continentaleconomics.com Blog

NEW YORK (AP) — Wall Street’s worst fears came to pass Monday, when the government’s financial rescue plan failed in Congress and stocks plunged precipitously — hurtling the Dow Jones industrials down nearly 7 percent. The almost 780-point decline was the largest one-day point drop ever for the index…

http://biz.yahoo.com/ap/080929/wall_street.html

Comment: The problem is not the vote. The problem is that the economy CANNOT be bailed out whatever the vote was or will be. One may bet: Congress will meet again in a few days and “pass the bill”. Yet this yes vote is as unimportant as today’s no vote. The economy will go down the drain with or without the bill.

Antony Mueller

Sept. 29 (Bloomberg) — The Federal Reserve will pump an additional $630 billion into the global financial system, flooding banks with cash to alleviate the worst banking crisis since the Great Depression.

The Fed increased its existing currency swaps with foreign central banks by $330 billion to $620 billion to make more dollars available worldwide. The Term Auction Facility, the Fed’s emergency loan program, will expand by $300 billion to $450 billion. The European Central Bank, the Bank of England and the Bank of Japan are among the participating authorities.

The Fed’s expansion of liquidity, the biggest since credit markets seized up last year, came hours before the U.S. House of Representatives rejected a $700 billion bailout for the financial industry. The crisis is reverberating through the global economy, causing stocks to plunge and forcing European governments to rescue four banks over the past two days alone…”

http://www.bloomberg.com/apps/news?pid=20601087&sid=a9MTZEgukPLY&refer=home

Comment: Like a madman bumping his head ever more fiercely against the wall not noting that the wall won’t move.

Alison Vekshin and Laura Litvan report: Sept. 28 (Bloomberg)

– President George W. Bush and congressional leaders said they reached an agreement on a $700 billion bank-rescue package designed to revive moribund credit markets.

The House may consider the plan tomorrow and the Senate will vote by Oct. 1, lawmakers said today. While Bush and House Majority Leader Steny Hoyer predicted the measure would pass, Senate Majority Leader Harry Reid and House Speaker Nancy Pelosi suggested they were unsure of the outcome.

“Now we have to get the votes,'’ Reid said at a press conference on Capitol Hill. “We will have to have bipartisanship to pass it,'’ Pelosi said.

Lawmakers are trying to steer a path between voter anger at having to foot the bill for the mistakes of Wall Street bankers and the need to shore up a financial system shaken by the collapse of Lehman Brothers Holdings Inc. and Washington Mutual Inc. Bush, in a speech yesterday, said the package was needed to prevent a “deep and painful recession.'’ … –

http://bloomberg.com/apps/news?pid=20601087&sid=azFatjV6Or7M&refer=home

Comment: The bait has been thrown and the fishermen dispute the spoils.

Sept. 29 (Bloomberg) — The dollar rose to a one-week high against the euro as Congressional leaders and President George W. Bush agreed on a $700 billion package to revive credit markets by purchasing distressed debt from banks.

The greenback also gained against the yen after Speaker Nancy Pelosi said the House may vote on the plan today. The British pound dropped to a one-week low versus the dollar on concern Bradford & Bingley Plc, Britain’s biggest lender to landlords, will be taken over by another bank or nationalized today under a U.K. government-backed plan to protect 21 billion pounds ($38.5 billion) of customer deposits… –

http://www.bloomberg.com/apps/news?pid=20601080&sid=a57FFNxSEHYY&refer=asia

Comment: Smart people know that it takes a bait to slaughter the dumb. It is easy to play this game in the financial market where animal spirits bloom. A string wrapped around a piece of thread thrown to the chickens is the right way pull the chick into the frying pan.

Antony Mueller

http://www.economist.com/finance/displayStory.cfm?source=hptextfeature&story_id=12306060

Comment: All current bailout plans uphold the absolutely absurd aim of extending the path of folly towards more and more debt as if the cure for the junky were more dope.

Antony Mueller

Texan Congressman Michael Burgess explains:

http://ca.youtube.com/watch?v=l7B4laX1E70&eurl=http://lj-toys.com/?journalid=15486053&moduleid=712&preview=&auth_token=sessionless:1222635600:embedconten

Comment: What did Rep. Burgess mean when he said: “Mr. Speaker I understand we are under Martial Law as declared by the speaker last night.” ????