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Dear Friends, It takes a lot of time to dig into the truth. But this financial crisis is so important, I feel compelled to do it. Hopefully, my reporter instincts are helping me make the distinction between good reporting and political partisanship. I'm doing this research mostly so my children and grandchildren will be empowered not to let their generations make the same mistakes. And since we are all so busy these days we barely find the time to eat dinner around a table, much less dig through a myriad of news reports and blogs, I'm sharing my research with...

This is something going around the trading desks. Suddenly tightening margin credit is a precipitant to artificially steep market declines as those students of the Crash of 1929 will well remember. That is something one does on the upside of a potential asset bubble, not in the decline. If this is true, then there is an obvious need for the Fed to step in and provide credit relief even if on high rates, moreso than propping up a few banks by buying their worthless assets at above market prices. Forced margin selling because of arbitrary private bank policies is going...

Treasury Secretary Henry Paulson and his team are starting to look like short-order cooks stuck in a perpetual lunch-hour rush. The worse the economic crisis gets, the more confidence- and liquidity-boosting measures they cook up, from the Bear Stearns deal last spring to the AIG bailout last month. Now the markets have devoured last week's passage of the titanic $700 billion bailout package without a trace. By the end of Tuesday, the Dow had dropped 1,400 points in five days, the biggest point loss ever. As increasingly gloomy job numbers pile on top of the continuing problems in the credit...

Great fears floating through the internet threads that we are in "end times" because of the worldwide financial crises. Not so. At least not according to everything I've read about the "end times." That won't happen until the temple in Jerusalem is (again) rebuilt. Worldwide financial collapse is also predicted as a portent of advancing the end times, but what is this current crises all about then? Well, in my own opinion, this current financial mess is a big fat warning to take a good look at ourselves and what we believe. If you've had thoughts running around in the...

If Niccolò Machiavelli were to envision an economic crisis that would cripple the Republicans prior to Election Day, he couldn't do much better than one precipitated by the banking industry. The Republican Party was founded in 1854 as one consequence of the Kansas-Nebraska Act. That measure divided the Whig Party into sectional factions and so destroyed it for good. The GOP was formed mostly from the remnants of the northern Whigs - and, unsurprisingly, the party picked up many Whig principles, which it has retained even after 150 years. The Whig Party stood for expanding American industry (hence its support...

Well, no one ever accused Sen. Chuck Schumer of letting any sense of shame hold him back. Ditto for irony. Still, it was a bit surreal to see Schumer - one of the prime apologists for the faulty federally backed mortgages now dealing body-blows to the US financial system - laying the groundwork yesterday for yet more government meddling in the loan business. "We need to build an impermeable wall around the student-loan market to protect our kids from this financial crisis," he said at Stuyvesant HS in Manhattan. It's unclear exactly what such an "impermeable wall" might look like,...

I've been an FR reader since 2002.This is my first vanity post. For months, conservatives have been complaining about the unprecedented favoritism that the media has been showing Obama, which goes well beyond the normal amount of favoritism that the media shows towards Democrats during an election year. But we need to take a step back and realize that the media's reluctance to pin the blame for this financial crisis squaurely on the shoulders of the culprits who are responsible for it is not just part and parcel of the their desire to help Obama get elected. It is a...

The smart college boy/college girl MBAs* who run investment banks and other businesses have less practical ability than a man who did not even finish high school. Henry Ford told us in 1922 exactly why a good 20-30 percent of our investments vaporized during the past several months, and he summarized the cause in one sentence: The primary functions are agriculture, manufacture, and transportation. There are exactly three ways to create wealth: grow it, mine it, or make it. While transportation does not add actual value, one usually has to move whatever one grows, mines, or manufactures. Other activities, such...

The Honorable George W. Bush Presidenot f the United States The White House Washington,D C 20050 Dear Mr. President: We urge you to reconsider your Administration's criticisms of the housing-related government sponsored enterprises (the "GSEs") and instead work with Congress to strengthen the mission and oversight of the GSEs. We write as members of the House of Representatives who continually press the GSEs to do more in affordable housing. Until recently, we have been disappointed that the Administration has not been more supportive of our efforts to press the GSEs to do more. We have been concerned that the Administration's...

They keep telling us that this is the worst financial crisis since the Great Depression. But there is at least one difference: in the Great Depression, nobody needed to be told they were in a depression. Today, except for relatively few investment bankers and somewhat more middle-class homeowners, who would guess that things are so dire? Life goes on, reasonably normally. Maybe it's easier to get a cab in New York City--a reliable real-life indication of an economic downturn--but then maybe the effect of the financial crisis is canceled out by the effect of that other crisis, the one about...

In a recent paper, NYU's Thomas Philippon estimated the size of the financial sector. The model he used was surprisingly accurate from 1920's through the 1990's. But as this chart from his paper shows, something happened in the late 1990's that threw off the model. Here are Philippon's possible explanations for the discrepancy: Up to the 1990s, the model seems able to predict most of the changes in the size of the financial sector. The model falls short in the more recent decade. Since the model forces all the demand for financial services to come from domestic firms, the discrepancy...

Largest Bank Failure in US history. $188 billion in deposits. FDIC couldn't fund seizure...FDIC next GSE bailout. This is getting iffy.

This is a video you should see if you want to understand what caused this crisis...post it everywhere!! Burning Down The House: What Caused Our Economic Crisis?!! http://www.youtube.com/watch?v=H5tZc8oH--o!!

This is a video you should see if you want to understand what caused this crisis...pass it on, post it everywhere! Burning Down The House: What Caused Our Economic Crisis? http://www.youtube.com/watch?v=H5tZc8oH--o

"A quick summary: Companies that had billions in subprime loans were feeling the effects of their stupid decision to make those loans in the first place, and practically gave them away for pennies on the dollar. But since no one wants these loans, and they've had to mark them down to market value, it has frozen the market. If we temporarily change the rule that forces companies to do that, that will free the market up...." http://www.daveramsey.com/tdrs/index.cfm/2008/9/23/Fix-the-bailout-with-mark-to-market?ictid=sptlt http://www1.daveramsey.com/etc/fed_bailout/economic_cleanup_10887.htmlc

What happens if there is no government bailout of the financial markets?

Okay.....so....here we go again.....as usual the Democrats have created problems, this time in the financial markets. BUT, this is what they DO....create problems, so they can save US from those problems with their programs (the bailout). WHEN are American's going to wake up to this SCAM???? We must somehow educate people about this game.

No taxpayer money should be spent on bailing out financial institutions, period. What will taxpayers get for their money? Absolutely nothing. The money goes to pay other folks debts. Why in the world should we do that? They aren’t our debts. The money goes to the lenders that made bad loans. Why should we bail out lenders who made bad loans? We didn’t make bad loans. Are we supposed to reward bad judgment? The worry is that credit will dry up, damaging the economy. If that’s the problem, perhaps we need a temporary “loan insurance” program. For a fraction of...

It is difficult to believe that the U.S. government is contemplating taking on the bad assets of these institutions at probable taxpayer loss and effectively immunizing the bondholders (and shareholders) of these companies. . . the Treasury proposal to address current financial difficulties places corporate bondholders ahead of the public, rewards irresponsible risk-taking, and sets a precedent for future bailouts. Moreover, we know from a long history of economic experience across countries that a major expansion of government liabilities is invariably followed by multi-year periods of extremely high inflation, particularly when it is not matched by a similar expansion of...

As the Wall Street meltdown continues, private-sector financial institutions have no choice but to swallow the market’s harsh verdict on the past decade’s financial engineering. Stunned global investors won’t give financial firms any more money, forcing the firms into bankruptcy if they’re not lucky, or into the arms of Uncle Sam or of much bigger companies, if they are. But as the House Financial Services Committee proved on Tuesday, the public sector somehow feels it can continue to ignore reality—at least for a little longer. The committee, chaired by Massachusetts Rep. Barney Frank, took steps to gut a modest reform...

The root of the problem is a cocktail of debt with a chaser of pathological optimism, and many Americans got drunk on both. Awash in credit offers, they bought homes, cars, and lots of other stuff they couldn't afford, and hoped for a best-case scenario, in which their home values and rising salaries would take care of it. There were plenty of foolish, crooked, and greedy intermediaries who played key roles in the meltdown -- from the Federal Reserve, which held interest rates too low for too long; to mortgage brokers who defrauded borrowers; to the investment houses that securitized...

Democrats and the MSM are pointing to John McCain's vote for the Financial Services Modernization Act of 1999 (S. 900, Gramm-Leach-Bliley) as evidence that he contributed to the recent financial collapse of Lehman Brothers, AIG, et. al. The truth is that Alan Greenspan, then Chairman of the Federal Reserve Board, and Donna Tanoue, then Chairman of the FDIC, not only supported the legislation but testified in front of the Senate Committee that the legislation was essential for economic growth and absolutely necessary. Read the Senate Committee Report at http://thomas.loc.gov/cgi-bin/cpquery/?&dbname=cp106&sid=cp1064MJzX&refer=&r_n=sr044.106&item=&sel=TOC_12543& President Clinton signed the bill into law on November 12, 1999....

Washington Mutual, the struggling savings and loan, has been working on several efforts to save itself, including a potential sale, people briefed on the matter said Wednesday. The unsurprising announcement comes as the bank, which has suffered badly from losses on mortgages it had made, continues to stumble. Shares in Washington Mutual fell nearly 10 percent on Wednesday to $2.09; they have plunged 94 percent over the last 12 months. This week alone, investors have been frightened by Standard & Poor’s cutting of the bank’s debt rating to junk. Goldman Sachs, which Washington Mutual has hired, started the auction several...

Home | Market Monitor | Market WrapUp | Storm Watch | Sitemap | About Us | Contact Us | Disclaimer | Privacy Statement THE FINANCIAL TSUNAMI The Next Big Wave is Breaking Fannie Mae Freddic Mac and US Mortgage Debt by F. William Engdahl July 15, 2008 The announcement by US Treasury Secretary Henry Paulson together with Federal Reserve chief Bernanke, that the US Government will bailout the two largest guarantors of housing mortgage debt—the Fannie Mae and Freddie Mac—far from calming financial markets, has confirmed what we have said repeatedly in this space: The Financial Tsunami which began in...

I am requesting if anyone out there in FReeperdom has information / testimonials (positive or neagative) on the ethics, business practices, professional conduct, overall behavior of its representatives. Need to advise a WWII Generation member on whether or not these folks can be trusted and be able to back it up with facts.

WASHINGTON (AP) -- When the Pentagon announced an obscure California company had won a lucrative military contract, no one mentioned any plans for a Caribbean outpost -- a tropical shell the company quickly created that allowed it to duck millions in taxes and deflect U.S. lawsuits. It's legal, at least for now. Contractors large and small have been heading offshore to shield piles of taxpayer dollars, according to an Associated Press investigation, but irate lawmakers are thundering that they'll put an end to it. Almost a decade ago, a few months after winning the deal that has totaled more than...

The ignorance of the American population about why this is occuring is stunning. There is plenty of food. People keep blathering on about corn and ethanol. The plan of this nation was to subsidize 5% of our energy needs through corn based ethanol. This has been completed. Farms have sprung up everywhere and now meet the demand. This is one commodity people out of dozens of agiculture commodities. What does rice increasing 500% in two years have to do with corn?!?!?! Nothing! This is point number one. The food crisis has been caused through inflation. Why did inflation occur so...

The moment I read the front page of the Washington Post on Wednesday I knew that the folks who enjoy spending other people’s money (OPM), while calling it corporate social responsibility, were prepared to use every available weapon to convince the rest of us that it would be socially irresponsible if we fussed about the government taking our money to bail out those who bet on the wrong numbers in the housing market. Below the fold in the lower corner of the front page was an article by Washington Post staff writer Steve Hendrix headlined: “Losing a Best Friend Along...

Alan Greenspan may be correct that a glut of global saving pumped up the housing bubble by keeping long-term interest rates low. If so, then watch out, because the situation has gotten worse: Foreign stockpiles of U.S. dollars are fatter and interest rates lower than at housing's zenith in 2005. Global central-bank reserves surged to a record $6.4 trillion in the fourth quarter of 2007, according to the International Monetary Fund, up from about $4 trillion in 2005. Those reserves are pouring into U.S. Treasury bonds for safekeeping. Foreigners held $2.32 trillion in Treasurys in the fourth quarter, compared with...

WASHINGTON - The Bush administration Friday proposed a sweeping overhaul of the way the nation's financial industry is regulated. In an effort to deal with the problems highlighted by the current severe credit crisis, the new plan would give major new powers to the Federal Reserve, according to a 26-page executive summary obtained by The Associated Press. The proposal would designate the Fed as the primary regulator of market stability, greatly expanding the central bank's ability to examine not just commercial banks but all segments of the financial services industry. The administration proposal, which was to be formally unveiled in...

Things are getting very weird very fast -- and will probably get even weirder, faster, as the train wreck of bad debt meets the Saint Paddy's Day Parade of bacchanalian excess at the grade-crossing of destiny. The train is carrying America's financial system, but the engine driving it is peak oil, because declining energy resources necessarily means declining capital wealth -- and declining value of all the institutions, instruments, and markers that denote that wealth or hope to profit by trading in it. The fiasco leads straight to the necessary reinvention of American life on other terms and by other...

Americans still live in the land of opportunity. For their family's sake, the family breadwinner needs to expand his or her horizons and take more responsibility for their own financial destiny. They need to learn the practical investment techniques of successful investors and especially heed the advice of flourishing investors who have come from the ranks of working America. This foolproof investing trades the finest performing; most diversified no-load mutual funds in the world without tax consequences. You evaluate and incorporate momentum techniques that replace your laggard funds every six months. Recently we have been in a stock market that...

As we each search for our personal pot of gold, many of us wonder whether the rainbow leading us to a six-figure paycheck has to be so long. We want financially rewarding jobs, but not everyone is eager to commit the time and money necessary to complete a medical or law degree. The good news is that, even though statistics have shown that more education translates to higher earnings, there are still plenty of six-figure salary jobs for those of us who have decided not to take the seven-years-and-a-stethoscope route. The following is a list of seven lucrative fields in...

TOKYO (Thomson Financial) - Japanese shares were sharply lower in early trade Tuesday as growing fears of a US recession and a stronger yen prompted investors to sell. The benchmark Nikkei 225 Stock Average fell below 13,000 points for the first time since October 2005. After their losses Monday, stocks continued to lose ground on the widespread view that President Bush's 145 billion US dollar stimulus plan may not be enough to pull the world's largest economy back from the edge of recession. Adding to the nervousness was the yen's appreciation. The currency was last trading at 105.64 yen to...

Amid the daily market turmoil, and to help prevent a crash, it helps to step back and remember how we got here. With the benefit of hindsight, everyone can see that the U.S. economy built up an enormous credit bubble that has now popped. Our own view -- which we warned about going back to 2003 -- is that this bubble was created principally by a Federal Reserve that kept real interest rates too low for too long.In doing so the Fed created a subsidy for debt and a commodity price spike. The price spike contributed to "excess savings" in...

Recession is no longer the taboo word on Wall Street. It's being tossed around like confetti. The new phrase that can't be uttered is "systemic risk," and with bond insurer Ambac (ABK - Cramer's Take - Stockpickr) losing its triple-A credit rating from Fitch Ratings on Friday, the real risk of a financial disaster will be widely whispered into the next week amid the possibility of more downgrades for the industry. T.J. Marta, fixed income strategist with RBC Capital Markets, estimates that roughly $2.5 trillion in outstanding debt is backed by bond insurers like Ambac and MBIA (MBI - Cramer's...

WASHINGTON, Jan. 11, 2008 – Troops on extended deployments can rest easier knowing that if their family experiences an unexpected financial emergency, help is available. The American Soldier Foundation was created to assist servicemembers on extended duty and their families, Daniel Wright, the organization’s president, said. Assistance also can extend to families of those killed in the line of duty. “We believe that the lives of the men and women keeping our country safe should not be any harder than they have to be,” Wright said. “The foundation can provide grants or interest-free loans for medical expenses, education, funeral...

Soybean futures on the Chicago Board of Trade hit their highest levels since 1973 on strong technical buying and bullish long-term fundamentals, which included concern over securing enough U.S. soybean acres for next spring. U.S. soybean acreages have fallen sharply as farmers jumped to corn amid a rally in prices of the other crop last year. In Friday's trading, CBOT soybeans for January surged as much as 17.25 cents to $11.78 a bushel. They closed at $11.77-1/2, up 16.75 cents CBOT corn for March rose as much as 10.5 cents to a 11-year high of $4.48 a bushel on indications...

Recent revelations of China's state-sponsored cyber attacks on U.K. financial institutions underscores that strategic financial power is high on Beijing's list of priorities. Moreover, these attacks are consistent with "Unrestricted Warfare," a white paper published in 1999 by two PLA Air Force colonels, Qiao Liang and Wang Xiangsui, in which they argue that future wars will be fought on many fronts, and that in fact economic and financial warfare will become an increasingly necessary and accepted form of conflict. Whether Unrestricted Warfare represents today's official view of China's strategic outlook is unclear. What is clear, however, is that from a...

The subprime mess is grabbing all the headlines these days, but allow us to focus on another problem for American financial markets: their growing lack of global competitiveness... That's the judgment of the latest report of the Committee on Capital Markets Regulation, which started a debate last year with its initial study on how and why American public stock markets are losing global market share... First, the delisting of foreign companies from U.S. markets leapt this year -- to 56 so far, up from 30 in 2006 and 12 a decade ago. Those 56 represented 12.4% of all listed foreign...

There are four main triggering factors, according to our team: 1. Drastic drop in revenues for banks operating in the US 2. Slumping value of assets owned by these banks resulting from new US banking regulation (FASB regulation 157) 3. Increasing weakness of bond insurers 4. Economic recession in the US These factors must of course be placed in the general context described by LEAP/E2020 since the beginning of 2006, i.e. a global systemic crisis, which only today is beginning to be grasped by the world's political, financial and economic leaders (4). The fact that over the past two years,...

Any fiscally minded folk care to speculate on what the DOW, NASDAQ, S&P, Bonds and Currency markets will do today after the 'dip' yesterday??

Fox Business Network: Full of Foxes! Rupert Murdoch's new finance channel just launched its Website, and it lends a little insight into what the network will be offering up when it launches on October 15. Namely, foxy young broads!* Almost all of the on-air talent that's plugged on the site are skinny, youthful beauties like Shibani Joshi (a former model in India), Cheryl Casone (a former flight attendant), Jenna Lee (she played Division One softball in college), and Nicole Petillades (she loves slalom waterskiing!). And the best part is some of the foxy young broads are dudes! Reporter Colin McShane...

Long-term vision to become 'an Arab city of global significance' powered Nasdaq deal, writes Frank Kane Sheikh Mohammed bin Rashid Al Maktoum, the Ruler of Dubai, explained the essence of his ambitions for the Gulf city-state at a grand presentation earlier this year. He told an audience of the emirate's political and business elite that he wanted Dubai to become "an Arab city of global significance". The events of last week, when in a complex set of deals, Dubai forced its way on to centre stage in the rush to consolidate the world's stock exchanges, should be viewed in the...

IT'S no wonder the state has such budget problems - no one seems to know exactly how it spends billions of taxpayer dollars. That was the conclusion of an investigation into the California state General Services Department's database by The Associated Press, which found the records of tens of thousands of contracts and purchases incomplete and riddled with errors. What's worse is that the database, called the State Contract and Procurement Register System, was created in 2003 specifically to track expenses after an audit uncovered millions in misspent money. So much for that goal. If the state's doing that bad...

Paris is less attractive for international financial companies than London partly because of French attitudes to business, according to a leading US investment banker. “London made it very attractive for people to come there and work there, and I think in France, quite frankly, attitudes exist that cause people to shy away from that part of the world in terms of being a financial centre,” ... Mr Perella pointed to concerns about “raids” on international companies by the French tax authorities. “There have been a lot of stories ...of raids into people’s homes and offices to seize their computers to...

The politics of bulls and bears How does the U.S. Media describe the economy? It depends on who's president David Frum National Post Saturday, February 03, 2007 Want to get rich in the American stock market? Here's some advice: Don't watch the news. I'm not being facetious here. One of the iron laws of U.S. news reporting is that the economy gets positive reviews under Democratic presidents and negative reviews under Republican presidents. In 2004, the Virginia-based Media Research Center (MRC) produced a stark summary of the disparity. In 1996, Bill Clinton ran for reelection as president. The U.S....

Yesterday, consulting firm McKinsey unveiled a report.... Mayor Bloomberg and Sen. Charles Schumer (who jointly commissioned the report) gave the sobering news the attention it deserves, and Gov. Spitzer joined in. "If New York goes from being the financial capital of the world to becoming only a regional market . . . every aspect of New York life will suffer, not just financial services," Schumer said, alluding to how Wall Street drives Gotham's economy. McKinsey found trouble across New York's entire financials-services spectrum, from equity to debt to derivatives. Equities: Global firms no longer line up to list stocks on...

The world's financial system is overflowing with stocks, bonds and other financial assets -- $140 trillion worth, to be precise. The figure was released in a study by McKinsey & Co. that maps financial assets around the globe and seeks to track the flows of these assets as they move from one region to another, putting hard numbers on the oceans of capital washing up around the globe. At $140 trillion in 2005, the value of the world's financial assets hit a new peak and was more than three times as large as the total output of goods and services...

As someone born in late 1945, I say this to the 76 million or so subsequent baby boomers and particularly to Bill Clinton and George W. Bush, our generation's leading politicians: Shame on us. We are trying to rob our children and grandchildren, putting the country's future at risk in the process. On one of the great issues of our time, the social and economic costs of our retirement, we have adopted a policy of selfish silence. As Congress reconvenes, pledges of "fiscal responsibility" abound. Let me boldly predict: On retirement spending, this Congress will do nothing, just as previous...