The Euro Zone is on the edge [UPDATE]

spiegel...

A Continent Stares into the Abyss

Fear is spreading through the financial markets as investors pull their money out of the crisis-stricken euro-zone countries. With Chancellor Angela Merkel ophttp://www.blogger.com/img/blank.gifposed to using the ECB's firepower to solve the crisis, the monetary union appears increasingly in danger of breaking apart. Some economists are even arguing for Germany to reintroduce the deutsche mark.

mm-hmmmm...

[UPDATE]

it looks like barack is worried about the global economy his re-election prospects...

from the guardian [emphasis added]...

Barack Obama is to press European Union officials to reach a definitive solution to their sovereign debt crisis, which is emerging as a major 2012 US election worry.

As Germany and France scramble to tighten budget controls across the eurozone, the European council president, Herman Van Rompuy, and the European commission president, José Manuel Barroso, will face tough questions from Obama at the White House on Monday on how much longer the crisis might go on.

No breakthroughs are expected from the meeting, which will not include the European heads of state who need to make crucial decisions about the future of the 17-nation currency union.

But Van Rompuy and Barroso wield influence as heads of key EU institutions at the heart of efforts to fight the crisis, which has thrown the future of the eurozone into doubt at a moment of weakness for the global economy.

what's at the root of barack's 2012 worry, i wonder...? is it merely the prospect of losing votes or that the super-rich elites who pump vast amounts of cash into obama's campaign coffers might either not have enough to throw his way or, if they do, might not be willing to fork it over...?

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No, small investors aren't "losing their appetite for risk," they finally get that they've been fleeced

and we're not going to hand over our money to the wall street casino quite so freely any more... fool me once, twice, three times, hey...! maybe i'll start getting a clue, particularly when those i put in office to supposedly look after MY interests hand trillions of my dollars over to the wall street crooks who just finished squandering everything i'd put in to THEIR hands in the foolish belief THEY had my interests at heart... HA...!

Investors withdrew a staggering $33.12 billion from domestic stock market mutual funds in the first seven months of this year, according to the Investment Company Institute, the mutual fund industry trade group. Now many are choosing investments they deem safer, like bonds.

If that pace continues, more money will be pulled out of these mutual funds in 2010 than in any year since the 1980s, with the exception of 2008, when the global financial crisis peaked.

Small investors are “losing their appetite for risk,” a Credit Suisse analyst, Doug Cliggott, said in a report to investors on Friday.

screw 'em... they can all go rot in hell...

p.s. atrios has a slightly different take...

It isn't about uncertainty or appetite for risk, it's about not having any fucking income.

yeah, that too, but my hunch is that, even if they did, they'd be goddam leery of putting it back in the hands of crooks...

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The perfect recovery would necessarily be 100% jobless ... Human costs of generating profit would be entirely eliminated

since "discovering" joe bageant, i've been continually amazed at how closely our views track with each other... there's been a not-so-fantastic scenario playing out in my mind lately where the board of directors and the senior management of a major corporation are discussing business strategy... the gist of the discussion is this... "we really don't want any damn employees... they're nothing but a cost drain not to mention they're a pain, always whining and causing trouble... is there any way we can just get rid of the lot of 'em...?"

joe bageant...

Paying the workers in society to produce real wealth costs money. Capitalists hate any sort of cost. It represents money that has somehow escaped their coffers. So when any behemoth corporation hands out thousands of pink slips on a Friday, Wall Street cheers and "the market" goes up. No ordinary mortal has ever seen "the market." But traders on the floor of 11 Wall Street, people who've deemed themselves more than mortal by virtue of their $110 Vanitas silk undershorts, assure us the market does exist. No tours of the New York Stock exchange are permitted, so we have to take their word for it.

In any case, in the money economy, eliminating costs, even if those costs happen to be feeding human beings, citizens of the empire, is sublime. That is why economists in the tertiary economy can declare a "jobless recovery" with a straight face. By their lights, the perfect recovery would necessarily be 100% jobless. Human costs of generating profit would be entirely eliminated.

it was only a little more than twenty years ago that people were considered to be an organization's most important resource... no longer... people as a "factor of production," as a cost to be minimized or eliminated, has trumped all respect for the dignity of labor, of the essential worth of using one's ability or skill to provide a livelihood for one's family...

fortunately, it's not true everywhere, at least not yet... in argentina, for instance, taxi driver is still considered a worthwhile and dignified career... i've met numerous taxi drivers, solid, middle-class family men, proud of their profession and respected by their friends and neighbors for the work they do... look at taxi drivers in the u.s... it's seen as a dead-end job, about on a par with flipping burgers at mac and don's...

our entire way of life is swirling the bowl but we can't rouse ourselves enough from our favorite tv programs to notice...

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Glenn: "The administration has substantial leverage ... on those issues ... actually important to them"

glenn greenwald has been engaged in a lengthy online and highly public debate with other so-called liberals and progressives (i would call them obama "apologists") who insist that obama isn't or can't fulfill much of his promised agenda because he is crippled by the essential powerlessness of the presidency... i happen to be in complete agreement with glenn... talkin' the talk without walkin' the walk is bad enough but when you're doing neither, it's inexcusable...

from time immemorial, people have been able to deduce one's real intentions and motivations from the behavior the person displays... as glenn so rightly points out, what are we hearing about closing guantánamo, about a genuine effort to restore human rights to detainees, about accountability for 4th amendment constitutional violations, about REAL - as opposed to cosmetic - financial reform, about the serious development of alternative energy resources, about a dedicated effort to get our country back from the corporations...? damn little... and what does that tell you...? it can only be one thing... the obama administration has chosen not to exert any effort in those directions whether or not they could be successful in influencing them...

The administration has substantial leverage to influence what Congress does, but they use it only on those issues that are actually important to them. And in those White House actions, one finds their actual priorities. The White House applied vast pressure on Congress to get what it wanted by having a war-funding bill enacted without conditions, demanding progressive provisions be stripped out of the financial reform bill, preventing drug re-importation from being enacted in order to please the pharmaceutical industry, negotiating the public option away with industry interests, and (to their credit) blocking funding for obsolete fighter jets. They exerted great influence over Congress because those were important priorities for Obama. By contrast, they do nothing on a whole slew of issues which they claim they support and which were at heart of the Obama campaign -- such as closing Guantanamo -- thus conveying to Democrats in Congress that they do not really care about such measures (or even oppose them) despite their public assurances to their base that they continue to support them.

at this point, as far as i'm concerned, there is no defense anyone can mount on behalf of the obama administration... actions have always spoken louder than words... much, MUCH louder, in fact, and i've re-learned a lesson i've re-learned so many times in my life as to be downright embarrassing: only pay attention to what a person says when and if it's backed up by congruent action...

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Talk about an understated headline

check it out...

U.S. Adds Jobs in May, but Private Hiring Disappoints

so... not good news, for sure, but certainly not disastrous either, right...?

A shadow fell across America’s economic recovery on Friday, as the Labor Department’s monthly report showed that private sector job growth was considerably weaker than expected.

The headline numbers suggested a reason to be optimistic — employers added 431,000 jobs and the jobless rate fell to 9.7 percent from 9.9 percent in April.

wrong...

But the underlying numbers showed that almost all of the job growth came from the 411,000 workers hired by the federal government to help with the Census. Most of those jobs will disappear in a few months.

By contrast, the private sector created 41,000, far short of expectations of 150,000 to 180,000 jobs. And the number of long-term unemployed, those who out of work for 27 or more weeks, remained at its highest rate since the Labor Department began collecting such data in the 1940s.

how about a headline a little bit more in line with the truth, like this one for instance...

Long-term unemployment remains highest since the 1940s

our precious stock market isn't easily fooled, however...

The markets were sent skidding immediately after the opening, after the Labor Department’s report on job growth in May fell short of expectations.

[...]

The Dow Jones industrial average closed below 10,000 for the third time this year, ending at 9,931.22, down 324.06, or 3.2 percent. It was the Dow’s lowest close in almost four months. The Standard & Poor’s 500-stock index was down 3.4 percent, and the Nasdaq composite declined 3.6 percent.

ya gotta love that "short of expectations" part... no shit...

but it ain't only the labor market stats that are weighing things down... no sir...

The euro also continued its decline, dropping to less than $1.20 on concerns about the fiscal troubles in Europe.

While the markets have been bedeviled for weeks by worries mostly over debt problems in Spain, Portugal and Greece, the boundaries of the problem shifted to Hungary after its government sent worrying signals about its finances. Investors fled the country’s assets, and the euro slipped to $1.1992 in afternoon trading in London, its lowest level since March 2006.

our so-called news media, no doubt responding to the urging of our super-rich elites, continue to try to paper over the deepening world financial crisis... but no matter how much they try to soft-pedal it, things just ain't gettin' better...

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"The latest face that masks the corporate state" - Chris Hedges on Obama

oh, would that it were otherwise...

What is happening in Greece, what will happen in Spain and Portugal, what is starting to happen here in states such as California, is the work of a global, white-collar criminal class. No government, including our own, will defy them. It is up to us. Barack Obama is simply the latest face that masks the corporate state. His administration serves corporate interests, not ours. Obama, like Goldman Sachs or Citibank, does not want the public to see how the Federal Reserve Bank acts as a private account and ATM machine for Wall Street at our expense. He, too, has helped orchestrate the largest transference of wealth upward in American history. He serves our imperial wars, refuses to restore civil liberties, and has not tamed our crippling deficits. His administration gutted regulatory agencies that permitted BP to turn the Gulf of Mexico into a toxic swamp. The refusal of Obama to intervene in a meaningful way to save the gulf’s ecosystem and curtail the abuses of the natural gas and oil corporations is not an accident. He knows where power lies. BP and its employees handed more than $3.5 million to federal candidates over the past 20 years, with the largest chunk of their money going to Obama, according to the Center for Responsive Politics.

We are facing the collapse of the world’s financial system. It is the end of globalization. And in these final moments the rich are trying to get all they can while there is still time. The fusion of corporatism, militarism and internal and external intelligence agencies—much of their work done by private contractors—has given these corporations terrifying mechanisms of control. Think of it, as the Greeks do, as a species of foreign occupation. Think of the Greek riots as a struggle for liberation.

[...]

As the crowds of strikers in Athens understand, it is not the banks that are important but the people who raise children, build communities and sustain life. And when a government forgets whom it serves and why it exists, it must be replaced.

in some ways, i wish chris hedges wasn't so damn rational and articulate... as much time as i spend in search of the big picture, when someone lays it on me as clearly as hedges does, it can be more than a little depressing...

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Roubini: no Glass-Steagall-Lite

when i hear the voice of reason, i recognize it immediately... it's simple, straightforward and completely understandable by even the most brain-cell challenged among us... it's also a pure breath of fresh air amidst all the spin and propagandized crap we're routinely fed...

We must be capable of going beyond the Volcker Rule, which is essentially Glass-Steagall-Lite. We need to go all the way and implement the kind of restrictions between commercial banking and investment banking that existed under Glass-Steagall.

[...]

If you look at the cases against Goldman Sachs and Morgan Stanley, leaving aside whether there was any fraud or illegal activity—that's for a court to decide—there is still a fundamental conflict of interest. These institutions are always on every side of every deal. That's an inherent conflict of interest that cannot be addressed with Chinese walls [internal company barriers between different aspects of its business].

There are no benefits from these economies of scale and scope, as we've seen from the disasters at Citigroup, AIG and others. And there are massive conflicts of interest. So I would separate all of these financial businesses under separate institutions, and I would go back to the kind of restrictions that we had under Glass-Steagall.

yes, nouriel, but that would put restrictions on unfettered greed and that is something our super-rich elites will simply not allow...

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Nassim Nicholas Taleb - my hero - and a voice of reason amid the idiots who pass for financial gurus

i picked up taleb's book in the dubai airport back in february... i'd never heard of it before but as soon as i got into it, i realized i was reading a very fundamental, profound work... i was so impressed with it, in fact, that i made it one of two required texts for my mba seminar on leadership that starts in june... i will virtually guarantee you, there will be only one or two of the students in the class that will have heard of it before they saw it on the required reading list... sad, eh...?

anyway, here's taleb, giving his none-too-rosy financial outlook...

PBS NEWS HOUR Interview with Nassim Nicholas Taleb, famous economist and author of "The Black Swan" and Dr. Mandelbrot, professor of Mathematics. Both say that the present economy more serious than the Great Depression, and the economy during the American Revolution.

here's the view from brasscheck tv...

A sobering discussion on the nature of the current economic crisis and why this one may be very different from ones in the past.

The problem: globalization adds exponentially to the complexity of potential outcomes, but the banking system is not designed to absorb the kind of rapid and massive changes globalization makes possible.

These aren't two hippies railing against the system. This is one of most insightful mathematicians and one of the most accomplished options traders of our time.

like i've repeatedly said, let's get on with it... watching this slow-mo train wreck is getting really boring...

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Roubini calls the market rally for what it is - a dead cat bounce

you can drop a dead cat off of a tall building and it will bounce but it's still dead...

Nouriel Roubini, the so-called "arch bear" economist who predicted the current financial crisis in 2006, added further gloom yesterday after he wrote off recent rises in global stock markets as no more than a dead cat bounce.

While an increasing number of analysts have in recent weeks urged investors to go back into equities, Mr Roubini, a professor at New York University's Stern School of Business who has emerged as one of the most respected economic voices in the wake of the credit crunch, warned yesterday that he didn't yet see a buying opportunity.

He holds little faith in the recent market rallies, which prompted some to suggest a recovery was underway. "I'm still cautious and bearish," he said. "I believe we are closer to a bottom in the stock market than a year ago, but this is a bear market rally."

Anthony Bolton, fund manager at Fidelity International, said last month that a bull phase had started, while analysts at Goldman Sachs have argued in recent weeks that "we are past the low point in the economic cycle".

However, Mr Roubini, dubbed "Dr Doom" for his warnings about financial meltdown, said there would be more bad news in the next few quarters.

let's get on with the financial meltdown, i say...

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The Dow takes another 280-point plunge and there's no end in sight

yowee-zowee...

6,594.44, down –281.40

and the rest of the world is pretty ugly as well...

Key Indexes	At close 03/05/2009	Change	% change	1 month	1 year

FTSE 100 Britain	3,529.86	–116.01	–3.18%	–16.53%	–39.70%
DAX Germany	3,695.49	–195.45	–5.02%	–18.07%	–44.71%
CAC 40 France	2,569.63	–106.05	–3.96%	–16.20%	–45.98%
FTSE Eurofirst 300 Europe	670.72	–25.51	–3.66%	–17.25%	–48.45%

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Dow ain't climbin' out of the cellar

i half thought it might take a jump back up but it looks like it might be establishing a new base... that tells me that it may well be poised to take another big drop...

6726.02, down -37.37

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Dow at 7243.73 at noon today, down -121.94 [UPDATE]

once again, i am sitting in kabul on monday night, 9 1/2 hours ahead of u.s. east coast time, watching the dow plunge... i'll update this post in the morning when i get up which will be approximately five hours after wall street's closing bell...

[UPDATE]

holy shit...! i knew it was going to continue to fall, but i wasn't expecting THIS...!

7,114.78, down -250.89

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Yikes...! Dow closes on Thursday at 7465.95

i guess we're going to have to hold our breath and see what's going to happen today...

Dow Jones Industrial Average ... 7,465.95 ... -89.68

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¡Que se vayan todos!

¡Que se vayan todos! (All of them must go!)

naomi klein opines that the disgust with capitalism that toppled four presidents in succession here in argentina may at last be spilling over to the rest of the world...

The stoic Icelandic matriarchs beating their pots flat even as their kids ransack the fridge for projectiles (eggs, sure, but yogurt?) echo the tactics made famous in Buenos Aires. So does the collective rage at elites who trashed a once thriving country and thought they could get away with it. As Gudrun Jonsdottir, a 36-year-old Icelandic office worker, put it: "I've just had enough of this whole thing. I don't trust the government, I don't trust the banks, I don't trust the political parties and I don't trust the IMF. We had a good country, and they ruined it."

[...]

Similar demands can be heard these days in Latvia, whose economy has contracted more sharply than any country in the EU, and where the government is teetering on the brink. For weeks the capital has been rocked by protests, including a full-blown, cobblestone-hurling riot on January 13. As in Iceland, Latvians are appalled by their leaders' refusal to take any responsibility for the mess. Asked by Bloomberg TV what caused the crisis, Latvia's finance minister shrugged: "Nothing special."

But Latvia's troubles are indeed special: the very policies that allowed the "Baltic Tiger" to grow at a rate of 12 percent in 2006 are also causing it to contract violently by a projected 10 percent this year: money, freed of all barriers, flows out as quickly as it flows in, with plenty being diverted to political pockets. (It is no coincidence that many of today's basket cases are yesterday's "miracles": Ireland, Estonia, Iceland, Latvia.)

Something else Argentina-esque is in the air. In 2001 Argentina's leaders responded to the crisis with a brutal International Monetary Fund-prescribed austerity package: $9 billion in spending cuts, much of it hitting health and education. This proved to be a fatal mistake. Unions staged a general strike, teachers moved their classes to the streets and the protests never stopped.

[...]

The pattern is clear: governments that respond to a crisis created by free-market ideology with an acceleration of that same discredited agenda will not survive to tell the tale. As Italy's students have taken to shouting in the streets: "We won't pay for your crisis!"

unfortunately, argentina's outburst only produced a temporary stay of execution... today, you can find the same elites, dressed in their faux populist finery, still lining their pockets and feeding from every available trough... the good news is that it's happening without imf and world bank debt... the bad news is that the poor are still poor and getting massively poorer by the day...

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"Once the bubble was over, was the time coming when we, too, would be “de-modernized?"

an extremely important read... don't pass it up...

from catherine austin fitts* via cryptogon...

Financial Coup d’Etat

In the fall of 2001 I attended a private investment conference in London to give a paper, The Myth of the Rule of Law or How the Money Works: The Destruction of Hamilton Securities Group.

The presentation documented my experience with a Washington-Wall Street partnership that had:

• Engineered a fraudulent housing and debt bubble;
• Illegally shifted vast amounts of capital out of the U.S.;
• Used “privatization” as form or piracy - a pretext to move government assets to private investors at below-market prices and then shift private liabilities back to government at no cost to the private liability holder.

Other presenters at the conference included distinguished reporters covering privatization in Eastern Europe and Russia. As the portraits of British ancestors stared down upon us, we listened to story after story of global privatization throughout the 1990s in the Americas, Europe, and Asia.

Slowly, as the pieces fit together, we shared a horrifying epiphany: the banks, corporations and investors acting in each global region were the exact same players. They were a relatively small group that reappeared again and again in Russia, Eastern Europe, and Asia accompanied by the same well-known accounting firms and law firms.

Clearly, there was a global financial coup d’etat underway.

The magnitude of what was happening was overwhelming. In the 1990’s, millions of people in Russia had woken up to find their bank accounts and pension funds simply gone – eradicated by a falling currency or stolen by mobsters who laundered money back into big New York Fed member banks for reinvestment to fuel the debt bubble.

Reports of politicians, government officials, academics, and intelligence agencies facilitating the racketeering and theft were compelling. One lawyer in Russia, living without electricity and growing food to prevent starvation, was quoted as saying, “We are being de-modernized.”

Several years earlier, I listened to three peasant women describe the War on Drugs in their respective countries: Colombia, Peru, and Bolivia. I asked them, “After they sweep you into camps, who gets your land and at what price?” My question opened a magic door. They poured out how the real economics worked on the War on Drugs, including the stealing of land and government contracts to build housing for the people who are displaced.

At one point, suspicious of my understanding of how this game worked, one of the women said, “You say you have never been to our countries, yet you understand exactly how the money works. How is this so?” I replied that I had served as Assistant Secretary of Housing at the US Department of Housing and Urban Development (HUD) in the United States where I oversaw billions of government investment in US communities. Apparently, it worked the same way in their countries as it worked in mine.

I later found out that the government contractor leading the War on Drugs strategy for U.S. aid to Peru, Colombia and Bolivia was the same contractor in charge of knowledge management for HUD enforcement. This Washington-Wall Street game was a global game. The peasant women of Latin America were up against the same financial pirates and business model as the people in South Central Los Angeles, West Philadelphia, Baltimore and the South Bronx.

Later, courageous reporting by Naomi Klein and Greg Palast confirmed in detail that the privitization and economic warfare model I discussed in London had deep roots in Latin America.

We were experiencing a global “heist”: capital was being sucked out of country after country. The presentation I gave in London revealed a piece of the puzzle that was difficult for the audience to fathom. This was not simply happening in the emerging markets. It was happening in America, too.

I described a meeting that had occurred in April 1997, more than four years before that day in London. I had given a presentation to a distinguished group of U.S. pension fund leaders on the extraordinary opportunity to reengineer the U.S. federal budget. I presented our estimate that the prior year’s federal investment in the Philadelphia, Pennsylvania area had a negative return on investment.

We presented that it was possible to finance places with private equity and reengineer the government investment to a positive return and, as a result, generate significant capital gains. Hence, it was possible to use U.S. pension funds to significantly increase retirees’ retirement security by successfully investing in American communities, small business and farms — all in a manner that would reduce debt, improve skills, and create jobs.

The response from the pension fund investors to this analysis was quite positive until the President of the CalPERS pension fund — the largest in the country — said, “You don’t understand. It’s too late. They have given up on the country. They are moving all the money out in the fall [of 1997]. They are moving it to Asia.”

Sure enough, that fall, significant amounts of moneys started leaving the US, including illegally. Over $4 trillion went missing from the US government. No one seemed to notice. Misled into thinking we were in a boom economy by a fraudulent debt bubble engineered with force and intention from the highest levels of the financial system, Americans were engaging in an orgy of consumption that was liquidating the real financial equity we needed urgently to reposition ourselves for the times ahead.

The mood that afternoon in London was quite sober. The question hung in the air, unspoken: once the bubble was over, was the time coming when we, too, would be “de-modernized?”

In 2009 — more than seven years later — this is a question that many of us are asking ourselves.

no surprises here, at least not for anyone who pays attention... it's always good, however, to see someone with intelligence and the credentials to back it up put the cards on the table...

* Catherine Austin Fitts ... background includes:

* Investment Advisor: Founder and managing member of Solari Investment Advisory Services, LLC.
* Entrepreneur: President of The Hamilton Securities Group, investment bank and financial software developer.
* Government Official: Assistant Secretary of Housing - Federal Housing Commissioner, Bush I.
* Investment Banker: Managing Director and member of the board of Wall Street firm Dillon, Read & Co. Inc.

Catherine has designed and closed over $25 billion of transactions and investments to-date and has led portfolio strategy for $300 billion of financial assets and liabilities.

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B.O.H.I.C.A. - the bailout continues as the financial meltdown shows no signs of abating

b.o.h.i.c.a. = bend over, here it comes again...

bank of america is the latest financial vampire to sink its teeth into the already-dessicated american taxpayer...

[T]he government agreed early Friday to provide an additional $20 billion infusion of capital into the bank and to cover the bulk of up to $118 billion in losses, largely arising from the bank’s Merrill acquisition.

Overall for 2008, Bank of America posted a net profit of $4.01 billion compared with net income of $14.98 billion a year earlier.

It said earnings were driven reflected “the deepening economic recession and extremely challenging financial environment, both of which significantly intensified in the last three months of 2008.”

but, wait...! there's MORE...! hold on to your wallets... citi is probably next in line...

Citigroup capped a devastating 2008 by announcing Friday that it would split into two entities and that it had posted an $8.29 billion loss for the fourth quarter.

When John A. Thain, left, of Merrill Lynch and Kenneth D. Lewis of Bank of America announced their companies’ merger in September, it looked as if Mr. Lewis had scored a coup. But now Bank of America is in need of more federal money to deal with Merrill’s losses.

Citigroup’s rival, Bank of America, also posted a loss, just hours after receiving a new infusion of government support.

Underlining the depth of the problems that have emerged from its acquisition of Merrill Lynch, Bank of America said Merrill had a fourth-quarter net loss of $15.31 billion, or $9.62 per diluted share, “driven by severe capital markets dislocations,” before the acquisition was completed.

Even as Bank of America was coping with the challenge of absorbing Merrill, Citigroup was announcing the latest steps in dismantling its own financial supermarket.

Citigroup confirmed that it would divide, for management purposes, into two separate businesses — Citicorp and Citi Holdings.

and, if you think things are slowing down in the financial meltdown department, check this out...

Last fall, as Federal Reserve and Treasury Department officials rode to the rescue of one financial institution after another, they took great pains to avoid doing anything that smacked of nationalizing banks.

They may no longer have that luxury. With two of the nation’s largest banks buckling under yet another round of huge losses, the incoming administration of Barack Obama and the Federal Reserve are suddenly dealing with banks that are “too big to fail” and yet unable to function as the sinking economy erodes their capital.

Particularly in the case of Citigroup, the losses have become so large that they make it almost mathematically impossible for the government to inject enough capital without taking a majority stake or at least squeezing out existing shareholders.

nationalized banks... cool...! it will be the absolute death knell for the capitalist, free-market, "invisible hand" quasi-religious ideology... and about goddam time, too...! < /snark >

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Unf-ingly believable...!

one for the books...

Fed Cuts Its Benchmark Interest Rate to Near Zero

The Federal Reserve entered a new era on Tuesday, setting its benchmark interest rate so low that it will have to reach for new and untested tools in fighting both the recession and downward pressure on consumer prices.

Going further than analysts anticipated, the central bank cut its target for the overnight federal funds rate to a range of 0 to 0.25 percent, a record low, virtually bringing the United States to the zero-rate policies that Japan used for six years in its own fight against deflation. The rate had previously been 1 percent, and a cut of a half-point had been widely expected.

The move, which affects the rate at which banks lend their reserves to one another, was to a large degree symbolic. Demand for interbank loans has been so low that the actual Fed funds rate has been far below the previous target for a month and hovered at barely 0.1 percent in the last several days.

In its statement announcing the cut, the Fed’s Open Market Committee made it clear that it still had ammunition with which to stimulate the economy and referred the wide array of new lending programs that essentially allow it to pump money directly into financial institutions.

“The Federal Reserve will employ all available tools to promote the resumption of sustainable economic growth and to preserve price stability,” it said. Among those tools, it cited the continuing purchase of agency debt and mortgage-backed securities and the “potential benefits of purchasing longer-term Treasury securities.”

round and round she goes, where she stops, nobody knows...

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The financial meltdown is picking up speed

when you see a 40%, 5,200-point year-to-date drop, and a 444-point, 5% drop in ONE DAY, you know things are getting really, really serious...



it ain't pretty, but my hope is that it will keep on going and force the kinds of changes we so desperately need...

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'Scuse me, but I have a VERY strong suspicion about WHY there's opposition to an automaker bailout

yes, i'm cynical, but you already knew that...

i was watching cnn last evening where paulson and bernanke were testifying before congress on the bailout... this was interspersed with stories about the big three automakers also scheduled to appear with hat in hand... now, i don't know about you, but i've been watching our - taxpayers' - money being handed out by the billions to banks, insurance companies, investment brokers and damn near everybody else that passes by, and i was sitting there trying to make sense out of why, fercryinoutloud, our super-rich elites, personified by paulson and bernanke, people who've been so free with our money up to now, were suddenly so hard over against helping detroit... then it dawned on me...

what sets detroit's situation apart from the banks, insurance companies, etc...? hmmmmmm...?? think about it... yep, that's right... unions AND a very large, blue-collar labor force... what is it that our elite, corporatist, super-rich overlords hate beyond almost everything else...? hmmmmmmm...? that's right... unions... who works for banks, insurance companies and investment brokers...? hmmmmmm...?? the super-rich power brokers, that's who... why would these people who are so busy feeding at the taxpayer trough pass up the chance to completely destroy the unions AND take out a large swath of the u.s. middle class in one fell swoop...? what a golden opportunity...!

don't get me wrong... i'm not favoring a detroit bailout... i'm just trying to understand an apparent contradiction... why is aig "too big to fail," but detroit, with almost three million jobs at stake, can be flushed down the toilet without a backward glance...?

just sayin'...

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Bite me, Henry...!

you suck...

Fighting the Financial Crisis, One Challenge at a Time
By HENRY M. PAULSON Jr.
If we have learned anything throughout this year, we have learned that this financial crisis is unpredictable and difficult to counteract.

unpredictable, my ass... when an entire economy is built on nothing but expanding debt, it's most definitely possible to predict that, at some point, it's bound to collapse... get a clue, you fool... you may THINK we all just fell off the turnip truck, but, guess what...? ain't so...

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