Posted on 09/27/2008 12:48:53 PM PDT by Chet 99
Kristol: A Genuine and Immediate Crisis
I've received phone calls in the last hour from two economists I respect, one of them Larry Lindsey, the other in a position where he'd prefer not to be named. Both have government experience, neither is alarmist by nature, and they say this:
The huge European bank Fortis is apparently about to fail. The ripple effect on the American banking system could be disastrous, with bank runs, liquidity crises, and stock sell offs possible Monday. Wachovia may well fail next week. As Larry put it, this really will be 1933 soon if we don't move rapidly to stabilize the banking system.
And here's the bad news: the current bailout bill, whatever its merits and likelihood of passage, does nothing to address this.
Congress should pass by Monday simple legislation doing two things:
1. Giving the FDIC authority to provide unlimited deposit insurance through the FDIC for transaction accounts in banks.
2. Authorizing the Secretary of the Treasury to provide unlimited protection of principal in money market funds through the Treasury's exchange stabilization fund.
Maybe my acquaintances (and I) are too worried; maybe this legislation wouldn't quite be the right solution. But I wanted to sound what may be, unfortunately, a needed alarm.
I think it was fine for Kristol to report there’s tension in the European markets- but he didn’t need to name names- this could cause a run on Wachovia.
It’s irresponsible.
Who is Krystal’s friend? Putin?
Someone needs to call the boys on Capital Hill.
I am afraid the house Republicans are doing more harm than good.
Bingo. As much as I detest Paulson and the Greespan/Bernanke team, there IS really a global crisis that was caused by government intervention for which there is no private market answer.
Paulson/Bernanke don’t want bank runs and Kristol (whom I admire) should not contribute to the problem.
Unlimited federal guarantees, unlimited federal protection, unlimited federal funds?
The socialist chickens are coming home to roost.
As ye sow, so shall ye reap.
Obama “ The failure of Fortis is the fault of Repubicans and Bush. McCain is another Bush.It is deregulation in Europe and Anglo-Saxon capitalism that cuased Fortis to fail.
To each according to his need;to each according to their ability.”
I don’t feel so bad now about not having saved enough for retirement. It appears there’s a good chance no one’s nest egg will be hatched. Sad and scarry times.
But, anyone with any sense should have known that this couldn’t go on forever. With the world having gotten so small it was only a matter of time before something snapped.
Or we can take the Biblical approach. If you believe in “end times”, and I do, this may all be a sign.
my fear is that we might just have to bite the bullet, Jim.
I feel like the house Republicans are fighting a losing fight with noble intentions.
Yeah, that's it. It's the house Republicans fault.
There is already a run on Wachovia.
On Drudge as we speak:
WACHOVIA shares plunge as investors question fate...
...early merger talks with CITIBANK
EXACTLY.
We all need to remember a few things.
The markets are run on perception and even emotions.
The markets can behave like a mob.
It takes very little in this climate to send signals that are, as Rummy would say, are unhelpful.
Anyone know?
Thanks!
So who'd rather see the House GOP members roll over and vote for this unconstitutional piece of garbage. That is fiscally irresponsible on every level. We don't need more big government intervention. We need free market solutions and more limited government.
the deck is stacked against them in a fight against Hank Paulson. Boaener is nothing more than a hot head.
I agree with the house republicans in principle. But what is the writing on the wall ?
You can’t solve a problem created by socialism through socialist solutions. Socialism (government) is not the solution to our problem, it is the problem. (RR)
We’ll have to work through it. The entire world will have to work through it. There’s no other choice, other than caving-in to worldwide socialism. The Marxists will have won without firing a shot.
Hang tough!
Someone (the taxpayer) needs to do something quickly to save the Wall Street fat cats and their exorbitant salaries and lifestyles!
The cat is out of the bag on Wachovia already. The stock tanked after hours on yesterday. After losing almost 30% in regular hours trading, the news after market closed that they are desperately seeking a buyer drove them down another 35%. By Monday or midweek latest, Wachovia will likely stop trading like WAMU did, at 16 cents.
I do not think it is irresponsible to speculate on how bad this problem could potentially be. The bank I do business with is locally owned and operated for near 80 years, conservative in their lending, but I still ask my bank manager every couple of weeks lately how things are looking. When I spoke to him Thursday, I did not get a straightforward answer like I’m used to hearing.
I’ve got a feeling your money is going to be safer in smaller, independent banks, rather than the big franchises.
Neil Cavuto is covering this now live- has European market guy on.
Worrisome- not yet alarming.
Curl up into a little ball, then. Times are tough.
picking a fight against Hank Paulson was a waste of time. Again, I agree with them on principle.
but it was never going to anywhere. There was going to be a bail out all along reguardless. and it was always going to be Hank Paulsons plan.
We should have took this stand in 2006 before we lost the election.
I believe the MSM would like to see a run on banks. IMHO.
Strange to even be thinking about this kind of thing.
If the House GOP (and by extension, McCain) is seen blocking a bill over the weekend, and the market melts down on Monday... good heavens...
It may be unfair, but perceptions are what matters in politics...
The one lesson from this whole mess should be that government must stay out of market manipulation and social engineering.
Despite the lies that Democrats are spreading to the American people about “deregulation” being the cause, I think Europe and Asia are going to slap down the US government very hard for what they did with Fannie and Freddie. I think their practices, and the very institutions, will be radioactive from now on.
The free market did not get us into this mess, pass the word.
Government backed loans to the uncreditworthy is not a free market!
Neil Cavuto is on now live- Fred will be up shortly.
I Panicked 5 days ago !!!!!!
Im all Panicked out!!!!!!
Four of the five largest banks in the world, are now Chinese.
Our banks are in trouble, because we are SPENDING all the money in them. On imported trinkets.
“Free trade” is destroying America.
Absolutely.
I can not believe how many Republicans are not taking this seriously. I could not believe Michelle Bachmanns “whistle pass the graveyard” attitude for instance.
Well, it appears we're about to test that question. Does the federal government have an unlimited supply of paper and green ink? What happens to the value of our currency if it does?
Amen, is it going to be like Germany in the 30’s and we elect a “Hitler”?
You don’t know how true that statement is.
Join Camp Obama:
http://www.freerepublic.com/focus/f-news/2091941/posts
Man, I knew this country wouldn’t last forever but I sure didn’t think it would fold in my life time. Wow! Scarry stuff!
FOR GODS SAKE THIS IS NO TIME FOR HUMOR!!!!!!!!!!!
Do you think these kinds of posts could foster more panic (runs on banks) and exacerbate the problem?
BUMP
I have an account at WAMU, and my first instinct was the same, but I held steady. I am however going to open a checking account at my locally owned credit union ASAP.
My wife was on me for a week to take my few grand out of WAMU and put it in our Credit Union Account. Must go do that on Monday. I’m not sure JP Morgan is going to be able to handle the run on WAMU.
In 1932, not only did FDR win - but the GOP in Congress was essentially wiped out. The Dems had over 2/3rds control of Congress as well. There needs to be a deal before the market opens Monday for many reasons.
Isn’t Wachovia on life support? Oxygen, Sucrose IV’s, morphine,..... the whole works?
The Democrats and the MSM are salivating over the possibility of a national economic crash before the election. Remember, the Great Depression is what got FDR elected and the socialists firmly entrenched in power for a generation.
Every socialist dream that the Democrats have - nationalized medicine, massive redistribution of wealth, cutting and running in Iraq, and gutting the military - will all be possible under the guise of trying to recover from the "Bush Depression."
Yep- but it appears there’s a lot of inter-connection between these major financial institutions.
Someone sneezes- by the end of the week they all have pneumonia.
The FDIC is only useful if the gov’t can pay the insurance.
Whew! I thought that Billy was going to propose sending $700 billion more to Europe to buy up their bad mortgages too.
chuckle, har, har.
Brigadeers still live among us.
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