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 ...
I very rarely have participated in selling anything short - however, it is a very much needed component to form a proper market. You can't just have investors lining up on one side of the company's balance sheet. It would be too easy for that company to manipulate their worth and nobody would be the wiser.
Any politician and any employee of a politician, which Paulson is, cannot allow option A to happen. If only to save his own skin. You have to be seen to be doing _something_. Nothing was what the Fed tried during the Great Depression.
Will it only delay the inevitable? Probably. But perhaps the landing can be cushioned somehow. I have no idea how, but it is certainly worth trying.
“even the announcement of the plan has gotten money moving again”
That’s what’s meant by our money being backed by the “faith & trust”... once a critical mass o the population don’t have faith and trust in the system, the system implodes.
“Where do you keep the cash? In the bank?”
At home waiting to take advantage of others errors and foolishness!
Sure they can - now that countries in the Far East own so many of our Treasury Bills. This will actually give the "Oil rich nations" an incentive to not have to peg to the U.S. Dollar anymore.
Buying imports is fine. It's when we don't have equalizing exports that things begin to go haywire. The only thing that we're exporting large amounts of is Treasury Bills.
This is my frustration. Unless someone can show a REALLY good reason how this can work then why is it worth trying?
Sorry. We go bust ... they lose half their income ... for a looooong time.
No buying imports is NOT fine for us, any more. We can no longer affort to pretend things are just fine.
The countries we (should) be exporting to, have been playing us for fools.
Unfortunately, most of our business sector, has obliged.
By being ... fools.
Even Russian Roubles will be worth more than the dollar if this keeps up. And Russia has been having financial problems of its own.
Chinese markets have also been struggling, especially after the Olympics. The world is having an economic slowdown.
Russia is running a large trade surplus.
Something we have evidently forgotten, is important.
Ain’t “free trade” grand?
Pretty general statement with no fact behind it.
And if you want to see "worse" you would already have seen it in the last 2 days without the Fed/Treasury action.
My point was that it is find as long as it is balanced by true exports - not meaningless ones meant to fudge numbers.
Absent this, then we should not be importing like we currently are - especially from China.
I must admit I’m sorely tempted to use this opportunity to greatly lighten my stocks. Of course, since I owned Constellation Energy, Warren Buffet is taking care of some of that for me. :-<
It’s just because frankly, while I understand some of what happens in markets, I have no stomach for knowing I’m losing money. It just bothers me more than it’s worth at this point.
Of course, if I was serious about that, I would have done something today. I didn’t.
Good point. It was good to see some of that “faith & trust” restored this week.
My suggestion: DRILL HERE. DRILL NOW. It may not be sufficient, but it will certainly help.
America’s trade policy has become that of a battered wife.
Series.
We submit, because we’re afraid those whose stuff we buy, will get mad.
What is wrong with us?
How did we get to this point??
I saw it WITH the Fed/Treasury action.
Let's review: the U.S. government nationalized an entire sector of our country and nobody seems to care; the government is creating powers and/or an organization to put us (in reality) $2 trillion dollars further into debt; the massive problems in the derivatives market that threatened to shut down the global economy are still there - and won't be solved by "fixing" the mortgage problem....etc...etc...etc...
Sorry FRiend...I can't give you advice one way or the other. I can only tell you what I've done, and my reasoning behind it.
Don't misread it.
What you saw the last two days was not "faith & trust"
It was "greed & lust"
The fundamentals of the market should have never shown what happened the last two days. It's simply speculators hoping to make a quick buck off of government guarantees. Pretty sweet deal - as long as the U.S. dollar actually means something. When it ceases to - then watch out below...
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