Wall Street Bailout

[Cube]

You see I haven't even decided to use it yet because I don't want people thinking that. But I wanted to have the post just in case I change my mind and decide to use it.

[Cube]

Nothing wrong with that

[Mariner*]

Disclaimer:

All material posted by this poster (Mariner*) is for informational purposes only and should not be construed as an offer or solicitation of an offer to buy or sell securities. By reading this or any post by this poster, you are accepting the sole responsibility for your own investment decisions. By reading this post or any post by this poster, you acknowledge that the information hereunto contained within this post (message) is provided solely for general opinionated discussion and informational purposes and therefore should not be considered to be complete, precise, accurate, or current. Beware that posters on not only this message board but other message boards not limited to this website may be increasing or decreasing their share positions in a security regardless of what they are posting and/or may be compensated in some way from a company or 3rd party investor in the company mentioned in the post. Assume that any security mentioned by this poster is owned by this poster and that this poster may be buying or selling or adding or subtracting from a position they may have irregardless of anything said, inferred, construed, or believed. Always do your own due diligence prior to making an investment decision. Never borrow money to buy penny stocks, and always remember that all penny stocks are highly risky. Also be aware that information provided by this poster concerning certain securities contains forward looking statements that involve risks and uncertainties. NEVER INVEST IN A PENNY STOCK UNLESS YOU CAN AFFORD TO LOSE YOUR ENTIRE INVESTMENT. No statement within this post or made by this poster (Mariner*) past, present, or future should be construed as a recommendation to buy or sell a security or to provide investment advice. Past performance is not indicative of future results. Trading securities and options involves extreme risk and professional guidance. This poster does not give specific trading advice nor claim that a thorough analysis of each security mentioned has been conducted. This poster is not a Financial Analysts, Investment Broker, Financial Adviser, Guru or any sort of professional that would be deemed as an individual someone would rely upon for investment advice. You should discuss the asset allocation and risk tolerance level which is appropriate for your personal financial situation with a professional financial planner / adviser. This poster encourages viewers of this post to invest carefully and read the investor information available at the web site of the SEC at: http://www.sec.gov prior to investing in anything. You should also not make any trades or decisions based upon anything said or written by this poster with regard to investments without consulting a professional financial planner/adviser. Always assume at all times that this poster may have a position in any of the securities they mention and could be buying or selling at any time. Any opinions expressed by this poster are subject to change without notice.

[Cube]

Oh geez. It's only for anything frivolous. Like a few years ago being one of thousands of posters named in a frivolous lawsuit because I posted on a board of a stock that someone lost money on. Not to mention that I lost money on it as well.

[Mariner*]

VZ³, the only time I have ever seen such a lengthy disclaimer associated with an individual poster is when they are connected with a stock promotional company.

And then, it is usually posted in some obscure portion of the promoters website.

So, what's your gig?

[Cube]

Disclaimer:

All material posted by this poster (VZ³) is for informational purposes only and should not be construed as an offer or solicitation of an offer to buy or sell securities. By reading this or any post by this poster, you are accepting the sole responsibility for your own investment decisions. By reading this post or any post by this poster, you acknowledge that the information hereunto contained within this post (message) is provided solely for general opinionated discussion and informational purposes and therefore should not be considered to be complete, precise, accurate, or current. Beware that posters on not only this message board but other message boards not limited to this website may be increasing or decreasing their share positions in a security regardless of what they are posting and/or may be compensated in some way from a company or 3rd party investor in the company mentioned in the post. Assume that any security mentioned by this poster is owned by this poster and that this poster may be buying or selling or adding or subtracting from a position they may have irregardless of anything said, inferred, construed, or believed. Always do your own due diligence prior to making an investment decision. Never borrow money to buy penny stocks, and always remember that all penny stocks are highly risky. Also be aware that information provided by this poster concerning certain securities contains forward looking statements that involve risks and uncertainties. NEVER INVEST IN A PENNY STOCK UNLESS YOU CAN AFFORD TO LOSE YOUR ENTIRE INVESTMENT. No statement within this post or made by this poster (VZ³) past, present, or future should be construed as a recommendation to buy or sell a security or to provide investment advice. Past performance is not indicative of future results. Trading securities and options involves extreme risk and professional guidance. This poster does not give specific trading advice nor claim that a thorough analysis of each security mentioned has been conducted. This poster is not a Financial Analysts, Investment Broker, Financial Adviser, Guru or any sort of professional that would be deemed as an individual someone would rely upon for investment advice. You should discuss the asset allocation and risk tolerance level which is appropriate for your personal financial situation with a professional financial planner / adviser. This poster encourages viewers of this post to invest carefully and read the investor information available at the web site of the SEC at: http://www.sec.gov prior to investing in anything. You should also not make any trades or decisions based upon anything said or written by this poster with regard to investments without consulting a professional financial planner/adviser. Always assume at all times that this poster may have a position in any of the securities they mention and could be buying or selling at any time. Any opinions expressed by this poster are subject to change without notice.

[Poundthetable]

Very Nice Post IRISHBULL

[pkripper]

Yes worldwide

Financial Crisis: Fortis' Dutch assets are nationalised
The Dutch operations of Fortis, Europe's largest victim of the credit crisis, have been nationalised in a €16.8bn (£13bn) deal aimed to calm investors in the troubled banking and insurance group.


The Dutch operations of Fortis, Europe's largest victim of the credit crisis, have been nationalised
Fortis is Europe's largest victim of the credit crisis Photo: AFP

The Netherlands government stepped in to take over the assets, including buying Fortis' interest in ABN Amro – the Dutch investment bank it jointly acquired last year in a consortium with Royal Bank of Scotland and Banco Santander. Shares in Fortis have tumbled almost 70pc this year as fears mounted that it had overstretched itself through its €24bn participation in the ABN Amro transaction.

Yesterday's deal replaces an agreement struck on Sunday by the Belgium, Dutch and Luxembourg governments to rescue Fortis by pumping €11.2bn into the Belgian-Dutch bank. Under that deal, they would have taken a 49pc stake in the bank's operations within each of their borders.

This new transaction, which has been approved by the Dutch Central Bank, was announced after the Euronext market closed. Fortis' shares had earlier closed down 0.79pc to €5.42.

Belgian Prime Minister Yves Leterme said the decision was "aimed at maintaining the durable solvency" of the banking and insurance group, which has become the first major banking casualty in the Euro zone of the global credit crunch.

Dutch finance Minister Wouter Bos added that the move to fully nationalise the bank's Dutch operations was needed to prevent "the danger of infection" as investors still lacked confidence in Fortis, despite the bailout package announced earlier this week.

"We have today ensured that savers and clients know their money is in safe hands in our banks," he said, explaining that savers had been withdrawing their money from Fortis and that other lenders were refusing to lend to the ailing bank.

The nationalistion package comes just days after Fortis warned that the €2.15bn sale of its asset management arm to China's Ping An Insurance was likely to collapse due to "severe market disruption and the ongoing uncertainty in the global capital markets". It had also said the Dutch Central Bank had not approved its sale of several ABN Amro assets to Deutsche Bank for €709m

http://www.telegraph.co.uk/finance/financetopics/financialcrisis/3131247/Financial-Crisis-Fortis-Dutch-assets-are-nationalised.html

[DERBENSKI]

'pkripper'

Well everyone when deciding to flee from the dollar flew to the Euro making it very uncompetitive.

Apparently too, German banks are heavily invested in mortgages looking at the foreclosure data, very heavy. That is not going to go over very big.

Unfortunately we are not the only country with overvalued real estate assets, making it a global problem.

Derb

[pkripper]

The Euro is falling. Europe is starting to look like they are in worse shape then the U.S.....wake up call to the world. We need to live within our means. I apologize for ranting.

[DERBENSKI]

Here comes the European Bank bailout....

In recent days, Germany has resisted pressure from European partners for an EU-wide rescue package for banks that would mirror the $700 billion plan in the United States and said bank troubles should be handled on a case-by-case basis.

But Steinbrueck reversed course on Monday: "I am very much aware that at some point individual solutions are no longer enough," he told reporters in Berlin. He said Berlin was looking at putting up an "umbrella for Germany as a whole, so that we don't go from one case to the next".

http://www.reuters.com/article/marketsNews/idUSL623740620081006

Derb

[Old_Drummerman]

Top 10 Tax Sweeteners in the Bailout Bill

http://www.taxpayer.net/resources.php?category=&type=Project&proj_id=1429&action=Headlines%20By%20TCS

[DERBENSKI]

'pkripper'

Well we have to compete with Asian labor and until that becomes a competitive venture, there is no reason to invest in factories. It is commonly agreed that trade tariffs don't work as that results in tariff wars and the only real solut5ion is to drop the currency until factories are competitive again.

It took them a while to figure it out in the last depression by raising the price of gold. If we look crappy enough to the rest of the world the dollar will fall.

Euro area is on the brink of recession and the Euro is very high to the dollar.

Derb

[DERBENSKI]

'pkripper'

The whole thing is a bad idea trying to save the housing market and yes Japan is an excellent example to follow. The only difference is that we will screw it up worse and the additional fact that we have a trade deficit and a huge deficit problem. We already have over 600 billion in currency swaps.

The good thing is that we got 2 million for wooden arrows for children in the bill. Certainly points out the absurdity of our congress.

Derb

[pkripper]

Sad isn't it Manufacturing decreases and unemployment increases. So when you say.We are basically fk'ed until we get some real leaders in government that will take our country back, bring manufacturing jobs back to the USA. We need to cut out foreign aid now and get some domestic aid with that money.. Thats the only way. If not, god help us all in the future. I say. Do you see any leaders?in the running?, I don't! Same wolves in sheeps clothing. And the latter half, YES WE ARE F'KED


The U.S. manufacturing sector shrank sharply in September, registering its steepest one-month decline since the nation’s last recession, the Institute for Supply Management reported today.

This is scary

“Manufacturing could be on the brink of a collapse,” Lindsey Piegza, a market analyst at FTN Financial in New York, told Bloomberg News today. “There are no orders, no jobs and there is really no incentive for businesses to invest. The credit crisis is compounding the problem.”

http://www.pbn.com/stories/35455.html

The unemployment rate (6.1 percent) was unchanged in September,
following a 0.4 percentage point rise in August. The number of
unemployed persons was little changed at 9.5 million. Over the past
12 months, the number of unemployed persons has increased by 2.2 mil-
lion and the unemployment rate has risen by 1.4 percentage points.

http://www.bls.gov/news.release/empsit.nr0.htm

[pkripper]

I don't suggest folowwing Japans example, what they had a 20 recession. ouch. Good post, Home ownership is a privilege not a right.

"With the taxpayer bailout passing, some that were likely holding off from walking on moral grounds will likely now see fit to walk by ceasing to make payments since they are now going to pay anyway. Look for a spike in notice of defaults "

Couldn't agree more. Can you see it now " the government threw me out of my house, that's why granny/jr. froze to death."

[Susie924]

I know you would!

[IRISHBULL]

Thanks Susie, I think I would do a much better job than these clowns have

[Susie924]

Great post Irish!

Have you ever thought of running for political office!

[DERBENSKI]

'IRISHBULL'

The the subprime was our modern day Custer's last stand..

I like that "Custer's last stand". I have been calling it for several years, our last Hurrah. You know it, I know it and most of America does not have a clue. People on Wall Street were talking about how Credit Default Swaps on McDonald's debt cost less than default swaps on the US dollar. While that may show our current strength in the economy is fast food, fast food is not a durable product and is expended in 24 hours, having what little nutritional value there is fully extracted.

One of my favorite sayings is that people who work at McDonald's can't afford to eat there. We went from GM producing durable products and high paying factory jobs to fast food of a very limited life span product.

IMO all of these consumer stocks are going to now start a major suffering. The dollar has to go lower to support factories on our soil, Americans building stuff for Americans. This of course will drive up the price of goods and lower our living standards that we have taken as a birthright.

Derb

[IRISHBULL]

Bingo! re: We have lost most all of our manufacturing jobs...

Thats why I can't see a recovery from this recension we keep sinking deeper into.. Back in the day, we had problems but always dug ourselves out and became stronger with our manufacturing /businesses.. Lots of work for the people. The last 2 decades have seen jobs getting sent to other countries which has been weakening our economy so I guess they came up with this idea to use subprime loans so people who were not able to get a home would(short term) and those who owned a home would benefit from the housing boom and be able to take equity out of their home, but in many cases they reworked their mortgage all together from a prime a to a subprime.. Why? Much lower monthly payments PLUS a nice chunk of cash from the equity loan.. Cash was flowin everywhere, houses were being bought up fast driving the market up.. Retailers were posting huge numbers, cars were being bought up with home equity cash, it was all good(short term).. Guess bush was hoping it would have lasted until he was out of office(top brass probably told him it would lol)

Bottom line.. The the subprime was our modern day Custer's last stand.. There is nothing to fall back on now.. Manufacturing jobs are all but gone. There was a time when you could graduate high school and get a manufacturing job with good pay and a pension to boot.. Im not a political guy, I just see what I see and what I see is a government who sold out the American people long ago and continue to do so, so a chosen few could get filthy rich and ensuring people in office another term(I guess) We are basically fk'ed until we get some real leaders in government that will take our country back, bring manufacturing jobs back to the USA. We need to cut out foreign aid now and get some domestic aid with that money.. Thats the only way. If not, god help us all in the future. Just keeping it real!!

[DERBENSKI]

'pkripper'

Here is the bigger picture deal. We have lost most all of our manufacturing jobs. That is because there is a huge low priced workforce overseas. The Housing Bubble allowed us to create a false economy to mask this situation. It created a large number of jobs in housing construction, Banks, mortgage lending, real estate, home furnishings, you name it. In additions, home equity loans flourished, dumping large cash into the economy.

Lots of people complain that they didn't participate in the housing bubble directly and should not have to pay. However we can't avoid the fact that although temporary, the economy was flush with good times and thus likely gained some economic benefit. Not saying it was worth it, just bring home the point that it was a super boost to the economy.

Now that the credit creation is over, we have overspent to where it now becomes a credit contraction.

Here is the current housing problem. Housing prices went up for two reasons. One was lower interest rates and we all know how that works. The other was lower lending standards where a greater focus needs to be because that was the primary cause.

The old time lending rules.
20% down
Source of down payment had to be verified to make sure you did not borrow the down.
36% of income was the limit that qualified you house payment, how much house you could own.
Credit score very important.

Housing Bubble rules.
No money down, same bank would lend 20% second for the down and do the 80% loan with no mortgage insurance required!
Up to 50% of income for house payment OK!
Stated income, no verification required.
Low teaser rates that will kick the loan to reset if you continue them and Jumbo loans.
560 credit score OK.

What needs to be understood is that as the old sound bank money lending rules return to the market, and in a higher interest rate environment, we are not going to have a large pool that will qualify to own homes at current prices even in the seemingly depressed state. Housing prices will conform to the lending practices. Housing prices can only be supported by loose lending, which is what got them into trouble in the first place. One fix is that we could do as Japan did and drop interest rates to near zero. Going against that is the fact that we still operate on a basis of needing to sell our debt to the world.

If we are to have sound banking, we need to have sound lending and sound lending means lower prices even at today's level. There is already lots of foreclosure property in the pipeline. The 700 billion bailout is a revolving facility, once it fills up, they are going to have to dump.

Now here is the big problem we have. Government wants affordable housing, just so long as affordable housing does not mean lower prices! That means that rather than letting the market adjust back to sound lending, they will do everything to try and keep housing prices up with more bad loan practices.

The other problem is that in many states the home loans are none recourse, meaning that if you just walk away, the bank just gets the property back. Therefore you only have to not like your situation in order to have justification to walk away from your investment even if you can make the payments, just for the simple fact that your investment is underwater.

With the taxpayer bailout passing, some that were likely holding off from walking on moral grounds will likely now see fit to walk by ceasing to make payments since they are now going to pay anyway. Look for a spike in notice of defaults (if they are even going to be filed now since the banks have a ready buyer).

So what is the reality? Some have suggested the taxpayer could actually make money! What is going to happen is when the government takes bad paper they are going to have to do something with it. They can try to modify the loan but borrowers should not take anything less than a markdown to current value, which means an immediate loss to the taxpayer on the paper just received. It is a borrowers right to walk from the property if they do not like the deal. The government now becomes the the bad guy evicting people due to foreclosure so they will likely loosen the terms on defaults. This just makes walking a better option because you get more free rent in the process.

Will the bailout shore up the economy? No, they are just trying to make banks whole again. Some politicians are saying that there will be "New Deal" legislation next year, so aparently they know the real scoop. This means more deficit spending of course.

The bottom line is that we need to be competitive on a worldwide basis with the new global reality of a lower wage base in Asia. This means a lower dollar like it or not.

Derb

[pkripper]

That is odd, and market reacted so negative. I hope this pans out. some (experts?) say a couple weeks for the credit markets to reflect it.

[Tina]

that's odd

it happens and there's only one post here today

no one discussing it?

I haven't heard the full details yet

[pkripper]

http://www.cnbc.com/id/24596546

[DERBENSKI]

Maybe they should allow everyone voting on this line item veto powers...

IMO if this cannot stand on its own two legs, then it should not be brought before our representatives for a vote. Something this large should stand on its own merits.

This is a clear example that the system needs fixing. Congress will likely say that this is the way business gets done but I say changing the system could solve our deficit problem. Maybe we would be better off if government could not get anything done at all!

Derb

[IRISHBULL]

They shoehorned a bunch of garbage into the bill that has nothing to do with the bailout.. it's legal government bribes to win yes votes.. I would say it passes but would not be surprised if it didn't because if the American people were against it in the first place you can bet your last dollar their REALLY against it now that they are seeing these dem/rep peeps are using the bill for self gain..


New Tax earmarks in Bailout bill
- Film and Television Productions (Sec. 502)
- Wooden Arrows designed for use by children (Sec. 503)
- 6 page package of earmarks for litigants in the 1989 Exxon Valdez incident, Alaska (Sec. 504)

Tax earmark “extenders” in the bailout bill.
- Virgin Island and Puerto Rican Rum (Section 308)
- American Samoa (Sec. 309)
- Auto Racing Tracks (317)
- Wool Research (Sec. 325)

I love the auto racing tracks in particular. I can see the headlines now: “Global financial markets melt down, NASCAR, Caribbean rum hardest hit”. As many people have said now, I’d be more inclined to take this crisis seriously if people on the Hill didn’t use it to butter up their favored constituencies.

http://hotair.com/archives/2008/10/01/senate-bailout-bill-hits-the-internet/

[david7979]

will it pass the House tomorrow??? Opinion???

[Tina]

extended short sale ban on financial stocks

SEC says extends short sale ban on financial stocks October 1, 2008 8:12 PM ET

All Reuters news(Reuters) - The U.S. Securities and Exchange Commission on Wednesday said it would extend its existing short sale ban on financial stocks while Congress completes work on financial bailout legislation. The ban had been scheduled to expire on Thursday night.

* Said its short sale ban on financial stocks will now expire on the third business day after U.S. legislation is enacted, and will not be extended beyond October 17.

* Said it would also extend a short sale disclosure requirement through October 17.

* Said it would also extend a rule to curb abusive short selling through October 17.

Copyright 2008 Reuters

[Tina]

Senate passes $700B 'sweetened' rescue package By JULIE HIRSCHFELD DAVIS and CHARLES BABINGTON, Associated Press Writers
1 minute ago

After one spectacular failure, the $700 billion financial industry bailout found a second life Wednesday, winning lopsided passage in the Senate and gaining ground in the House, where Republicans opposition softened.

Senators loaded the economic rescue bill with tax breaks and other sweeteners before passing it by a wide margin, 74-25, a month before the presidential and congressional elections.

In the House, leaders were working feverishly to convert enough opponents of the bill to push it through by Friday, just days after lawmakers there stunningly rejected an earlier version and sent markets plunging around the globe.

[DERBENSKI]

'david7979'

Depends on how the provisions are perceived on how the government expects to pay off the foreign banks and investors. In its original form outside banks were certainly not excluded and I assume that they still remain.

http://www.google.com/webhp?sourceid=navclient&ie=UTF-8

http://www.youtube.com/kdenninger

Derb

[david7979]

pass or fail???

[jimmy$teel]

It's raining and I don't want to work in it, would someone please subsidize me.

[mattjez]

This video pushes blame but does not state true facts. Everything in this video blames the Community Reinvestment Act which basically states that if you take deposits from the poor you should also lend to them if they meet the requirements.

Now. Sub-prime mortgages are to blame for this you say. Great and I will agree to that fact however the sub prime lending was not done by the banks governed by the CRA the CRA only applied to FDIC insured banks.

Sub prime lending by break down of covered by CRA and not covered by CRA.

50% of all sub prime mortgages came from companies not bound by the CRA meaning private companies not FDIC insured. These are mortgage companies only and not deposit banks meaning I can't have a checking account from the place my mortgage is created. These companies where driven by profit margins not laws that forced them into lending.

Another 25-30% came from bank subsidiaries and affiliates that are loosely tied to the CRA.

This leads us to 1 in 4 sub prime mortgages are created by banks covered by the CRA. This does not lead us to say the CRA is the problem.

"Most important, the lenders subject to CRA have engaged in less, not more, of the most dangerous lending. Janet Yellen, president of the San Francisco Federal Reserve, offers the killer statistic: Independent mortgage companies, which are not covered by CRA, made high-priced loans at more than twice the rate of the banks and thrifts. With this in mind, Yellen specifically rejects the "tendency to conflate the current problems in the sub-prime market with CRA-motivated lending.? CRA, Yellen says, "has increased the volume of responsible lending to low- and moderate-income households.""

http://www.prospect.org/cs/articles?article=did_liberals_cause_the_subprime_crisis

"But CRA has always had critics, and they now suggest that the law went too far in encouraging banks to lend in struggling communities. Rhetoric aside, the argument turns on a simple question: In the current mortgage meltdown, did lenders approve bad loans to comply with CRA, or to make money?

The evidence strongly suggests the latter. First, consider timing. CRA was enacted in 1977. The sub-prime lending at the heart of the current crisis exploded a full quarter century later. In the mid-1990s, new CRA regulations and a wave of mergers led to a flurry of CRA activity, but, as noted by the New America Foundation's Ellen Seidman (and by Harvard's Joint Center), that activity "largely came to an end by 2001." In late 2004, the Bush administration announced plans to sharply weaken CRA regulations, pulling small and mid-sized banks out from under the law's toughest standards. Yet sub-prime lending continued, and even intensified -- at the very time when activity under CRA had slowed and the law had weakened."

Here is the time line (http://www.telegraph.co.uk/finance/2815755/Timeline-The-sub-prime-mortgage-crisis.html)

"That's because CRA didn't bring about the reckless lending at the heart of the crisis. Just as sub-prime lending was exploding, CRA was losing force and relevance. And the worst offenders, the independent mortgage companies, were never subject to CRA -- or any federal regulator. Law didn't make them lend. The profit motive did."

I am all about placing blame where blame is due, however just because you don't like people who modified it does not mean you can blame them.

The blame lies in the spending of America, being driven off profit margins, living on debt instead of within your means etc. There is plenty of blame to go around but the numbers do not lie

[IRISHBULL]

Question is, how long will it be until the bill is signed into law? Until then, banks are still in harms way for FDIC raids, take overs and BK

[IRISHBULL]

IMO they will put together a bill and pass it this week.

[BerryBuck]

AWESOME!!LOL!!cash and fetal.

[DERBENSKI]

While not the singular cause, some looked the other way and protected and covered up while the pressure cooker simmered.

Derb

[DERBENSKI]

'~6979~'

I somewhat gave my opinion on who/what is/is not to blame maybe here.

http://investorshub.advfn.com/boards/read_msg.aspx?message_id=32524393

Federal Reserve bunk and debunking

http://www.usagold.com/federalreserve.html

http://www.msnbc.msn.com/id/7762302/

Derb

[~6979~]

...wait a minute...does the government completely own the FED??? Is the FED ,-government or private for profit bank???

Who owns the FED if it is a private company???...someone told me that Lehman brothers and J.P.Morgan are actually shareholders in the FEDERAL RESERVE...is that true???

I thought the whole concept of why the FED was created was to make sure that "it never happened again" (in terms of the banking crisis of the 1920's...so if the banks are indeed failing again today,then why do we have the FED again???

[Zardiw]

ALRIGHT!!!......It's back up!!!.......excellent video.....won't play right now cause too many people are watching it....

User is TheMouthPeace .........z

[CosmoKramer]

Burning Down The House: What Caused Our Economic Crisis?

[Zardiw]

Hmmm. Didn't realize that little tidbit. I've always wondered what would happen if AmeriKa declared bankruptcy.....not really thrilled about having to live through it though.......z

[DERBENSKI]

'zardiw'

I don't think you understand the ramification of what is going down. The rest of the world is looking for us to stand behind our MBS debt regardless of whether or not it is government backed.

The rest of the world is looking at Americans saying "We are not going to pay."

These obligations are sitting in the vaults of central banks as currency reserves....

We have a currency that is backed by the full faith and credit of the US Government. Government of the people, for the people and by the people. The people are saying that they are not going to pay. This is making the rest of the world very nervous.

They might cut us off. Then we are really screwed.

Derb

[Zardiw]

Well that's good news.......Better a lingering decline than a total crash........z

[Zardiw]

Any losses will just be added to the debt. So what. It's 9 trillion already. What's an extra 700B...and probably a lot less. It's not like those loans are totally worthless. There's collateral involved I'm sure. But in the end it's preferrable to what's going to happen if the credit crunch continues.......Total Global Meltdown...........z

[DERBENSKI]

'zardiw'

We can only defend the dollar for so long, what this really is for is to prop the dollar, to give us foreign currency to dump to keep the dollar floating....

I am going to guess that they increased the swap lines with Japan, Canada and Swiss etc.

ECB, Fed double swap lines to US$240 billion

The European Central Bank and the U.S. Federal Reserve have doubled to US$240 billion the amount of dollars being made available to banks hungry for cash.
In an announcement Monday by the ECB _ the central bank to the 15-nation eurozone _ said it and the Fed decided to double their temporary reciprocal currency arrangements, or swap lines, from US$120 billion to US$240 billion.

http://www.etaiwannews.com/etn/news_content.php?id=751334

Derb

[CosmoKramer]

By 2004, all of the elements of the current financial collapse had been in place for several years. The aggressive approach to enforcing the Community Reinvestment Act (CRA) started under Bill Clinton in 1998, and the seemingly endless appetite for paper by Fannie Mae and Freddie Mac had turned massive amounts of bad loans into mortgage-backed securities to spread their cancer throughout the system. In 2004, a year after the Bush administration tried to tighten regulation and oversight on Fannie and Freddie, Congress was told yet again that disaster loomed. The Democratic response is instructive to seeing who really sat back and allowed this collapse to occur

Maxine Waters: Through nearly a dozen hearings, we were frankly trying to fix something that wasn’t broke. Mr. Chairman, we do not have a crisis at Freddie Mac, and particularly at Fannie Mae, under the outstanding leadership of Franklin Raines. [Raines would barely avoid prosecution for fraud.]

Gregory Meeks: … I’m just pissed off at OFHEO [the regulators trying to warn Congress of insolvency at the GSEs], because if it wasn’t for you, I don’t think we’d be here in the first place. … There’s been nothing that indicated that’s wrong with Fannie Mae, Freddie Mac has come up on its own … The question that then comes up is the competence that your agency has with reference to deciding and regulating these GSEs.

Lacy Clay: This hearing is about the political lynching of Franklin Raines.

Barney Frank: I don’t see anything in this report that raises safety and soundness problems.


http://hotair.com/archives/2008/09/29/video-democrats-insist-nothing-wrong-at-fannie-mae-freddie-mac-in-2004/

Follow the link to the video and the rest of the story

[DERBENSKI]

'zardiw'

If you think the government is going to take garbage paper and have the pope wave over it and make it better you have more faith than me. Put the Government in charge of 700 billion and they are sure to screw it up too.

700B is just a cap, then they have to start dumping assets so they can pour more through the funnel. Halliburton will be in charge with a no bid cost plus anyway.

Derb

[Zardiw]

Well it makes sense. Since the godernment is the only entity that can operate consistently in the red, why NOT have them buy those loans.......z