They are being forced to but the media is deliberately failing to report upon it as per usual.
jerZ07002
And now the world begins to share in the pain as they feel the rath of exacerbating the situation.
quote:
European Lenders Get Bailouts as U.S. Crisis Spreads (Update2)
By Simon Kennedy
Sept. 29 (Bloomberg) -- European governments stepped in to rescue Fortis, Bradford & Bingley Plc, and Hypo Real Estate Holding AG as tremors from the U.S. credit crisis reverberated around the world.
The U.K. Treasury seized Bradford & Bingley, Britain's biggest lender to landlords, while governments in Belgium, the Netherlands and Luxembourg threw an 11.2 billion-euro ($16.3 billion) lifeline to Fortis. Germany guaranteed a loan to Hypo.
The interventions exposed how fallout from the crisis that drove Lehman Brothers Holdings Inc. into bankruptcy and prompted a $700 billion U.S. bank-rescue package has gone global. It also added urgency to negotiations among European policy makers as to how they deal with banking collapses.
``The precarious global environment means the weakest links in Europe are now falling,'' said Mamoun Tazi, an analyst at MF Global Securities Ltd. in London. ``If banks continue not to lend to each other we'll see more failures.''
Shares of Dexia SA, a lender based in both Brussels and Paris, fell as much as 33 percent in Brussels trading after Le Figaro said the world's biggest lender to local governments may soon announce a plan to raise capital. Iceland agreed to buy 75 percent in Glitnir Bank hf, the island nation's third-largest bank by market value, for 600 million euros.
European equities and U.S. stock-index futures fell today. Euro-area economic confidence dropped this month to the lowest since the aftermath of the Sept. 11 attacks amid concern that the U.S. plan will fail to stem the crisis. The pound tumbled by the most against the dollar in 15 years and the euro slid.
ECB Auctions
The European Central Bank said today it will make additional funds available to banks through the end of the year in ``special'' auctions to ease tensions in money markets. The cost of borrowing euros for three months soared to a record 5.24 percent today. The Libor-OIS spread, a gauge of cash availability among banks, widened to a record 219 basis points.
Tightening credit is casting a pall over the European economy with U.K. growth the weakest since the early 1990s and the 15-nation euro-area on the edge of its first recession. The risk is of a spiral in which the credit crisis and the economy begin to feed off each other, resulting in costlier borrowing and even weaker expansion.
``The extreme dislocations in European money markets are both a symptom and a source of serious stress in the financial sector, exacerbated by the rapidly deteriorating growth environment,'' said Marco Annunziata, chief economist at Unicredit MIB in London.
Fortis Rescue
To head off the collapse of its biggest bank, Belgium agreed to buy 49 percent of Fortis's Belgian banking unit for 4.7 billion euros, while the Netherlands will pay 4 billion euros for a similar stake in the Dutch business, the governments said in a statement late yesterday. Luxembourg will provide a 2.5 billion-euro loan convertible into 49 percent of Fortis's banking division in that country.
The talks to rescue Fortis involved European Central Bank President Jean-Claude Trichet. Former Bank of England policy maker Willem Buiter said today on his blog that the rescue of Fortis showed ``the ability of the euro-area fiscal authorities to coordinate on a bailout for a bank with not only strong cross-boundary operations, but indeed with a strong multi- national identity.''
Santander Purchase
Bradford & Bingley was saved as tighter credit made it impossible for it to operate. Deposits at the bank amounted to slightly more than half of its loans outstanding, forcing it to depend on frozen capital markets for support. Banco Santander, Spain's biggest lender, will pay 612 million pounds ($1.1 billion), including a transfer of 208 million pounds of capital, to buy its branches and deposits.
Hypo Real Estate, Germany's second-biggest commercial- property lender, received a 35 billion euro loan guarantee to fend of insolvency. The rescuers of the bank will pay the guarantee cash in two allotments of 14 billion euros and 21 billion euros, a government official said, speaking on terms of anonymity.
Roskilde Bank A/S, the lender bailed out by the Danish central bank because of mortgage writedowns, said today it sold its branches to Nordea Bank AB, Spar Nord Bank A/S and Arbejdernes Landsbank A/S.
Bush Package
Acting in the aftermath of Lehman's collapse and government rescues of American International Group Inc. and mortgage lenders Fannie Mae and Freddie Mac, President George W. Bush and congressional leaders said yesterday that they reached agreement on a rescue package aimed at reviving moribund credit markets.
The U.S.'s woes have been transmitted abroad as investors focus on how much capital banks have on hand and as financial companies hoard cash for their own needs, shutting off funding for those whose access to money is limited.
Fortis dropped 35 percent last week in Brussels trading on concern the company would struggle to replenish capital depleted by the 24.2 billion-euro takeover of ABN Amro Holding NV units and credit writedowns.
``Markets thought that they were over-leveraged,'' Dutch central bank governor Nout Wellink said. ``What's happening in the U.S. is having an impact on the rest of the world.''
The bailouts add to concern that Europe's patchwork of banking regulations will hinder coordinated response. While European Union officials are drafting legislation aimed at strengthening how large banks are monitored and what capital they must hold, governments have agreed only to knit supervisors closer together and pledged to cooperate in managing a crisis.
Rejecting Paulson Plan
Unwilling to commit taxpayer money up front, they have resisted calls to devise a plan for splitting the bill should a bailout become necessary. German Finance Minister Peer Steinbrueck and France's Christine Lagarde last week rejected a plea from U.S. Treasury Secretary Henry Paulson to follow the U.S. in erecting similar bailout mechanisms, arguing their banking systems aren't at risk of a systemic breakdown.
Still, of the $554.3 billion losses and writedowns recorded by banks since the start of 2007, 42 percent are accounted for by European institutions.
Daniel Gros, director of the Brussels-based Center for European Policy Studies, said in a report this month that the largest European banks have a leverage ratio -- which measures shareholders' equity to total assets -- of 35 compared with less than 20 for the biggest U.S. counterparts.
``Europe is under greater pressure to act now as it's still not ready for a major banking crisis and the worst fears of policy makers are coming true,'' said Nicolas Veron, an economist at Bruegel, a Brussels-based research organization.
To contact the reporters on this story: Simon Kennedy in Paris at [email protected]
To the Speaker of the House of Representatives and the President pro tempore of the Senate:
As economists, we want to express to Congress our great concern for the plan proposed by Treasury Secretary Paulson to deal with the financial crisis. We are well aware of the difficulty of the current financial situation and we agree with the need for bold action to ensure that the financial system continues to function.
We see three fatal pitfalls in the currently proposed plan:
Its fairness. The plan is a subsidy to investors at taxpayers' expense. Investors who took risks to earn profits must also bear the losses. Not every business failure carries systemic risk. The government can ensure a well-functioning financial industry, able to make new loans to creditworthy borrowers, without bailing out particular investors and institutions whose choices proved unwise.
Its ambiguity. Neither the mission of the new agency nor its oversight are clear. If taxpayers are to buy illiquid and opaque assets from troubled sellers, the terms, occasions, and methods of such purchases must be crystal clear ahead of time and carefully monitored afterwards.
Its long-term effects. If the plan is enacted, its effects will be with us for a generation. For all their recent troubles, America's dynamic and innovative private capital markets have brought the nation unparalleled prosperity. Fundamentally weakening those markets in order to calm short-run disruptions is desperately short-sighted.
For these reasons we ask Congress not to rush, to hold appropriate hearings, and to carefully consider the right course of action, and to wisely determine the future of the financial industry and the U.S. economy for years to come.
Signed (updated at 9/25/2008 8:30AM CT)
Acemoglu Daron (Massachussets Institute of Technology)
Adler Michael (Columbia University)
Admati Anat R. (Stanford University)
Alexis Marcus (Northwestern University)
Alvarez Fernando (University of Chicago)
Andersen Torben (Northwestern University)
Baliga Sandeep (Northwestern University)
Banerjee Abhijit V. (Massachussets Institute of Technology)
Barankay Iwan (University of Pennsylvania)
Barry Brian (University of Chicago)
Bartkus James R. (Xavier University of Louisiana)
Becker Charles M. (Duke University)
Becker Robert A. (Indiana University)
Beim David (Columbia University)
Berk Jonathan (Stanford University)
Bisin Alberto (New York University)
Bittlingmayer George (University of Kansas)
Boldrin Michele (Washington University)
Brooks Taggert J. (University of Wisconsin)
Brynjolfsson Erik (Massachusetts Institute of Technology)
Buera Francisco J. (UCLA)
Camp Mary Elizabeth (Indiana University)
Carmel Jonathan (University of Michigan)
Carroll Christopher (Johns Hopkins University)
Cassar Gavin (University of Pennsylvania)
Chaney Thomas (University of Chicago)
Chari Varadarajan V. (University of Minnesota)
Chauvin Keith W. (University of Kansas)
Chintagunta Pradeep K. (University of Chicago)
Christiano Lawrence J. (Northwestern University)
Cochrane John (University of Chicago)
Coleman John (Duke University)
Constantinides George M. (University of Chicago)
Crain Robert (UC Berkeley)
Culp Christopher (University of Chicago)
Da Zhi (University of Notre Dame)
Davis Morris (University of Wisconsin)
De Marzo Peter (Stanford University)
Dubé Jean-Pierre H. (University of Chicago)
Edlin Aaron (UC Berkeley)
Eichenbaum Martin (Northwestern University)
Ely Jeffrey (Northwestern University)
Eraslan Hülya K. K. (Johns Hopkins University)
Faulhaber Gerald (University of Pennsylvania)
Feldmann Sven (University of Melbourne)
Fernandez-Villaverde Jesus (University of Pennsylvania)
Fohlin Caroline (Johns Hopkins University)
Fox Jeremy T. (University of Chicago)
Frank Murray Z. (University of Minnesota)
Frenzen Jonathan (University of Chicago)
Fuchs William (University of Chicago)
Fudenberg Drew (Harvard University)
Gabaix Xavier (New York University)
Gao Paul (Notre Dame University)
Garicano Luis (University of Chicago)
Gerakos Joseph J. (University of Chicago)
Gibbs Michael (University of Chicago)
Glomm Gerhard (Indiana University)
Goettler Ron (University of Chicago)
Goldin Claudia (Harvard University)
Gordon Robert J. (Northwestern University)
Greenstone Michael (Massachusetts Institute of Technology)
Guadalupe Maria (Columbia University)
Guerrieri Veronica (University of Chicago)
Hagerty Kathleen (Northwestern University)
Hamada Robert S. (University of Chicago)
Hansen Lars (University of Chicago)
Harris Milton (University of Chicago)
Hart Oliver (Harvard University)
Hazlett Thomas W. (George Mason University)
Heaton John (University of Chicago)
Heckman James (University of Chicago - Nobel Laureate)
Henderson David R. (Hoover Institution)
Henisz, Witold (University of Pennsylvania)
Hertzberg Andrew (Columbia University)
Hite Gailen (Columbia University)
Hitsch Günter J. (University of Chicago)
Hodrick Robert J. (Columbia University)
Hopenhayn Hugo (UCLA)
Hurst Erik (University of Chicago)
Imrohoroglu Ayse (University of Southern California)
Isakson Hans (University of Northern Iowa)
Israel Ronen (London Business School)
Jaffee Dwight M. (UC Berkeley)
Jagannathan Ravi (Northwestern University)
Jenter Dirk (Stanford University)
Jones Charles M. (Columbia Business School)
Kaboski Joseph P. (Ohio State University)
Kahn Matthew (UCLA)
Kaplan Ethan (Stockholm University)
Karolyi, Andrew (Ohio State University)
Kashyap Anil (University of Chicago)
Keim Donald B (University of Pennsylvania)
Ketkar Suhas L (Vanderbilt University)
Kiesling Lynne (Northwestern University)
Klenow Pete (Stanford University)
Koch Paul (University of Kansas)
Kocherlakota Narayana (University of Minnesota)
Koijen Ralph S.J. (University of Chicago)
Kondo Jiro (Northwestern University)
Korteweg Arthur (Stanford University)
Kortum Samuel (University of Chicago)
Krueger Dirk (University of Pennsylvania)
Ledesma Patricia (Northwestern University)
Lee Lung-fei (Ohio State University)
Leeper Eric M. (Indiana University)
Leuz Christian (University of Chicago)
Levine David I. (UC Berkeley)
Levine David K. (Washington University)
Levy David M. (George Mason University)
Linnainmaa Juhani (University of Chicago)
Lott John R. Jr. (University of Maryland)
Lucas Robert (University of Chicago - Nobel Laureate)
Luttmer Erzo G.J. (University of Minnesota)
Manski Charles F. (Northwestern University)
Martin Ian (Stanford University)
Mayer Christopher (Columbia University)
Mazzeo Michael (Northwestern University)
McDonald Robert (Northwestern University)
Meadow Scott F. (University of Chicago)
Mehra Rajnish (UC Santa Barbara)
Mian Atif (University of Chicago)
Middlebrook Art (University of Chicago)
Miguel Edward (UC Berkeley)
Miravete Eugenio J. (University of Texas at Austin)
Miron Jeffrey (Harvard University)
Moretti Enrico (UC Berkeley)
Moriguchi Chiaki (Northwestern University)
Moro Andrea (Vanderbilt University)
Morse Adair (University of Chicago)
Mortensen Dale T. (Northwestern University)
Mortimer Julie Holland (Harvard University)
Muralidharan Karthik (UC San Diego)
Nanda Dhananjay (University of Miami)
Nevo Aviv (Northwestern University)
Ohanian Lee (UCLA)
Pagliari Joseph (University of Chicago)
Papanikolaou Dimitris (Northwestern University)
Parker Jonathan (Northwestern University)
Paul Evans (Ohio State University)
Pejovich Svetozar (Steve) (Texas A&M University)
Peltzman Sam (University of Chicago)
Perri Fabrizio (University of Minnesota)
Phelan Christopher (University of Minnesota)
Piazzesi Monika (Stanford University)
Piskorski Tomasz (Columbia University)
Rampini Adriano (Duke University)
Reagan Patricia (Ohio State University)
Reich Michael (UC Berkeley)
Reuben Ernesto (Northwestern University)
Roberts Michael (University of Pennsylvania)
Robinson David (Duke University)
Rogers Michele (Northwestern University)
Rotella Elyce (Indiana University)
Ruud Paul (Vassar College)
Safford Sean (University of Chicago)
Sandbu Martin E. (University of Pennsylvania)
Sapienza Paola (Northwestern University)
Savor Pavel (University of Pennsylvania)
Scharfstein David (Harvard University)
Seim Katja (University of Pennsylvania)
Seru Amit (University of Chicago)
Shang-Jin Wei (Columbia University)
Shimer Robert (University of Chicago)
Shore Stephen H. (Johns Hopkins University)
Siegel Ron (Northwestern University)
Smith David C. (University of Virginia)
Smith Vernon L. (Chapman University- Nobel Laureate)
Sorensen Morten (Columbia University)
Spiegel Matthew (Yale University)
Stevenson Betsey (University of Pennsylvania)
Stokey Nancy (University of Chicago)
Strahan Philip (Boston College)
Strebulaev Ilya (Stanford University)
Sufi Amir (University of Chicago)
Tabarrok Alex (George Mason University)
Taylor Alan M. (UC Davis)
Thompson Tim (Northwestern University)
Tschoegl Adrian E. (University of Pennsylvania)
Uhlig Harald (University of Chicago)
Ulrich, Maxim (Columbia University)
Van Buskirk Andrew (University of Chicago)
Veronesi Pietro (University of Chicago)
Vissing-Jorgensen Annette (Northwestern University)
Wacziarg Romain (UCLA)
Weill Pierre-Olivier (UCLA)
Williamson Samuel H. (Miami University)
Witte Mark (Northwestern University)
Wolfers Justin (University of Pennsylvania)
Woutersen Tiemen (Johns Hopkins University)
Zingales Luigi (University of Chicago)
Zitzewitz Eric (Dartmouth College)
A few possible conflicts of interest amongst those voting on the bailout bill:
Senator Christopher J. Dodd 2003 - 2008
Citigroup Inc $314,694
SAC Capital Partners $282,000
Royal Bank of Scotland $229,950
American International Group $224,678
Bear Stearns $205,600
Goldman Sachs $175,600
Morgan Stanley $155,000
Credit Suisse Group $154,550
Merrill Lynch $135,950
Lehman Brothers $133,800
JPMorgan Chase & Co $129,650
Hartford Financial Services $110,450
Bank of America $91,300
Senator Barack Obama (D-IL) Cycle Fundraising, 2003 - 2008
Goldman Sachs $748,880
JPMorgan Chase & Co $493,469
Citigroup Inc $467,849
Lehman Brothers $393,324
Morgan Stanley $341,320
Senator John McCain (R-AZ) Cycle Fundraising, 2003 - 2008
Merrill Lynch $306,813
Citigroup Inc $277,251
Goldman Sachs $234,345
Morgan Stanley $234,272
JPMorgan Chase & Co $185,325
Credit Suisse Group $165,575
US Government $137,842
Bank of America $133,975
Wachovia Corp $123,096
Pinnacle West Capital $123,050
Lehman Brothers $120,600
US Army $103,613
Bear Stearns $99,300
110th Congress House 2007-2008
SPEAKER - Nancy Pelosi (D-CA)
Citigroup Inc $11,000
Goldman Sachs $11,000
JPMorgan Chase & Co $11,000
Credit Union National Assn $10,000
Fannie Mae $10,000
Mortgage Bankers Assn $10,000
Natl Assn Real Estate Investment Trusts $10,000
Wells Fargo $10,000
MAJORITY LEADER - Steny Hoyer (D-MD)
JPMorgan Chase & Co $35,300
Goldman Sachs $12,500
Citigroup Inc $10,250
National Venture Capital Assn $10,000
Natl Assn Real Estate Investment Trusts $10,000
Securities Industry & Financial Mkt Assn $10,000
Wells Fargo $10,000
MAJORITY WHIP - James E. Clyburn (D-SC)
Wachovia Corp $13,500
American Express $12,000
Bank of America $11,000
JPMorgan Chase & Co $11,000
Credit Union National Assn $10,000
Natl Assn Real Estate Investment Trusts $10,000
CAUCUS CHAIR - Rahm Emanuel (D-IL)
JPMorgan Chase & Co $45,700
Goldman Sachs $32,950
Citigroup Inc $28,500
Lehman Brothers $27,600
Merrill Lynch $20,800
Carlyle Group $16,250
Morgan Stanley $16,200
Bank of America $16,000
MINORITY LEADER - John Boehner (R-OH)
American Financial Group $14,300
Morgan Stanley $14,300
Goldman Sachs $12,000
MINORITY WHIP - Roy Blunt (MN)
Jones Financial Companies $31,800
Blackstone Group $20,700
Interface Group $13,800
Citigroup Inc $10,250
Altria Group $10,000
Fannie Mae $10,000
JPMorgan Chase & Co $10,000
Securities Industry & Financial Mkt Assn $10,000
You hit the nail on the head with the thread title, josh4.
With nooooooo end in sight...
Bloomberg Analyst: $700 Billion Bailout Could Balloon to $5 Trillion
Marc Faber Ltd. director calls initial cost estimates a 'drop in the bucket,' says real solution is to bring down overleveraging.
By Jeff Poor
Business & Media Institute
9/26/2008 11:09:16 AM
Conservative House Republicans and economists warn about the toll a $700 billion federal bailout of the financial sector would have on the taxpayers footing the bill. But according to Bloomberg TV analyst Marc Faber, the actual cost could be closer to $5 trillion.
Faber, author of the “Gloom Boom Doom” report, appeared on Bloomberg TV’s Sept. 26 broadcast of “Bloomberg Today” and noted just how small the proposed $700 billion bailout is compared to the overall U.S. credit market.
“So now they try to solve the problem by having this credit bubble actually extended and I think the $700 billion will be like a drop in the bucket because the total credit market in the U.S. is something close to $60 trillion, then you have the CDS market – credit default swap – of around $62 trillion. Then you have the whole derivatives worldwide worth about a notional $1,300 trillion. So the $700 billion is really nothing and the Treasury is just giving out this figure when actually the end figure may be $5 trillion.”
In his Bloomberg TV analysis of the financial bailout, Faber noted the inconsistencies of government intervention to date, but not without taking a swipe at the compensation of Wall Street executives.
“The reaction to that is inconsistent,” Faber said. “You let essentially Lehman Brothers go bankrupt but you save AIG and you save other brokers by merging them with banks and then you come with a bailout plan that should be paid by the taxpayer, when Wall Street last year in total received a compensation of $69 billion - $38-39 billion of which were bonuses paid to the executives essentially of Wall Street.”
Faber told “Bloomberg Today” host Jeremy Naylor the solution isn’t government intervention through a bailout, but to figure out how to eliminate the excessive leveraging in U.S. financial markets.
“Well first of all, I think the decline of home prices of 20 percent is a relatively minor decline so far,” Faber said. “And it’s created so many problems. It’s not the problem that home prices have gone down. The problem is excessive leverage. And somewhere, somehow, the U.S. has to try to bring down the excess leverage that exists in the system – that incidentally was built over the last seven to 15 years under Fed chairman Mr. Greenspan and then also under Mr. Bernanke.”
Ron Paul talking about the possible destruction of the dollar as further induced by the recent bailout.
The Creation of the Second Great Depression
by Ron Paul
Whenever a Great Bipartisan Consensus is announced, and a compliant media assures everyone that the wondrous actions of our wise leaders are being taken for our own good, you can know with absolute certainty that disaster is about to strike.
The events of the past week are no exception.
The bailout package that is about to be rammed down Congress’ throat is not just economically foolish. It is downright sinister. It makes a mockery of our Constitution, which our leaders should never again bother pretending is still in effect. It promises the American people a never-ending nightmare of ever-greater debt liabilities they will have to shoulder. Two weeks ago, financial analyst Jim Rogers said the bailout of Fannie Mae and Freddie Mac made America more communist than China! "This is welfare for the rich," he said. "This is socialism for the rich. It’s bailing out the financiers, the banks, the Wall Streeters."
That describes the current bailout package to a T. And we’re being told it’s unavoidable.
The claim that the market caused all this is so staggeringly foolish that only politicians and the media could pretend to believe it. But that has become the conventional wisdom, with the desired result that those responsible for the credit bubble and its predictable consequences – predictable, that is, to those who understand sound, Austrian economics – are being let off the hook.
The Federal Reserve System is actually positioning itself as the savior, rather than the culprit, in this mess!
* The Treasury Secretary is authorized to purchase up to $700 billion in mortgage-related assets at any one time. That means $700 billion is only the very beginning of what will hit us.
* Financial institutions are "designated as financial agents of the Government." This is the New Deal to end all New Deals.
* Then there’s this: "Decisions by the Secretary pursuant to the authority of this Act are non-reviewable and committed to agency discretion, and may not be reviewed by any court of law or any administrative agency." Translation: the Secretary can buy up whatever junk debt he wants to, burden the American people with it, and be subject to no one in the process.
There goes your country.
Even some so-called free-market economists are calling all this "sadly necessary." Sad, yes. Necessary? Don’t make me laugh.
Our one-party system is complicit in yet another crime against the American people. The two major party candidates for president themselves initially indicated their strong support for bailouts of this kind – another example of the big choice we’re supposedly presented with this November: yes or yes. Now, with a backlash brewing, they’re not quite sure what their views are. A sad display, really.
Although the present bailout package is almost certainly not the end of the political atrocities we’ll witness in connection with the crisis, time is short. Congress may vote as soon as tomorrow. With a Rasmussen poll finding support for the bailout at an anemic seven percent, some members of Congress are afraid to vote for it. Call them! Let them hear from you! Tell them you will never vote for anyone who supports this atrocity.
The issue boils down to this: do we care about freedom? Do we care about responsibility and accountability? Do we care that our government and media have been bought and paid for? Do we care that average Americans are about to be looted in order to subsidize the fattest of cats on Wall Street and in government? Do we care?
When the chips are down, will we stand up and fight, even if it means standing up against every stripe of fashionable opinion in politics and the media?
Times like these have a way of telling us what kind of a people we are, and what kind of country we shall be.
September 25, 2008
Dr. Ron Paul is a Republican member of Congress from Texas.
http://www.lewrockwell.com/paul/paul479.html
Groundhog Boy
quote:
Originally posted by Trancer-X
You hit the nail on the head with the thread title, josh4.
With nooooooo end in sight...
Bloomberg Analyst: $700 Billion Bailout Could Balloon to $5 Trillion
Marc Faber Ltd. director calls initial cost estimates a 'drop in the bucket,' says real solution is to bring down overleveraging.
By Jeff Poor
Business & Media Institute
9/26/2008 11:09:16 AM
Conservative House Republicans and economists warn about the toll a $700 billion federal bailout of the financial sector would have on the taxpayers footing the bill. But according to Bloomberg TV analyst Marc Faber, the actual cost could be closer to $5 trillion.
Faber, author of the “Gloom Boom Doom” report, appeared on Bloomberg TV’s Sept. 26 broadcast of “Bloomberg Today” and noted just how small the proposed $700 billion bailout is compared to the overall U.S. credit market.
“So now they try to solve the problem by having this credit bubble actually extended and I think the $700 billion will be like a drop in the bucket because the total credit market in the U.S. is something close to $60 trillion, then you have the CDS market – credit default swap – of around $62 trillion. Then you have the whole derivatives worldwide worth about a notional $1,300 trillion. So the $700 billion is really nothing and the Treasury is just giving out this figure when actually the end figure may be $5 trillion.”
We lost about $1 trillion in market capitalization today. Another week of this, we might be devalued enough to hit the high figure Faber's talking about.
pkcRAISTLIN
ron paul: another american in dire need of an economics refresher.
Groundhog Boy
quote:
Originally posted by pkcRAISTLIN
ron paul: another american in dire need of an economics refresher.
It's frightening how much his popular, noble, but unrealistic, ideals are so heralded by young people here.
Our youth, who don't have the educational discretion to realize what's logical and what's not, are fighting with our old people, who can't get the information to determine what's fact or fiction. We're in a fairly ed situation.
Trancer-X
quote:
Originally posted by Groundhog Boy
It's frightening how much his popular, noble, but unrealistic, ideals are so heralded by young people here.
Our youth, who don't have the educational discretion to realize what's logical and what's not, are fighting with our old people, who can't get the information to determine what's fact or fiction. We're in a fairly ed situation.
I would hardly call them unrealistic. It's simply a different school of economics.
He doesn't believe in printing unlimited amounts of fiat money because he's studied his history and has seen where that's led governments in the past - down the ter.
It's funny how he schools Bernanke but then gets labeled as uneducated in economics just because he believes in sound money.
