JJ,

Here's a website where you can follow the news, and if you have cable TV, there's good coverage on the financial news channels.  I've given up on local news as it's too influenced by politics of the news organization.

http://www.cnbc.com/

What's going on in Washington sounds like they're trying to build a raft while being swept down the rapids.

There seems to be a sincere desire by both parties to solve the problem, but strong disagreement on the approach.  Should it be a "bailout" or a loan?

Clearly, there are pros/cons to both points of view depending on whether you favor a short term or long term fix.  And don't forget that one option is to do nothing and let the markets work things out.

While I was following the news yesterday, CNBC reported that China told their banks to not lend to US banks.  Apparently, this was a rumor and the story was quickly withdrawn, but if this were to happen, there would be dire consequences.

Whatever the "solution", IMHO, this debacle will eventually have far reaching and widespread effects.

5CatMom
₌^..^₌

So many people are so beaten down financially that they feel they have nothing to lose if the system freezes.  They don't have stocks, bonds, or money in a bank.  Or if they did, they secured those assets some time ago.  And if they have a mortgage, they are prime borrowers and they can pay their bills.  As far as being spooked about job loss - during the Great Depression peak unemployment was estimated to be about 25%.  75% were still working.  Some parts of the country flourished.

Real unemployment figures are already much higher than those given by the propaganda arm of the government. (6%)

http://www.shadowstats.com/alternate_data

BLS pegs it at about 10.5% and the economist at Shadow Stats estimates it to be about 14.5%.  So we are talking about a possible 10% increase in unemployment.  If we let people be accountable for their actions, we could save that 700 billion and use it for emergency aid and infrastructure rebuilding programs to create jobs for people here in America, should we need it.  There is no guarantee that the 700 billion will stave off a Depression.  We will be even more in the hole if we spend that money now and the plan does not work.

I heard a suggestion today about letting bankruptcy judges order refi's for deserving mortgage holders.  I think we should force mortgage holders to do that, even if they have to write 50 year mortgages.  That holds the mortgage companies that did the risk assessment on those loans or that bought the loans in the secondary market responsible for their actions along with the people that took out those loans.

That could help us hit a bottom on the real estate market.  I think this BIS economist makes sense.


We will be throwing good tens and hundreds of billions after bad if we don't hit that bottom in the real estate market.  I was willing to go along with the Bear Stearns bailout and AIG nationalization....but now I have lost confidence in all of this.  I feel like a bunch of carpetbaggers are coming out West and picking up assets on the cheap and dumping the toxic slop on the taxpayers.

WaMu was not just 'sold.'  The bank that 'bought' them took the crown jewels, the retail banking structure, but the government took over most of the debts!  They are not being forthright about all this to the public. 

Poco, wow had no idea Lincoln said that - that should be printed across the front page of every newspaper, on a billboard on every highway in every state, printed in magazines, run as the bottom scroll on news channels on cable, tv, etc. So true, how very true - they got in a spot and tried to come up with another way to fleece the people and the people said NO THANKS!

Sardonic a title may be, true. On the other hand we have all be royally screwed. Wait until this rip-off plan IMO folds out and watch what happens-no help for anyone except people who created this ponzi fiasco in the first place. From what I read on a couple of sites this bailout is supposed to make credit become more freed up so people can borrow to buy cars and houses. But with the unemployment being at a real figure of 11% (rumormillnews.com in their Reading Room today) who out there is credit worthy with all the foreclosures going on, companies downsizing or just closing up and people losing jobs-not many left who are credit worthy. Those who are probably already own a home and car so not going to take on any more debt as they watch whats going on nor in any rush to go out and buy another car to replace the one they have and take on another car payment. Financial companies going bust, banks out of money to stay in business, more and more losing jobs, food heading for the stratosphere, utilities trying to get their share of the turnips money that they do not have by trying to jack their rates higher and higher, cost of schooling heading for the stratosphere too, fees on everything they can think of to stick one on, gasoline still way too high.

Nah there are too many out there all expecting to keep taking money out of the pockets of the least among who can afford it and are barely hanging on now. Maybe when the credit cards are defaulted on big time along with the car loans something correct will be done. Until then its business as usual for the rich, of the rich and by the rich IMO. Not trickle down to any of us, don't wait, not going to happen anytime soon.

Now we know what that sound was in Suzanne Vega's song, Cracking:

The Crack of Doom

http://www.telegraph.co.uk/finance/markets/3148364/Russia-and-Brazil-crumble-as-commodity-prices-crash.html

Russia and Brazil crumble as commodity prices crash
The entire complex of commodities and emerging market stocks, bonds, and currencies is now in free-fall as the economic crisis spreads like brushfire, threatening to draw every corner of the globe into the vortex of recession.
 
By Ambrose Evans-Pritchard
Last Updated: 1:51PM BST 07 Oct 2008
"Oil, grains, and industrial metals all crumbled as the week began despite the passage of the Paulson bail-out plan in Washington and dramatic moves by European governments to shore up their banking systems, compounding the steepest commodity crash in over half a century.

The big exception yesterday was gold, which surged $34 to $864 an ounce on safe-haven buying as the markets came face to face with the unsettling reality that the euro is no healthier than the dollar, and perhaps sicker.

The euro’s dramatic slide over the past two weeks has for the first time exposed the instability of the twin-pillar system holding up global finance.

Hans Redeker, currency chief at BNP Paribas, said investors fear that no one is in charge of Europe’s monetary union. “Who is Mr Europe? What is his telephone number? There is no such thing. We have a cancer eating at the system because even healthy companies cannot roll over their debts, yet the politicians still don’t understand the risk", he said.

“The boom was fuelled by massive speculation,” said Charles Dumas, chief strategist at Lombard Street Research.

“Commodity derivatives in the spring had a face of $10 trillion, so it doesn’t take many bulls to sell and send prices crashing. Remember all those clever bankers saying this was the new investment medium, 'uncorrelated’ with either assets? Well, it’s correlated now – downwards,” he said.

The Australian dollar, the beacon of commodity sentiment, went into near-meltdown yesterday, dropping 9.7pc against the yen in the largest one-day drop on record as Japanese investors dumped their Uridashi bonds and scrambled to close bets on high-yield economies – known as the carry trade.

Brent crude oil fell to $85 a barrel, down over 40pc since the July spike. It is a casualty of the synchronised recession engulfing the entire G7 bloc of leading powers.

Japan and the eurozone are already contracting: the Anglo-Saxon economies are close behind. The new twist is an abrupt downturn in China, until now the dominant force in the oil and metals boom.

Albert Edwards, global strategist at Société Generale, said China depends on exports to US and Europe for its lifeblood, and could face banking problems of its own.

“I think China is going into recession as well. This is going to catch investors off-guard.”

Stephen Jen, currency chief at Morgan Stanley, said the “glowing reputation” enjoyed by emerging markets during the global boom was a deception caused by the easy-money largesse of the credit bubble. Strip that away, and the picture looks very different.

“They are very vulnerable to a U-turn in capital flows,” he said.

The oil slide has reached the point where it is setting off a powerful chain reaction through the nexus of global markets. It may soon be unprofitable to divert much of the US crop harvest to biofuels, so futures contracts are rapidly scaling back assumptions. Corn fell 6.4pc yesterday, while soya beans were off 5.4pc.

(Food may actually get more affordable when we stop burning it.)

There are fears that Russia could slip into a downward spiral if oil drops to $50 a barrel, which is now the lower end of Merrill Lynch’s forecast.

Veteran analysts say they have seen this movie before. " 

---

Sure, we have seen a commodity crash before, but not one on financial steroids like this one is. 

My sympathies for those who set this up and profited from it and expect U.S. taxpayers to foot the bill.

http://www.youtube.com/watch?v=vInuw2f5xn0&feature=related

Poco, You did a great job with the music and the pictures.

Poco, you have such a gift in putting together pictures, words, poetry and music. Thanks!