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PART I
http://www.fireflyfans.net/mthread.asp?b=18&t=34184
PART II
http://www.fireflyfans.net/mthread.asp?b=18&t=34664
PART III
http://www.fireflyfans.net/mthread.asp?b=18&t=34859
PART IV
http://www.fireflyfans.net/mthread.asp?b=18&t=34935

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Originally posted by participant:

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PART I
http://www.fireflyfans.net/mthread.asp?b=18&t=34184
PART II
http://www.fireflyfans.net/mthread.asp?b=18&t=34664
PART III
http://www.fireflyfans.net/mthread.asp?b=18&t=34859
PART IV
http://www.fireflyfans.net/mthread.asp?b=18&t=34935

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CALL YOUR CONGRESSMAN

Currency traders worried that the huge price tag of the bailout could weaken the U.S Dollar and this kind of insanity can make our currency like the value of toilet paper
dollar also fell against the British pound, the Euro and Japanese yen.

WRITE, TELL YOUR SENATOR WHATS WRONG

Say NO to the destruction of the US currency !!

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Originally posted by Hank Paulson:

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Dear American:

I need to ask you to support an urgent secret business relationship with a transfer of funds of great magnitude.

I am Ministry of the Treasury of the Republic of America. My country has had crisis that has caused the need for large transfer of funds of 800 billion dollars US. If you would assist me in this transfer, it would be most profitable to you.

I am working with Mr. Phil Gram, lobbyist for UBS, who will be my replacement as Ministry of the Treasury in January. As a Senator, you may know him as the leader of the American banking deregulation movement in the 1990s. This transactin is 100% safe.

This is a matter of great urgency. We need a blank check. We need the funds as quickly as possible. We cannot directly transfer these funds in the names of our close friends because we are constantly under surveillance. My family lawyer advised me that I should look for a reliable and trustworthy person who will act as a next of kin so the funds can be transferred.

Please reply with all of your bank account, IRA and college fund account numbers and those of your children and grandchildren to wallstreetbailout@treasury.gov so that we may transfer your commission for this transaction. After I receive that information, I will respond with detailed information about safeguards that will be used to protect the funds.

Yours Faithfully Minister of Treasury Paulson

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Over the last fourteen days, the failure of financial giants Lehman Brothers, AIG, Fannie Mae and Freddie Mae has rocked global financial markets. Former Federal Reserve Chairman Alan Greenspan has described the situation as "a once in a century economic event." Whispers are being heard from abroad that America is facing financial Armageddon, that American-style Capitalism is dead.

Is the American economic way of life hovering on the cusp of systemic ruin?

Secretary of Treasury Henry Paulson and Federal Reserve Chairman Ben Bernanke are pushing for an immediate financial bailout package that will cost taxpayers over 700 billion dollars. Sweeping new powers will be granted the U.S. Treasury and the Federal Reserve. Their proposal? The Federal government will buy-up all the bad real estate loans that are dragging down the nations financial institutions, thus allowing these companies to once again issue loans to fiscally sound businesses and individuals.

They are gambling that when money begins to again flow from lenders to responsible individuals and businesses, the economy will begin to heal, eventually returning to something resembling a healthy state.

Well, that's the theory.

Can this draconian step end the market turmoil? According to Paulson, "It has to."

What is happening? Why must taxpayers bail out failed financial institutions?

The answer to these questions can be found in the wreckage of the stock market crash of 1929 and the economic depression that followed.

During the last weeks of October 1929, the New York stock market plunged to record low levels. Unimaginable quantities of wealth were lost. The crash was pointed to by many as the cause of The Great Depression.

The "Crash of 29" was the result of multiple economic pressures, foremost being promiscuous stock market speculation. Also, years of easy credit had led to over-expansion by companies and a significant increase of personal debt. In addition, financial debt from World War I put a serious strain on the world economy. European countries were struggling to pay on the massive debts their governments owed to American lenders. These debts contributed to a serious drag on the national economies of England, France, and especially Germany.

In his hugely influential book entitled A Monetary History of the United States, Nobel prize-winning economist Milton Friedman writes that the severity of the economic downturn known as The Great Depression was acerbated by a huge contraction of the money supply. Friedman believed that The Great Depression was caused not by the Crash of 1929, but by the inadequate governmental response that followed. He argued that in the absence of market liquidity, the solution is for the Federal government to support existing financial institutions with massive injections of money until equilibrium returns to the marketplace.

In Friedman's view, if the Fed had provided emergency lending to key banks in 1929, smaller banks would not have failed and the money supply would not have fallen as far and as fast as it did, devastating an already floundering American economy. The Great Depression that lasted almost a decade would have instead been a severe recession, lasting only a few years.

Friedman's economic theories were popular with Margaret Thatcher and Ronald Reagan. Current Federal Reserve System chairman Ben Bernanke spent much of his academic career studying Milton Friedman's economic writings, and is a fervent believer in his theories.

Over the next six weeks, Friedman's theories will be put to the test. Will they save us from financial disaster?

To succeed, the Paulson/Bernanke bailout plan must overcome several significant hurdles.

After stabilizing the banking system by purchasing all the "toxic" sub-prime mortgages and removing them from the books of financial institutions, there will remain a massive surplus of housing on the market. Until that surplus is whittled away, housing values will remain depressed, as will the fortunes of related industries like construction and building supplies.

With tighter mortgage requirements, there will be less people able to qualify for loans to buy the available homes. Potential home buyers might choose to remain on the sidelines, waiting for the market to hit bottom. Sluggish home sales are likely to continue to drag on the economy unless the Paulson/Bernanke plan is able to quickly get people buying houses again.

While we wait for the housing surplus to disappear, the national economy will continue to cool. More people will be laid-off. State and city governments will begin belt-tightening. Confidence in the future is likely to remain elusive, discouraging consumers from making big purchases and businesses from expanding. The longer the economy cools, the deeper the slowdown.

Finally, just like during the run-up to the Great Depression, other major world economies are struggling. Today, international financial institutions that were heavily invested in AIG, Fannie May and Freddie May, are trying to add up their losses. Leading banks in Europe, Russia, China, and across Asia are furiously struggling to ascertain how many sub-prime loans are in their portfolios. England and Spain are wrestling with the economic impact of their own housing bubbles.

Financial turmoil in the economies of foreign nations will impact Wall Street. And if our American economic malaise continues to spread worldwide, putting the brakes on the economies of other nations and trading areas, there is no economic engine---China's included---that is likely to rescue us from an economic slowdown.

How deep and how long will be the slowdown? Hold on to your hat; the answers will begin to reveal themselves this week. And whether you live in Harrisburg Pennsylvania, or Berkeley California, your life will be changed.

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The Group of Seven industrialized nations pledged Monday to help the United States address a global credit crisis, saying they will "take whatever actions may be necessary."

G7 finance officials welcomed recent US measures to counter the worst credit crisis since the 1930s Great Depression, including a US Treasury proposal to spend 700 billion dollars to buy toxic mortgage-related assets from financial institutions unveiled over the weekend.

"We strongly welcome the extraordinary actions taken by the United States to enhance the stability of financial markets and address credit concerns, especially through its plan to implement a program to remove illiquid assets that are destabilizing financial institutions," the G7 finance ministers and central bank governors said in a statement.

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Originally posted by JaynezTown:
WaMu just got taken out

Washington Mutual's Historic Collapse To Strengthen JPMorgan's Earnings
http://www.istockanalyst.com/article/viewarticle+articleid_2654068.htm
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UN team warns of hard landing for dollar
By Harvey Morris in New York
Published: December 1 2008 08:48
http://palmtreeofdeborah.blogspot.com/2008/12/un-warns-of-us-dollar-co
llapse-in-2009.html
The current strength of the dollar is temporary and the US currency risks a hard landing in 2009, according to a team of United Nations economists who foresaw a year ago that a US downturn would bring the global economy to a near standstill.

In their annual report on the world economy published on Monday, the economists said the dollar’s sharp rebound this autumn had been driven mainly by a flight to the safety of the international reserve currency as the financial crisis spread beyond the US.

The overall trend remained a downward one, however, reflecting perceptions that the US debt position was approaching unsustainable levels. An accelerated fall of the dollar could bring new turmoil to financial markets.

“Investors might renew their flight to safety, though this time away from dollar-denominated assets, thereby forcing the US economy into a hard landing and pulling the global economy into a deeper recession,” the report said.

...The UN team said that, as the financial crisis spread beyond the US, there had been a massive shift of global financial assets into US Treasury bills, driving their yields almost to zero and pushing the dollar sharply higher. At the same time, however, the US’s external debt had risen to new heights that could provoke a dollar collapse...

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The White House and Democrats in Congress are this weekend working on details of the package to provide about $15bn (£10bn) in loans to General Motors, Ford and Chrysler. The legislation is being crafted for the beleaguered industry, which has called for a government bailout as the global recession has led to plunging sales of cars.

House Speaker Nancy Pelosi said the House of Representatives would consider legislation next week to provide “short-term and limited assistance” to the industry, which will undergo “major restructuring.”

She said: “Congress will insist that any legislation include rigorous and ongoing oversight to guarantee that taxpayers are protected and that resources are directed to ensure the long-term viability and competitiveness.”

The short-term lifeline comes as the heads of the Detroit car manufacturers have this week faced two days of intense questioning by assorted politicians on Capitol Hill as they call on Congress for $34bn of loans to help them survive a severe economic downturn.

Although a rescue package is likely to be considerably smaller than this figure, politicians have recognised that the collapse of any one of the Big Three would have profound implications for an already damaged American economy.

The agreement to put together a bailout package came just hours after the government reported that employers slashed 533,000 jobs in November – representing the worst single month’s job loss in 34 years. The three carmakers together employ nearly 250,000 workers, and more than 730,000 others produce materials and parts for cars.

The focus of the short-term bridging loan is likely to be GM and Chrysler, which are most in need of immediate assistance. GM had said it needed $4bn before the end of this month, while Chrysler, which is understood to have hired Jones Day for restructuring and bankruptcy work, had wanted $7bn immediately. The Senate is scheduled to be in session next week.

A key breakthrough on the long-stalled bailout proposals is understood to have come when Ms Pelosi bowed to President George Bush’s demand that the aid come from a fund set aside for the production of environmentally friendlier cars. She, along with environmentalists, had instead wanted the administration to take money from the $700bn fund the government set aside for the financial industry.

Ms Pelosi said the billions of dollars that had been set aside to modernise plants to develop the green cars would be repaid “within a matter of weeks.”

Although the details of the legislation are still being thrashed out, it is understood that this could include the creation of a trustee or group of industry overseers to make sure the bailout funds were used by car manufacturers for their intended purpose. The funds are designed to last until March.

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Originally posted by dreamtrove:
The problem is far worse than anyone thinks. The associated debt that the govt. has taken on by absorbing the mortgage guaranteers and through the federal reserve system exacerbates the situation to a point where now the amount of debt that would be created because of the devaluation to pay of the actual debt is now in the neighborhood of a quadrillion dollars. I assume that the outcome of this is that the dollar is doomed, and like Russia, we will start trading another currency soon.


Nice flag.

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Originally posted by Fremdfirma:
You know, it doesn't matter what one uses for currency so long as it's value is agreed upon by both sides.

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Originally posted by JaynezTown:
Socialist Nation?

ZERO INTEREST RATES

US is running out of options
http://economictimes.indiatimes.com/Opinion/US_is_running_out_of_optio
ns/articleshow/3854952.cms
The US Federal Reserve surprised markets on Tuesday with a larger-than-expected cut in its Fed rate (indicative overnight inter-bank rate) bringing it down to virtually zero...

...If only the Fed had shown as much zeal in tracking and curbing banking sector excesses when they took place right under its nose, the world economy might not have come to this sorry pass. Alas, that is all in the past! Right now the first priority is to get the US economy — the 800-pound gorilla in the room — moving.

Unfortunately, the outlook is not too bright.

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