WHO KILLED WALL STREET: Phil ‘Stop Whining’ Gramm, McCain’s Econ Advisor/Belarus Ambassador

MOTHER JONES: As the news broke of the Lehman Brothers meltdown and the rest of the latest financial crisis, John McCain, speaking at a campaign rally in Florida on Monday, angrily declared, “We will never put America in this position again. We will clean up Wall Street. This is a failure.” And in a statement released by his campaign, McCain called for greater “transparency and accountability” on Wall Street. If McCain wants to hold someone accountable for the failure in transparency and accountability that led to the current calamity, he should turn to his good friend and adviser, Phil Gramm.

As Mother Jones reported in June, eight years ago, Gramm, then a Republican senator chairing the Senate banking committee, slipped a 262-page bill into a gargantuan, must-pass spending measure. Gramm’s legislation, written with the help of financial industry lobbyists, essentially removed newfangled financial products called swaps from any regulation. Credit default swaps are basically insurance policies that cover the losses on investments, and they have been at the heart of the subprime meltdown because they have enabled large financial institutions to turn risky loans into risky securities that could be packaged and sold to other institutions. MORE

WIRED:  Stocks fell sharply around the world, with the benchmark Dow Jones industrial average in the U.S. tumbling more than 300 points, or more than 2.5 percent, before rebounding slightly. London fell as much as 5 percent and Frankfurt as much as 4 percent before recovering somewhat; European indexes generally were down 3 to 4 percent as floor trading ended. Bank stocks are among the biggest losers. The major Asian markets—Tokyo, Hong Kong, and Shanghai—were closed for a holiday today. Australia closed down 1.8 percent, while Singapore fell 3.3 percent. Credit default swaps also soared across the board. Even financially sound companies like General Electric were hit by investors suddenly skittish about everyone’s creditworthiness. G.E.’s finance unit, GE Capital, saw its swaps jump by more than half today, to 348 basis points from 209 basis points on Friday. That means the cost to protect $10 million of GE Capital’s debt rose to $348,000 a year today from $205,000 last week. MORE 

NEW YORK TIMES: The churn of a rapidly changing financial landscape left Wall Street cold on Monday, as a late afternoon sell-off sent the stock market to its worst daily loss in seven years. The Dow Jones industrial average plummeted more than 500 points — its worst session since the days after the Sept. 11, 2001 terrorist attacks.