Topic: Economics
Fed Scrambles to Save Wall Street, Gold Hits $1032 The Fed backs up Wall Street to avoid panic, but is it enough?by Kipper Mathews
(Libertarian)
Monday, March 17, 2008
On Friday, Bear Stearns Cos., one of Wall Street's biggest securities firms, ran out of cash after taking losses on its investment holdings and accepted an emergency injection of funds from the Federal Reserve. The Fed kept the firm afloat to stave off a panic in the debt markets.
Over the weekend, with gold edging $1007 /oz., the Federal Reserve in a rare weekend move, took action Sunday evening to provide cash to financially squeezed Wall Street investment houses, in an effort to prevent a spreading credit crisis from sinking the U.S. Economy.
The central bank approved a cut in its emergency lending rate to financial institutions to 3.25 percent from 3.50 percent, effective immediately, and created a lending shelter for big investment banks to secure short-term loans. The new lending facility that would be available to big Wall Street firms on Monday, came in short for Bear Stearns, who had just assured Wall Street that the company was not in trouble, was forced on Sunday to sell the investment bank to competitor JP Morgan Chase for a bargain-basement price of $2 a share.
The last-minute buyout was aimed at averting a Bear Stearns bankruptcy and a spreading crisis of confidence in the global financial system. Bear Stearns was the first major bank to be undone by that market's collapse. The Federal Reserve and the U.S. government swiftly approved the all-stock buyout, showing the urgency of completing the deal before world markets opened. The Fed made the takeover risk-free with a guarantee up to $30 billion.
Gold rocketed to peak at over $1032 /oz. Sunday evening with the news.
VIEW POINT:
Something about this smells like Bush.
I'm sure glad we purchased our placer mining claim last year.
It might get us through this mess.
Did you like this article? If you did, Thumb It! 3 thumbs so far
2008 Kipper Mathews, all rights reserved.
Published: Monday, March 17, 2008
Last modified: Monday, March 17, 2008
The views expressed in this
article are those of Kipper Mathews only and do not represent
the views of Nolan Chart, LLC or its affiliates. Kipper Mathews is
solely responsible for the contents of this article and is not an
employee or otherwise affiliated with Nolan Chart, LLC in his/her role as a columnist.
Take note that the Presidents Working Group on Financial Markets (Plunge Protection) worked over the weekend and met this morning. Everyone was nervous about the market open and miracle of miracles...no crash....hmmmm....even though any clear headed analyst would say that's what should have happened. The Plunge team has the ability to manipulate the markets, especially futures, to keep them from crashing. Kind of like legal insider trading. Ron Paul asked McCain about this group in the Florida debate. McCain didn't seem to know what it is...or he was playing stupid because it's actions are so secretive and Paul was letting the cat out of the bag. Yes we know they meet. But exactly what is it they do to "manage" the equity markets is a mystery to all who aren't at the meeting. Whatever it is they did I think I can say with confidence that it will benefit the bankers and not the average work a day American.
Jim, Ron Paul should have pushed McCain harder at that moment in time during the debate. If he did, McCain wouldn't have won the primaries IMO. Although he is "the chosen one."
Speaking of the PPT, I would love to follow the money trail coming from some of these banks to prop up the U.S. market when asked to: http://www.bis.org/cbanks.htm
I'm not saying.....but.......
Kipper, every move the Fed makes will just prolong the inevitable.
I'm sure one of your favorite sayings is/has been, "got gold?'
Want to comment on this
article? Leave your comment here. Your email address is
required to track your comment. However, we will neither
publish your email address nor distribute it to other
organizations or persons. The only reason we might use
it would be if we needed to contact you regarding your
comment. All comments are subject to our
terms of use policy.
2008 Kipper Mathews, all rights reserved.