August 10, 2007

And then there was panic, and a run on the banks, and right on schedule Bernanke's printing press and helicopter swooped into action

Gotta love Bernanke stepping in with billions in depreciating US dollars to rescue the depreciating housing market by bailing out the imploding banks. Man, is this really happening?


Get them printin' presses runnin' boys! Some 5's, some 10's, some 20's and tons and tons of hundys! And get my helicopter ready!

We're so screwed...

Fed Pumps Another $35B Into US Financial System Friday to Stem Credit Turmoil

WASHINGTON (AP) -- The Federal Reserve, trying to calm turmoil on Wall Street, announced Friday that it will pump as much money as needed into the U.S. financial system to help overcome the ill effects of a spreading credit crunch.

The Fed, in a short statement, said it will provide "reserves as necessary" to help the markets safely make their way. The central bank did not provide details but said it would do all it can to "facilitate the orderly functioning of financial markets."

The current meltdown in the housing and mortgage markets has caused new home foreclosures to climb to record highs and has forced some lenders out of business.

Increasingly restrictive lending conditions can put a damper on people's ability to buy big-ticket items such as homes, cars and appliances. And it can crimp businesses' capital investment and hiring. That reduced appetite by businesses and consumers would slow overall economic activity.

87 comments:

Anonymous said...

(Dateline: 1937)

"It's burst into flames, it's crashing terrible...there's smoke and there's flames now... Oh the humanity!"

— Hindenburg

Anonymous said...

Why should investors invest in loans that won't be paid back ?

Anonymous said...

BWA HA HA HA HA

BWA HA HA HA HA

face it rening losers, prices of homes are not coming down. bernake will give every man woman and child a sack full of thousand dollar bills if need be...

good luck with those 5% CDs and renting in an era of hyperinflation

Anonymous said...

Buh...buh...the MSM, the WH, and the Fed keep telling us that inflation is sooooo low:

"U.S. Import Prices Soar in July On Energy Costs, China Products

(WSJ) WASHINGTON -- The era of imported disinflation may have come to an end for the U.S.

U.S. import prices swelled for a fifth-straight month in July on higher energy prices and another record increase in the prices of products from China, suggesting the U.S. can no longer count on cheap overseas goods to offset domestic price pressures.

The data should keep Federal Reserve policymakers on edge about the risk that high oil and commodity prices, a weak dollar and robust global economic growth will boost inflation in the U.S., even though heightened concerns about global credit markets seem to be ...
"

Patrat said...

A moment's silence please for our dear, departed friend -- the dollar. Dead, but not yet buried.

Anonymous said...

GOLD TO THE MOON ALICE!!!!!!!!

Anonymous said...

[Blue Star has gone from 24 to 16 1/2 in a very short time]

Gordon Gekko: Where the hell are you? I am losing MILLIONS! You got me into this company and sure as hell better get me out or the only job you'll have on the Street is SWEEPING IT! You hear me, Fox?

Bud Fox: You once told me, don't get emotional about stock. Don't! The bid is 16 1/2 and going down. As your broker, I advise you to take it.

Gordon Gekko: Yeah. Well you TAKE IT!
[shouts]

Gordon Gekko: *Right in the ass you fucking scumbag cocksucker!*

Bud Fox: It's two minutes to closing, Gordon. What do you want to do? Decide.

Gordon Gekko: [calms down] Dump it.

Anonymous said...

Video: Subprime Crisis: How We Got Here CNN News

http://cosmos.bcst.yahoo.com/up/
player/popup/?rn=289004&cl=
3654454&src=finance&ch=289023

Anonymous said...

That's w's stuff being airlifted to PARAGUAY!!!

Ramen For Everyone said...

Won't this kick the dollar in the shorts?

What the hell is wrong with helliben?

Anonymous said...

The New World Order plan is right on track.

Mike said...

This is ridiculous. People are being punished for being sane and reasonable. In the end people who gambled and lost are rewarded. After fed's intervention we will see how might the dollar will be in the next 6-12 months.

Anonymous said...

Blackhawk down!

Blackhawk down!

Commander Ben and the A Team go into action!

devestment said...

I noticed many Asian banks dumped US dollars as a result of the Fed move. My guess is that if this continues the Fed will have to raise rates to save the dollar. I figure that without the dollar there is no housing market, stock market, or game at all. Their objective is clearly to keep the dollar strong. The choice to manipulate thru dollar injections is only a temporary fix with numbered days.

Anonymous said...

PRESS RELEASE

--------------------------------------------------------------------------------

Central Bankers Say, `Let It Blow!'
Aug. 8, 2007 (EIRNS)—The Lyndon LaRouche Political Action Committee (LPAC) issued the following release today.

"The central bankers have decided to let [the system] blow up," said Lyndon LaRouche this morning... "As of now, the word is, 'let it blow!' If nothing changes in the meanwhile, it will probably happen. It will be horrible."

Consistent with this forecast, the Federal Reserve announced from its meeting today, that it was making no change in monetary policy or "outlook."

Why? LaRouche says they looked at the figures, and saw there was no way this could be bailed out. It simply could not be done. For a week or more, they counted all their fingers and toes. It's not that they were negligent; they saw that given the scale of the problem and of their resources, it would be worse if they tried to bail it out, than if they did nothing. They said to themselves, "If we throw our inadequate resources at this, it'll be a disaster!" Better save their limited resources for urgent future use. They had to say, "Let it go!"

To the question, "but what's their plan?", LaRouche responded: "They have no plan. We have the plan!"

A City of London analyst told LPAC yesterday that, "there has been no Greenspan-like bailout response from the world's central banks to the Bear Sterns and other hedge fund/investment bank disasters, and there will not be any." As the City of London sees it, recent statements by European Central Bank head Trichet indicate that it is "about time" that this blowout of the vast credit bubble took place, and the central banks will not do anything to stop it. Alan Greenspan would have done so in the past, but Bernanke will not do it now.

The central bankers are saying: "Let it happen, and the wilder investors will just have to take their losses," the source said. There will be a lot of damage, and many casualties, but, as far as Bear Stearns and their ilk are concerned, so what if they lose 25% or much more of their assets? Everything was far too inflated anyway. However, there is a real risk that the whole thing could "go over the top," the source said. There are real systemic risks, especially where the private equity control of the real economy is concerned, pension funds being threatened, and so on. But the view of many is that the system HAS to "get rid of all this stuff" before anything can function sanely again.

Along just the same lines, the lead editorial of the City's The Economist this week is that it is "A good time for a squeeze". The editorial says that "Tighter credit conditions are just what the markets need," and that whatever bankers and investors may say, "the recent sell-off in financial markets is good news. It may, at last, have brought people to their senses." While the frenzied US housing market could not be saved, the Economist says that the takeover boom might be brought under control by the tight credit squeeze. But the "big question now is how serious those consequences are likely to be." The debt markets are being hit hard." While the Economist fantasizes that bigger investors can survive, it does warn that the "biggest risk to the global economy probably lies with debt-laden American consumers." And, if the squeeze sets off a broader market meltdown, there will be trouble. "The real worry comes from a well-known source—the banks. They will face trouble on several fronts, and it is they who could turn a healthy credit squeeze into a nasty crunch." But essentially, the Economist endorses such a credit crunch, as does today's Financial Times.

Mark said...

Some shmuck on Bloomberg TV named John Sauro, North Atlantic Mortgage President, just said like 15 minutes ago that he predicts the Dow will go over 15,000 by Sept/Oct of this year and that the 75 million baby boomers who are about to retire will flood the market with liquidity and they will be purchasing plenty of homes and condos and will turn the real estate market around.

WHAT!

Holy Shit said...

Well I think it might be a good move to go to Euros.

Anonymous said...

So when will the BEP start printing $1000 bills again?

That's one of the things I'm waiting for.

Anonymous said...

Let me get this straight, the illegal's and OTM's (other then mexicans) are pouring across the border and the goverment does nothing but when banks lose money they jump on it and pour in BILLIONS !! to keep it going ? Hey houses for everybody !!

Anonymous said...

What happened to the notion of "free markets" Republicans are always lecturing everyone about? I see, when it's their ass that's on the line, they have a sudden change of heart.

Anonymous said...

This is what you get when you vote in a blue blood legacy MBA retard and his sleazy neo-con puppet master. Before you say it doesn't make a difference, think back to the state of our economy when they took office. The prior administration gave ample consideration to the deficit, balanced budgets and preserving a strong dollar.

suzanne researched it... said...

This is predictable. Instead of getting the pain all at once, this will prolong it over many moons. I for one would like to get it over ASAP but then again I don't own a house. What a effin mess either way...

-SRI

Bitter Renter said...

Perhaps one of the capitalists on the board can tell me why a culture so enamored with the "free market" is so prone to messing with it? this cash infusion is hardly in the mold of a free, unfettered market.

My question is especially directed at those libertarians salivating over the possibility of a Ron Paul presidency since he so favors the laisse-faire (sp?) capitalist model.

Anonymous said...

Fed Bailout?

Listen to the Mortgage Brokers

http://forum.brokeroutpost.com/
loans/forum/2/152007.htm

********************************

This is B.LL Sh.T!!!!!

This is only going to help the people with money, save money.

What needs to happen is lower the interest rates.

There are one trillon dollars in ARMs, that are going adjustable in the next few months. Predicting 40 million foreclosers, because people will not be able to qualify for loans.

*******************************

It is market pyschology.

Everyone is saying green light go dog go to enhance the perception that we are fine this is a blip in the radar so the stock market doesn;t crash. Investors are sheep and they WILL pull their money.

If you drive home and night and looka t the people in car next to you and wonder why they aren;t tearing their hair out and smashing their head on the steering wheel it is because the TV says this will pass and we are fine.

the gambit that is going on right now is basically let see if we can keep it afloat and really hope these problems work themselves out because coming into an election year a crashed stock market would do no favors for the US.

Oh yeah plus the faith in government and media would be permanently damaged. Do you know someone who has a 401k? not if the stock market crashed.

the market will organically correct itself and it will be painful and it seems like people are dragging it out to marginalize thee panic and fear.


If you think this is bad... see what happens when someone comes out and says we are fu$%#$ ;)

Call you broker or your financial advisor and talk about it with them.

Anonymous said...

that's it everyone. if this past week didn't cause the massive run on the market, I don't know what will. Countrywide is toast, CS funds are toast, BNP funds are toast, subprime is not contained after all (like that was a shock), mortgages are impossible to get.

All this and yet the markets end up higher for the week. Man at some point you have to throw your hands up and give up.

I bought back in today,about. As the old saying goes you can't fight the fed. For better or worse, Bernake is going to to the Grenspan. Fight it or profit from it, your choice.

Vandal said...

Silly troll... this "bailout" is for the rich bankers only. You won't see a dime of it, and it won't open the lending floodgates again nor will it stop home prices from dropping.

Any bailout to help so called "victims" of foreclosure will be a symbolic gesture at best.

Oh and don't assume everyone here is a renter. I bought my home pre-bubble and didn't max on HELOCs. I refused to play that silly game. A return to year 2000 prices is no sweat for me.

Have fun paying the monthly nut for your overpriced "asset", you'll be stuck with it for a long time.

Anonymous said...

Our markets are just fine (provided that the Federal Reserve is ready willing and able to dump
$38 B-Large into the pool to keep asset prices afloat....)

nothing to see there....

nothing to wonder about there...

nothing to question over how and/or why....

gas prices are a little lower, so do yourself and our economy a favor and go buy a big new S.U.V.

move along.

rcochran said...

These paltry dozens of billions of dollars being pumped into the system will not make a dent in this multi-trillion-dollar problem.

Not even a scratch.

The storm is here, it has hit the shores in full force.

When the European Central Bank, the US Fed, big money houses like Goldman Sachs and Bear Stearns, and countless other financial elite start to panic...WE ARE OFFICIALLY AT THE PANIC LEVEL.

rcochran said...

BWA HA HA HA HA

BWA HA HA HA HA

face it rening losers, prices of homes are not coming down. bernake will give every man woman and child a sack full of thousand dollar bills if need be...

good luck with those 5% CDs and renting in an era of hyperinflation


______

You really don't understand the magnitude of what's happening, do you?

Doktaire said...

Where are these "reserves" coming from, I thought that the US government doesn't have any money? Is it just more debt then, or they are just printing more fake money? Bad as all this seems, I think we are just at the top of the big down part of the rollercoaster. Just think now, almost nobody can buy a house now, so what will this do to the already dire housing market, 20%-30% price drop by the end of the year?

Anonymous said...

I never understood why the IRS will take your house and throw you in prison for not paying taxes when ol' Ben can just turn on the printing presses.

Anonymous said...

Although sacks of dollars will FALL to ground from the helos, inflation will SOAR as a result.

econ101 said...

What exactly does this mean?
(Besides a delay in the meltdown)
Seriously...How does a central bank inject liquidity?

Batman said...

OK, panic MAY be beginning on the street, but the proles still haven't figured it out yet. Check out this poll taken today:

http://tinyurl.com/33lpsm

In 1987 the DJIA took a 25% kick in the balls. That would be a 3500 point drop today kids.

This balloon is SOOOOO big - and Ben aint gonna let it pop.

Grab some of those bundles of money landing in the street and see if a billion or two will get you a loaf of bread...

brokersleaveyoubroke said...

Not true, you can still get a mortgage, all you need is a spotless credit rating, %20 down and be willing to pay %10 on a 30 year fixed. A couple in the DC area was quoted those terms yesterday. The guy said it would be cheaper to buy the house with his credit card. Only the most brain dead troll thinks home prices will not fall drastically.

Anonymous said...

Drama Pricing
Drama Pricing
Drama Pricing

Anonymous said...

SO WHAT DO YOU THINK HAPPEND TO THE PRICE OF GOLD ?????
$1000 By the year end ????
*********************************
Uncle Sam, Your Banker Will See You Now

By Paul Craig Roberts

08/08/07 "ICH" --- - Early this morning China let the idiots in Washington, and on Wall Street, know that it has them by the short hairs. Two senior spokesmen for the Chinese government observed that China’s considerable holdings of US dollars and Treasury bonds “contributes a great deal to maintaining the position of the dollar as a reserve currency.”

Should the US proceed with sanctions intended to cause the Chinese currency to appreciate, “the Chinese central bank will be forced to sell dollars, which might lead to a mass depreciation of the dollar.”

If Western financial markets are sufficiently intelligent to comprehend the message, US interest rates will rise regardless of any further action by China. At this point, China does not need to sell a single bond. In an instant, China has made it clear that US interest rates depend on China, not on the Federal Reserve. ........................................................
US interest rates depend on China, not on the Federal Reserve.
US interest rates depend on China, not on the Federal Reserve.
US interest rates depend on China, not on the Federal Reserve.
US interest rates depend on China, not on the Federal Reserve.
US interest rates depend on China, not on the Federal Reserve.

Anonymous said...

The beauty of this bailout is that Congress and the Prez can avoid the blame and hang it on an unelected Fed official.

cobra2411 said...

HOUSE PRICES? You think this is about you're stinking house price?

Someone very large out there is F$%#ED.

This isn't about house prices this is about a major bank or money center going tits up.

They've already said screw the housing market. They don't care that you're McMansion took a 30% haircut.

And to the Sheeple buying into the rally on wall street... ARE YOU INSANE?

This is like tossing a bucket of water on the Hindenburg.

Tick tick tick...

Pretty soon... KAAAAA-BOOOOOM!

Hello recession? This is the US calling, we're ready for our reservation we made Summer 06 when we inverted the yield curve...

Anonymous said...

DOLTS

MORONS

IDIOTS

BAFFOONS

IMBECILES

HPers

Some crash

Shakster said...

336billion(1/3rd Trillion) in just over 24hrs by the FED,and Europeans CBs.Nah, Nothing happening ,everything is fine.
Jim Willie spells it pretty good.
Fannie's gonna eat all those dollars,and make them dissappear.

SPECTRE of Deflation said...

They added an additional $3 Billion Keith in a third Repo. Total is $38 Billion just today, but it's all good.

SPECTRE of Deflation said...

Anonymous said...
That's w's stuff being airlifted to PARAGUAY!!!

August 10, 2007 7:52 PM


I'm not sure. It could be the Clinton's stuff headed to Costa Rica.

Anonymous said...

They great August 2007 crash ends up 0.4% higher at week's end. Spin that HP losers.

Face it you clowns, you have been wrong about everything. You said no way markets would rebound. Well lookey here markets rebounded

You said no way fed cuts, well holy shit what do you know they will cut, probably next week.

Good luck with that whole renting thing. You'll need it when inflation is running 20% a year.

Anonymous said...

From cnn:
"Not only is it nothing to worry about, it's an absolute positive," said Loni Graiver, president of the Maine-based Cumberland County Mortgage. "Not only have [home] valuations come down, but [interest rates] are still historically low."

Let's see what would this fool say when all the ARMs reset.

Anonymous said...

Give'm hell Gary!
(Sorry, my twist on the old Harry Truman saying)

http://tinyurl.com/yo5ssg

http://www.cnbc.com/id/15840232?video=462842690

Lost Cause said...

What's the big deal? It is only a few months worth of the Iraq War. They have misplaced more pallets of $100 bills, I am sure.

Anonymous said...

The dollar is doomed. The rich guys have already stashed their money off shore, in non-dollar accounts. After the dollar collapses, they will swoop in and buy up all the assets with their money.

We, like Russia, are going to see the emergency of an ELITNI.

Anonymous said...

Thank you Fed for providing a Banking institution bail out. You have once again proved that you are not in the game for the American people. But rather the money managers and bureaucratic institution's that pay your salary.

I hope you feel good sleeping at night knowing that you just gave tax dollars to the people that have more money than they know what to do with.

borderguy519 said...

Greenspan's theories have created the inflation of today. While reported inflation has been low, inflation really has been peaking since about mid 2003. Why it was hidden to the real economy is because of the way the housing bubble was created.

Since at least the mid-1990s Greenspan believed that mortgages are a way to introduce new money into the economy (still looking for the reference). The theory was that because the money was backed by mortgages, and housing prices don't deflate quickly, the newly created money would expand the economy without inflation. In fact, that is part true.

Greenspan may not have known how much his theory was contributing to money supply until really late in his Chairmanship, but (a) he did know about it, and (b) whoo-boy, is it a lot.

In "Estimates of Home Mortgage Originations, Repayments, and Debt on One-to-Four-Family Residences" (2005) found at http://tinyurl.com/aydhd, Greenspan and his colleague calculate massive money flows from home equity into the economy. The data (calculated to 2005) show about 2 to 3 times the flow of money from housing to the economy as in the period before easy money in 2001. Simply put, the effect of this cashflow annualized was about 20 to 40 times the rate of infusion as what the Fed did on 2001-09-14 or 2007-08-10 in order to stabilize markets after 09-11 and the 2007 Credit Crunch.

So, the timeline is this: The Fed reduced rates and injected a lot of money in response to achieve price stability against deflation in 2001-2002. This made securitized mortgages the only option for investors looking for a place to save their money. In exchange for mortgages homeowners used the equity to spend-spend-spend and saving very little.

Greenspan elected to dance with the Devil: instead of having the Fed flood the economy with newly printed money in the period of 2001-2005 with Fed market activities (like it did on 08-10), it made home equity the source of new money.

Now that the new money has caused inflation, and the Fed HAS to respond to real inflation, the effect is to diminish the size of home equity. Home equity's flipside is mortgage-backed securities. If the equity isn't there, the value of the mortgage-backed security -- regardless of the quality of the credit the security represents -- goes down in value.

Que music intro for "Credit Cruch 2008".

Anonymous said...

HOME PRICES ARE COMING DOWN. ONLY A IDIOT BUYS NOW. I'VE HAD PEOPLE I KNOW TELL ME THEIR POS IS WORTH 200K LESS THAN THEY PAID. OF COURS I ACT LIKE I CARE BUT REALLY, I JUST LAUGH AT THE FOOLS.

CASH IS KING THESE DAYS. CASH OWNS ALL OVER-LEVERAGED BITCHES.

AuAgPb said...

A run on the banks. What's your average FB going to do?? Run down and demand a loan?? Pull out that minimum required balance of $5.00??

For Anon at 7:27. Please, I prefer to referred to as a Jealous Bitter Renter, not a rening loser. Thank you for your cooperation in this matter.

Paul E. Math said...

Bernanke just showed his true colours. All that talk about inflation being his priority was just talk.

Helicopter Ben protects the interests of Wall Street, this proves it. Bernanke doesn't give a damn about consumers, about workers or about true Americans. This ticks me right off and I'm not even an American.

Anonymous said...

Uncle Ben only loaned mnney to the banks backed by mortgage debt. This money is supposed to be repayed in 3 days. This is just a band aid. And it bumped up the interest rate for these loans to 6%. Just what the government needs - more debt securing more debt.

GenX said...

I never thought my tax dollars would be used to bail out snot nose hedge funds.. The rich get richer the poor keep working and getting poorer...This calamity on Wall Street is unreal..The market is only down 6-7 percent from its highs and everyone is crying..Their crying because the truth is finally hitting the fan..It was a fantasy world and looks like because of this lunacy the dollar will become Monopoly money. Soon the US will subsidize milk and bread..like third world countries..earmark that..instead of a bridge to nowhere. How come after 1 percent teaser rates people are shocked that their mortgage payments went up? Bush was right calling Americans dumb.

The sitcom on CNBC is really getting to a fever pitch its the best Novella (Soap Opera in the world) What to beleive anymore???...

I'm a democrat but I have to say after hearing Ron Paul on that propaganda Kudlow show I may just vote for him.

GenX

Anonymous said...

This won't help housing because most people can't get loans. It will end up inflating energy, metals and probably stocks. Bombs away on housing.

Anonymous said...

You guys should be glad they did this. Now you know they chose inflation and can invest accordingly. The credit is still tight for real estate, but we can avoid a recession.

Dopes...Not said...

S&P stable today. DJ off 31 points. Yep what a crash!!!

corvinus said...

Hmm... check this out, y'all:

"The move by the Fed is temporary, and the paper must be bought back within three days."

ROFL!!!

Anonymous said...

Let's all look forward to $11.87 for a gallon of milk and $6.00 gas.

MrCoffee

Anonymous said...

People or investors are so reluctant to go for the Gold. After languishing in the duldrums of the 90's, it is concidered rather out dated in today's e-commerce world!

But, it has never failed to return to a source of value or money.....'especially' in uncertain, financially unstable times!

Like now?
"Gold Is Money"!
J.P. Morgan

Anonymous said...

*










Got Gold?

Anonymous said...

Buy Gold before your priced out of the market!


Sounds reminiscent of the housing boom!

Anonymous said...

The situation will continue until financial institutions revalue their mortgage-backed securities to what they're actually worth.

"They're faced with redemptions and margin calls, and they have to value their securities to their market prices because they have to sell them," said Zandi. That will determine how hard a hit the investment community will take.

Peter Schiff, president of Euro Pacific Capital Inc. and author of "Crash Proof: How to Profit from the Coming Economic Collapse," has said the problem goes way beyond subprime.

"It's a mortgage problem," he said. "Subprime is like a little leak where the underlying problem is the integrity of the dam itself. Most of the mortgages taken out during the past few years will fail."

RJ said...

BWA HA HA HA HA

BWA HA HA HA HA

face it rening losers, prices of homes are not coming down. bernake will give every man woman and child a sack full of thousand dollar bills if need be...

good luck with those 5% CDs and renting in an era of hyperinflation

--------------------------------
You're correct. In nominal terms the prices will go up. But if the price of a house doubles because the value of the dollar is cut in half, then the real price in previous dollars hasn't changed. That's why the DOW is still below it's 2000 high in real 2000 dollars.

You're also correct that fixed income assets will get crushed in a hyperinflationary environment. But so will everything else except maybe commodities, assuming demand destruction doesn't crush the commidities markets.

So Ben could give every man, woman and child a sack filled with millions of dollars. And we could use those dollars for toilet paper.

Anonymous said...

IS THIS THE SAME AS A BAILOUT?

kitchenstove said...

Anonymous said...
BWA HA HA HA HA

BWA HA HA HA HA

face it rening losers, prices of homes are not coming down. bernake will give every man woman and child a sack full of thousand dollar bills if need be...

good luck with those 5% CDs and renting in an era of hyperinflation

August 10, 2007 7:27 PM


- The Fed has been throwing away cash like this all along, and it hasn't changed anything. This is like putting a band aid on gangrene and hoping it gets better. He's only delaying the inevitable. Now go away and eat your "steak sandwich" and listen to your iPhone.

Anonymous said...

HeliBen can not increase money supply, that great feat is accomplished by the banks as they loan out "money" that they create out of thin air, by fractional reserve banking.

If no one wants to lend because not enough people are credit worthy, or borrow, then the system implodes. This will ALWAYS happen with a fractional reserve system, since the rule of compound interest demands constantly increasing money supply to pay the interest on the existing debt. The principal is created out of thin air, but not the interest, growth is the only way it gets serviced.

We are headed for systemic implosion and no power can stop it. The Fed is about to be revealed as powerless. The only reason it has a perception of power is because people do not understand the mechanics of the banking system.

Anonymous said...

GOT GOLD

Anonymous said...

Hurray! Today everyone got a liquidity injection. The problem is that the bankers got theirs in their wallets and the rest of use got them in the... well, you figure it out.

Anonymous said...

Can't you understand what's happening here? Don't you see what's happening? Bernanke isn't selling. Bernanke's buying! And why? Because we're panicky and he's not. That's why. He's picking up some bargains.

This bubble, collapse, and run on the banks is all carefully orchestrated plot so that the biggest banks and the Fed will OWN everything! Then you will be an indentured servant (ie. slave) and work for them until the day you die!

Anonymous said...

Keith:

This is a very, very serious report, from the guys who define what a recession is.

I promise, you will love every word.

http://www.cepr.net/documents/publications/meltdown_2007_08.pdf

Anonymous said...

It's my understanding that this was a short term LOAN with mortgages being used as collateral.

This would be fine if the problem were just liquidity for the moment, like a paycheck loan to get you to payday, however, we don't know the actual SOLVENCY of the organizations who took this money. They might be broke and unable to pay back these loans. Now the Federal Reserve will be stuck with 38 billion of worthless paper?

Anonymous said...

Actually, if the government chooses to bail out hapless borrowers and lenders, I'm HELOCing myself to the max, then burying the money. Next I'm going to max out my credit cards (about 100k at least) and use that as a down payment on a second home, then taking a second mortgage on that and burying that money. Then I'll miss a few payments on my mortgages and tell Hilary to bail me out, that I was given too much money by the MAN and my civil rights got violated. If everything goes the way the bleeding hearts in Washington want, I'll get to keep my houses, screw my lender and dig up the cash and use it for hookers and crack! Next, I'll go to work on Wall Street where people like that work!

blah blah said...

Bitter Idiot said:


Perhaps one of the capitalists on the board can tell me why a culture so enamored with the "free market" is so prone to messing with it? this cash infusion is hardly in the mold of a free, unfettered market.

My question is especially directed at those libertarians salivating over the possibility of a Ron Paul presidency since he so favors the laisse-faire (sp?) capitalist model.



Since when did Ron Paul or any Libertarians call for a bailout? The only people in congress calling for a bailout are Hillary Clinton, Barney Frank, Chris Dodd and Chuck Schumer.

In a true free market, the government would not be on the hook for this mess, the private Fed would not be around, banks could not afford to be reckless, and there would not be and GSE's around to buy up hundreds of billions in bad loans from the private markets.

Anonymous said...

Foreclosures up 400% in Califronia. How can the Fed help FB's triple their income?

Anonymous said...

That's w's stuff being airlifted to PARAGUAY!!!

LMAO!

Anonymous said...

--------------------------------
You're correct. In nominal terms the prices will go up. But if the price of a house doubles because the value of the dollar is cut in half, then the real price in previous dollars hasn't changed. That's why the DOW is still below it's 2000 high in real 2000 dollars.

You're also correct that fixed income assets will get crushed in a hyperinflationary environment. But so will everything else except maybe commodities, assuming demand destruction doesn't crush the commidities markets.

So Ben could give every man, woman and child a sack filled with millions of dollars. And we could use those dollars for toilet paper.

August 11, 2007 2:19 AM

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Absolutely best thing to have in an era of high inflation is long term debt at a low fixed interest rate....like oh I dunno, hmmm a MORTGAGE!! Ding Ding Ding.

My housing cost is $2100 today. It will be $2100 next year and $2100 23 years from now upon which I will have $0 as the loan is paid off (well OK property tax, granted).

When hyperinflation arrives, and gas costs $15 and bread costs $10, rent what do you think will happen to your rents? Hint: they will not fall.

Anonymous said...

Here's a great editorial:
http://www.lewrockwell.com/north/north559.html

Title: Cramer's Tantrum
You'll love it.

stocksystm said...

A measly 7% drop in the DJIA gets Cramer acting like a crazed idiot calling for the Fed to cut rates and bail out every irresponsible investor out there. The central banks should just let natural forces take their effect and allow the survival of the fittest. They aren't doing anyone any favors by injecting money into the system at this point. After a 25% crash, maybe, but certainly not now!

Anonymous said...

Official reports state $323 billion have been pumped into the collapsing financial system over the last 48 hrs world wide.

What's that $6 billion every hour?

stuckinthecity said...

face it rening losers, prices of homes are not coming down. bernake will give every man woman and child a sack full of thousand dollar bills if need be...


China will put a stop to this.

Anonymous said...

Mark said...
Some shmuck on Bloomberg TV named John Sauro, North Atlantic Mortgage President, just said like 15 minutes ago that he predicts the Dow will go over 15,000 by Sept/Oct of this year and that the 75 million baby boomers who are about to retire will flood the market with liquidity and they will be purchasing plenty of homes and condos and will turn the real estate market around.

WHAT!

August 10, 2007 8:12 PM
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ffffffffffft

ffffffffffft

Heeeey brrroooo wanna hit this?



I predict weed gets legalized in '08!

Anonymous said...

I'm not sure. It could be the Clinton's stuff headed to Costa Rica.

August 10, 2007 10:28 PM
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If Hillary was smart she would back out and let Balack have it!

Pete said...

>>>The prior administration gave ample consideration to the deficit, balanced budgets and preserving a strong dollar.<<<

Of course there's that little financial hiccup in the NASDAQ that occurred in the last administration, but we won't talk about that. Why should we, it's STILL down from its highs under the last administration.

We could blame the avg. American for being irresponsible with debt and for feeding bubbles in the NASDAQ and Housing markets, but it's just so much more fun to blame a politician than to take personal repsonsibiity, right?

k.w. - southern ca. said...

At the time they invested, all looked great, house values were appreciating, so the "paper worth" of these stocks kept going up and up.

Like any ride, you have to know when to get off ... some did ... many have not.

Those investors that are left will take heavier and heavier losses now as time progresses.



Anonymous said...
Why should investors invest in loans that won't be paid back ?

Keyser Soze said...

Dylan had it right, not heliBen:
"the pump won't work cause a vandal took the handle"