A lot of shares traded Friday.
Posted on 03/17/2008 1:48:03 AM PDT by bruinbirdman
The dollar tumbled and stock markets were left reeling after the Federal Reserve unveiled new measures designed to prevent a meltdown in global financial markets and Bear Stearns was sold for $240m.
Meeting over the weekend, Fed Chairman Ben Bernanke cut the so-called discount rate at which it is prepared to lend to banks to 3.25pc and said it will lend more to the 20 big banks that make the market for US government debt.
Coming a day before the Fed was scheduled to meet on interest rates, the action signals that the central bank is increasingly fearful of an implosion in markets. Vincent Reinhart, a former director at the Fed, told Bloomberg News that the move's "got to tell you the economy is in a pretty precarious state."
The news sent shares in Asia tumbling, with Japan's Nikkei 225 down more than 3pc, Hong Kong's Hang Seng index off more than 4pc and the dollar crashing to a new low against the euro.
The greenback, which has been battered so far this year, also fell against the yen and reached parity with the Swiss Franc. David Goldman, a strategist at Asteri Capital in New York, said: "Something is systemically very wrong and we're at a very dangerous moment."
Separately, JPMorgan announced it will buy Bear Stearns, the second-biggest underwriter of US mortgage bonds, for $240m. Shares in Bear Stearns crashed almost 50pc on Friday amid rumours of a cash shortage.
US Treasury Secretary Hank Paulson defended the bailout out of Bear Stearns, arguing that "our focus, our No. 1 priority is the stability of our financial system."
A buddy of mine works at JP Morgan. He told me that they’re positioned to be the premiere powerhouse on the block when this thing is all over with.
As an aside, I predict that this episode will wind up with the introduction of the Amero. It will take a while to get there, but the trauma will be deep enough and persistent enough to overcome concerns of the loss of sovereignty. Just my prediction- I hope I’m wrong.
You do understand that this isn’t just about banks someplace far away, don’t you? This will have a serious — even devastating — impact in places far from Wall Street.
So who threw out that large faction of “productive but undocumented workers?”
Certainly not the government.
I’m in the same boat you are. What I fear most immediately is a redestributative attack on savings and investments.
Long term I worry about the prospects for the coming generations, especially if the reaction is more government intrusion into the economy.
T-minus 3 hours, 48 minutes and counting.
Like the cutthroat days of Laissez faire. JP Morgan Chase gobbles up Bear Sterns, one of the largest global investment banks and securities trading and brokerage firms in the world, for 10 cents on the buck.
Bear Sterns survived the Great Depression.
yitbos
Any idea how many employees Bear Stearns has?
Won't happen.
Any unlikely scenario along those lines would be all the currencies one might think would join an "Amero" would just peg their present currency to the greenback.
yitbos
Yep...I know that some people here think every brown face they see is illegal, but even the immigration conservatives have noted that the crackdown post-collapse has resulted in a significant number of illegals voluntarily leaving. At the same time, looking at the front lines of the issue (ag business people looking for people to pick crops) see a significant decline in available workers. People without jobs or who can’t stay in the country don’t pay their mortgages.
A lot of shares traded Friday.
They’ll trim 20% of those folks — at least.
What “crackdown post collapse?”
They’re still here in my neck of the woods and I see no indication of any crackdown whatsoever. Some may be leaving due to the economy weakening, but I see no coordinated effort by government at any level to force them to leave.
So what are they going to do? Make more steel to sell? Grow a few hundred million tons of wheat? Design a car that gets 60 mpg? For that matter, open up and start refining oil fields to the tune of 20 million barrels per day?
What?
Play with the numbers.
That’s what.
What a crock! Please explain the mortgage meltdown and how it directly relates to illegals. I don't buy your sophistry for a moment.
While in some parts of the country I'm sure your right about the illegals, it's not that way, near me in central Indiana.
Around here, people I know only make 40 to 50 grand a year are in 250k homes with 2 sometimes 3 new vehicles, 3 kids, 150 dollar sneakers and Home theaters. Am I jealous.......nope not at all I didn't saddle myself with that kind of debt.
I didn't creatively finance, take out a second mortgage and then max out every credit card I received "free" in the mail.
This isn't about immigration, its about instant gratification.
Please, use some common sense. I can trace it back to Terri Schiavo.
Huh?
Sit on it. Commies cannot have enough foreign reserves if they are to play in the capitalists' big league.
yitbos
Home ownership may be still at a record, but it's not up that much. The root of this problem (and more) is cheap credit. Subprime start in the mid 90's under Easy Al. In 1998 it was dying out, securities based on fixed subprime loans were looked on with disfavor. In 1998 the Fed bailed out LTCM investors but also lowered rates 0.75% and spurred a large increase in subprime adjustable mortgage securities. These took off with absurdly low rates in 2002/3.
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