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Strategies & Market Trends : New US Economy Policy -- Ignore unavailable to you. Want to Upgrade?

To: Arthur Tang who wrote (272)	4/17/2001 6:14:12 AM
From: Arthur Tang	Read Replies (1) \| Respond to of 435

Greenspan's error now is in the news again? The correction he did was also insufficient, as more banks runs into trouble and had to have shotgun marriage? Wachovia bank in North Carolina, first announced the sale of their credit card division to Bank One. Now, it is going to be merged into First Union Bank also in North Carolina. The problem was in the overnight discount rate going beyond the Libor rate, resulting in the member banks of the FEDs losing money on every dollar they borrowed from the FEDS. Then the new 4.5% is in sufficient to make up any losses suffered for 6 month long period. The result is lack of funds to continue operations. How the FEDs ruin their own member banks were well known since the 1970s. FEDs hiding behind excuses of leading indicators, move interest rates so high that no bank can survive. FDIC did not have enough money to close down banks. Now FDIC forces the banks to merge to avoid runs on banks. Either Congress has to limit the powers of the FEDs in lending rates or the chairperson has to be replaced periodically. Can we wait any longer?