What a piece of crap.
The Federal Reserve, a private company, that is interested in the nation's banks in so far as they provide steady profits, will provide US paper money {for a fee} to keep this charade from collapsing.
When the USA abandoned the gold standard, we got this semi-private banking system and it since wall street has been allowed to enter the banking business {via the side door} this is a natural extension.
I have no solutions to this mess, but I hope I outlive it's collapse.
>>I have no solutions to this mess, but I hope I outlive it’s collapse.<<
Those are my sentiments.
I’ve actually been waiting for this since I graduated from High School - 1972. I believe the seeds of this whole thing were sown in the 1930’s. The chickens are coming home to roost. Finally. But it will not be pretty.
Glas Steigel was repealed to allow US banks to become larger and more competitive with overseas banks who had broader charters and broader playing fields.
It looks like a lot of our bankers couldn’t handle the responsibility. The market will clean up a lot of that..who would trust a US Bank bond and it’s rating now?
To reestablish that trust will take a while..and in the meantime the US taxpayer is providing the guarantee..for the bond holders, but not the share holders.
I’m a Bear due to the uncertainty of what is going on now. However, I’ve cut most of my short positions and have some small longs now due to the fact that the Fed is so involved, money managers are growing confident.
I’m not buying it, but the easiest path seems to be up at this point. Will the whole system collapse? I doubt it. The Fed could actually gain a boon if when the real estate market turns around.
Caveat: I do not like the extra involvement and regulation that is sure to come. Long term I think it weakens us relative to other economies, but it is providing stability. Without the Fed involvement I predicted that a major bank or investment bank would go under. BearStearns was that company, and there others would probably get hit severely, as well as midzized and smaller banks.
However, now, with the floor in on firms collapsing, it’s probably at least a short term buying opportunity...but be careful we cold retest the lows.