You have to be kidding me does that look like a trio you can trust?
Remember just one year ago Treasury Secretary Henry Paulson attempted to soothe jittery investors, insisting the United States will safely get through a spreading credit crisis that has unhinged Wall Street. "We are going to work through this problem just fine," Paulson said. He urged patience as investors reassess their appetite for risk, saying there isn't a "quick solution" to the matter. "These things take a while to play out," the secretary said.
Paulson stressed in an interview on CNBC that the economy remains in fundamentally good shape and suggested that it should be should be able to weather the financial storm. Before taking over the Treasury helm Paulson was a top executive at Goldman Sachs. Paulson said he has "great confidence" in the Fed. You know there is no way in hell I share his trust in the Fed! I was doing research on the guy and opted to leave it alone because he is part of the problem. There was so much screwed up information on this guy I decided not knowing it was true or not to leave it alone. Knowing Bush?
Sunday I was sent this story! The market was 500 trades away from Armageddon on Thursday, traders inside two large custodial banks tell the Post. Had the Treasury and Fed not quickly stepped into the fray that morning with a quick $105 billion injection of liquidity, the Dow could have collapsed to the 8,300-level -- a 22 percent decline! -- while the clang of the opening bell was still echoing around the cavernous exchange floor. According to traders who spoke on the condition of anonymity, money market funds were inundated with $500 billion in sell orders prior to the opening. The total money-market capitalization was roughly $4 trillion that morning. The panicked selling was directly linked to the seizing up of the credit markets -- including a $52 billion constriction in commercial paper -- and the rumors of additional money market funds "breaking the buck," or dropping below $1 net asset value.
The Fed's dramatic $105 billion liquidity injection on Thursday (pre-market) was just enough to keep key institutional accounts from following through on the sell orders and starting a stampede of cash that could have brought large tracts of the US economy to a halt. While many depositors treat money market accounts as fancy savings accounts, they are different. Banks buy a variety of short-term debt, including commercial paper, with the assets. It is an important distinction because banks use the $1.7 trillion commercial-paper market to fund their credit-card operations and car finance companies use it to move autos. Without commercial paper, "factories would have to shut down, people would lose their jobs and there would be an effect on the real economy," Paul Schott Stevens, of the Investment Company Institute, told the Wall Street Journal. Cracks started to show in money market accounts late Tuesday when shares in one fund, the Reserve Primary Fund -- which touted itself as super-safe -- fell below the golden $1 a share level. It had purchased what it thought was safe Lehman bonds, never dreaming they could default -- which they did 24 hours earlier when the 158-year-old investment bank filed Chapter 11.
By Wednesday, banks sensed a run on their accounts. They started stockpiling cash in anticipation of withdrawals. Banks, which usually keep an average of $2 billion in excess reserves earmarked for withdrawals, pumped that up to an astounding $90 billion by Wednesday, Lou Crandall, chief economist at Wrighton ICAP, told the Journal. And for good reason. By the close of business on Wednesday, $144.5 billion -- a record -- had been withdrawn. How much money was taken out of money market funds the prior week? Roughly $7.1 billion, according to AMG Data Services. By Thursday, that level, fed by the incredible volume of sell orders pouring in from institutional investors like pension funds and sovereign funds, had grown to $100 billion. It was still not enough to stem the tidal wave. The banks knew something drastic had to be done. So did Treasury Secretary Hank Paulson.
The injection of capital into the market was followed up by calls from Paulson to major money market players like Bank of New York Mellon and State Street in Boston informing them that federal money was in the market and they should tell their clients the Feds would be back with a plan to stem the constriction in the credit market. Paulson knew the $105 billion injection was not a real solution. A broader, more radical answer was needed. Hours after Paulson made his round of calls to calm the industry, word leaked out that an added $1 trillion bailout of banks was being readied. Investors cheered. At about 3 p.m., news of the plans was filtering up and down Wall Street, fueling a 700-point advance in the Dow Jones industrial average through 4 p.m. Friday. By that time, Paulson had announced the plan. It included insurance on money market accounts, a move that started in quiet Thursday morning, when the former Goldman Sachs executive saved the country from a paralyzing meltdown. 500 trades from Armageddon
Now Bush warns the world is watching and he demands immediate action
No way in hell do I trust the fool Bush! He wants action before those executives can be stayed or homeowners and taxpayers can be helped! Meanwhile Bush is damaging Obama: Democratic presidential candidate Barack Obama says he probably would have to delay the spending programs he has called for during his campaign in light of the massive government bailout being proposed for the nation's financial industry. Obama: Bailout likely to delay spending programs
Things are pretty Dire but to make it worse I hear this about an Economic War with Russia: As Russia’s stock market went into free fall this week, conspiracy theories circulated that Washington was egging on American financiers to punish Moscow for its incursion into Georgia last month. The theories gained enough credence that Russia’s finance minister, Alexei Kudrin, spoke with U.S. Treasury Secretary Henry Paulson late Wednesday and sought assurances that the U.S. wasn’t playing politics with Russia in the financial crisis, the Russian Finance Ministry said. Mr. Paulson told Mr. Kudrin that the U.S. wasn’t, according to the Russian side. A U.S. account of the call wasn’t available.
… In recent weeks, Mr. Medvedev has blamed the crisis primarily on the U.S., which has been the target of Kremlin wrath on all fronts since the U.S. sharply criticized Russia’s war in Georgia. A top State Department official, meanwhile, this week cited the financial problems as the “price” Moscow was paying for the war. On Thursday, Secretary of State Condoleezza Rice said Moscow’s moves in Georgia and elsewhere “are putting Russia on a one-way path to self-imposed isolation and international irrelevance.” The question broached by Mr. Kudrin in his phone call with Mr. Paulson reflects a view widely held in the opaque world of the Moscow elite. Russian officials have asked U.S. bankers in recent weeks if the banks have been ordered by U.S. officials not to lend to Russian companies, according to people familiar with the conversations. The banks deny any such order. “There’s a feeling of hostility,” said one person who works closely with the Russian government. “The biggest problem is that they don’t understand that the problem is home-made.” Rumors of financial war with Russia
As you know we won the last cold war while we were financially equitable. After what Bush has done to our country there is no way in hell we are going to win this one and I can only wait with anxiety to see what catastrophe Bush is going to create to mask this mess and get this war going. Economic woes favor Obama. War woes favor McCaidn. To keep the right in power I chill thinking what is going to happen next. Thoughts anyone?
James Joiner
Gardner, Ma
www.anaveragepatriot.com
