Posted on 09/21/2008 3:05:28 AM PDT by Onerom99
The market was 500 trades away from Armageddon on Thursday, traders inside two large custodial banks tell The Post.
Had the Treasury and Fed not quickly stepped into the fray that morning with a quick $105 billion injection of liquidity, the Dow could have collapsed to the 8,300-level - a 22 percent decline! - while the clang of the opening bell was still echoing around the cavernous exchange floor.
According to traders, who spoke on the condition of anonymity, money market funds were inundated with $500 billion in sell orders prior to the opening. The total money-market capitalization was roughly $4 trillion that morning.
.....
Without commercial paper, "factories would have to shut down, people would lose their jobs and there would be an effect on the real economy," Paul Schott Stevens, of the Investment Company Institute, told the Wall Street Journal.
.....
Paulson knew the $105 billion injection was not a real solution. A broader, more radical answer was needed.
Hours after Paulson made his round of calls to calm the industry, word leaked out that an added $1 trillion bailout of banks was being readied. Investors cheered. At about 3 p.m., news of the plans was filtering up and down Wall Street, fueling a 700-point advance in the Dow Jones industrial average through 4 p.m. Friday.
By that time, Paulson had announced the plan. It included insurance on money market accounts, a move that started in quiet Thursday morning, when the former Goldman Sachs executive saved the country from a paralyzing meltdown.
(Excerpt) Read more at nypost.com ...
Somehow, I do not see turning America into a Socialist State as “Saving the Day.”
That is why.
It seemed a bit risky to me to let Lehman go cold-turkey bankrupt, but Paulson and Bernanke insisted on “market discipline”. Now it seems these brave titans of finance have totally panicked, flip-flopped 180 degrees, and want to give a trillion dollars of public funds to all their best friends. Any chance we can get them to do it with their own money instead of ours?
Yes, my dad who was born in 1920 remembered the Great Depression and the Socialist steps that FDR took to “save America.”
So, I feel 100% confident that my dad, who fought in Europe in WWII, would be strongly opposed to using his tax dollars to prop-up the Stock Market and even more opposed to the administration’s move to Nationalize one of America’s largest corporations.
My Dad was not a Socialist but America is now a Socialist State.
Picking up the economy off the street where it was hit by a bus and putting it in the dumpster along with much of the remaining resources of the economy is saving someone’s day but not the country’s.
When your hearts stops, they jolt you with several thousand volts to get your heart going again. Yes, everyone agrees that doing that on a person with a beating heart will kill them. Capiche?!
In the 30’s we were a stalwart people. We are now a nation of whiners. There is no doubt that today's dumbmasses would clamor for the government to “do something.”
With the rats in control there is no telling what sort of fascist solutions they would impose.
Good Words, Sir.
You, know I never thought I would see the day when American Conservative would cheer actions that brought America into socialism.
Ping to this report.
I agree with you 100%. The actions of the fed were necessary. These people railing against the bailout have no idea how bad things were about to get.
"Their own money" is ours.
Isn’t it wonderful how some good conservatives on FR turn into rank socialists when the socialism is perpetrated by someone ostensibly on “our side?”
So, you advocate the Nationalization of a major corporation, a trillion dollar bail our of banks and the markets and a prohibition on short selling of stocks.
Where I come from, we call all of the above a “Managed Economy” or Socialism and damn close to Communism.
I would imagine that if it were Bill Clinton who began nationalizing industry that those same people would not favor his socialist actions.
As for me, anyone who nationalizes industry is no longer of Democrat or a Republican but rather a Socialist.
If the GOP presided over another deflationary collapse like the 30’s, the rats would be in absolute control for at least the next generation.
We would then only be able wish that Treasury Secretary Paulsen took the timely actions that he did.
“These people railing against the bailout”
This is not a bailout, it is a giveaway. Chrysler (1979) was a bailout; AIG (2008) was a bailout; this is a proposed trillion dollar giveaway that will trash the US dollar and cause most of us to live in poverty for the rest of our lives. Tell me what you think once gold hits $10,000 per ounce.
So, you would be okay with the Federal Government Nationalizing the banks, the auto companies, the airlines and the oil companies?
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