Good question! Dunno, ... mind you, this "bailout", ... er "financial assistance", most likely will unravel to this:
the $700 billion is just part of a massive "pump and dump" scheme engineered with the tacit approval of the US Treasury and the Federal Reserve. Once the banksters have offloaded their fraudulent securities and crappy paper on Uncle Sam, they will do whatever they need to do pad the bottom line and drive their stocks up. That means they will shovel capital into hard assets, foreign currencies, gold, interest rate swaps, carry trade swindles, and Swiss bank accounts. The notion that they will recapitalize so they can provide loans to US consumers and businesses in a slumping economy is a pipedream.
C., ... watching this innovative, democratic act working it's way through! [more]
... and we are here to serve [to serve man?*], ... and with a big smiles, too! [ ... I just love that photo 3 of 7! You?]
The title, To Serve Man, is a play on the word serve having the dual meanings: "assist" and "provide as a meal".
Here is Kudlow - off his rocker once again, (... of course!), explaining the benefits:
Any loan package bought by the Treasury will be 100 percent taxpayer owned. Period. ...
.... The taxpayers own the bonds the Treasury buys; the taxpayers own the cash flows generated by the bonds; the taxpayers own the profits when the bonds are sold; and the taxpayers benefit when the profits and cash flows are used to pay-down government debt.
Actually, for taxpayers, it’s a win-win-win-win.
See? The "toxic assets" are actually good assets to own! [Oh, fool that Larry...] [more]
Bush: Bailout Plan "soon"
From MarketWatch: Bush confident of financial rescue plan bill 'very soon'
President Bush said Saturday morning he's confident that Congress will pass a bill ... "very soon." ... The president also stressed ... "our entire economy is in danger." Negotiators from Congress and the administration are returning to talks Saturday with an eye toward finalizing a deal by Sunday.
During the Presidential debate, Senator McCain said he would vote for the bill, and Senator Obama said he wanted to see the details, but he would probably support the bill too.
[... bold added to emphasize the McBomba stand!]
We will probably have more details sometime this weekend.
I'm lovin' watchin' this hard work! You people take potshots at the bailout, and send e-mails to Congress. In in menatime, basically in secret, they cook various plans, ... then people get promise that, YES, a deal will be reached by Sunday, ... as if people actually wanted this deal!
C., ... watchin' this 'We the people have spoken!' deal being cooked! ... watchin' representative democracy in action, ... crumbling! [more]
- McBama favors the Billionaire Bailout. [more]
This cycle will persist until the bad debts are accounted for and written off or until the exhausted dollar-system collapses altogether. ...
... In truth, there is no fix for a deleveraging market any more than there is a fix for gravity. The belief that massive debts and insolvency can be erased by increasing liquidity just shows a fundamental misunderstanding of economics. [... this is from my earlier post.]
This is the truth that almost no one accepts! No trouble, ... [more]
Shrub-minor last night: "... market is not functionig properly."
Pardon me? The fact is - and we all here know it, the market is functioning properly!
Of course, ... that is why he is trying to torpedo it!
It's new era for investors! It's true, ... ... the new political division formed, already! Now, it is between a small group of plutocrats on one side, and the rest of the population on the other. [more]
The system is at the breaking point, and despite Wall Street's elation from the proposed $1 trillion dollar bailout to remove toxic mortgage-backed debt from banks' balance sheets, the market is still correcting in what has become a vicious downward cycle. This cycle will persist until the bad debts are accounted for and written off or until the exhausted dollar-system collapses altogether. Either way, the volatility and violent dislocations will continue for the foreseeable future.
Most people don't understand what happened on Thursday, but the build-up of bad news on the Lehman default and the $85 billion government takeover of AIG, triggered a run on the money markets and a freeze in interbank lending. The overnight LIBOR rate (London Interbank Offered Rate) more than doubled to 6.44 per cent. Bank of America reported overnight borrowing rates in excess of 6 per cent. Longer-term LIBOR rates also rose sharply. On Wednesday, jittery investors removed their money from money markets and flooded short-term US Treasurys for the assurance of a government guarantee on their savings even though interest rates had turned negative which means that their balance would actually shrink at the date of maturity. This is unprecedented, but it does help to illustrate how raw fear can drive the market.
The TED spread (the TED Spread measures market stress by revealing the reluctance of banks to lend to each other) widened and the credit markets froze in place. Borrowing three-month dollars on the interbank market and the U.S. Treasury's three-month borrowing costs widened five full percentage points. That's huge. The banking system shut down.
What does it mean? It means the Federal Reserve has lost control of the system. The market is driving interest rates now, and the market is terrified. End of story.
The problems cannot be resolved by shifting the debts of the banks onto the taxpayer. That's an illusion. By adding another $1 or $2 trillion dollars to the National Debt, Paulson is just ensuring that interest rates will go up, real estate will crash, unemployment will soar, and foreign central banks will abandon the dollar. In truth, there is no fix for a deleveraging market anymore than there is a fix for gravity. The belief that massive debts and insolvency can be erased by increasing liquidity just shows a fundamental misunderstanding of economics. That's why Henry Paulson is the worst possible person to be orchestrating the so called rescue project. Paulson comes from a business culture which rewards deception, personal acquisitiveness, and extreme risk-taking. Paulson is to finance capitalism what Rumsfeld is to military strategy. His leadership, and the congress' pathetic abdication of responsibility, assures disaster. Besides, why should the taxpayers be happy that the stocks of Morgan Stanley, Washington Mutual and Goldman Sachs surged on the news that there would be a government bailout yesterday? These banks are essentially bankrupt and their business models are broken. Keeping insolvent banks on life support is not a rescue plan; it's insanity.
[bold added for emphasis]
Grasping at Straws
Exactly what the government will do remains to be determined. Officials from the Treasury and the Fed and members of Congress intend to spend the weekend hammering out the details.
Wall Street Fascism
There are a number of signs that the financial system is at the brink of collapse and that Wall Street is headed for a 1929-type crash. Depositors have begun to withdrawal their savings from money market funds alarmed by the gyrations in the market and the daily deluge of bad economic news. According to the Washington Post, funds dropped "by at least $79 billion, or about 2.6 per cent" on Wednesday alone. ....
.... Before the end of the day, the Fed had quadrupled the amount of dollars (to $247 billion) that central banks around the world could access in an effort to loosen up trading between the banks and resume lending to loan applicants and businesses. According to Bloomberg: "The Fed will spray dollars around the world via swap lines with other central banks. They can then auction them in their own markets." [....]
.... Not a dime of public money is provided for over-extended mortgage-owners trying to stay in their homes. Not one congressman or senator at Thursday's meeting rejected the bailout plan or called for a criminal investigation to establish whether laws were broken in the sale of fraudulent securities which have clogged the global system; pushed banks, hedge funds, insurance companies and homeowners into default, and precipitated the greatest financial crisis in the nation's 230 year history.
Ironically, the very people who created this mess, are the ones who will decide how to resolve it; the Federal Reserve and the US Treasury. [....]
[Bold added for emphasis]
C., ... ... watching this financial circus (National Socialism?), where the rich use the state to steal from the rest! [more]
Buy McGillicutty's Jellied Ox Tongue in bulk, 340g cans, ... while you still can! [more]
The other day I commented: The proletariat will pay to save the power elite's bacon!
Actually, ... it's more then that! Have a look at this first:
... and I mean have good long look first!
What I, for example, see is that the U.S. government has just aquired for itself the ability to inflict a whole bunch of "terror" worldwide. How very smart!
And I thought government taking controlling interest in such huge financial firms - such as AIG, were a problem! How stupid of me!
Depending on who you are and what you want, "terror" is an awesome and powerful weapon, ... be it military, financial, ... or what have you other kind of "terror" weapon - the FISA wapon, or the Military Commissions Act weapon, or the Patriot Act weapon. But I'm digressin', ... sorry.
Still in the Stock Market?
Anyone who thinks this crisis is some minor affair is not paying attention. The Federal Reserve is in panic mode. The experts are scared; ... one can see this as they face the tee-vee cameras. This fear will spread to the general public. The mainstream media are frightened. Oh, nightmare!
Fed’s $85 Billion Loan Rescues Insurer (NY Times)
The bailout [of American International Group]... effectively puts taxpayer money at risk while protecting bad investments made by A.I.G. and other institutions it does business with. [more]
Oh, Brother! Hope you're well-supplied with illicit substances. [more]
... then your face will surely show it, ... while you read this! [more]
It's worth a note that it was only six months ago that oil was in the $90's. So while oil prices have dropped considerably from their recent highs, oil is still very expensive. Don't be fooled by this extraordinary volatility, though...
... McCains' speech last night [... short version, since long version went on a long, long time.]:
'I'm born-again outsider! A healer.' [... presented in monotone, Zombie-like voice.]
... I'm unnerved.
... according to Palin! And I agree, ... but for entirely different reasons. [more]