Central Banks Offer Extra Funds to Calm Money Markets

www.bloomberg.com

The Federal Reserve, the European Central Bank and the Bank of Japan united with their counterparts around the world to offer an additional $180 billion to markets facing their worst crisis since the 1920s.
Finance officials have struggled to restore confidence in markets this week as concern mounted more banks will follow Lehman Brothers Holdings Inc. into bankruptcy. The cost to hedge against losses on U.S. government debt climbed to a record yesterday, the U.K. government was forced to sponsor a rescue of mortgage lender HBOS Plc and Russia poured money into its banks.

``There's a complete lack of faith in the markets,'' said Jim O'Neill, chief economist at Goldman Sachs Group Inc. in London. ``There's a lot of cash hoarding and people losing trust in banks, so the central banks are acting to relieve that. This might not be the last time they have to act.''

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[edit on 18-9-2008 by gottago]

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[edit on 18/9/2008 by Mirthful Me]

Not much to add to this horrific news; the major central banks are in full panic mode, pumping funds into the financial system as the unraveling hits major US banks, Deutsche Bank shows stress, and Russia is reeling.

The perfect storm. And this was widely predicted to occur in the fall, when everyone came back from summer holidays to face unpleasant truths.

www.bloomberg.com
(visit the link for the full news article)

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[edit on 18/9/2008 by Mirthful Me]

Posted only five hours ago and already the amount being poured into the markets is up by $70 billion.

How very reassuring.

Short selling has just been declared illegal in UK.

BBC News.

Can anybody else hear that? I think I hear "monetary inflation"! It's getting louder!

This situation is just criminal.


If I took 100 bucks from your house, I would be arrested. These people have stolen BILLIONS and they just gently float away on their golden parachute.

[edit on 18-9-2008 by bismarcksea]

The question is who is going to pay for all this money? and how much the tab is going to be at the end?

Anybody knows?

reply to post by bismarcksea


Yup, if your a small business owner and you declare bankruptcy because you can't pay bills, who will bail you out? Nobody.... and you will wil get your assets including your home taken away.

What exactly does the term "pump" really mean. Who are they going to give the money too and why? Any wall street veterans or econnomists want to take that.

Second, where is the fed or our government going to get the billions to rescue fan, fred, and Aig. are they going to just print it, and what effect will that have on the value of our dollar.

And what are the expectations that the money will be repaid? What if the borrowers fail to meet the interest payments, rescue them again?