Discussion in 'Wall St. News' started by NY_HOOD, Sep 30, 2008.
this is well above the 2% fed.
Like manipulated and intentional to persuade opposition to go along with the $700B GRAB..
"See... if you don't go along quietly, everything gonna turn to shit...look at rates"
This isn't manipulation, it is financial panic at the banks. The reason Fed Funds and Libor spiked is because banks are afraid to lend to each other, each one fearing the other will be the next one to go under.
Its unbelievable how ignorant "main street" people are. They rather shoot themselves in the foot in the hopes of punishing bankers without understanding how they will be effected by their actions.
Well guess what, we are in a prisoners dilema, we can either risk letting the guilty parties go unpunished or we can execute the innocent with the guilty to make a point...
Maybe. Maybe the "crisis" is overstated... to get us to "go along" with the mugging.
I called my bank and asked about borrowing for a car or house... they told me "no problem"..
So... thing's ain't "frozen" everywhere.
They got your security and freedom with 911/ Patriot Act and now you will slave the average people to their money control.
Good - cheap credit (aka 'dope') got us into this pickle.
Maybe high borrowing costs will impose the fiscal discipline that artificially low interest rates couldn't.
Yup. The Patriot Act went right over most of our heads....
I suspect history of this will not be kind. Likely to be regarded as the "2nd worst legislation"... right behind the creation of the Federal Reserve.
I assure you it is not overstated. The impact of what is happening amongst major banks is not hitting main street yet because some companies have locked financing with their banks for a certain period of time, but when those locks expire those banks will be forced to reduce that credit because of their own borrowing constraints or to raise rates to the going rates on wall street.
Unfortunately many companies rely on bank credit to do things like pay salaries before products are sold; exporters and importers rely on banks to finance payments before deliveries... I could go on and on.
The point Im trying to make is that if you don't have a functioning interbank credit market NOW you might not have one two months from now for the rest of us. Without credit provided by banks most major US companies can't function, if they can't function then "main street" people who are innocent and didnt borrow over their heads will lose their jobs.
I ask you this, what is the worse solution, punish the guilty along with the innocent or let the guilty free?
I choose the latter.
Indeed I agree with you, but what no one can quantify is whether its better to have a sudden shock (ala 1929) or to risk having a 1990s Japan redux.
If we look back to the Savings and Loan crisis we managed to dig our selves out of that hole "eventually", but the last time we had a credit crunch on today's scale was in 1929 and the pain that followed was much worse then the Japanese scenario.
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