Posted on 09/19/2008 5:52:08 PM PDT by politicket
When government officials surveyed the flailing American financial system this week, they didn't see only a collapsed investment bank or the surrender of a giant insurance firm. They saw the circulatory system of the U.S. economy -- credit markets -- starting to fail.
Huddled in his office Wednesday with top advisers, Treasury Secretary Henry Paulson watched his financial-data terminal with alarm as one market after another began go haywire. Investors were fleeing money-market mutual funds, long considered ultra-safe. The market froze for the short-term loans that banks rely on to fund their day-to-day business. Without such mechanisms, the economy would grind to a halt. Companies would be unable to fund their daily operations. Soon, consumers would panic.
(Excerpt) Read more at online.wsj.com ...
It’s hard to figure out what is a “safe investment”, when you find out that the money market funds used for the solid cash portion of every portfolio were on the verge of being bankrupted.
I’ve been joking about having a couple of thousand dollars in cash just in case, but apparently on Wednesday there was a real chance that every credit card in America might have stopped working.
But buy that $100K house for $40K right now while you still can, and you have yourself a deal. After all, you need to live somewhere. Later, you can dig up the gold you buried in the backyard and trade it for however many yuan the dollar value has been replaced with.
This is the elephant in the living room that nobody is talking about. Thursday morning this was the big story. Thursday afternoon, it had vanished amidst the ongoing turmoil. I believe this is what really spooked Paulson et al into the "mother of all bailouts".
The other thing I find amazing is the modest number of replies on these threads. This is the biggest news in my lifetime and everybody is off talking about Sarah Palin's emails. Is everybody in shock that this is going down and can't face the reality that America is broke?
Osama bin Laden said he wanted to bankrupt America. We just may save him the trouble and do it ourselves.
You would of thought Long Term Capital Management would of taught them something.. they(meaning the big banks) had to bail them out.
Funny thing was that instead of learning they all did something although they thought to a lesser degree of leverage and exposure.
Boy were they wrong.
I never understood allowing short selling in the first place.
Where else in the market can you borrow something.. sell it.. and then buy it back later? Real Estate?
I say get real.
Market forces are about buying and selling.. letting the market determing the price of something.
Short sellers create artfical activity that would otherwise never take place... and yes that means when short sellers close a gap too.
Short selling is gambling.. always has been.. and I believe never been healthy for a market.
I hear you. I am livid with rage at these people squandering the wealth of the most egalitarian economy the world has ever known because of a fear of standing up to class warfare tactics.
If you believe in the free market you will see that shorting is actually the free markets at work.
Illegal naked selling (sliding thru the loopholes by not actually taking possession of shares you borrow) is another story.
Paulson: Government Crafting Plan to Rescue Banks From Bad Debts
Fox News.com | AP
Posted on 09/18/2008 8:19:12 PM PDT by Danae
http://www.freerepublic.com/focus/f-news/2085571/posts
Paulson plan could cost $1 trillion
The Politico
Posted on 09/19/2008 8:18:13 AM PDT by Sub-Driver
http://www.freerepublic.com/focus/f-news/2085884/posts
The Meltdown in a Nutshell?
Me | 9/19/2008 | Me
Posted on 09/19/2008 11:51:15 AM PDT by agooga
http://www.freerepublic.com/focus/f-chat/2086039/posts
Interesting One Hundred Year Stock Market Chart (Perspective)
Stockcharts.com
Posted on 09/19/2008 9:49:17 AM PDT by Crimson Elephant
http://www.freerepublic.com/focus/f-chat/2085951/posts
Stocks surge on report of entity for bad debt
Yahoo Finance | 9/18/2008 | Tim Paradis
Posted on 09/18/2008 12:38:31 PM PDT by politicket
http://www.freerepublic.com/focus/f-news/2085270/posts
Treasury will insure public offered money funds
Market Watch | 09/19/08 | Steve Goldstein
Posted on 09/19/2008 5:11:16 AM PDT by TigerLikesRooster
http://www.freerepublic.com/focus/f-news/2085733/posts
SEC to temporarily ban short-selling: report
Marketwatch | 9-18-08 | Robert Schroeder
Posted on 09/18/2008 5:36:14 PM PDT by RKBA Democrat
http://www.freerepublic.com/focus/f-news/2085463/posts
Washington moves to shore up money-market funds
MarketWatch | 9-19-08 | Sam Mamudi et al
Posted on 09/19/2008 5:45:09 PM PDT by RKBA Democrat
http://www.freerepublic.com/focus/f-news/2086238/posts
Obama denies Franklin Raines ties
Politico | September 18, 2008 | Ben Smith
Posted on 09/18/2008 5:44:59 PM PDT by RatsDawg
http://www.freerepublic.com/focus/f-news/2085473/posts
On the Outside Now, Watching Fannie Falter (Franklin Raines advises Obama)
Washington Post | Wednesday, July 16, 2008; Page D01 | By Anita Huslin
Posted on 09/18/2008 5:50:54 PM PDT by Perdogg
http://www.freerepublic.com/focus/f-news/2085476/posts
On the Outside Now, Watching Fannie Falter
(Proof Obama Is Lying About Raines)
washington post | 7/16/2008 | Anita Huslin
Posted on 09/19/2008 10:08:33 AM PDT by milwguy
http://www.freerepublic.com/focus/f-news/2085965/posts
Breaking the Bank (connecting the Obama subprime dots)
The American Spectator
Posted on 09/18/2008 6:32:25 AM PDT by wilco200
http://www.freerepublic.com/focus/f-news/2084995/posts
Fanny, Freddie, and Obama
Washington Prowler | 9/8/2008 12:08:38 AM
Posted on 09/18/2008 6:50:46 PM PDT by 11th_VA
http://www.freerepublic.com/focus/f-news/2085520/posts
Franklin Raines [cached version of Wikepedia entry before changes]
Wikpedia (cached) | 9/18/08
Posted on 09/18/2008 6:17:41 PM PDT by mathprof
http://www.freerepublic.com/focus/f-news/2085498/posts
Raines, Federal Regulators Reach Settlement (Raines: $24.7 Million)
Washington Post Biz Blog | 9-19-08 | David S. Hilzenrath
Posted on 09/19/2008 9:33:47 AM PDT by STARWISE
Edited on 09/19/2008 9:38:14 AM PDT by Admin Moderator. [history]
http://www.freerepublic.com/focus/f-news/2085937/posts
Fannie Mae Enron?
Wall Street Journal | October 4, 2004
Posted on 09/18/2008 6:29:26 PM PDT by 11th_VA
http://www.freerepublic.com/focus/f-news/2085506/posts
Fannie Mae CEO to Democrats: You Are Our ‘Family’ and ‘Conscience’
NewsBusters | September 18, 2008 | P.J. Gladnick
Posted on 09/18/2008 6:30:41 AM PDT by PJ-Comix
http://www.freerepublic.com/focus/f-news/2084994/posts
2005 Video: Fannie Mae CEO addresses
Obama & the Democrat Black Caucus, his “Family”
NakedEmperorNews on YouTube
Posted on 09/18/2008 11:33:12 AM PDT by Jim Robinson
Edited on 09/18/2008 12:20:55 PM PDT by Jim Robinson. [history]
http://www.freerepublic.com/focus/f-news/2085235/posts
Raines says housing bubble won’t burst (Obama housing advisor in 2003)
Washington Post Biz Journals | 6-6-03 | Jeff Clabaugh
Posted on 09/19/2008 10:20:08 AM PDT by STARWISE
http://www.freerepublic.com/focus/f-news/2085977/posts
Freddie & Fannie Unconstitutional Bail Out Using What?
The National Expositor | 21 July, 2008 | Devvy Kidd
Posted on 09/19/2008 6:25:34 AM PDT by kellynla
http://www.freerepublic.com/focus/f-news/2085789/posts
Yet Another Bailout - Taxpayer Tally ( $800 Billion...for starters )
cnnmoney.com | September 18, 2008 | Jeanne Sahadi
Posted on 09/19/2008 4:22:12 AM PDT by kellynla
http://www.freerepublic.com/focus/f-news/2085706/posts
And Option A won't?
Sure seems like National Socialism to me.
Nope.
The Oil rich nations cannot afford for the West to go through a financial collapse. I even wonder if this whole thing was not engineered to force an infusion of massive capital assets to flow back to the West from the terrorist supporting Arab oil magnates.
"I absolve you of your sins, now go and sin some more."
I remember when I was younger and dumber, and thought those in charge were the best and brightest. Now I see they are the corruptest and stupidest.
I am not trying to start an argument...but you don't understand the fundamentals of economics. You might be elated by Paulson's actions yesterday, but will you be as elated when it is shown that his actions have made the matter worse in the coming weeks, months, and years?
What if I said less than 1%.
I guess that wouldn’t be saying much in a trillion dollar bill.
:-)
Yesterday and today proved that this is not the case. Investors have looked at the announcement and said to themselves: "Wow! The government is going to protect financial institutions against losses - even to the point of Money Market Funds, and they're going to keep other investors from shorting absolutely any financial company? Let's jump out and buy lot's of that - there's no risk!"
They made lots of money if they were day traders, but the investors (speculators) jumping back in for a long-term hold are in for an unpleasant surprise.
All we can do is warn people my FRiend...
Simple solution:
BRING AMERICAN JOBS HOME.
Stop buying imports.
If it takes a trade war, then bring it on.
We are shipping the equivalent of an entire Fortune-500 company to China EVERY MONTH.
What did they suppose would happen?
DUH.
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