Has greed finally got us? Do we deserve the financial crisis we are currently in?
Bin Laden has to be laughing now. The United States starting to implode without him moving a finger. We have got to do something but nobody seems to have any answers. What is a course we can take where we can feel assured that it is the right path to take?
Some of the latest news:
"Overall it's the fact that despite the huge firefighting efforts of central banks worldwide we still haven't seen any thawing of interbank lending that is going to be causing the most concern now," said Matt Buckled, a dealer at CMC Markets in London.
The late burst of selling Thursday on Wall Street sent the Dow Jones industrials down to 8,579, crashing through the 9,000 level for the first time in five years and wiping out $872 billion of investment value.
As bad as the day was, even worse was the cumulative effect of a historic run of declines: The Dow suffered a triple-digit loss for the sixth day in a row, a first, and the average dropped for the seventh day in a row, a losing streak not seen since 2002.
"Right now the market is just panicked," said David Whys, chief economist at Standard & Poor's in New York. "Nobody wants to take on any risk. Everybody just wants to get their money and put it under the mattress."
Thursday's sell-off on Wall Street took place one year to the day after the Dow closed at its record high of 14,164. Since that day, frozen credit, record foreclosures, cascading job losses and outright fear have seized the market and sapped 39 percent of its value.
Paper losses for the year add up to an staggering $8.3 trillion, according to preliminary figures measured by the Dow Jones Wiltshire 5000 Composite Index, which tracks 5,000 U.S.-based companies representing almost all stocks traded in America.
It was the second straight day that Wall Street was rocked by a final-hour sell-off, but this one was particularly shocking.
Most of the day was relatively calm, and the trading floor was quieter than usual because of the Jewish holiday of Yom Kippur. Wall Street awoke to news the federal government was brandishing a new weapon against the financial crisis — considering seeking an equity stake in major U.S. banks in order to stabilize them.
But that step appeared to be as ineffectual as the others Washington has rolled out in recent weeks, including a $700 billion bailout of the financial industry, a coordinated interest rate cut by central banks around the world and direct lending by the Federal Reserve to private companies to provide them with short-term cash.
Acquiring a stake in the banks would be yet another startling intervention by the government in the free market, but economists said Bush was left with little choice because of the credit markets, where tight lending has choked off the everyday cash that is the lifeblood of the economy.
"In normal times, this would be out of the question, but in the present dire situation, I think the government should be employing all the powers that it can," said Sung Won Shone, an economics professor at California State University, Channel Islands.
Wall Street has been teetering on the brink of panic for a month now, vulnerable to any bad news. Thursday's sell-off was triggered when a major credit rating agency put General Motors Corp. and its finance affiliate under review to determine whether it should be downgraded.
Stock in GM, one of the 30 components of the Dow Jones industrials, lost 31 percent of its value and closed at $4.76 — its lowest level since the Korean War began more than a half century ago.
For the Dow, it has been nothing short of a free fall:
—The average is down 2,338 points, or 21 percent, in the last four weeks, since the Lehman Brothers bankruptcy escalated a long-running credit crunch into a full-fledged crisis.
Here is another article about artificial help from the IMF:
Bin Laden has to be laughing now. The United States starting to implode without him moving a finger. We have got to do something but nobody seems to have any answers. What is a course we can take where we can feel assured that it is the right path to take?
Some of the latest news:
"Overall it's the fact that despite the huge firefighting efforts of central banks worldwide we still haven't seen any thawing of interbank lending that is going to be causing the most concern now," said Matt Buckled, a dealer at CMC Markets in London.
The late burst of selling Thursday on Wall Street sent the Dow Jones industrials down to 8,579, crashing through the 9,000 level for the first time in five years and wiping out $872 billion of investment value.
As bad as the day was, even worse was the cumulative effect of a historic run of declines: The Dow suffered a triple-digit loss for the sixth day in a row, a first, and the average dropped for the seventh day in a row, a losing streak not seen since 2002.
"Right now the market is just panicked," said David Whys, chief economist at Standard & Poor's in New York. "Nobody wants to take on any risk. Everybody just wants to get their money and put it under the mattress."
Thursday's sell-off on Wall Street took place one year to the day after the Dow closed at its record high of 14,164. Since that day, frozen credit, record foreclosures, cascading job losses and outright fear have seized the market and sapped 39 percent of its value.
Paper losses for the year add up to an staggering $8.3 trillion, according to preliminary figures measured by the Dow Jones Wiltshire 5000 Composite Index, which tracks 5,000 U.S.-based companies representing almost all stocks traded in America.
It was the second straight day that Wall Street was rocked by a final-hour sell-off, but this one was particularly shocking.
Most of the day was relatively calm, and the trading floor was quieter than usual because of the Jewish holiday of Yom Kippur. Wall Street awoke to news the federal government was brandishing a new weapon against the financial crisis — considering seeking an equity stake in major U.S. banks in order to stabilize them.
But that step appeared to be as ineffectual as the others Washington has rolled out in recent weeks, including a $700 billion bailout of the financial industry, a coordinated interest rate cut by central banks around the world and direct lending by the Federal Reserve to private companies to provide them with short-term cash.
Acquiring a stake in the banks would be yet another startling intervention by the government in the free market, but economists said Bush was left with little choice because of the credit markets, where tight lending has choked off the everyday cash that is the lifeblood of the economy.
"In normal times, this would be out of the question, but in the present dire situation, I think the government should be employing all the powers that it can," said Sung Won Shone, an economics professor at California State University, Channel Islands.
Wall Street has been teetering on the brink of panic for a month now, vulnerable to any bad news. Thursday's sell-off was triggered when a major credit rating agency put General Motors Corp. and its finance affiliate under review to determine whether it should be downgraded.
Stock in GM, one of the 30 components of the Dow Jones industrials, lost 31 percent of its value and closed at $4.76 — its lowest level since the Korean War began more than a half century ago.
For the Dow, it has been nothing short of a free fall:
—The average is down 2,338 points, or 21 percent, in the last four weeks, since the Lehman Brothers bankruptcy escalated a long-running credit crunch into a full-fledged crisis.
Here is another article about artificial help from the IMF:
IMF promises swift assistance to troubled countries
The IMF has promised to deliver swift assistance to countries grappling with severe economic difficulties. The Managing Director of the IMF, Dominique Strauss-Kahn, said yesterday that the IMF Board had approved the use of the funds Emergency Funding Mechanism, which means that funds can be delivered within two weeks, bypassing the usual, more protracted procedures.
“The doors of the fire house are open” said an IMF source. Mr Strauss-Kahn said: “we are ready to answer any demand by countries facing problems”. He warned that the world was “on the cusp of a global recession” and pointed out that “100 per cent” of world economic growth in 2009 would be accounted for by developing and merging economies, as the advanced nations stagnate.
The IMF chief refused to be drawn on which countries might be the first to apply for such a facility, but said that both developed and developing nations would be expected to make sue of it. The Icelandic government, probably the lost high profile sovereign victim of the financial crisis, has thus far indicated that it is not seeking IMF assistance.
On the dangers facing the global economy, Mr Strauss-Kahn said that losses to the worlds financial system as a result of sub prime and other problem lending was $1.4 trillion, and stressed the importance of national and international organisations encouraging and in some cases funding the recapitalisation of major financial institutions: “there is no way to have a way out of the situation that we are in without enough recapitalisation of the financial institutions.” Mr Strauss Kahn also said that “we need to look further at fair value accounting” adding to chorus of calls for a move away form “marking to market” unsaleable mortgage backed securities at fires sale prices.
The dangers posed by the credit crunch to the world’s poorest nations were stressed by World Bank President Robert Zoellick. Mr Zoellick said that they faced a “triple jeopardy” from “food, fuel, and finance”: “We must look beyond the financial rescue to the human rescue. The poorest cannot be asked dot pay the biggest price. For the poor, the costs of crisis can be life long”.
What kind of intervention will this take. Right now, it looks like the 700-billion dollar plan must be extended and may not be enough. It will take more than sharp SNL skits to get us through this one. We must sober up and forge our way out, one step at a time. Good solid reasoning and maybe a little faith(I admit) will get us through this one. Hang on, we are in for a bit of a roller coaster ride. In these times of trouble, it's time for our very best Amercan character to shine.
2 comments:
Scary stuff but I still see thousands of jobs posted on employment sites too.
www.linkedin.com (networking)
www.indeed.com (aggregated listings)
www.realmatch.com (matches you to jobs)
good luck to those searching for jobs.
Thanks Ray. Good information.
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