Banking Gnomes Do NOT Want To Be Rescued!

October 5, 2008

Elaine Meinel Supkis

This is just too funny and utterly pathetic: the banking gnomes who have been putting on this hilarious show about how they are DYING and need to be rescued, well, now they are no longer dying. They are in a surly mood. The bail out won't arrest them, alas. But it won't let them get millions of dollars in profits and bonuses, either! They HATE this. So they don't want to be rescued! HAHAHAHA. I warned everyone that this was FAKE. Their agony was full press faux, a hoax. We are in danger....FROM THEM. Arrest them all, I say. Now. At night. Raid those hotels with high priced prostitutes. Easy as pie.

Now Wall Street may shun $700bn bail-out

Fears are mounting that many Wall Street banks and financial firms will refuse to participate in the US government's $700bn bail-out package, leaving global markets and world economies in a perilous state for months to come.

'There is a growing feeling that banks ... might instead decide to tough it out,' said Thomas Caldwell, chairman and CEO of Caldwell Financial, a $1bn-plus fund manager.
*snip*
One of the least attractive elements is a section designed to curb executive pay at banks that participate in the bail-out package. These include limiting stock-related pay and banning 'golden parachutes' for executives.

'I think this hodge-podge of regulations and rules will be enough to put many [chief executives] off participating,' Caldwell said.

Sources close to Goldman Sachs and Merrill Lynch indicated the banks might choose not to participate in the bail-out as there is a growing view on Wall Street that the market may be bottoming out.

Analysts also believe that the mere presence of the government as buyer of last resort will be enough to get credit markets moving again, and that a large number of banks would not need to take part for the legislation to succeed.

OK: time for something big here! I did this so loud, my cats jumped. The dogs barked. The cow jumped over the damn moon. HAHAHAHAHAHAHAHA, Sigh. HAHAHAHA with tears running down my face. Good barking grief! The Sunday Dish just ran off with the silver spoon! Hey, diddle diddle dandy.

Wow. Thanks to all the very wonderful readers here, I ran down to DC, braving a nasty storm brewing offshore, I sat for over 7 hours without going to the toilet, all so I could hammer away at the Congress so they would not dare pass that stupid bill. They didn't pass Gollum's Ring of Power bill which was three pages long and gave him total dictatorial power over our entire economy and banking systems.

No, the bill that passed was decked out with every toy the pixies and elves working for Santa could hammer together. This bill had tax cuts and spending sprees spread all over kingdom come and into hell itself.

BUT it also had LIMITS ON WEALTH FOR THE GNOMES!!!! How on earth can these guys hire prostitutes like the ones in DC that poor faux reformer, Spitzer, humped at night? Some readers suggested I should have stayed at the Mayflower Hotel. I probably would have met more politicians there than in the Halls of Congress. Too bad I am too old and obviously a crone to pass as a Lady of les Nuites. So I only got to be slightly annoying there.

But I did note that Bernanke was dead set against any tax cuts in this Bank bail out bill. This was not reported by anyone, I believe. And I know that Paulson was aching to save only his fellow gnomes and had zero interest in saving this nation or anyone living here outside of the most opulent jerks on Wall Street.

This bail bill is now pure poison to them! I figured they would run away from being rescued! HAHAHA. I even laid down on the floor and pretended to be dying and then told a Congressman to pull me up. As soon as he touched my hand, I sprang up and pretended to punch him out.

These pathetic sons of a poor clone of Sarah Bernhardt did a passable job at pretending to die. But this was pure summer stock Hamlet. They certainly hammed it up. They had their buddy, the crazed Cramer running about the TV studios last year at this time, shrieking 'There is BLOOD in the STREETS! My friends are losing their JOBS!' But this was all theater of the absurd. The minute a rescue was proposed that cut these goofy gnomes off from their beloved flow of instant wealth, their little jonny walkers in their pants shriveled up.

'Hey, we can't pump prostitutes unless we get lots and lots of loot!' yelled the infuriated gnomes. So tonight, they are huddling. They must find some way of unloading their toilet stuff onto someone with no strings attached. They must find someone who will do this for them! How, how can they pull a scam this huge? Ah!

Well, TV and the mainstream newspapers can come to the rescue. These are all run by gnomes and they are all very, very close to each other and have hands in each other's pockets as well as sharing the same goddesses, etc. at the same DC hotel. They kiss each other at Bilderberger Meetings! Crimmeny! They have to have some way of foisting this on the US public.

They are a tad scared, of course. The bail out bill was, even as amended, still extremely unpopular. They know that if the US public learns that they are going to REJECT this bill because it won't make them even richer, this is a real kicker! The fury of the public will be, I hope, immense. Even people who were stampeded into supporting this bill after the jokers pulled a 777.7 point decline in the DOW....HAHAHA. I said right away, this was a game, a foil, a trick! It was far too neat to be accidental.

Let them all die of starvation. Don't give any of these CRIMINAL CLOWNS a damn penny! Put them in prison! We can declare their banks to be 'outlaw' for extending too much credit and playing too many risky games and for creating the Derivatives Beast. Then lock them all in the Cave of Death and Wealth with this Beast and the two goddesses who are Inflation and Depression. Let them learn what real torture is. Maybe we could televise this somehow. Like 'Survivor' or 'Big Brother'. Watch them all flip out. Demon Network News can arrange a feed.

Hypo Real Gets EU50 Billion Government-Led Bailout

(Bloomberg) -- The German government and the country's banks and insurers agreed on a 50 billion euro ($68 billion) rescue package for commercial property lender Hypo Real Estate Holding AG after an earlier bailout faltered.

Germany's financial industry agreed to double a credit line for Hypo Real Estate to 30 billion euros, Torsten Albig, a spokesman for Finance Minister Peer Steinbrueck, said late yesterday in an e-mailed statement. The federal government's guarantee for the credit line remains unchanged, Albig said.

Arrest the Hypocrites of Hypo. Haul them into prison. Bail outs of banks should accompany pictures of the presidents of these goofy banks being led away in handcuffs. No bail outs if the guys who engineered these crashes get paid or worse, profit! This is the MORAL IMPERATIVE. If no one pays for these economic crimes, no one will stop. And if someone cries, 'Wolf' and screams, 'This is the END of the WORLD' and then, when learning they won't get millions of dollars in pay, turn tail and say, 'We don't want this, go away.' They should be arrested just like anyone joking about hijacking on a plane is arrested and put in prison! Arrest them ALL. GADS. I will assist if necessary.

LIBOR Gone Crazy as Commercial Paper Market Implodes By: John_Mauldin

As I have said repeatedly for months, the problem is that financial institutions are having to deleverage. They have massive losses and simply have to raise capital in order to survive. If you can't raise equity capital (and most can't), one of the ways you do that is to make fewer loans and to take less risk. You also charge more for the loans you do make.

Larger institutions cannot raise capital on competitive terms. GE is an AAA-rated company. Yet they had to pay Warren Buffett 10% to get $5 billion, plus in-the-money warrants worth at least another 10%. Buffett is likely to double his money on this deal over 4-5 years. A short while ago, GE could get short-term commercial paper for a few percentage points. That difference is going to significantly impact GE's bottom line. But they had no real choice. They took the money.
*snip*
Sidebar: taxpayers really must demand that someone like Bill Gross of PIMCO and/or other savvy market specialists run this new government operation. He offered to do it, and I think we should take him up on his offer. Taxpayer losses should be kept to a minimum, and I believe someone like Gross would do his best to see that would be the case. The point of this exercise is to restart the frozen credit markets, NOT to bail out banks. Some banks may get bailed out in the process, but it should be at a cost to their shareholders and management, not to the taxpayer.

I am asked, why can't private money solve the problem? Because there is simply not enough private money. Buffett offered to take 1% of the new government pool. If that is all the largest pile of free money in the world can take, why does anyone think there is enough private capital to take the other 99%? Insuring the mortgage bonds is not sufficient, because there is not enough money to buy them in this market. When things have sorted themselves out in a few years, I think the bonds can be insured and sold, and likely at a profit if bought correctly. But we do not have the luxury of waiting a few years.

This guy just got hired by a big magazine with many thousands of readers. He is utterly stupid. So of course, he gets elevated. He is a gnome, of course. And has no morals nor can he see the obvious. Here are two graphs he published:

The commercial paper outstanding has shot up twice in the last 20 years. The Dot Com bubble and then the Housing Bubble. It is painfully obvious that these are bubbles. It is also painfully obvious that the proper decline to normalcy after the Dot Com stupidity was cut short by Greenspan. IT BARELY DECLINED AT ALL! And everyone was so proud to see a second bubble right on the heels of the big first stock market bubble!

Whoopee. I was aghast back when Greenspan dropped rates far below the rate of inflation. My savings gave me nearly no return at all. I was lucky to get even 1%. And inflation took off immediately. Gas cost me $.86 a gallon in 2000. It costs me still over $4 a gallon today. All the necessities shot upwards. Housing did, too, for a critical 3 years. Then it all crashed to earth, stocks, banking and housing, industry, everything, in tandem. The price we are paying is obvious!

The solution the Fed cooked up was the same hash the cooked in 2002: sub-inflation interest rates! But hark! That isn't working. For it is NOT translating into easy credit for all the leverage queens out there in Sarah Bernhardtland. All the shrieking ninnies are charging each other huge interest rates for any money that leaves their hot little gnome hands! NONE of them want to lend at sub-inflation rates. HAHAHA. What a shocker.

Bernanke killed the publication of M3. But if we look at the growth of M3 since the dawn of the Floating Currency regime, we learn that M3 was at $1 trillion, January, 1974. It swelled to over $10 trillion in 2006. A queer thought here: the US national budget deficit was around $1 trillion by 1978 and is now over $10 trillion today. Now, when we look at mirror images we have to suspect they are connected, eh? Right! Is 100% of US monetary growth really just our budget deficit feeding inflation into our economic systems?

How obvious does this have to be? I don't need any fancy Fibonacci convex or concave triangles to figure out that these hypotenuse opposite the right side of this equation is equal to the sum of the Federal Deficit! And I get to make fun of Hypo AG again! Its losses are mirrored in the US and UK and all are in the same boat, too.

LIBOR seems to have 'gone crazy' only because the central banks keep pulling down the LIBOR only to see it bob back to the surface again. This is like dunking a basketball. I used to do this as a kid, for fun. I would shove the ball under my feet in the swimming pool and stand on it. But this was very unstable and eventually the ball would slip from under my feet and shoot to the surface and then right out of the water, throwing water all over the place in a huge geyser! I loved to shock visiting children with this game.

Well, we are playing this game with money. And so each time the central bankers of the G7 shove down rates, the LIBOR ends up, less than three months later, shooting upwards just like the basketball! What this means is, the LIBOR is being set TOO LOW! It MUST rise or else! And if it is artificially suppressed, it will overshoot greatly. The more it is suppressed, the more it will overshoot. Now we see these stupid, irresponsible bankers shoving rates to Japanese levels which is 0%. Lord! That basketball is going to the MOON.

And we know this because the last time this stupid, idiotic trick was tried, LIBOR rates nearly hit 20%. After pretty much killing global trade and the US business landscape, they gave up and let rates rise to a natural level. And never, never, NEVER is the natural level 0%. Got that?

Mauldin:

I think it is about an even chance that the government will have to guarantee for a period of time (say 6 months to a year) every bank deposit, regardless of size, in the US.

That is a staggering thought. The potential will be large for almost-insolvent banks to pursue risky behavior to try and work their way through problems. If such a policy is pursued, tight controls must be administered so risky banks do not offer high CD rates in order to garner assets. The FDIC must closely monitor such activity. Perhaps such guarantees should be for existing depositors and not new customers. Insolvent banks and those on the edge must be shut down quickly in such an event, to prevent risky behavior.

Unthinkable? I bet you there is a working committee of government and Fed officials thinking about just that very thing and how to do it. It would be even more scary if there is not one. We are in completely uncharted waters, and every contingency needs to be thought through well in advance. We simply don't need more last-minute Paulson plans.

HAHAHA. Mauldin thinks the gnomes want restrictions? Of course not! They would rather saw off their reproductive organs with a blunt buzz saw, first! They want the government to insure against all their risks while they reap the profits of risky ventures. Everyone of these gnomes know that if there is no risk, there is no profit. So they NEED risks! And the greater, the better. So they can't have the government clipping their wings when they fly off to play risky games. Nor do they want to pay taxes. Or be responsible citizens. Or do anything but be outright PIRATES. So again, why rescue them?

If they can't run a simple bank, then shut the doors and start over, fresh, with non-gnomes running sane banks based on the old rules. And have huge signs warning people about gnomes. 'DANGER! GNOME DOUBLE CROSSING!' at various intersections like Wall and Broad Streets in Manhattan.

And here is a very good story I wrote last year. It is all about charts, graphs and international trade, as usual. The charts alone are worth looking at:

October 6, 2007 one year ago: Peering Into The Future And Seeing Dragons

A reader in Singapore kindly sent me a link to a PDF page which is very long and very enlightening. The charts and data in this document are astonishing and also shows how fast Asia had evolved in the last 5 years from being US-centric and dependent to interlocking economies within their own sphere. Also, economics professor, Kuttner, testifies before Congress and as usual, I throw up my hands in despair at his inability to see the obvious. And I am invited to go to a forecasting/prediction conference where world business leaders and important professors can tell me how to see into the future...hahahaha. I am not being paid to go there so they will have to hoof it alone without me.

Things are changing. The status quo is dead. Long live the new status quo! Let us change with it! I look forwards to a new America, one that isn't up to its eyeballs in debt. The US as the world's top creditor nation, not top debtor nation. Arrest the banking gnomes and start over again. We can do it.

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Comments

[Blunt Force Trauma]

Shock & Awe: Bi-Partisan Beltway Terrorists Launch Economic 9/11 on the American People
(Uruknet/Global Research)

http://tinyurl.com/3srk92

[Blunt Force Trauma]

European Crisis Deepens; Officials Vow to Save Banks (Bloomberg)

http://tinyurl.com/3zhgnc

Britain: Police train for riot scenarios (BBC)

Editor's note:

This training points to the militarization of law enforcement in the UK. Does it bear a relation to potential social unrest and the unfolding economic and social crisis?

Police officers from forces across the South West are to receive training to prepare them for riots.

Police horses, dogs and a helicopter will be used to add realism during the two-day courses at Moreton-in-Marsh Fire College, Gloucestershire.

Some officers will take on the role of hostile crowds in real-life scenarios such as raves, demonstrations and disorder at football matches.

Missiles and petrol bombs will be thrown as part of the training.

Officers attending the training will come from Gloucestershire; Dorset; Wiltshire; Avon & Somerset; and Devon & Cornwall Constabularies.

Inspector Mac McGarry, of Gloucestershire Constabulary Operational Services, said: "These are very important and impactive sessions because it is essential all officers allocated to the Public Disorder Unit experience the sort of difficulties they will encounter in real-life situations.

"It also gives us the chance to test the command structure we have in place and the inter-operability with other forces."

[Blunt Force Trauma]

Gangsters Now Demanding that Europe pay 440 Billion dollars to Bailout Continent

'Since the Federal Reserve and the US Treasury Deparment have made it clear that they will be bailing out European banks, why is more money needed for this scheme?'

http://tinyurl.com/4ogs5c

[calvino]

Blunt, the British police need riot training? Bwahaha. Send them to a Celtic United and Rangers game.

[GK]

I wonder how many trillions in Yen-denominated loans the Gnomes have outstanding?

As they sell high yielding currencies to buy Yen, stand back while the Yen soars, making loans more and more expensive to pay back.

When the flow of dough from Yen loans to US stock market speculation changes direction, POW goes the DOW.

I have been watching for a year for the Yen to go up as the TRIGGER for the big one. Is this is? No idea.

Scenario 1 tomorrow: USD down, Yen Up, DOW way down. Call this "Capital Deleveraging"

Scenarios 2: PPT sell gold/silver DOWN, USD UP, Put PPT proceeds into DOW Futures UP or level if fighting Armageddon. Call this "Save the Carry Trade".

Scenario 3: Euro collapses DOWN, Warren Rothschild Buffet purchases some HUGE EU bank WAY UP. USD and DOW UP. Call this "EU Bailout".

Scenario 4: Some Russia/China oil/weapons/trade wildcard announcement. Call this "NEW POWER BARES TEETH".

Yom Kippur is coming up on Wednesday the 8th and it recognized atonement for the sin or worshiping the Golden Calf. Expect some wild gold price action in the next few days.

Anyone else want to hazard a few scenario options? I think it is impossible to predict the future, but it is possible to prepare for a certain number of options.

http://www.bloomberg.com/apps/news?pid=20601087&sid=aQW8OjCOo5UA&refer=home

Yen Unbeatable as Credit Seizure Proves `Carry Trade Is Dead'

Oct. 6 (Bloomberg) -- The same credit market collapse that drove Lehman Brothers Holdings Inc. into bankruptcy and sent bank borrowing costs in Europe to record highs is making the yen unbeatable.

Japan's currency was the best-performer in September and the only currency to appreciate against the dollar. Deutsche Bank AG, the biggest trader of foreign exchange, says the yen will rise 5 percent in coming months. New York-based Morgan Stanley is telling clients to buy the currency versus the euro and pound.

After seven years of providing the cheapest source of funds for investors buying higher-yielding New Zealand dollars, Australian dollars and Brazil reais, the yen is appreciating as $587 billion of subprime mortgage-related losses force banks to restrict credit.

[Neon Vincent]

Economic cycles were a big part of your last two posts. I'd love to chat with you about them, but not now. Time to go to bed!

[Neon Vincent]

Here's someone who's figured out what you've figured out.

The Bailout in Plain English

Who knows, maybe he reads your blog!

[JT]

10 years of Euro was enough for me:). I never wanted Euros.
I´ve missed the good old Deutch mark and Finnish markka. We just might get them back in a few years.

I like them both; no lidless mordor eyes in either one.

I have this one dollar bill from 1988 (I saved it the last time I was in the US in 1994). I plan to use it as a hedge ;).

http://tinyurl.com/4jrra2

Hope it will keep the fox out ;).
Hehee..

[carli]

Elaine: "Translating this page above into modern English, it says, 'We were really dumb and mostly parked our clients in the MEZZANINE of a BURNING HOUSE! OH NO!' These nasty 'mezzanine' rated CDOs are the infamous funds based on lending to 90 year old suicidal ladies who decide it is time for a 30 year mortgage or they lend to repeat bankrupt, Donald Trump. Either way, these things are screwed into the wood until the head is buried."

You hit a homer with this post, Elaine. But I have to comment, while the Countrywide's, Lehman's, Hypo's and the like all have behaved criminally, negligently, and greedily, the real question that needs to be addressed is, WHO ALLOWED THEM?

At the end of the day, it doesn't matter if you bring back regulation, upon regulation upon regulation, because if the gatekeepers choose to manipulate the numbers and cook the books, hide the M3 and such criminal things, then what?

S&P, Fitch, Moody's, all these ratings agencies should be burned to the ground! With their CEO's in them. They were the porters of the beautiful buildings who told the young lasses it was safe to enter, when they knew all along it was infested with rapists.

They should be strung up by their balls, assuming they have any, the cowards. They were paid to protect the investors, but what did they do, they went mercenary, and took payment from the investment banks they rated. How quaint! BTW, the European banks used them too!

If there is no accountability in all this mess then whomsoever enters this pool is a moron and a half (Goldman people are exempt). One pays a premium for rated instruments, but if you get AAA for in reality Caa2, it's like paying top $25,000 for a Rolex replica.

From the Economic Times Mumbai, "For jobs that often did not require very high skills, investment bankers ended up getting paid astronomical sums. Seldom in history has so much money been made by so few with such little talent"

Who's the chump?

[OC]

This is the economic equivalent of 9/11 whereby the two towers came crashing down after burning for a while; occupants trying to escape were reassured that it is safe only to have them crashing soon after.

Same too with US and now EU. Folks, get out while the going is good; it's too late to stop the chain of events. The vested interests are not going to save USD or Euro. They are just stretching the ride and will cut and run before it's too late.

[OC]

Carli,

Don't get worked up about it, the gnomes and their money will soon be parted. They have no ability to keep what they did not earn honestly.

They can run but they can't hide. 21st century have very little hiding places left. They have the whole world after their hides by the time this is over.

[Elaine Meinel Supkis]

I picked up the yen carry trade story last night. Even Bloomberg's reporters don't have the faintest idea, what is really going on. This is because they are submerged in a sea of propaganda.

The yen is still very, very weak compared to the dollar and euro. It has quite a ways to go yet. I would say, to at least 86 yen to the dollar, for example.

Only when the Japanese export industry finally begins to balance somewhat, should this end. But the Japanese industrialists would disembowel themselves first.

[OC]

Elaine,

Looks like lots of folks are going to be 'dead' before WWIII starts. Did u see the rout in Asian stock markets now...them gnomes must be shitting in their pants right now. All their tricks and magic wand waving are failing.

[Buffalo Ken]

Hey did someone say something about World Wierdness 3? Please, why fight wars with weapons causing so much blood to be spilled on the ground. Why not use our minds?

[Buffalo Ken]

Why not just "defuse" all those few folks who want to push buttons for the fun of it.

They can be defused humanely.

[Buffalo Ken]

And just be clear, the few folks I'm referring to are the ones who would choose to perpetuate large-scale suffering of innocence - the causes of said suffering should be readily evident by now. Anywho, I'm assuming most don't want them to do this - it seems obvious from a logical standpoint assuming we are all equal.

We are all created equal right? I mean correct?

Peace,
Ken

[Buffalo Ken]

If you think not (that we are all created equal), please prove it.

Now obviously we all have different attributes so we are each unique. But I put forth and equal and unique are not exclusive, in fact, they work well together.

[Buffalo Ken]

Sorry, last post....

"....I put forth THAT equal and unique...."

I hope everyone has a great day.

Peace,
Ken

[Blunt Force Trauma]

Calvino said:

"Blunt, the British police need riot training? Bwahaha. Send them to a Celtic United and Rangers game."

LOL. I'd fly to Britian just to attend one of those matches. Those must be a hoot (not the riot part)!

OC said:

"This is the economic equivalent of 9/11 whereby the two towers came crashing down after burning for a while."

Except these "towers" are crashing at a snail's pace and will burn for a while yet before the final fall. It seems like it is happening quickly, but it isn't. The one thing that would speed it all up is another stupid, illegal, useless and major war.

[jt]

Now the Pope is making comments. He´s bearish on money.
I guess he´s long on gold and antiques.

Pope says financial crisis shows money an illusion (International Herald Tribune)
http://tinyurl.com/3ttdkr

[Blunt Force Trauma]

@ OC:

"Did u see the rout in Asian stock markets now.."

I just did. Averaging a 5% loss across the board on all markets; Nikkei, Hang Seng, et. al.

European markets at this hour show the same loss percentages.

You're going to "love" this; DOW opens officially for trading this week in 2 hours and the pre-market DOW shows it down 264 points to 10,100.

My wager? 9,850 for the DOW's close today. Remember when it was at it's all time 'high' at 14,100 on October 9th, 2007?

[Elaine Meinel Supkis]

You are correct, Blunt Force Trauma.

[Blunt Force Trauma]

Elaine said:

"Even Bloomberg's reporters don't have the faintest idea, what is really going on. This is because they are submerged in a sea of propaganda."

You know you'll get NO argument from me on that opinion.

[CL]

"...the presence of skilled former bankers, stockbrokers and accountants on the yakuza's extended payroll has dramatically increased the mob's income stream and made it virtually impossible to discern the difference between legal and illegal funds as they flow through the Japanese markets."

http://tinyurl.com/4wr3tq

[carli]

OC, the Fight Club scene of Tyler Durden in the bathroom talking to the City Councilman comes to mind and would be the right approach! LOL.

Elaine, I have been saying for the longest time that the yen's real value is 85 to the dollar, but at the rate things are going it could be 10 to 1 in no time.

The 4th Estate are amorous with the 1st & 2nd Estates, while the 3rd Estate are asleep whilst getting screwed. A 5th Estate is needed...

[Blunt Force Trauma]

Ready?

Fed says it will pay interest on banks reserves

WASHINGTON (AP) _ The Federal Reserve says it will begin paying interest on commercial banks' reserves and will expand its loan program to squeezed banks, fresh steps to help ease a painful credit crisis. Congress in the $700 billion bailout bill President Bush signed on Friday gave the Fed the power to pay interest on those reserves for the first time. The law accelerated the effective date to Oct. 1 of this year versus 2011.

[Blunt Force Trauma]

Scotiabank projects recession in Canada, U.S. (Globe and Mail)

"Economists are gutting their forecasts for Canada's growth next year as the United States slides into recession and pulls the rest of the world down with it."

http://tinyurl.com/4uccyu

[Blunt Force Trauma]

Ha, ha, ha. Oh, I'm cryin' from laughin' so hard. I had to say 'I told ya so", but you knew this was coming!

More! More! More!

Fed, Treasury face demands for more action on credit crunch (Financial Times)

Experts are calling for the Federal Reserve and U.S. Treasury to implement additional measures to loosen up paralyzed credit markets, saying passage of the $700 billion bank rescue is not enough to get the economy moving again. The Fed is expected to respond with a bigger and broader program to enhance liquidity among financial institutions. Some experts said the Fed could take a radical step of offering unsecured-term loans to regulated banks at a fixed spread of more than its benchmark interest rate, effectively capping the interbank rate.

More?:

http://tinyurl.com/4zslyh

[Blunt Force Trauma]

Reuters just released their version:

Fed to boost auctions, pay interest on reserves

WASHINGTON, Oct 6 (Reuters) - The Federal Reserve on Monday announced a series of steps to help it funnel massive amounts of liquidity to clogged credit markets, including boosting the sizes of cash auctions and offering banks interest on reserves.

"Together, these actions should encourage term lending across a range of financial markets in a manner that eases pressures and promotes the ability of firms and households to obtain credit," the Fed said in a statement.

[Blunt Force Trauma]

I just have one question: "What fucking reserves?!!"

(sorry if I offended anyone - but now, I'm pissed)

[Blunt Force Trauma]

LOL. I'm losin' it!

Let's see if I'm not completely "losing" it. Banks borrow money from the Treasury that gets it's money for the Federal Reseve and now the Fed is going to pay interest on that borrowed money so that the banks can use that interest paid by the Fed to lend out to retail bank customers?!

Holy shit!

Egads, man. The world is gone a-kilter. This is whole new Ponzi scheme. My neck is getting sore from all this damn head shaking.

[Blunt Force Trauma]

Credit crunch continues as lending rates climb (MarketWatch)

"Central banks have ramped up liquidity operations in an effort to keep the financial system from seizing up. The Federal Reserve on Monday said it would increase the size of its loans to banks to a potential $900 billion and would begin to pay interest on bank reserves, in a move the central bank said would give it "greater scope" to address credit market conditions."

Full article:

http://tinyurl.com/3q9xns

[carli]

From MI6 Ambrose over at the Telegraph:
"We face extreme danger. Unless there is immediate intervention on every front by all the major powers acting in concert, we risk a disintegration of global finance within days. Nobody will be spared, unless they own gold bars."
http://tinyurl.com/4zh837

This jives with Ralph's post yesterday. The bankers are shitting bricks, so are the politicos, and so are the Royals. And what happens when that happens? They start doing very stupid things. The more they try to do something, the more havoc they create. It's really quite simple, the status quo is no longer. They believed their own bullshit, now, they have to eat it!

Of course, we could for the sake of conspiracy interpret that as a message to the US elite from the EU elite. The conversation would go something like, "If you don't start towing the line and give us back our money, we are going to intentionally sink this boat. And we know you have no inflatables (gold)!"

Whatever it is, one thing is sure, all the Queens men are in a panic today, and while Calvino thinks this is the slow boat to collapse, methinks otherwise.

[carli]

Uhhh, got the US elite mixed up with the EU elite, it's in reverse order. And I don't drink! Heh.

[Blunt Force Trauma]

Carli said:

"...and while Calvino thinks this is the slow boat to collapse..."

I think I was the one that stated that and this is what I did say; "Except these "towers" are crashing at a snail's pace and will burn for a while yet before the final fall. It seems like it is happening quickly, but it isn't. The one thing that would speed it all up is another stupid, illegal, useless and major war."

After I saw the stories (above) on the Fed willing to pay interest (thin air) on bank's reserves (also thin air), I can certainly see the speed of collapse now.

It's all so stupid. Banks have no "reserves". They're insolvent. Broke, broke, broke. Those "reserves" only exist as that "money" was given to them as a loan from the Fed anyway. All of which is backed by NOTHING! Bwah-ha-ha-ha.

[carli]

Blunt you're right, I was quoting you. Geez, as I always say, it happens in the best of families. LOL.

Let's see how the market does on openning. Btw, the NYSE has implemented new circuit-breaker collar trigger levels effective Wednesday, October 1, 2008.
http://www.nyse.com/press/1222772891771.html

[Blunt Force Trauma]

Hey, Carli.

The market opening will suck (or is that 'blow'?). The DOW pre-market is down by 206 points. Markets officially open in 6 minutes.

[carli]

Blunt I am watching for it, and I agree. It's the 6th October today. I expect the BIS to announce it will audit the FED soon.

[GK]

Burn, baby, Burn!

In fourth-quarter 2008, the 10, 20 and 30-percent decline levels, respectively, in the DJIA will be as follows:

Level 1 Halt
A 1,100-point drop in the DJIA before 2 p.m. will halt trading for one hour; for 30 minutes if between 2 p.m. and 2:30 p.m.; and have no effect if at 2:30 p.m. or later unless there is a level 2 halt.

Level 2 Halt
A 2,200-point drop in the DJIA before 1:00 p.m. will halt trading for two hours; for one hour if between 1:00 p.m. and 2:00 p.m.; and for the remainder of the day if at 2:00 p.m. or later.

Level 3 Halt
A 3,350-point drop will halt trading for the remainder of the day regardless of when the decline occurs.

[Blunt Force Trauma]

Hey, Carli.

Just heard that the BIS is or has recorded it's lowest level ever. I'll try to find more...

[Elaine Meinel Supkis]

Just posted story about yen carry trade ending.

Will post more after I come back home today. Must run!

[carli]

Check this out guys!
http://www.bis.org/statistics/otcder/dt20b20c.pdf

OTC foreign exchange derivatives account by currency. Look at the dollar ratio to all currencies.

[carli]

DOW broke 10,000, now at April 2005 level. Now -352 on the day, are we going to see a Level 1 halt today?

[Blunt Force Trauma]

DOW just broke 9,000. 9,965 and falling....

[GK]

The PPT NEVER let's it fall more than 5%.

I call the turn at 5% drop.

[Blunt Force Trauma]

Toronto Stock Exchange is down 902 points.

DOW down 390 points to 9,934

[Blunt Force Trauma]

DOW at 9,863. At 7:30 this morning I was betting on 9,850. That'll be exceeded.

Total, so far, on DOW; down 461 points.

TSX just passed 1,000 point fall.

[Blunt Force Trauma]

DOW now down 532 points to 9,792 and falling. Rapidly.

[Blunt Force Trauma]

Last week it took all day for the DOW to sink down 777 points. Todays looks to meet and exceed that inside of two hours. By 11:30 am / Noon?

[GK]

Turn and Burn baby.

Watching that SLV get dumped, giving up it's 2% gain?