WASHINGTON (AP) -- Frantically trying to stop the bleeding on Wall Street, the Federal Reserve took a first-time step Tuesday to get cash directly to businesses and hinted that interest rates could come down soon. Stocks continued their free fall anyway and hit new five-year lows.
The central bank invoked emergency powers to lend money to companies outside the financial sector and buy up mounds of commercial paper, the short-term debt that firms use to pay for everyday expenses like salaries and supplies.
...
To that end, the Fed announced it would begin buying companies' short-term debt. The powers were bestowed during the Depression as part of the Federal Reserve Act.
Greetings, and welcome to new edition of Manufacturing Tuesday. Normally there is a Manufacturing Monday, but sometimes we just can't get the edition out on time. Still, the show must go on, as they say.
Now if manufacturing were a show, this would probably be either a Greek tragedy or a horror. Because, folks, things aren't looking that great. Some economic numbers out late last week point to industrial activity slowing down or stalling. The current credit crisis is causing delays in payments. Smaller industrial enterprises are suffering the most with their credit lines cut down or completely frozen.
Former Fed Chairman Paul Volcker and Jacob A. Frenkel (Group of 30) released a new report,
The Structure of Financial Supervison: Approaches and Challenges in a Global Marketplace
The attached paper recommends a restructuring on financial market supervision called Twin Peaks.
Both Presidential campaigns have mentioned major structural and regulatory reforms of the financial systems. Volcker is advising Obama and please note, the other paper authors, many are from surviving financial institutions and yes, yet once again, Goldman Sachs is represented.
Shocking, true. Here Comes The Light. Although the details are not known, how much transparency and regulation will exist, the actual Fed meeting is tomorrow. CNBC is reporting that the Fed is setting up a credit default swap auction.
Officials at the Federal Reserve plan to meet with top executives from two commodities exchanges in an effort to create a new marketplace for credit default swaps, one of the most important, controversial and opaque securities traded on the Wall Street, CNBC has learned.
The meeting, scheduled to be held as early as Tuesday of this week at the headquarters of the New York Fed, is expected to clear the way for the creation of a new clearing house, or exchange, where CDSs can be traded with more transparency and with a degree of government oversight.
Saying Iceland was at risk of "national bankruptcy," Prime Minister Geir Haarde prepared to give regulators authority to take over the nation's ailing banks as a worsening financial crisis all but cut off the island from the global financial system.
The American consumer has had largely stagnant wages since 1974. While from 1980 through 2006, the median income of an American household has risen only from $39,700 to $48,200 in real terms, house prices for example have shot up form nearly $125,000 to $246,500. Consumers have responded generally by taking on more and more debt. Total household debt service has risen from 16% in 1980 to 19.4% in 2006.
A Settlement of $8.6 Billion was reached today on a lawsuit by 9 states.
Maybe more people and states need to plain sue to be able to restructure their mortgages and principles so they might have a prayer's chance of staying in their homes.
Some details:
Bank of America, which bought Countrywide in July, reached a deal with attorneys general representing 11 states in which it will offer more affordable and sustainable mortgage payments for borrowers who had financed their homes with subprime loans or adjustable-rate mortgages serviced by Countrywide.
The Washington Post reports that Kashkari is a former vice president at Goldman Sachs, where he led the firm's security investment banking practice. Apparently, Kashkari was still a student at Wharton in February, 2002, when the Philadelphia Inquirer reported on his participation in a leadership class exercise. That would put him at no more than six years out of school.
In 2006, Neel Tushar Kashkari of Stow Ohio was reported to be selected as one of the regional finalists for the White House Fellows Program. A final listing of the actual recipients for 2006-2007 does not include Kashkari.
That's only 5 years of experience and most in IT related areas!
A 35 year old recent MBA graduate with no expertise in the S&L crisis or any other....is going to run the bail out!
It looks like we're seeing a global stock market correction.
Note, the term crash is defined in the double digit percentage losses. So, this is a correction, although some emerging markets are entering crash territory.
At the time of this writing:
The Dow is down over 550 762 points and drops below 10,000.
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