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."
It's about a lot of things that add up. You have to ask, what was the trigger here? Having lots of debt is not a bad thing *if* you can finance it. The question to ask is, why were people no longer able to finance their debt? It's a lot of different things which interact - some job losses here, some inflation there, some tax hikes someplace else, bad monetary and spending policies elsewhere, etc.
NO FED BAILOUT!!!
I agree and would add that homes are generally not income producing and in fact are often the opposite.
It was a joke. The world’s financial markets have nothing to do with illegal immigration, the second amendment or... schiavo.
Please. Spare us your sanctimonious sophistry.
The banks had no legitimate business lending these people money in the first place. Zero.
When I applied for my mortgage, the first thing they wanted was my legitimate Social Security Number. Another question was if I was a US citizen or here legally. None of these people met the first requirement much less the second. Lending to these people was like lending money to a criminal on the lamb who will run at the first sign of trouble. Yet the banks continued on their merry way to give these criminals whatever money they wanted.
The banks involved deserve to lose whatever money they gave these people. Additionally, their loan officers and managers should be sent to jail for either gross criminal negligence or aiding and abetting a fleeing criminal.
This has nothing to do with whether they "have a job" or not. Lots of criminals on the lamb have "legitimate" jobs. They are still criminals and miserably poor loan risks to boot.
The government is negligent, the banks are negligent, and We The People are negligent for electing such fools and allowing these shenanigans to go on in the first place.
Everybody in the know knew this was going on and anybody with half a brain knew it could not end well.
But the politicians were looking for some fast votes, the banks were looking for some fast money, and We The People were looking the other way so as not to offend anybody and be called a racist or nativist.
Illegal immigrants should not be here in the United States in the first place - much less taking out huge loans so they could rent out their overpriced homes by the bunk to other illegal aliens as flophouses to make the payments. Did anybody of sound mind really expect they would hang around when the music stopped.
We are all fools and will now reap what we sowed. We are all going to lose, big time, in this fiasco, except Juan (or whatever his name is but it is probably not the one on the mortgage application) who has absconded to who-knows-where!
der.. I feel dumb lol
Think,....CRA...Community Redevelopment Act behind some of this...I think....
Schumer and Dodd plan to do more meddling....they will welcome this opportunity....
It may be sanctimonious and it may be sophistry but it also has the advantage of being true. In a sense it doesn't matter whether or not the banks should have made better loans. The fact is that they didn't and people let their emotionalism cloud their long term better interests.
Oh.
But, aren't we talking about the U.S. economy on this thread?
Just what we need.
And then they’ll blame the whole damn financial meltdown fiasco on Bush.
F’n great.
The U.S. economy is dependent on the world financial markets at this point.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.