Busted: Bankers and The Global Economy

September 15, 2008

No Wall Street Government Bailout, Sort of

With steely resolve, Henry Paulson, former Goldman Sachs investment banker has declined to cave in to pressure. There will be no investment banking bailout by Big Government today. Henry Paulson is prepared to let Lehman Brothers die on the vine, a sacrificial warning to bankers.

national banking snuggy?

national banking snuggy?

However, the Federal Reserve and the U.S. Treasury have designed a way to take some pressure from Wall Street investment firms as we clearly answer the question to yesterday’s post. Wall Street is awash in debt that previously could not be used for collateral. Starting tomorrow, the Federal Reserve will accept “investment-grade debt securities” as collateral in the Term Securities Lending Facility (TSLF) auctions and has expanded securities for the Primary Credit Dealer Facility (PCDF) based on what national clearing banks have on hand.

In essence, the Federal Reserve is accepting less secure banking instruments that bankers have in ample supply. This is subject, of course, to various conditions to “promote safety and soundness,” all good through January 30 of next year. It is hoped that this move will prevent any panic in the markets as authorities continue to dumb the system down. The investment banking system has been in worse shape than authorities have been willing to previously acknowledge. Outsiders have often assumed otherwise.

Former Fed Chairman Alan Greenspan said the market is the worst he has ever witnessed and predicted another major bank would close soon. Meanwhile, inflation is rising, real wages are declining, and the problems in the housing market persist.

~ E. Manning

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3 Comments

  1. it’s hard to object to the government’s mass bailouts as similar debt-producing methods were put into action to bring the U.S. out of the Depression… our economy has been supported and driven by debt ever since

    Comment by kingdom media — September 19, 2008 @ 3:09 pm

  2. NO WALL STREET BAILOUT.THEY’VE HAD THIERE ” GLORY ” GOT TIRED OF IT SO ITS TIME TO MOVE ON , AT WHO’S? EXPENSE? THIERS, YA THIERS…

    Comment by Manuel F. Lujan — September 25, 2008 @ 9:36 pm

  3. Its real fair to us that they gorge on our hard earned money and then wanting to gorge on our tax money too. We cant handle the load as it is right now so putting more load on us would only bring this country down even deeper than we are right now.. SO AGAIN NO WALL STREET BAILOUT

    Comment by Manuel F. Lujan — September 25, 2008 @ 9:50 pm


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