"The only thing we have to fear, is fear itself." -FDR
And that is what stands behind this "bailout bill". That and all the BS that goes with it. Somehow the government has convinced the sheeple that this "financial rescue plan" will end all fears in the financial system, and everything will be hunky dory going forward from the last yes vote. Not gonna happen...
Today's market reaction to falling factory orders and rising unemployment claims threw a truckload of cold water on that notion. This bill ain't gonna fix nothing but the retirement plans of the crooks that cooked up this whole scheme. I am convinced that the USA is in the midst of a coup where the banking elite are attempting to take over the government by stealth, fabrication, and bald faced lies. The gullible American public falling for it hook, line, and sinker in fear that their 401ks are going to implode if we don't immediately hand over $700 BILLION to these extortionists immediately. Too bad, the "value" of your 401ks is going into the crapper, no matter what, as the US Dollar [eventually] collapses under the weight of all this debt that is being piled onto it.
Is the financial system stronger today than it was two weeks ago when Gold rose $85 in one day? NO, it is not! The why was Gold hammered down today? Damn good question. I have run out of expletives, please advise...
As advised, protective stop losses in Gold at 860 and Silver at 12.60 would have protected you from this CRIMEX chicanery we witnessed today in New York. Gold is the Truthsayer. The LAST thing the US Fed is interested in is the truth. Therefore, Gold and Silver had to be squashed today in an unending effrt by the US Government to hide the truth about it's currency and financial system. Strength in the Dollar AGAIN today was NOT a flight to quality, but a flight to refuge. The Euro was weak right out of the box this morning after ECB President Trichet revealed that the ECB "talked" about cutting rates at their meeting this week. The ECB held rates steady. It will be the US Fed that cuts rates first, not the ECB.
Fed considers rate cut as recession fears mount
Federal Reserve officials are weighing further interest-rate cuts, even if Congress passes a $700 billion rescue plan, in the face of a deteriorating economic outlook and severely strained financial conditions.
The Fed's willingness to consider additional cuts marks a turnaround from the past few months, when soaring food and energy prices turned its attention to inflation risks. At a regular September meeting, after oil prices had receded, officials still declined to move the central bank's federal-funds target rate from 2%.
A reduction in rates is still far from certain, in part because of inflation worries. But in just the past few weeks, as the credit crisis pummeled the financial system, economic data have become steadily worse, raising fears of a recession.
http://gata.org/node/6709
LOL, fears of a recession. WE ARE IN A RECESSION RIGHT NOW DAMN IT! It is comical to hear President Bush warn of a "bad recession" if lawmakers don't pass the bailout bill. He really needs to get out more. The worst is when you believe your own lies...
More Monopoly Money ...
Where's the money going to come from?
Washington doesn't have $700 billion. Nor did it have the $592 billion it's already shelled out since August of last year, when the crisis began.
In fact, the U.S. government was broke before this bailout package. Now, it's even more broke.
So the money has to be borrowed from the public. Yet again. From investors in this country and from other countries. By issuing loads more government notes and bonds. Loads more IOUs.
Right now, it seems like investors around the world still have enough faith in the U.S. government to lend it most of the $700 billion. But it remains to be seen what interest rates they'll want to receive.
So we should be able to borrow most of the money for the bailout package.
And what about the amount that the public isn't willing to lend to the Treasury? No problem there either. The Federal Reserve will just print up the balance.
You see, the ultimate source of all money in the U.S. is either debt, or monopoly money created by the Federal Reserve. Or some combination of the two.
Either way, it's not real money. It's fictitious money. It's nothing but a bunch of IOUs and electronic credits and debits.
It's nothing more than a promise to pay you something of value. If you wait around long enough to get paid.
So we have that settled. We'll be able to borrow the money, or print it up. Either way, it's clear: The U.S. government, already in hock past its eyeballs, has to go even deeper in debt. A lot deeper.
http://www.moneyandmarkets.com/Issues.aspx?More-Monopoly-Money-2368
The Financial Tsunami has not reached its Climax
Credit Default Swaps: Next Phase of an Unravelling Crisis
by F. William Engdahl
The next phase of the unravelling crisis in the US-centered "revolution in finance" is emerging in the market for arcane instruments known as Credit Default Swaps or CDS. Wall Street bankers always have to have a short name for these things.
Credit default swaps resemble an insurance policy, as they can be used by debt owners to hedge, or insure against a default on a debt. However, because there is no requirement to actually hold any asset or suffer a loss, credit default swaps can also be used for speculative purposes.
Warren Buffett once described derivatives bought speculatively as "financial weapons of mass destruction." In his Berkshire Hathaway annual report to shareholders he said "Unless derivatives contracts are collateralized or guaranteed, their ultimate value depends on the creditworthiness of the counterparties. In the meantime, though, before a contract is settled, the counterparties record profits and losses -often huge in amount- in their current earnings statements without so much as a penny changing hands. The range of derivatives contracts is limited only by the imagination of man (or sometimes, so it seems, madmen)." A typical CDO is for five years term.
Like many exotic financial products which are extremely complex and profitable in times of easy credit, when markets reverse, as has been the case since August 2007, in addition to spreading risk, credit derivatives, in this case, also amplify risk considerably.
Now the other shoe is about to drop in the $62 trillion CDS market due to rising junk bond defaults by US corporations as the recession deepens. That market has long been a disaster in the making. An estimated $1,2 trillion could be at risk of the nominal $62 trillion in CDOs outstanding, making it far larger than the sub-prime market.
http://www.globalresearch.ca/index.php?context=va&aid=9202
Proposed Bailout Package: Doom's Day or Doublespeak
"The process of this bailout reminds me of a panic-stricken swimmer thrashing in the water only making his situation worse," said. Rep. Ron Paul, R-Texas. Dr. Paul argues the root cause of the current economic crisis is a failed monetary system, and the bailout will only make the situation worse.
"For 37 years, the world built a financial system based on the dollar as the reserve currency of the world in an attempt to make the dollar serve as the new standard of value," Dr. Paul said. "However since 1971, the dollar has had no intrinsic value, as it is not tied to gold. The dollar is simply a fiat currency, which has fluctuated in value on a daily, if not hourly, bias. This worked to some degree until the market realized that too much debt and malinvestment existed and a correction was required."
In 1971, thanks in large part to the debt created by the Vietnam War, the monetary system established by Bretton Woods collapsed. Currency was removed from the gold standard and was attached to a floating currency stream of no intrinsic value.
The breakdown caused currency to become destabilized and, as Dr. Paul contends, set the stage for the current economic meltdown. But to fix the crisis the country must fix its currency, and Dr. Paul argues the bailout does the exact opposite.
"The more money and credit you create out of thin air, the bigger the challenge it will be to the dollar," Dr. Paul said earlier in the week on Fox News. "What they are doing now is creating a situation where every single person in this country is going to suffer with dollar deprecation. That means the savings of every person."
While Dr. Paul readily admits his way of addressing the crisis would create a short-term pinch - he believes there could be a "very serious recession for a year" - he is adamant the bailout alternative is worse.
"Right now they are prolonging what has to be done. Bad assets and bad debt has to be liquidated. But now they are not allowing that to happen. That is what we did in the Depression and that is why it lasted more than a decade," Dr. Paul added.
http://www.thebulletin.us/site/index.cfm?newsid=20148892&BRD=2737&PAG=461&dept_id=576361&rfi=8
36 hours of alarm and action as credit crisis spiraled
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 — a financial insurance policy against potential bankruptcy — at prices 30 times what they normally would pay.
It was this 36-hour period two weeks ago — from the morning of Wednesday, Sept. 17, to the afternoon of Thursday, Sept. 18 — that spooked policy makers by opening fissures in the worldwide financial system.
In their rush to do something, and do it fast, the Federal Reserve chairman, Ben Bernanke, and Treasury Secretary Henry Paulson Jr. concluded the time had come to use the "break the glass" rescue plan they had been developing. But in their urgency, they bypassed a crucial step in Washington and fashioned their $700 billion bailout without political spadework, which led to a resounding rejection this past Monday in the House of Representatives.
That Thursday evening, however, time was of the essence. In a hastily convened meeting in the conference room of the House speaker, Nancy Pelosi, the two men presented, in the starkest terms imaginable, the outline of the $700 billion plan to congressional leaders. "If we don't do this," Bernanke said, according to several participants, "we may not have an economy on Monday."
http://www.iht.com/articles/2008/10/02/business/02crisis.php?page=1
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