Posted on 10/01/2008 10:14:44 PM PDT by Freedom_Is_Not_Free
Some selected excerpts from the article...
"This is what a credit crisis looks like. It’s not like a stock market crisis, where the scary plunge of stocks is obvious to all. The credit crisis has played out in places most people can’t see. It’s banks refusing to lend to other banks — even though that is one of the most essential functions of the banking system. It’s a loss of confidence in seemingly healthy institutions like Morgan Stanley and Goldman — both of which reported profits even as the pressure was mounting. It is panicked hedge funds pulling out cash. It is frightened investors protecting themselves by buying credit-default swaps..."
snip
“If we don’t do this,” Mr. Bernanke said, according to several participants, “we may not have an economy on Monday.”
snip
"If money market funds became fearful of buying commercial paper, that would make it far more difficult for companies to raise the cash needed to pay employees, for instance. At that point, it would not just be the credit markets that were frozen, but commerce itself."
snip
“Breaking the buck was the Rubicon,” said a federal official. “This was the first time in the crisis that you could see stories talking about how it was affecting real people.”
snip
"Although there were suggestions for a “bank holiday” — a temporary, nationwide closing of banks, which had not been done since 1933, to stem panicky withdrawals — Mr. Bernanke and Mr. Paulson dismissed the idea, fearing it would do far more harm than good by scaring people needlessly. They had both assembled teams to map out drastic rescue plans — the “break the glass” plans. Almost from the start, they concluded the best systemic solution was to buy hard-to-sell mortgage-backed securities. "
(Excerpt) Read more at nytimes.com ...
"Behind the scenes, the credit markets had almost completely frozen up. Banks were refusing to lend to other banks, and spreads on credit default swaps on financial stocks — the price of insuring against bankruptcy — veered into uncharted waters."
"Out of the blue, it seemed, there was a run on the $12.3 billion Putnam Prime Money Market Fund. That meant the money fund contagion was spreading. Because of huge withdrawals, Putnam decided it had to shut the fund, and distribute the cash to shareholders."
I am a little bit slow, so help me out.
Can’t a sound bank borrow from the federal reserve?
If a bank does not loan money, how does it make money since loans are their principle source of income?
Is it not more likely that this story should go something like “banks with poor credit or a igh exposure to bad investments, like individuals with no credit, are having an increasing problem in borrowing money?
Just a question.
I’m a little bit slow too and am not sure of the answer to your question, but I suspect your version wouldn’t be scary enough.
Well, I don’t know how bad it can be. They are still running ads for top-of-the-line Mercedes on Bloomberg TV when they take a break from showing whining reporters telling politicians that they have to repackage this bailout and resell it to us poor, dumb slobs.
They can all go pound salt.
This is scarier than lead-based paint, radon, Africanized killer bees, black mold, and global warming COMBINED!!
I hope the government will save me.
But mostly I hope the government will give me free money like they give to deadbeats.
Here are a couple of links that may explain why the unbelievable sense of urgency is being promoted. It's not just the sub prime market at risk.Good, non US, present day summary. http://www.telegraph.co.uk/finance/comment/ambroseevans_pritchard/3118994/Financial-Crisis-So-much-for-tirades-against-American-greed.html
What's really going on: http://www.financialsense.com/fsu/editorials/amerman/2008/0917.html This one can be tedious to read.
If they try to put the Bullsheet Bailout back - IN.
AMERICA MUST run on the banks and pull its money - OUT.
The Libor rate, the rate the banks charge each other went up from 2 to 6..... I heard on the news...but still there is a lot of money being loaned....just at a higher rate...which I think is good.
The credit is NOT frozen up...
the amount of all bank credit at all commercial banks, which is reported weekly. For the most recent week reported, the one that ended on September 9, this credit amounted to $9,406 billion, which is only slightly less than the all-time peak of $9,485 reached in the week that ended on March 26, 2008
the Fed announced $630 billion in new central bank credits Monday, >>>half of it to central banks abroad<<<. And oh, the FDIC guaranteed to Citigroup all losses beyond the first 13% on Wachovia’s mortgage book, which is around $300 billion.
HALF! OF IT TO CENTRAL BANKS A B R O A D!?!?!?
John missed an opportunity to stop the Bailout and to call Obama out and have him try to defend giving 700B to Wall Street.
Well there is still time to flip flop on this for MCCain. He can say “we HAVE TO LISTEN TO AMERICAN”! and then McCain could help stop the Bullsheet Bailout.
ANd Sarah could crush Plugs on it.
America can see that this would not be the last, but the beginning of bailout after bailout after bailout, including apparently, banks ALL OVER THE STINKING EARTH.
These bailouts never come with any warranty saying that it will work, they don’t come with any statement that it will be the last one.
We need to take names of who supports this giant theft against America.
“If we don’t do this,” Mr. Bernanke said, according to several participants, “we may not have an economy on Monday.”
Well we are still here Bernee.
As soon as the plan was announced the markets started up.
That's why Bernanke got the Senate on board fast.
Huuraaagghhhh!!!(from the “Green Army”)...:0/
What I want to know is there any chance Soros and the DH ceo at Progressive Ins could take a heavy hit?
[The strategy of forcing political change through orchestrated crisis. The "Cloward-Piven Strategy" seeks to hasten the fall of capitalism by overloading the government bureaucracy with a flood of impossible demands, thus pushing society into crisis and economic collapse.]
1. The first stage being "demoralization"2. The next stage is destabilization.
3. The next stage of course is crisis.Soviet Subversion of the Free Press (Ideological subversion, Destabilization, CRISIS - and the KGB)
http://www.freerepublic.com/focus/news/2095202/posts?page=1
[YURI BEZMENOV:No they serve purpose only [up] to the stage of destabilization of a nation. For example, your leftists in [the] United States; all these professors and all these beautiful civil rights defenders. They are instrumental in the process of the subversion; only to destabilize a nation. When the job is completed, they are not needed anymore. They know too much. Some of them, when they get disillusioned - when they see that Marxist-Leninist come to power. Obviously they get offended; they think that THEY will come to power. That will never happen, of course; they will be lined up against the wall and shot.]Soviet Subversion of the Free Press (Ideological subversion, Destabilization, CRISIS - and the KGB)http://www.freerepublic.com/focus/f-news/2095202/posts
[The strategy of forcing political change through orchestrated crisis. The "Cloward-Piven Strategy" seeks to hasten the fall of capitalism by overloading the government bureaucracy with a flood of impossible demands, thus pushing society into crisis and economic collapse.]
1. The first stage being "demoralization"2. The next stage is destabilization.
3. The next stage of course is crisis.Soviet Subversion of the Free Press (Ideological subversion, Destabilization, CRISIS - and the KGB)
http://www.freerepublic.com/focus/news/2095202/posts?page=1
Funny how the crisis brewed up just a few days late to save Lehman, but just in time to rescue Goldman Sachs’ investments in AIG and to encourage Buffet to buy up billions of GS.
Good thing that those HTML strikeout codes don't cost anything to post.....
Thus abusing both elements of his screen name.
Unless the entire original post was meant as sarcasm, in which case I do apologize.
What do you know? Monday come and gone and we still have an economy ... and not much changed from Friday's economy!!!
Of course, we all have to understand that we only have Smilin' Ben's and Happy Hank's word for all the disasters that MIGHT happen if this bill don't get passed.
The worse it is, the more pressure is on both the conservatives and the liberals.
The liberals are the ones that have panicked.
The conservatives should use that hysteria to force the necessary legislative changes needed to bring sanity to the banking and financial industry.
Hysteria at the scene of an accident does not save the victim, neither will it save our economy, our nation or our Constitution. Have you noticed that at the scene of any really bad accident, the person or persons who keep their cool and think are the ones that save people? We need the same kind of cool thinking under pressure.
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