Posted on 10/05/2008 7:46:15 PM PDT by markomalley
Now that Congress has passed the $700 billion bailout bill, will calm return to the economy and Wall Street?
While a semblance of normality may come back to some markets, analysts are reluctant to say that all is cured because the damage to the economy and markets from the yearlong credit crisis has gone far and deep.
GLOOM: Two mourning sculptures outside the U.S. Capitol are memorials to those killed in the Civil War, but critics of a controversial $700 billion economic bailout passed last week have adopted a similar attitude. (Astrid Riecken/The Washington Times)
"Passage of the bailout plan raises expectations that the credit freeze should begin to thaw in the months ahead," said Bernard Baumohl, managing director of the Economic Outlook Group. "But the fact is, no one really has a clue whether this bill will be enough to help fix the balance sheets of financial institutions so they can lend again."
"The U.S. is reeling from two intractable problems," Mr. Baumohl added. "An utter lack of confidence in the economy by consumers and business leaders, and the ever-deepening credit crisis."
(Excerpt) Read more at washtimes.com ...
Seven hundred billion?
Look again it was actually 1.8 *T*rillion...
After that Food Crisis.
Control the People.
I'll see if I can find his exact words on YouTube.
Inflation, high interest rates and our currency getting crushed.
In the very short term, it will do well against the Euro as Europe is in even bigger trouble than us. In the long term, we are going to get crushed.
We are in massive debt, we are a “service” economy and think we can get out of this mess by creating credit/money out of thin air...it will end badly.
A huge deficit to ensure Obama can not implement his socialist plans. What do you think happened to Bill Clinton? He called it Stockman’s Revenge. Read some of Bob Woodward’s accounts of his early days in his administration when he learned he was trapped. He quickly abandoned his populist line of bullshit.
Right now, 11:00 pm EDT Asian markets are down around 4-5%. US DOW futures down $162. Not looking good for Monday morning.
Now what? Read Congress their Miranda rights.
Shoes to fall are like the shoes on a hundred legged centipede. This month, credit default swaps (52 trillion worth) are to be tested beginning tomorrow: Freddie and Fannie will be settled on 6 October, with Lehman on 10 October and Washington Mutual on 23 October. Much rides on thte results. No one knows the settlements that will result or the capacities to meet them, or the number and identity of the swaps involved.
If the Libor stays up tomorrow, and continues up, credit markets will not unfreeze. The rescue of the huge German Hypo Realestate firm ($68 billion US) is a positive development today. Many feet yet to fall. Huge hedge fund redemption demands begin at the end of Dec. Credit card defaults to hit in the first quarter of ‘09. Just a few.
One way or another, the intent is to break us. They’re not even hiding it any more.
BOHICA!
Satyajit Das is the world expert on credit derivatives, having written the largest and most informed book on the subject. He has a blog, and, on Oct. 4 placed a new entry. It is well worth reading on what is to come in the near future...
http://www.wilmott.com/blogs/satyajitdas/
Earlier pieces are worth a review in his archives.
You are optimistic. You did not mention the riots, roving bands seeking food and comforts. You did not mention lost savings, and lost retirements of millions of Americans whose only sin was they played by the rules and saved for retirement. You forgot to mention the inevitable Balkanization of America. You did not mention the destruction of an entire way of life for those heartland American. The Warren Buffett, "Weapon of Mass Economic Destruction" has been deployed and there is absolutely no way to call it back. It has begun the unwinding of the financial system, and nothing on earth can stop it now. The spring was pressed down, pressed down harder, then harder,....and now it is released and the derivitive atom has been spit. It will not be reversed. It will only destroy.
The 700 billion cannot paper over 65 trillion in derivitives which are going to declare themselves in the months ahead.
Congress and Wall Street should be tried for Crimes against humanity and when found guilty punished with the same enthusiam which compelled those at Nurenberg. Before this is over, the death count may well rival what we saw in the Rhineland and all across Europe.
Wall Street realizes that the U.S.government, notwithstanding $700,000,000,000.00, is in technical default. The wall street crowd are many things, but stupid they are not.
Once we are tied economically the next step is political.
Once we are tied economically the next step is political.
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