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Politics : GOPwinger Lies/Distortions/Omissions/Perversions of Truth -- Ignore unavailable to you. Want to Upgrade?

To: Kevin Rose who wrote (139294)	9/29/2008 6:11:30 PM
From: geode00	Respond to of 173976

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.''..... bloomberg.com "The frostiness of interbank lending was one of the primary arguments for the pro-bailout crowd, and the London interbank offered rate climbed again Monday on an overnight and three-month basis. Overnight Libor was up to 2.57%, from 2.31%, while three-month Libor was up to 3.88%, from 3.76%.... Meanwhile, the Federal Deposit Insurance Corp. brokered a Citigroup (nyse: C - news - people ) takeover of the banking assets of Wachovia (nyse: WB - news - people ) Monday morning. Citi will absorb the first $42.0 billion in losses on Wachovia's $312.0 billion loan portfolio, with the FDIC stepping in after that in return for $12.0 billion in preferred stock and warrants. With the deal, the FDIC executed its second arranged marriage in less than a week, both times avoiding significant exposure for taxpayers." forbes.com =========== So what is the bail out for again? Where is the Fed getting the money, where is the FDIC getting the money? Doesn't it all come from the same pot?

To: Kevin Rose who wrote (139294)	9/29/2008 7:14:05 PM
From: Lizzie Tudor	1 Recommendation Read Replies (4) \| Respond to of 173976

Silicon valley companies own a ton of these bonds and trusts- they are all rated AAA. Then they thought they were doubly and triply safe by buying credit default swaps to hedge. Billions of dollars at GOOG and others with this arrangement. Now, the swaps are meaningless and worthless, apparently there was never any regulation to require reserves to use these things as insurance anyway (would have been nice to know that), and the trusts and bonds are trading at maybe .20 on the dollar IF YOU CAN GET IT. I know of one trust with monterey county properties, worst case those mortgages are worth .60 on the dollar. thats worst case, if most of the houses are in Salinas which they are not. But there is no market even at .60 which would be a firesale. There is no market even at .20 if you want to sell in size. These are the office of the CFO of these companies. I think a serious recession is coming, the voters think this is localized to Wall street banks- WRONG. Bush is such an incredible failure in every way. Obama has all but won now, he needs to bone up on the issues and hit the ground running the minute he takes office, we will probably be in a recession then.

To: Kevin Rose who wrote (139294)	9/30/2008 8:07:44 AM
From: JBTFD	Read Replies (1) \| Respond to of 173976

In my opinion and from what I've read the biggest problem with this bill is that the "loan" from the US taxpayer to the banks is undercollateralized. Right now it has some lame statement that if the taxpayers are not paid back within 5 years then they will start to think about what to do about it. That's the impression I get anyway. Under such an agreement it is a given that the taxpayer will get shafted. The best potential solution I have heard of is a security transfer excise tax of maybe .25% that would be levied on all securities transfers, with the money raised going to repay the taxpayer back for the money they have given for what could very well end up being close to valuless paper. This tax would have the added advantage of making it less attractive to speculate on derivatives transactions. We really need to put a curb on that, if it is not already too late to do so.