House bailout doesn't pass; Shit to hit fan -- News at 11

[zabu of nΩd]

The headline of the Richmond Times-Dispatch was hilarious today:

CHAOS

 

[cookiecutter]

No shit Repubs voted against this; the Conservative CEOs would lose MORE stuff if they passed the bill

Or maybe some Republicans actually believe in the free market instead of just blowing smoke up everyone's ass.

I'm not getting the sense that this is directly helping CEOs and high level executives. Yes, in that they will not lose their jobs due to their company going bankrupt, but the main goal here is to not save them, but keep the companies in business and save a multitude of jobs. If you have to save executives in spite of that, so be it.

The way the nightly news explained things, the government was buying off the bad assets, such as unpaid homes, and selling them back to the public when a level economy will allow the gov't to at least break even on them. Buying off bad assets should free up capital and credit.

Unless there's something dramatically faulty about the proposed plan, I really think they should have passed it.

This was my understanding of it.

It might come to that, but who knows. If the banking system stays private, there will only be 3 or 4 banks in a few years since they will buy up all the regional ones that fail.

The banks will probably be Chase, Wells Fargo, Bank of America and US Bank (this one is speculation).

This is not necessarily a bad thing. Canada has only like 5 banks and they are all national. EDIT: At least that's all I see here in Toronto. Could be different elsewhere in the country.

Stop trying to feed avery starving child in the world.

Did you seriously misspell "every"?

Just how passionate people are about it when their reasoning is complete nonsense. I just noticed how all this talk about martial law to get a new world order has only been talked about regarding the United States. I haven't heard about any other parts of the world (excluding Europe since it's the EU now obviously) discussing anything along the lines of a new world order in their part of the world. It's not even a blip on the radar screen.

I was watching the BBC World News and they talked about how this is affecting Europe. Britain and Germany are suffering, but not quite as bad America. France is feeling it, but since they have so much more regulation this is not a catastrophe. That's probably why it's not inflaming passions as much there.

 

[Lotus-Eater]

Guess I did.....

 

[Lotus-Eater]

You guys really have to be joking with the grammar shit....

 

[zabu of nΩd]

Did you seriously misspell "every"?

No, there's just a particular very starving child in the world whom we're dumping billions of dollars toward.

 

[Lotus-Eater]

No, there's just a particular very starving child in the world whom we're dumping billions of dollars toward.

Yeah you said it.....

 

[Lotus-Eater]

Still a waste of money.

We need to take care of our own first.

 

[viewerfromnihil]

You guys really have to be joking with the grammar shit....

they're not, they enjoy fuckin with people

 

[Lotus-Eater]

they're not, they enjoy fuckin with people

It's ok, I deal with children every day.

Hey, looks like I got the spelling right on this post.

 

[MasterOLightning]

I want money to buy stocks in the next few months. They're on sale. I'd stay the fuck away from banks, but it's probably a good time to buy into stable mature businesses that provide things people will always need, or companies that cater to the boomer crowd.

 

[Demonic viscera]

As a person who lives outside of the United States, I find the blame for the economy in the U.S. seems to point to bad economic decision when it comes to the housing market and general spending. I thought it actually might have something to do with the on going war on terror that causes billions in tax payers dollars. Funny thing about terror is that it is an idea not an army. You can't fight an idea.

 

[The Ozzman]

I want money to buy stocks in the next few months. They're on sale. I'd stay the fuck away from banks, but it's probably a good time to buy into stable mature businesses that provide things people will always need, or companies that cater to the boomer crowd.

Stay away from regional banks. Stalwarts like JPMorgan and Bank of America are buys though since they'll be two of the banks left standing in the end

As a person who lives outside of the United States, I find the blame for the economy in the U.S. seems to point to bad economic decision when it comes to the housing market and general spending. I thought it actually might have something to do with the on going war on terror that causes billions in tax payers dollars. Funny thing about terror is that it is an idea not an army. You can't fight an idea.

Don't turn this into an argument about the war on terror STFU

 

[Demonic viscera]

I know I know. It's just soooo damn difficult sometimes

 

[Matt]

I want money to buy stocks in the next few months. They're on sale. I'd stay the fuck away from banks, but it's probably a good time to buy into stable mature businesses that provide things people will always need, or companies that cater to the boomer crowd.

Yeah, I'm probably going to buy into some stuff as well. Not sure what, though.

 

[The Ozzman]

I would buy energy companies or staples like GE or P&G

 

[Demonic viscera]

As much as i hate your current government. I wish you guys the best of luck. Nobody should have to worry that much about the stability of thier country. This is why it is important to vote and speak your mind. When your given the ability to chose your leaders you should take it . Shure they are all assholes, but it is not vote for the one who makes the most promises that counts. Its the vote for the one who doesn't fuck you over.

 

[Matt]

I already have some in energy

@ozz

 

[The Ozzman]

You could put some more into energy. Which energy companies?

 

[The Ozzman]

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

Sept. 29 (Bloomberg) -- The Federal Reserve will pump an additional $630 billion into the global financial system, flooding banks with cash to alleviate the worst banking crisis since the Great Depression.

The Fed increased its existing currency swaps with foreign central banks by $330 billion to $620 billion to make more dollars available worldwide. The Term Auction Facility, the Fed's emergency loan program, will expand by $300 billion to $450 billion. The European Central Bank, the Bank of England and the Bank of Japan are among the participating authorities.

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. The crisis is reverberating through the global economy, causing stocks to plunge and forcing European governments to rescue four banks over the past two days alone.

``Today's blast of term liquidity will settle the funding markets down, and allow trust to slowly be restored between borrowers and lenders,'' said Chris Rupkey, chief financial economist at Bank of Tokyo-Mitsubishi UFJ Ltd. in New York. On the other hand, ``the Fed's balance sheet is about to explode.''

The MSCI World Index of stocks in 23 developed markets sank 6 percent, the most since its creation in 1970. Credit markets deteriorated further as authorities tried to save more financial institutions from collapse.

European Rescue

European governments have rescued four banks in two days and the Federal Deposit Insurance Corp. said today it helped Citigroup Inc. buy the banking operations of Wachovia Corp. after its shares collapsed. The Standard & Poor's 500 Index fell 3.8 percent and the cost of borrowing dollars for three months rose to the highest since January. The rate for euros hit a record.

``If people think the authorities may give in to fears, they are wrong,'' Financial Stability Forum Chairman Mario Draghi said today in Amsterdam, where the international group of regulators and finance officials is meeting. ``There is willingness and determination on winning the battle to restore confidence and stability.''

Banks and brokers have slowed lending as they struggle to restore their capital after $586 billion in credit losses and writedowns since the mortgage crisis began a year ago. The bankruptcy of Lehman Brothers Holdings Inc. also sparked fears among banks they wouldn't be repaid by counterparties, driving up the cost of short-term loans between banks.

Funding Risk

``By committing to provide a very large quantity of term funding, the Federal Reserve actions should reassure financial market participants that financing will be available against good collateral, lessening concerns about funding and rollover risk,'' the central bank said.

The Bank of England and the ECB will each double the size of their dollar swap facilities with the Fed to as much as $80 billion and $240 billion, respectively. The Swiss National Bank and the Bank of Japan will also double their dollar swap lines, while the central banks in Australia, Norway, Sweden, Denmark and Canada tripled theirs.

All the banks extended their facilities until the end of April 2009.

The Fed is also increasing the size of its three 84-day TAF sales to $75 billion apiece, from $25 billion. That means the Fed will make a total of $225 billion available in 84-day loans. The central bank will keep the sales of 28-day credit at $75 billion.

Special Sales

In addition, the Fed will hold two special TAF sales in November totaling $150 billion so banks can have funding available for one or two weeks over year-end. The exact timing and terms will be determined later, the Fed said. The TAF program began in December, totaling $40 billion.

The bank-rescue plan being debated by Congress today would give the Fed more power over short-term interest rates by providing authority as of Oct. 1 to pay interest on reserves held at the central bank by financial institutions. That would make it easier for the Fed to pump funds into the banking system.

Paying interest on reserves puts a ``floor'' under the traded overnight rate, which would allow a central bank ``to provide liquidity during times of stress'' without affecting the rate, New York Fed economists said in a paper last month.

tl;dr version: Apparently this is doesn't count as a loan according to US Accounting rules, but it is technically a loan regardless

http://en.wikipedia.org/wiki/Currency_swap

EDIT: This was yesterday. I heard about this, but wasn't aware that it involved currency swaps

 

[cookiecutter]

You know what we need? A world war. It worked last time. I can't wait for Obama's weekly radio addresses.