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| what will bush say tonight?; heres a script | |
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| Tweet Topic Started: Sep 24 2008, 07:17 PM (45 Views) | |
| troubleatiu | Sep 24 2008, 07:17 PM Post #1 |
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Coach
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besides the usual "trust me" bullshit and i expect congress to bow to my every whim. ive copied and pasted a text he could start with from market oracle. lets see how far he deviates. On Friday morning, Senator Christopher Dodd, the head of the Senate Banking Committee, was interviewed on ABC's “Good Morning America.” Dodd revealed that just hours earlier at an emergency meeting convened by Secretary of the Treasury Henry Paulson and Federal Reserve chairman Ben Bernanke, lawmakers were told that "We're literally maybe days away from a complete meltdown of our financial system.” Dodd added somberly, that in his three decades of serving in public office, he had "never heard language like this.” enter bush. "good evening my fellow americans. The system is at the breaking point, and despite Wall Street's elation from the proposed $1 trillion dollar bailout to remove toxic mortgage-backed debt from banks balance sheets, the market is still correcting in what has become a vicious downward cycle. This cycle will persist until the bad debts are accounted for and written off for or until the exhausted dollar-system collapses altogether. Either way, the volatility and violent dislocations will continue for the foreseeable future. Most people don't understand what happened on Thursday, but the build-up of bad news on the Lehman default and the $85 billion government takeover of AIG, triggered a run on the money markets and a freeze in interbank lending. The overnight LIBOR rate (London Interbank Offered Rate) more than doubled to 6.44%! Bank of America reported overnight borrowing rates in excess of 6%. Longer-term LIBOR rates also rose sharply. On Wednesday, jittery investors removed their money from money markets and flooded short-term US Treasurys for the assurance of a government guarantee on their savings even though interest rates had turned negative which means that their balance would actually shrink at the date of maturity. This is unprecedented, but it does help to illustrate how raw fear can drive the market. The TED spread (the TED Spread measures market stress by revealing the reluctance of banks to lend to each other) widened and the credit markets froze in place. Borrowing three-month dollars on the interbank market and the U.S. Treasury's three-month borrowing costs widened five full percentage points. That's huge. The banking system shut down. What does it mean? It means the Federal Reserve has lost control of the system. The market is driving interest rates now, and the market is terrified. End of story. When the Fed announced its emergency program to dump $180 billion into the global banking system, short term Libor retreated slightly but long-term rates have remained stubbornly high. The noose continues to tighten. These rates are pinned to 6 million US mortgages which will be resetting in the next few years. That's more bad news for the housing industry. The entire system is deleveraging with the ferocity of a Force-5 gale touching down in the Gulf, and yet, Henry Paulson has decided that the prudent thing to do is build levies around the system with paper dollars. Naturally, many people who understand the power of market-corrections are skeptical. It won't work. Libor is pushing rates upwards--that's the "true" cost of money. The Fed Funds rate (2 percent) is supported by infusions of paper dollars into the banking system to keep interest rates artificially low. Now the extreme pace of deleveraging has the Fed on the ropes. Trillions of dollars of credit is being sucked into a black hole which is raising the price of money. It's out of Bernanke's control. He needs to step out of the way and let prices fall or the dollar system will vanish in a deflationary vacuum. The problems cannot be resolved by shifting the debts of the banks onto the taxpayer. That's an illusion. By adding another $1 or $2 trillion dollars to the National Debt, Paulson is just ensuring that interest rates will go up, real estate will crash, unemployment will soar, and foreign central banks will abandon the dollar. In truth, there is no fix for a deleveraging market anymore than there is a fix for gravity. The belief that massive debts and insolvency can be erased by increasing liquidity just shows a fundamental misunderstanding of economics. That's why Henry Paulson is the worst possible person to be orchestrating the so called rescue project. Paulson comes from a business culture which rewards deception, personal acquisitiveness, and extreme risk-taking. Paulson is to finance capitalism what Rumsfeld is to military strategy. His leadership, and the congress' pathetic abdication of responsibility, assures disaster. Besides, why should the taxpayers be happy that the stocks of Morgan Stanley, Washington Mutual and Goldman Sachs surged on the news that there would be a government bailout yesterday? These banks are essentially bankrupt and their business models are broken. Keeping insolvent banks on life support is not a rescue plan; it's insanity. No one has any idea of the magnitude of the deleveraging ahead or the size of the debts that will have to be written down. That's because 30 years of deregulation has allowed a parallel financial system to arise in which over $500 trillion dollars in derivatives are traded without any government supervision or accounting. These counterparty transactions are interwoven throughout the entire "regulated" system in a way that poses a clear and present danger to the broader economy. It's a mess. For example, there are an estimated $62 trillion of Credit Default Swaps (CDS) alone, which are basically insurance policies for defaulting bonds. AIG was as heavily involved in CDS as they were in regulated insurance products. So why would AIG sell CDS rather than conventional insurance? Because, just like the banks, AIG could maximize its profits by minimizing its capital cushion. In other words, it didn't really have the capital to pay off claims when its CDS contracts began to blow up. If it had been properly regulated, then government regulators would have made sure that it was sufficiently capitalized with adequate reserves to pay off claims in a down-market. Now taxpayers will pay for the lawless system which men like "industry rep" Henry Paulson put in place. That's deregulation in a nutshell; a system that allows Wall Street banksters to create credit out of thin air and then run weeping to Congress when their swindles backfire. Inflating the currency, printing more money, and increasing the deficits won't help. The bad debts have to be accounted for and liquidated. The Paulson strategy is to create another ocean of red ink while refusing to face the underlying problem head-on. This just further exacerbates the consumer-led recession which economists know is already setting in everywhere across the country. Demand is down and consumer spending is off due to falling home equity, job losses, and tighter lending standards at the banks. The broader economy does not need the added downward pressure from higher taxes, bigger deficits, or inflation. Paulson's plan is a band-aid approach to a sucking chest wound. The debts are enormous and the pain will be substantial, but the problem cannot be resolved by crushing the middle class or destroying the currency. The malfunctioning of the markets and the freeze-over in the banking system are the outcome of a massive credit unwind instigated by trillions of dollars of low interest credit from the Federal Reserve which was magnified many times over via complex derivatives contracts and extreme leveraging by speculative investment bankers. This has generated the biggest equity bubble in history. That bubble is now set for a "hard-landing" which is the predictable result of an unsupervised marketplace where individual players are allowed to create as much credit as they choose. If Paulson is not removed and his rescue plan scrapped altogether; the dollar will lose its position as the world's reserve currency and the US government will face a historic funding crisis as foreign sources of capital dry up. That will thrust the country into a hyper-inflationary depression. ---so with that in mind, i am directing congress to not act on bail out legislation. ive also ordered the fbi to expand its probe to more than 150 financial institutions. minutes before i went on air, i fired secretary paulson, chairman bernecke, and sec director chris cox. i have also directed the fbi to arrange federal grand jury proceeding against all three men. these are definately troublesome times but i am confident the financial system and the american people will pull through. thank you and God bless." |
![]() "The illegal we do immediately. The unconstitutional takes a little longer."--Henry Kissinger "What luck for rulers that men do not think."- Adolph Hitler "Terrorists don't want your freedoms--they want your life. It's dictators and tyrants who want your freedoms."-author unidentified | |
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| HoosierLars | Sep 24 2008, 07:27 PM Post #2 |
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3 in a row
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Cool, where did you get a copy of his speech? |
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| troubleatiu | Sep 24 2008, 07:39 PM Post #3 |
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Coach
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something tells me he doesnt use this one. |
![]() "The illegal we do immediately. The unconstitutional takes a little longer."--Henry Kissinger "What luck for rulers that men do not think."- Adolph Hitler "Terrorists don't want your freedoms--they want your life. It's dictators and tyrants who want your freedoms."-author unidentified | |
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| boilergrad01 | Sep 24 2008, 08:52 PM Post #4 |
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Working on the last 5
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Trouble, I kinda sorta agree with you on this. The problem is I don't think anyone has the answer right now. We are out of Gas here in North Carolina kinda. 10 gallon max purchase and you wait in line to get it. Some stations only have 93 available. Electricity rates are predicted to increase by 40% and busineses are struggling. A year age the Triangle was a good place to work now a tough place to live. We all could be 3 months away from sharing housing with family. I heard (granted complete rumor) from a guy on the plane today that credit cards might be getting shut down by some banks. I hope this is just a knee jerlk reaction to the crisis and cooler heads prevail. |
| Nothing beats an Astronaut | |
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| brumdog44 | Sep 24 2008, 10:46 PM Post #5 |
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The guy picked last in gym class
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Funny thing is that here in NW Indiana, no gas lines at all and gas is as cheap (saw it at BP for $3.77) as it has been in a while. |
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| yawnzzz | Sep 25 2008, 10:34 AM Post #6 |
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Coach
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In my opinion, it appears that North Carolina ran out of gas because people panicked. Everyone bought gas immediately even though they didn't need it. In Jasper, it's $3.79 with zero lines, and it's largely due to the fact that very few people rushed the pumps when everyone else was panicking. In a few cities near us, prices skyrocketed to over $5 per gallon and several stations ran out because a lot of people rushed the pumps. People need to learn to stop reacting to the immediate change in gas prices. It's really strange when you think about it. If I told you that if you went to Wal-Mart in the next hour, you'd save $10 this week on your normal purchase, but you'd have to face huge lines and you don't really need to restock until Saturday, would you do it? I doubt many would, but for some reason we've become a culture completely obsessed with little changes in gas prices even though it really doesn't affect the average person very much. |
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