I keep saying it!! A SHIT ECONOMY!
"Central Bankers to Lend Billions in Credit Crisis" by VIKAS BAJAJ and FLOYD NORRIS
A day after the Federal Reserve disappointed investors with a modest cut in interest rates, central banks in North America and Europe on Wednesday announced the most aggressive infusion of capital into the banking system since the terrorist attacks of September 2001.
Time for another one then, huh?
In response, stocks initially surged in New York, but most of the early gains dissipated in afternoon trading as the market moved wildly up and down through the day.
The effort to grease the wheels of bank lending suggested that policy makers were increasingly concerned about the risk that economies could fall into recession because of failures in the credit markets, which have seized up again in the last couple of weeks.
When markets are functioning properly, banks easily and regularly borrow money from each other at rates that are only slightly higher than what the United States government, considered one of the world’s safest borrowers, pays when it issues Treasury bills. Like homeowners who borrow against the value of their property, banks borrow against the securities they own.
Haw, haw, haw, haw, haw!!!!!!!
Underscoring the banks’ problems, Wachovia and Bank of America said Wednesday that loan losses were rising and profits would fall further in coming months. During the credit crisis, few banks have voluntarily borrowed at the discount rate because it was seen as a sign of weakness.
Policy makers say they will be releasing auction results so that the participants know only which Federal Reserve bank made the loans, not which commercial bank borrowed the money. Based on the results of its first two auctions, the Fed plans two more auctions of an unspecified size in January.
Still, several analysts contended that the plan might raise more doubts about whether even bigger problems loomed.
Barry Ritholtz wrote on his widely read economics blog, the Big Picture:
“It smacks of panic, and suggests the Fed is very worried.”
Then we ALL SHOULD BE!
Even THEY KNOW this thing is a house-of-cards!
ICEBERG, right ahead!!!!
