Let's see what happens, doesn't look good right now

[peternap]

The bailout plan has been written and agreed to. Now it's going through finalization. Stocks should soar...right? Maybe not! It's going to be another interesting day.


https://i198.photobucket.com/albums/aa57/peternap/trees/zeusleep.jpg
TOKYO (AP) -- Asian stock markets fell Monday amid investors skepticism that the deal reached in Washington over a $700 billion bank bailout would quickly resolve the bad debt crisis.

Adding to concerns of further global financial contagion was news Sunday that Belgium, the Netherlands and Luxembourg pledged more than euro11 billion ($16 billion) to Dutch-Belgian bank and insurance giant Fortis NV to keep it from insolvency.

http://biz.yahoo.com/ap/080929/oil_prices.html
SINGAPORE (AP) -- Oil prices fell to near $103 a barrel in Asia Monday on concern that economic growth will slow across the globe despite a tentative agreement in Washington on a $700 billion bailout package to stabilize the U.S. financial system.

[ScottA]

Now is the time to put on a good suit and tie and stand on wall street with a tin cup in your hand. 

[peternap]

I expect the pawn shops will have some good deals on Rolex watches now.

[desdawg]

I think there has been a lot of pressure from constituents put on the ones who have to vote. So what was presented as a done deal may not be done after all. A lot of those folks doing the voting want to be re-elected and probably feel threatened. This was a hasty process behind closed doors. No C-span cameras were running inside the room. This may not be over for a while. We will see shortly I guess.

[John Raabe]

We are likely to be at only at the beginning of this. There is lots more pain to be shared.

The market is down as the unrealistic hope in a miracle is replaced by the reality of all the investment and job losses.

De-leveraging will continue and every high paid investment bank job that vaporizes will trigger belt tightening by ten other businesses.

[Sassy]

The foreign markets know that the $700 billion was created by a bankrupt country for the bankrupt investment banking cartels so how could that generate much trust?     I agree, this is going to be a long, painful, drawn out ordeal in which many will be dashed upon the rocks of insolvency...   

[muldoon]

maybe we can get a short squeeze and get some buyers out there and put in a bottom here...  oh wait, they made sure that couldn't happen.  no buyers, no bids.  this is getting ugly.  I closed my WB options today for nice profit.  I'm now completely out again.   

[apaknad]

just heard on glen beck's show that the $700 billion dollar amount wasn't picked because of any particular price point but just because they wanted an amount that was large. what a bunch of inept clowns(my apologies to clowns). i think all responsible should be sent to russia for treason or jailed!!!

[n74tg]

I agree with John --- either with or without the bailout package, we are at just the beginning of the pain. 

[glenn kangiser]

I hope all of our people get out OK, but I don't see 401K's as making it out, but they will always owe it to you. 

Sassy has one but I tell her not to hold her breath 'til she gets it.

[Sassy]

Looks like the United Kingdom is having problems...  http://business.timesonline.co.uk/tol/business/markets/article4844255.ece

It has caused the dollar to strengthen & also US Treasury debt staged a meteoric rally as investors scrambled for the safe haven of American government securities. The 30-year Treasury bond's price rose more than three points. The flight to safety was even after the Federal Reserve said it would substantially increase currency swap limits to $620 billion (£342 billion ) with nine leading central banks in response to short-term strains in the money markets.   that's where my Thrift Savings Plan retirement money is right now...  makes me feel a little better although I know it's mostly a mirage... 

[muldoon]

I keep going back to these swap deals and trying to figure out the mechanics of them.  The swap facility was announced back around the time of the TAF as a response to the crises and since March it has been used a bit with increasing frequency.  This latest dump of 630 billion is absolutely huge.  From what I have read, this is literally a swap of currencies.  We give other friendly central banks us dollars and they give us their currency such as swiss francs or japanese yen and such.  One theory for this is to help sustain the dollar while the crises is underway. 

As foreign investors leave US denominated assets, they are selling and wishing to dump huge sums of dollars.  This devalues our dollar causing it to weaken (which looks like the inflation we saw earlier this year with crushed dollar and strong oil).  Now by swapping these currencies and providing foreign currencies here we can stop the strong selling of dollars, or at least stave off demand to do so . 

As the currencies are swapped at par, it doesn't "cost" us anything on the balance sheet.  However it lends credence to the ability of governments to manipulate FX markets.  Like I said I am trying to work this out and I dont think I have the pieces put together right just yet.  But the BS meter is ringing. 

I think some insightful information is within this link:
http://www.khaleejtimes.com/DisplayArticleNew.asp?col=&section=business&xfile=data/business/2008/August/business_August888.xml

dont know what this means for the dollar long term.  The swaps seems to be getting bigger and bigger and more frequent.  If this is an FX backdoor, then traders will figure it out soon enough and arbitrage the situation.  Nothing works forever in financial worlds. 

[glenn kangiser]

Still seems like another name for just printing dollars but will watch for your information as you figure it out.

I'm not in any market but am still affected as work slows or grinds to a halt because of this.

[muldoon]

its not the same as printing as they are not creating any new actual credit or reserve notes.  it's a swap, meaning using the exchange rate we swap with another central bank dollars for foreign currency.   The idea here (I think) is to work around market pressure to sell dollars and dollar denominated assets by increasing demand for dollars in the overall market.  I say its not on the books because according to the fed balance sheet they dont actually have 630 billion to work with.  it being a swap makes sense because that would be a net wash on the books. 

**
different tangent. 
of course in a fractional reserve system, if someone gave you a 700 billion payment.  you would take 10% as reserves and lend the rest.  ten percent being 70billion, the balance being 630billion. 

http://www.bloomberg.com/apps/news?pid=20601087&sid=a9MTZEgukPLY&refer=home

"The Fed's expansion of liquidity, the biggest since credit markets seized up last year, came hours before the U.S. House of Representatives rejected a $700 billion bailout for the financial industry."

...  were they expecting that check to clear? 


and something else that fits some pieces together, from the ECB today,
http://www.telegraph.co.uk/finance/financetopics/financialcrisis/3104666/Banking-crash-hits-Europe-as-ECB-loses-traction.html

"The ECB is no longer able to inject liquidity because the money is just coming back to them again. This is extremely serious. If monetary policy is no longer working, there is a risk that the whole system will blow up in days," he said.

...
If this holds water, it paints a bleak picture.  Can the worlds central banks be the ones in need of a bailout?  Well, ECB is, it said so today which is outright jaw-dropping amazing by itself.  Are we?  It would explain alot about why this 300 to 1 opposed bill is even still on the table if so.  It also means it will be passed if the money is already spent. 

[Sassy]

kinda confusing - after reading "Den of Thieves" about the arbitrage racket of hostile takeovers of other companies & junk bonds, I don't even think those who are involved & running things know the whole extent of what is & isn't.  It's like Enron with their bookkeeping & the off-the-books trades, etc & on the books "assets" that weren't really there...  a big pyramid scheme... 

One economist wrote the article that was published by the Federal Reserve in 2005  "Is the US bankrupt?"  http://www.augustreview.com/news_commentary/economy/is_the_u.s._bankrupt_2006071719/ 
I've posted this before...  there's been lots of warnings but most weren't paying attention or they'd tell you to quit being full of doom & gloom, negative or believing in    "conspiracy theories"    ah well...   

The Federal Reserve is our central bank...  if this is going on throughout the world...  no amt of bailouts will make a difference, the dominoes have started to fall... 

a good article titled "BAIL OUTS, TIMING: WHO KNEW WHAT WHEN" by Devy Kidd @ http://www.newswithviews.com/Devvy/kidd398.htm
Edwin Viera stated The Hounds of Hell have been unleashed on we the people. Dr. Edwin Vieira so correctly called it on March 17, 2005:

"In addition, rather than disseminating demands for sound money and honest banking in order to deal with the crisis, the controlled media will orchestrate calls for massive increases in the supply of fiat currency and credit, ostensibly in order to enable common people to pay their debts. Of course, this will necessitate the maintenance of fractional-reserve central banking to emit the new currency, as well as the creation of more, more, and even more debt to serve as "security" for these emissions--thereby perpetuating the cause of the crisis and ensuring that further crises will break out later on. In this way, credulous Americans will be duped into chaining themselves to new debts in order to pay off their old ones, rendering permanent their financial indentured servitude to the Establishment."[2]

[apaknad]

so am i wrong in assuming that this is like using your credit cards to pay your mortgage when you have no job or savings? it's just a matter of time before you lose the house

[Sassy]

Just read this article - seems a pretty good explanation on what's happening (to my understanding) to the economy 
http://network.nationalpost.com/np/blogs/fpcomment/archive/2008/09/29/bailout-marks-karl-marx-s-comeback.aspx
Bailout marks Karl Marx's comeback
Posted: September 29, 2008, 8:03 PM by Jeff White
Martin Masse, mortgage crisis

Marx's Proposal Number Five seems to be the leading motivation for those backing the Wall Street bailout

By Martin Masse

In his Communist Manifesto, published in 1848, Karl Marx proposed 10 measures to be implemented after the proletariat takes power, with the aim of centralizing all instruments of production in the hands of the state. Proposal Number Five was to bring about the "centralization of credit in the banks of the state, by means of a national bank with state capital and an exclusive monopoly."

If he were to rise from the dead today, Marx might be delighted to discover that most economists and financial commentators, including many who claim to favour the free market, agree with him.

    con't at link above

[glenn kangiser]

John (Redover) sent a visual of how this plan is going to work out.  Much easier to understand this way.

Financial system on the left--- bailout and US economy on the right.

[MountainDon]

That's too funny. I don't understand what happened though.  Just like other things.

[ScottA]

Funny video. Pretty much says it all. 

[glenn kangiser]

The truck (representing the defrauded financial system) on the left should have had it's brakes set but it looks like after the wreck the driver got out and did not set the parking brake. Fits the system perfectly -- no one in control.

There is an air brake button he would normally pull to set the brakes... Likely he was in a bit of shock.  When it was righted, it had no brakes and the 80000 lbs started rolling down the hill taking the wrecker (the bailout, our children and their future offspring, as well as our retirements) with it.

Oh, yeah --- but the fat cats are still sitting in the  office whining and crying just the same as today.

...at least that's how I see it in my warped little mind...