the latest plan calls for govt to take level 3 assets off the hands of financials. will markets be higher or lower in a week?
Does not matter. The market is "Dead" in the eyes of the public. The wash out of 90% of the IBANKS and the fact that Money Market funds (one) broke the buck......smart money has moved and will continue to move out of the market. Gov regulations have yet to begin. They will come in and regulate the markets, as with short selling, they will destory the Free Markets. Private Capital will be used to push "Private Ventures"with Private Companies. That is the future trend. Manufacturing, Drilling, Wind Farms, Farming of whatever, anything that has a tangable asset,...Something that is produced. Techonogy and Telecome private ventures will pick up. Tax breaks for investors as well as a decent return in their monies is the future. Also, outside investments and a boat load of Hard Assets like RE will be very attractive in a year. The PUBLIC COMPANY has a black eye now. They lie, the cook books, they use risk beyond any ones wildest dreams and keep it off the books. They are not held accountable. And common/prefered stock holders get wiped out. The wealth that is created is not "True Wealth" per say, its all on paper. Just as those that held LEH, BS, etc. Mom and Pop types may still roll their 2 dollars a month into a mutal fund but that is about it. The biggest wealth destruction has occured in the last week. The dust will settle but the smart money has left the building. There will all ways be a "Market" to trade. But it will be one tight ass market if not "Sideways" for the next 10 years. Do not think that things will be back as "NORMAL".
in 3 years when real state is above its 2003 level,bernanke and palson will be heralded for their genius,the U.S. can live tax free off all their profits,this is really gonna piss off the taliban,maybe we can buy them out wth a cuople of hundred billion
CNN said there are 1000 banks currently in trouble. How can the Ted bail out everyone? IF they do, shouldn't we buy gold as the dollar will be worthless?
Who'll buy the junk from the Fed or the new entity it creates after it takes over the bad debt from the troubled banks?
The banks are just money stores,they apparently thought they were traders too,they didn't do so well,they will have to overhaul the banking system and shitcan a lot of bad investment products.The consumer has to stay afloat to fund the fed with taxes so the lights can stay on,that's what will make or break us.
Thing is though there is no magic solution as far as I can see the Fed will have to print money and or borrow to finance this activity. Either way this will likely push up interest rates and/or inflation which will also threaten the economy? It will also devalue the dollar further increasing inflation etc. Moreover it may well be the asian central banks who've so far bank rolled the US decide they don't want to be exposed to US housing market. It'll be interesting to see the deail of what the Fed proposes but I think its nlikey this will be a pancea for all americas economic woes.
It's just a bunch of worthless paper swaps that have no valuse. Its wall street lastest fleecing of America.