The Fed infuses money supply to banks with $8 billion. Come on boys, we know you can avoid a recession, put your nose to the grindstone and win one for the Gipper! [NYT]
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@CaliforniaCajun: Actually, that's not tax money. The Fed makes the money, this 8 billion was pulled directly out of thin air. Assuming a 2x money multiplier, and $13.6 trillion GDP, this move should increase 2007 inflation by about .1%
Using my money to reduce the interest I make on my savings! Brilliant! Gold, here I come.
The problem we face isn't a lack of liquidity, it's a lack of CONFIDENCE! Until all financial companies come clean with their exposures, take the medicine and mark their bad debt to market, there are going to be few buyers. FED rate cuts and liquidity injections aren't going to be much of a help.
Excerpt from NY Times story:
One indication that the Fed's rate cuts are not easing the flow of capital can be seen in the premium that investors are demanding to hold risky assets. High-yield debt is fetching a yield of 10.46 percent, up from 8.91 percent at the start of October. In other risky assets like bonds tied to subprime mortgages there is little to no trading going on.
"There is so much uncertainty and almost paranoia among certain market participants that market moves tend to be manic at times," said Derrick Wulf, a portfolio manager at Dwight Asset Management, a bond trading firm based in Burlington, Vt. "Today we saw credit spreads widen across asset classes."
....
"Until someone can quantify how bad the problem is, there will be a fear factor," said Scott Black, president of Delphi Investments, an investment firm in Boston. "And nobody wants to own financial stocks."
[www.nytimes.com]
Great job Fed! Let's use the people's money to bail out all of the financial greedheads who got their hand caught in the cookie jar. I say let we stop trying to prop up all of these idiots, and let the free market decide their fate.
Meanwhile the dollar edges ever closer to toilet paper status to go along with all of their crap loans.
Yea inflation! Whohoo!
Oh. Wait.
so, what's the dollar on par with today? the peso?
@CaliforniaCajun: No, that's money that they are printing up. Hello inflation!
And yeah, it's helping out those people who should be loosing money due to market forces, but of course we can't have them losing money now can we?
Let's help out the corporate masters but f--k over the masses.
Nothing like lowering the value of the dollar. My Costa Rican co-worker tells me that their currency, colones, is valued more than the dollar for the first time in decades. Or at least it went up in comparison. Excuse me. I haven't checked one it was. Either way...
Uh, that's our money.
But hey, I don't mind if my tax money goes toward bailing out companies that made crap loans and sold those crap loans to other companies who are now in trouble...