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French Bank freezes US funds;Stocks Plunge on Rising Credit Anxiety

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posted on Aug, 12 2007 @ 02:30 PM
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"For these ten marks I sold my virtue" - written on the back of German banknote, 1923.




The news of the Federal Reserve injecting $38 billion into the mortgage-backed securities market didn't get a lot of attention yesterday, but it should have.
Since a third injection is unprecedented, as such infusions typically only occur during a crisis, investors are again left wondering just how bad the subprime situation is and questioning whether or not an emergency rate cut would even be enough to avert a possible true credit crunch.
It was the largest infusion by the Fed since the 9/11 aftermath. But it paled in comparison to the European Central Bank's two day infusion of 155 Billion Euros.

What does it all mean? To answer that we must dig deeper than the headlines and take a look back in time.

Please visit the link provided for the complete story.

www.bitsofnews.com...




posted on Aug, 12 2007 @ 03:54 PM
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What about those who did speak up or protested?

Now being an American by birth I have to say that the lack of intelligence and common sense of many Americans is frightening although that could be said of any Nation.

Do you really think the Park ave Zionist or Bush or anyone important will feel the crunch of this ?

Muslims along side Jews alongside Catholics, Hindus and every other religion and race will starve and kill each other in American cities if there plans come to fruition.

If you are Arab I hope you understand that what America does in the Middle East and world is not the will of the majority of the people.

We want peace and everyday they spend millions to keep us stupid and uninformed and terrified.

They use drugs and other methods to coerce and control us and the way we think.

If you really relish the thought of anything bad happing to the U.S I tell you this Innocents killed are Innocents killed regardless of religion or race.

I do think they have the worst saved for us.

[edit on 12/8/2007 by SButlerv2]



posted on Aug, 12 2007 @ 03:58 PM
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SButlerv2- did you mean to post in this thread, as i never saw any one threatening you lot.



posted on Aug, 12 2007 @ 04:17 PM
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The Feds Path


The Fed today injected $65 bln of repos, extending credit to banks to shore up their liquidity needs. Normally the Fed only accepts treasuries as collateral. But the banks no longer have enough treasuries, or they don't want to sell their "safe" assets in exchange for credit. But they do have lots of risky assets like CDOs that everyone wants to get rid of. The Fed bent over and today announced they will take those "off their hands".

Please visit the link provided for the complete story.


www.minyanville.com...


I went back and dug-up this information that was posted on George Ure's site urbansurvival.com... in July. It appears that George's friend Bart was spot on with his speculation that the Fed may have modified the July H8 report to allow for the coming bank bail-out. Bear in mind that the $trillions in over-the-counter credit derivitives is a whole other issue.


"My friend Bart over at "Now and Futures www.nowandfutures.com... (which regularly posts the M-3 reconstructed figure I've mentioned to you many times), sent me a mind boggling email yesterday which is compelling and frightening":

"I just happened across some "interesting" data in the current H8
Fed report ( www.federalreserve.gov... ). A new entry suddenly appeared in line 34 (almost at the bottom) of the most recent report called "Securitized real estate loans".

The balance, under the section called "Large Domestically Chartered Banks", is blank in all prior weeks that I've searched and this week its $1.211 trillion... as if by magic.

I do know something about interpreting the Fed, and it strikes me
that it's *possible* (no guarantees of course) that since they are now
"securities" that the Fed could bail out the real estate and derivatives
mess... if needed
."

Having read a lot of Fed reports, I admit that I hadn't seen anything that
related to the ongoing collapse of marginal real estate securities, so I
clicked over to the report and went sniffing around for 'line 34'.

Turns out there are actual two references. One set is for large domestically
chartered banks, adjusted for mergers, while the other is for small,
domestically chartered banks.

You have to scroll down to page 13 of the report: The "new line" says that
the week of July 4, the size of the Big Bank securitized real estate loans
was $1,211.0 billion, i.e.. $1.211 trillion, and I don't see that this is a
total which includes the $653.7 billion of MBO's (line 31).

Same kind of thing for the Small Banks - except the numbers are a lot
smaller: "Only $270.9 billion in MBO's, and "only" $41.1 billion in
securitized real estate loans.

Still, thanks to the Fed report, looks like securitized real estate loans
are $1,252.1 trillion and MBO's they track are $924.6 worth of MBO's. - Bart


[edit on 12-8-2007 by OBE1]



posted on Aug, 13 2007 @ 12:00 AM
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As stocks continues to fall, rest assured that there will be some who will make money and there will be some who lost money. But generally, the amount of money is still the same or rising as minerals and exports are being traded daily and money printed which is backed by such commodities.

The only thing is, where the money is kept. If it is hoarded, then we will all have to worry because it is not cirulated - things are not bought, enterprises are not started, etc.

But no rational person will sit on money, least of all at home unless he/she has a home built like Fort Knox. Thus, money is still being circulated in the market, either in banks or govt bonds, which will be used to prop up blue chip stocks. So, no need to panic.

As for bank loan defaults, rest assured that not much loans are given without collaterals. Even if a borrower defaults, the collateral is still an asset, although perhaps becomes lesser in value to its transacted worth. And banks would have a huge stock of such collaterals, for example; houses.

To sell such houses in a dipping market, the prices will be low. But the thing is, market dictates the law of supply and demand. At cheap prices, people will rush to buy it up - thus pushing the value of homes up again with each home bought. And later on, bank's stockpile of repossessed homes may even become a huge profit as the stock value rises.

Bubbles, in truth, does not exist. Only 'correction' happens. The only day when a bubble exists is when earth resources is totally bone dry, which is unlikely to happen as there are still minerals untapped and fertile lands avaliable with improved tech to harvest and mine them.



posted on Aug, 13 2007 @ 01:21 AM
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US a paper tiger, says doomsayer

LISTENING to economist Peter Schiff you'd think the US should just fold the tent and call game over.

He's one of the doomsayers having a day in the sun as the US stock market plummets. A regular on the business shows, Schiff is shouting from the rooftops that this is the beginning of the end for the US economy.

The disturbing thing is he's been right so far, making his clients at his Connecticut-based brokerage firm Euro Pacific Capital wealthy by having predicted years ago that the US dollar would start falling and tipping them into euro-denominated assets.

www.news.com.au...

[edit on 13-8-2007 by Nuupio]

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[edit on 13/8/2007 by Mirthful Me]



posted on Aug, 13 2007 @ 01:44 AM
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At it's core, the problem is the "discount window" from which the 12 reserve banks can get money for less than market value when it serves the board of governor's wishes. That is not a sustainable system.

Commodity-backed currency (i.e. silver certificates) is the only kind that's worth more than the paper it's printed on.



posted on Aug, 13 2007 @ 11:40 AM
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Originally posted by Nuupio
US a paper tiger, says doomsayer

LISTENING to economist Peter Schiff you'd think the US should just fold the tent and call game over.

He's one of the doomsayers having a day in the sun as the US stock market plummets. A regular on the business shows, Schiff is shouting from the rooftops that this is the beginning of the end for the US economy.

Among his predictions: a housing-led slump, even depression, with at least a 20 per cent US economic contraction. He says the US dollar will lose half its value.

Where once it was about saving, investment and production, now the US is more about massive consumption on borrowed money. "We have a very sick economy -- it's been papered over because everyone around the world has been willing to lend us money," Schiff tells The Australian. "Now they are finding we can't pay them back."

"Everyone thinks the US is the No1 economy in the world. We're not. All we've been doing is consuming stuff on borrowed money. There's no savings."


[edit on 13-8-2007 by Nuupio]


So where is the rest of the countries gonna park their monies to earn some interests in? It cant just lie there and get fritted away in social spending each year.

Japan? - plenty of savings, but low interest and worse, limited resources, most of it are paid imports and goods manufactured sold cheaply.

Europe? plenty of resources, but their money dont circulate, most of which arent in banks but are hidden in biscuit tins!

China or Middle East? Banana republics at best though China is doing its best to be more transparent in its rule of law attempts, probably will be succesful in est 30 to 40 yrs time.

The UNITED States has huge multiple resource streams and is the only country that has the guts to spend it enterprisingly and entreprenuerly. Investors park their money not because of its governments, but on its successful system of check and balances in rules as well as more importantly, faith on the american people.

But then, who am i to contradict a full fledged qualified and eminent economist?

.



posted on Aug, 13 2007 @ 01:27 PM
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Originally posted by Nijato
At it's core, the problem is the "discount window" from which the 12 reserve banks can get money for less than market value when it serves the board of governor's wishes.


The 12 reserve banks are the 'discount windows'. The borrowers are the commercial banks, and trusts that have Federal Reserve accounts. The Fed has certain authority to lend to entities that are not depository institutions...but this rarely happens. In 2003 regulations were revised, to provide incentive for authorized banks & institutions to use the discount facility, and the lending rate was set at 100 basis points above the Fed Funds Rate...so it isn't technically a discount anymore. Prior to 2003 it was, but banks were tentative about using this option because of the red tape involved, and because of the message they felt it sent to their competitors. This was an obstacle to the Fed's ability to buffer liquidity crunches, so they lightened the qualifications for all three DW lending programs; primary, secondary, and seasonal credit...but they raised the rate.

These are typically short term loans; overnight, in the case of last weeks bail-out; three days. The Fed does have the authority to extend the maturity, and although we may never hear about it, I believe this may be the case with the current loans.

Like most loans & credit extensions...except subprime & credit cards
...the banks must provide collateral that exceeds loan value, and as witnessed last week, mortgage backed securities, and collateralized mortgage obligations have been declared acceptable forms of collateral.

So to sum-up, the Fed doesn't borrow from the discount window, public institutions do, and the discount rate isn't set below the Fed Funds Rate, it's higher...currently 6.25%.

Why is it still called "The Discount Rate"



*The Fed does have the authority to lower the discount rate below the Fed Funds Rate if an emergency situation meets certain criteria. That may also be the current situation, but I don't know where to go for that information.*



posted on Aug, 14 2007 @ 01:40 PM
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Stocks Fall to Session Lows as Credit Woes Plague Markets





Stocks fell to the lowest levels of the day amid anxiety about the credit markets and a weak earnings outlook from Wal-Mart.

"There are reports that Sentinel is looking to halt redemptions from their fund and we're also hearing some issues with the commercial paper market in Canada," said Mike Malone, equity sales and trading analyst at Cowen. "I think that is further confirmation that conditions in the credit markets remain very difficult and I think that's concerning to equity markets."

CNBC's Steve Liesman reported that Sentinel Management Group, an Illinois-based money market mutual fund for commodities, plans to halt redemptions because so many investors are trying to pull money out of the fund. Sentinel, which overseas about $1.6 billion in assets, told clients it wants to block redemptions to avoid a forced liquidation.


Please visit the link provided for the complete story.


www.cnbc.com...

YIKES!!

this quote is kinda worrying



"Right now we should be seeing some signs of stabilization, but we're having trouble getting momentum. The financials are the anchor that keeps weighing down the market. People don't know where the bodies are buried."



posted on Aug, 14 2007 @ 01:51 PM
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another day of plunging stocks.

If anyone has less than a billion worth of stocks in the market, best liquidate it and place it in banks, bonds or invest in cheap prime land -rising and longer living population will see land prices rise.

And let the govts slug it out with global fund mgmt groups as each timing their entry and exit points to get short selling gains, trying to con and outwit one another.

Have a little faith in the govts handling, for if they are united in an international coliation to battle the cash flushed fund mgmt groups, they would have the best resources and money to do so to win an economic market battle.

Not that the fund mgmt groups gonna take it lying down, for they will use diversionary and 'divide & conquer' tactics to challenge the coliation - the phonecalls, the long lunches with VIPs, sympathy calls and PR to the media, etc which may work cos some of the money in their funds belong to the citizens as well.

Who will win? No one knows. Its gonna be a long time till congress and parliaments around the world curtail the cowboy ways of fund mgmt groups to earn and give obscene amount of interest to its clients.

Who should one support? Govts have a responsibility to answer for the money used to battle for it belongs to the taxpayers, representing folks from all walks of life, but fund mgmt groups answer to no one, not even their rich clients, cos once they blow the money, they can just declare bankrupt and head home to their palaces in the Bahamas.

Hang in there, get some popcorns and a few cans of beer. Its gonna be an interesting ride.



posted on Aug, 14 2007 @ 03:10 PM
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well,

the DOW is down well over 200 points now.

CNBC alert!

Thornburg Mortgage Delays Quarterly Dividend, Citing Significant Disruptions in Mortgage Market

[edit on 14-8-2007 by infinite]



posted on Aug, 14 2007 @ 03:55 PM
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Moral Hazard


Wall Street has a dream: that the Federal Reserve will rescue financial markets with a sharp cut in interest rates. Behind that dream lurks a problem, something financial people call moral hazard.

Please visit the link provided for the complete story.

Link

Good piece detailing the Fed's current conundrum. I'm sure Bernanke would love purge his 'Helicopter Ben' image...but events may eventually overwhelm the desire to reform public perceptions. When does the cure become the curse? About 4yrs ago.

Important close today. The DIJA needs to rally off 13,000 tomorrow...or



posted on Aug, 14 2007 @ 04:02 PM
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Originally posted by OBE1
Good piece detailing the Fed's current conundrum. I'm sure Bernanke would love purge his 'Helicopter Ben' image...but events may eventually overwhelm the desire to reform public perceptions. When does the cure become the curse? About 4yrs ago.

Important close today. The DIJA needs to rally off 13,000 tomorrow...or



I'd be VERY surprised if the Fed bails out the market.

Bernanke can't win either way to be fair.



posted on Aug, 14 2007 @ 04:12 PM
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Originally posted by OBE1

Important close today. The DIJA needs to rally off 13,000 tomorrow...or



Why is the 13000 mark important, can you explain. Is it just to do with confidence.



posted on Aug, 14 2007 @ 04:32 PM
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the BBC business editor makes a good point in his blog about the ECB;



And here’s what should really turn the ECB red with shame. Just possibly it has needlessly bailed out the global hedge-fund industry.

It has signalled to the hedge funds and the giant investment banks servicing them that they can take all the mindless risk they like – because if they suffer a dose of the sniffles, the ECB will turn up quick-as-a-shot with the medicine.

What worries me is that ECB and Brussels politicians will become so embarrassed by their neurotic intervention that they’ll learn the wrong lessons.


www.bbc.co.uk...



posted on Aug, 14 2007 @ 04:35 PM
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Originally posted by andy1033
Why is the 13000 mark important, can you explain. Is it just to do with confidence.


psychological, if it drops down it means we could be seeing some bad news on the way.

the DOW is 1,000 points of its high it achieved a month or so back.



posted on Aug, 14 2007 @ 04:56 PM
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Originally posted by andy1033

Why is the 13000 mark important, can you explain. Is it just to do with confidence.


Hi andy1033. I was referring what appears to be a bearish Head & Shoulders formation that began developing on the DJIA chart at the end of June with a neckline at 13,000. As you and Infinite suggest, 13,000 is also a psychologically important level...as would be 12,000 etc etc. If this pattern is resolved down here, it could signal a significant break.



posted on Aug, 14 2007 @ 05:02 PM
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if the DOW opens up below 13,000 tomorrow, expect another sell off.

Again, it depends on how Asia performs tonight. Probably not good after what happened on Wall street.



posted on Aug, 15 2007 @ 08:50 AM
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It's dropped below 13k.

Anyone expect the FTSE to drop below 6k?




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