Analysis: Congress repeats 1930s errors with bailout vote
There have been worrying signs in the United States that the financial crisis is starting to unsettle bank customers. Sketchy data suggests that people are moving deposits out of banks that are considered more at risk than others. This has not yet turned into a full-scale bank run, but any more uncertainty could change that.
Fear of bank collapse hits the euro zone
Economic recovery, in other words, has been put on hold. And there's a potential monster stalking the euro zone: fear of a bank collapse.
Intuitive Blogger: Bull shit Tony, absolute bull shit(and the same for those weapons of mass destruction). I am not an economist, but I have been concerned about a potential world credit (and peak oil) melt down for over a year now and there are many blogs talking about this on the web. What kind of world are you living in?
And the White House (back in July 27 2007) was bullshitting all along -- also:
White House says to traders - don't panic The White House tonight made a concerted attempt to inject fresh confidence into the world's battered stock markets as share prices suffered a fresh day of falls on fears that a looming credit crunch will end an era of cheap funding for corporate takeovers.
With Wall Street down 100 points in early trading following Thursday's 311-point plunge, president Bush and his Treasury secretary, Hank Paulson, downplayed fears of contagion from the crisis-ridden American real estate market and claimed that the US economy was strong. http://www.guardian.co.uk/business/2007/jul/27/usnews.money
Intuitive Blogger: And now you are proposing I (as a US tax payer) have to bail out this mess with at least this amount of money?
$2324.50 to be more precise.
(For our information, it would be a lot more as not everyone in the US is a tax payer)
Tax calulations, (thanksPatrick.net) $700,000,000,000 divided by United States Population: 301,139,947 (July 2007 est.) EQUALS $2324.50 (collected for every man woman and child). Intuitive Blogger: My big fat:
Our gaze might be on the markets melting down, but the upheaval we are experiencing is more than a financial crisis, however large. Here is a historic geopolitical shift, in which the balance of power in the world is being altered irrevocably. The era of American global leadership, reaching back to the Second World War, is over.
You can see it in the way America's dominion has slipped away in its own backyard, with Venezuelan President Hugo Chávez taunting and ridiculing the superpower with impunity. Yet the setback of America's standing at the global level is even more striking. With the nationalisation of crucial parts of the financial system, the American free-market creed has self-destructed while countries that retained overall control of markets have been vindicated. In a change as far-reaching in its implications as the fall of the Soviet Union, an entire model of government and the economy has collapsed.
Another day, another bail-out • UK government poised to nationalise Bradford & Bingley • US Congress agrees $700bn deal to take over 'toxic debt' • Tories promise City reforms and curb on public borrowing
Average Americans may be forgiven for not understanding why Congress is moving so quickly to pass this massive bailout package. Sure the economy isn’t great—gas prices are still high, it’s harder to get a home loan, some folks have lost jobs—but why are guys close to Paulson saying things like this (from the Times of London):
We are also hearing this crisis is also going global:
European Lenders Get Bailouts as U.S. Crisis Spreads (Update1)
By Simon Kennedy
Sept. 29 (Bloomberg) -- European governments stepped in to rescue Bradford & Bingley Plc, Fortis, and Hypo Real Estate Holding AG as tremors from the U.S. credit crisis reverberated around the world.
The U.K. Treasury seized Bradford & Bingley, Britain's biggest lender to landlords, while governments in Belgium, the Netherlands and Luxembourg threw an 11.2 billion-euro ($16.3 billion) lifeline to Fortis. Germany guaranteed a loan to Hypo.
The interventions exposed how fallout from the crisis that drove Lehman Brothers Holdings Inc. into bankruptcy and prompted a $700 billion U.S. bank-rescue package has gone global. It also added urgency to negotiations among European policy makers as to how they deal with banking collapses.
I have no idea if this is the end of the world as we know it. All I know is the government wants to fix Wall Street before poverty. Sounds like people going mad to me!
--- REM: It's the end of the world as we know it (I feel fine)
> How long until we see a run on the bank? > My guess is the domino effect will start > September/October 2008. It will be just > before the election...
I may even pull out some cash from my bank tomorrow :)
If you watch the video below you will learn from Paul Krugman a columnist on the Op-Ed Page of the York Times (and professor of Economics and International Affairs at Princeton University) who says the whole system (banking industry) is apparently within days of breaking down. This is John Mc Cain's reason for panicking and stopping his campaign.
We are living through a very sensitive moment in history!
News anchor: "This feels bigger than the election"
This next item is BALDADASH!
The FBI has begun an investigation into four major US financial institutions caught up in the current financial crisis, US media say. As far as I am concerned, there needs to be an investigation but this investigation is a mere political public relations act at this point. The government knows what was going on. We know bank brokers were dishonest and got their $45,000,000 bonuses, but this is nothing compared to the magnitude of the whole problem. This is what is called unchecked capitalism at its worse and when left unchecked, it does not work. Anyone should be able to see this --especially now!
This historical moment has taken 15 months to play out and not 3 weeks as I had initially predicted. Intuition told me buying a house was unsustainable during this bubble. I am glad I was not caught up in this big scam, but now, as a tax payer, I will be bailing out those who created and made money from this mess with $2324.50. Thanks to Patrick.net for working this out:http://patrick.net/housing/contrib/paulson_home.html
Intuitive blogger wrote Jun 25, 2007: >> I think we're on the brink(about two weeks away) >> from an economic breakdown -- a depression as >> close to the 1930's. I am not an economist but >> I have read enough on the web to judge this is >> happening and am writing this down before it happens.
HENRY PAULSON: --Well, what I would say is I won’t bet against the American people. We’re an entrepreneurial people, a hardworking people, and we will work through this. We always do. I wouldn’t bet against the American people, and I wouldn’t bet against the long-term fundamentals of this country. But this is a humbling experience to see so much fragility in our capital markets and to ask, “How did we ever get here?”---
Financial Crisis: US calls on world to save banking systemBy Yvette Essen
Last Updated: 12:04am BST 22/09/2008
The US government last night urged other countries to follow its model of bailing out stricken banks after Treasury secretary Hank Paulson unveiled an unprecedented $700bn (£380bn) rescue plan to prevent a collapse of the financial system
President Bush with US Treasury secretary Hank Paulson, who has announced plans to buy up 'toxic' debts
The proposal would allow the Treasury to buy up "toxic" mortgage-related debts from financial institutions, including US arms of foreign banks, to try to stem the worst financial crisis since the Great Depression. With Congress set to vote this week on the emergency legislation, Mr Paulson took to the airwaves, warning that the massive bailout was the only way to avoid catastrophe and that other countries must take similar measure. "We have a global financial system and we are talking very aggressively with other countries around the world and encouraging them to do similar things and I believe a number of them will," Mr Paulson said.
However, Prime Minister Gordon Brown looks unlikely to follow suit, with a Treasury spokesman saying: "We're not working toward implementing a US -style resolution regime. But the Prime Minister and the Chancellor [Alistair Darling] have made clear that we will take whatever action is necessary in the interest of financial stability."
Mr Paulson and Fed chairman Ben Bernanke have taken the drastic measures in an attempt to stem dramatic losses caused on Wall Street by the collapse of investment bank Lehman Brothers and demise of AIG, once the world's largest insurer.
Are you capable of taking a perfectly good 158-year-old company and turning it into dust? If so, then you may not be earning up to your full potential.
You should be raking it in like Richard Fuld, the longtime chief of Lehman Brothers. He took home nearly half-a-billion dollars in total compensation between 1993 and 2007.
Last year, Mr. Fuld earned about $45 million, according to the calculations of Equilar, an executive pay research company. That amounts to roughly $17,000 an hour to obliterate a firm. If you’re willing to drive a company into the ground for less, apply by calling Lehman Brothers at (212) 526-7000.
Oh, nevermind.
I’m delighted to announce that Mr. Fuld (who continues to lead Lehman since it entered bankruptcy proceedings this week) is the winner of my annual Michael Eisner Award for corporate rapacity and poor corporate governance. The award honors the pioneering achievements in this field of Mr. Eisner, the former Walt Disney chief.
Mortgage crisis looks like a sports match! To me the financial crisis looks like a game of badminton. In this match I see banks are playing against the CDO team (Collateralized Debt Obligations).
Let us suppose the CDO team are winning 14 > 3 and the match point (15 > 3) would create a full blown financial collapse... Gasp! - you can see why government wants to bail out banks to ensure they get this next point right?
So we watch the government dramatically step in (one more time) to bail out banks, this time with700 billion dollars. This imaginary badminton match is not over but intuition tells me the score is not looking good for the banks at all.
Let's observe some of these bailouts.... (Send me feedback if there are any corrections or additions to be made as I can't even keep up any more!)
I don't understand how usually it takes months for changes to occur in government, yet this package of $700,000,000,000 is expected to be drawn up (once again) over this weekendwhile I write this blog. They must be busy this Sunday in Washington drafting up a plan on their notepads. I am sure they would rather be at home enjoying a day with their families. I hope the additional clerks who have to help out have overtime considered.
By the way, another $180 billion bailout happened only last weekend Sept 14th with the Lehman Brothers’ gigantic rescue. I still don't understand how this bank was allowed to divide a 2.5 billion bonus to staff bonus, despite the mess and how the boss Mr. Fuld was awarded $45 million in bonuses euivalent to $17,000 an hour. The New York Times asks: "Are you capable of taking a perfectly good 158-year-old company and turning it into dust? If so, then you may not be earning up to your full potential". http://www.nytimes.com/2008/09/18/opinion/18kristof.html?_r=1&oref=slogin).
On a different subject, I don't quite understand all the media hoo-hah this week about the biggest one day rise in shares since 1970.... Shares have dropped by a significant percentage this past 12 months, so come on! I don't mind optimism, I am optimistic for myself, but hearing news like this makes me wince. FTSC
DOW NAS
OK, well I am going to enjoy my Sunday and I leave it there!
$5 Watch out.... We are heading to $5 gas prices in 2009/2010 (after a very deep recession). Gas prices may go down for a while,even back to $1.90 but this will be short lived... mark my words.... This article below talks about $5 prices already reported...
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