot, and I guess that it would be too much to ask that people cool off until the time when we actually have a published text to read.

Until then, I'll be watching the ticker tape.

Gas prices and popular (re)action

So, I'm sure everyone is noticing the rising gas prices that accompany summer and it got me to thinking: do they really need to be this high? See, I've read the articles [example] about Exxon Mobile (for instance) earning record profits, and I remain skeptical that they are passing those savings onto us.

The question, however, is how to do something about it. I've received chain emails calling for various grass-roots efforts. The most reasonable of them seems to be the "don't buy from Exxon Mobile" idea. With the idea being that once they notice a hit in sales they would lower gas prices. But I don't think enough people will get organized to make such action effective, and frankly, I think they could last longer than us.

What about political action? Is the big oil "interest" too much to overcome? Why isn't gas a regulated utility, like electricity and water? [related: On Profit and Pump Prices.]

(Incidentally, I don't currently own a car. In fact I probably have one of the smallest "carbon footprints" of anyone I know. I often walk to work, carpool to school, and take flights rarely. I do, however, probably need to replace some light bulbs. And to be honest, I'd really like a car, and I just bought a couple sets of plane tickets.)

Anyway, I'd be interested to hear what my readers think. So this is your chance to voice your thoughts (and/or vent your frustration if you feel so inclined).

Update: In terms of pratical short-term solutions, GasBuddy tries to help you keep track of what prices are like at the pump in your area. A nice little resource for those of us trying to stretch our pocketbooks.

According to this article, the sharp rise in prices this year [graphic] is partially explainable by a "series of refinery outages and breakdowns." And oh yeah, they're predicting that this summer will be one of the "worst-looking" ones we've seen. Goody.