If the losses keep mounting then the hit to the Fed will be very real. Also if the market can't price these assets how can the Fed? All I'm saying is he Fed cannot afford to prop up whole US housing market however much it would like to. I don't think the banks will be seeing great returns on their bonds. At best it'll protect them from further losses which is no bad deal for them I agree, but lets see the detail. As I say there is no magic cure the problem is still fundamentally there its just been stranfered to another part of the system.
If our government had any control over itself, it would give credit to the mess where it is do. The Federal Reserve is; * Rothschild Banks of London and Berlin (Rothschild and world economy) * Lazard Brothers Bank of Paris * Israel Moses Sieff Banks of Italy * Warburg Bank of Hamburg, Germany and Amsterdam * Kuhn Loeb Bank of New York * Lehman Brothers Bank of New York * Goldman Sachs Bank of New York * Chase Manhattan Bank of New York (Controlled By the Rockefeller Family Tree) They made the mess and they are responsible for it. Let them settle the debt. We need to go back to the gold standard and print our own money backed by such. Kick the fed out of the United States. We dont control them they control you. We need our own currency and no more of their fiat money. The Constitution says only gold and silver will be money in the United States. Article2 Section 10. Our money has been junk and all that think this situation will get better are full of dun. How long will you continue to trade debt with people who write the rules as they go. Will you be one of the ones that cant quit the habit of being used. Get over your Stockholm Syndrome!
money is just a means of exchange,however it's measured,higher or lower,there will still be goods and services exchanged,gotta weigh the pig,not the color of the lipstick, the rich(banks) just got too rich and their wealth will depreciate by the measure of the dollar,we will always only buy what we can afford,they need to take the bubble out of theses currency exchange rates,with out the exchange of goods and services we would return to the stoneage
Exactly!!!!! Did you are realize that every penny of personal income tax goes to just paying only the interest on the debt we "borrowed" (our money, so I don't get how we have to borrow from a 3rd party) from central banks. Without the F'ing Fed, you could live personal income tax free for the rest of your life... and have truly free markets, where the smart and shrewd survive and thrive in the markets, and the weak are flushed out of the system like a dead goldfish.
So are you saying the banks will depreciate in proportion to their wealth, making this a wash? Because if you look at their income statements you can clearly see the looted a more than they will lose in proportion to a shrinking dollar. They won in the end, even though they lost game, ruined the league and almost and still might kill the entire sport. Everyone else lost except those who got their hand on those ill gotten gains. Speaking of which... I sure as hell hope that every last penny of the copious money they looted is confinscated, and face criminal prosecution... but we know this won't happen, because they meant no harm, right... these things just happen... "Ooops, Did I do that?" Everyone knew where this was heading from get go... and no one had the ethical sense and/or balls to put the brakes on it. To me, that is clearly fraud on many levels. The only thing that scare these guys is losing all their money, and sharing a cell with Bubba. Some guy selling a $10 crack rock to a grown adult and gets 10 years in "pound you in ass prison", and not Club Fed. These guys ruin way more lives than drugs ever will with just a handful of them, and there is no recourse... so why not do it if you're a scumbag? When these crooks have to fear for their asses and their necks, and their wallets... oh I'm sure this type of thing would stop pretty quickly.
This bailout is not only morally reprehensible but economically bad too. It will cause interest rates to go up which HURTS economic expansion and the housing recovery in the long run. It will cause either higher taxes or loss of government jobs, because you're gonna have to either raise taxes or cut spending to pay for this, unless you plan to do it solely through borrowing. Who is short intermediate and long-term bonds?
Bush said the authorities the administration wants Congress to approve â which Paulson said earlier Friday could entail "hundreds of billions" of dollars â was not without risk. But he said that because "the vast majority of assets the government is planning to purchase have good value over time" he expects the money to be paid back to the federal government. Even if it isn't, he said "the risk of not acting would be far higher." Bush spoke in unusually stark terms about the problems facing the economy and the dangers of not acting, which he attempted to frame in terms relevant not just to Wall Street, but to ordinary Americans, too. He said "the gears of our financial system ... were at risk of grinding to a halt." If this were allowed to happen, the president predicted it would "cause massive job losses, devastate retirement accounts and further erode housing values, as well as dry up loans for new homes and cars and college tuitions." The president also appeared to go out of his way to reassure Americans that money in traditional checking accounts, savings accounts and certificates of deposit is safe. http://news.yahoo.com/s/ap/20080919/ap_on_go_pr_wh/bush_markets;_ylt=AlWLDcTM9OkAbAgz9OzlIKas0NUE So who are you going to believe the one who just spent your childrens future or the reasonable fact that they are lying to get the rest of you on-board. All your paper trades are going to be part of their profit margins soon enough. Who will bail you out? No one.
I say higher. This move will be strong IMO though the next few weeks should be very volatile but I see the major indices taking out the highs of the last rally until we see resistance around DOW 12200 to 12400, where we may hit the ceiling on the weekly downtrend line. I'm looking forward to shorting at next resistance Right now, long dong silver for the next week or so.
I dont understand what kind of bid they will put up there. a lot of banks would be insolvent if they hit private market bids, so the government will have to make subsidized bids
I heard someone say they will have a reverse auction. With lowest bids get filled. The whole things smells. What solvent bank will be willing to crystallize losses @ the bottom?? So you get only the "near" insolvent banks dumping their trash so they can't get bought out by solvent banks? That avoids a crash but sure as heck doesn't provide any kind of upside.