but I do read what economists say and I found something at another site that seemed to scare the crap out of a guy that previously thought we might have a chance of working our way out of this mess.

Here's a thread from the LAOTC forum

Bloomberg article

Oct. 2 (Bloomberg) -- Commercial banks and bond dealers borrowed $348.2 billion from the Federal Reserve as of yesterday, an increase of 60 percent from the prior week amid a worsening credit freeze.

Loans to commercial banks through the traditional discount window rose about $10 billion to $49.5 billion as of yesterday, the Fed said in a weekly report today. The total surpassed the previous record after the 2001 terrorist attacks.

Borrowing by securities firms totaled $146.6 billion, up from $105.7 billion. Under a new emergency program announced Sept. 19, banks borrowed $152.1 billion as of yesterday to buy commercial paper from money-market mutual funds, more than double a week ago.

And this from Jeromie:

Read it and weep. The system is finished.

http://www.federalreserve.gov/releases/h41/current

Then this:

OK, for perspective. The US Treasury has pumped in as much money into the Federal Reserve Bank of New York in two weeks as the amount of currency that is likely to actually be circulating within the US itself! Another week like this and US Treasury loans to the FRB NY will be about the same as total holdings of US Treasuries all the FRB's own! Then the FRB system is no longer a central bank, I guess.

By the back door, the US Treasury has already bailed out the big banks and apparently to no avail.

The numbers are jibberish to me. The economist's reaction to those numbers...

That I understand. He's scared, you should be too.

I did inhale.

The US Federal Reserve also pumped a further 630 billion
dollars into the international system on Monday to increase cash flow and help alleviate the credit crunch.

Wall Street sets negative records after bailout fails

Posted : Mon, 29 Sep 2008 21:30:12 GMT
Author : DPA

Throwing money at the problem does not seem to be the answer..

Paulson plan for survivor basis

As I write this I don’t know the outcome of the attempt to ram through legislation for looting the US Treasury of $700 billion before the end of the Bush administration. I suspect that Congress will force the passage of the bill in some form because the media and political narrative on the necessity of the measure is unremitting and so horribly biased.

No alternatives will be considered.

No constraints on the unilateral executive authority of Hank Paulson will be considered.

No assurances that funds will be used to unlock credit markets or promote lending to the real economy (as opposed to the financial robber barons) will be considered.

Instead, the bill will get laden with an additional 300 pages of pork to sway the dissenters, adding to the tab imposed on the American taxpayer.

Having listened to all 42 minutes of the late night Treasury briefing of investment banks on Sunday, there is no doubt in my mind that this legislation represents the sort of federal largesse for Goldman Sachs, Morgan Stanley, Citibank and JPMorgan Chase that the Iraq war provided for Halliburton and Blackwater.

The most cynical moment in the call is when the Treasury official confirms, ”our preference would be to help the healthy banks become even healthier” rather than helping troubled banks or illiquid banks.

America is now a centrally planned economy where the Treasury will determine which firms survive and prosper through allocation of scarce capital to an undercapitalised financial sector.

read the whole thing at the link

I did inhale.

Big money is running into the dollar, even though the Fed and Treasury are doing everything they can to madly reflate in order to stave off the incipient deflation that is threatening to spiral through the freezing up of credit markets.

Actually, there is plenty of liquidity sloshing around, but risk has been repriced, shutting out all but the most creditworthy borrowers. The preference for safety in Treasuries over more risky rent is creating a liquidity trap that throwing more money at the banks is not going to solve, at least without interest rates rising enough for greed (reward) to offset fear (risk).

IN the final analysis, the ultimate question is whether the US elite can maintain the value of dollar and preserve its status as the world's reserve currency. As long as these conditions persist, then the new world order under this elite is still the dominant factor in globalization. If those conditions are threatened, then the creation of the new world order of international finance, on which the creation of money and allocation of capital is based, may well slip away from their control. Russia is already demanding a multipolar solution in the face of US irresponsibility as financial leader.

Armageddon will have arrived when confidence in the dollar begins to tank due to the same ill-advised policies managed by the same people that created this mess. Then, the only safe place left to go is gold, following the adage, "Gold is (real) money." Gold is now still in the accumulation stage, and has not yet become the haven of last resort in financial extremis.

Bailout or no bailout, America will continue. What is going to suffer is your comfort and prospects. Seems as though most Americans, judging from the outcry against any public saviour bill, are willing to forego their comfort in order to force change upon the elite - hell, I don't know whether the average American's life is all that great anyhow, if one discounts luxury goods.

I don't think any bailout plan is going to have any great affect upon our collective future, except by possibly pushing it away down the road a bit more. International confidence is dead and gone. Those who buy our debt abroad are looking hard for ways to get out without triggering a nuclear war, and eventually they will find one. Personally, I feel intuitively that a depression would probably be the best thing for us as a nation. Public apathy isn't going to disappear with full bellies, nor will anything basically change in our government SOP.

Call me naive, but it seems to me that our elites are pretty smart people. I can't help but think they've expected this sort of thing and have safeguards (possibly of the martial sort) to protect the status quo in place. I would hate to make any predictions as to what may occur within the US in the next few years, but I'm certain this bailout bill won't make much of a difference to the average person (as if that mattered, right?). All in all, expecting any solutions from the US Senate and House or Presidency, is nothing more than hubris or grasping panic.

EDIT: Just wanted to add, do we think the world at large, given our history especially of the last 8 years, really want America to remain the strongest kid in the schoolyard?

Meanwhile the price of corn has fallen to $4 and change per bushel.

That's what it cost us to raise corn last year if the farmer didn't pay himself a salary.

Prices of fertilizer have doubled since last season. Seed is high. The ground dry...

Enjoy the dead cat bounce.

I did inhale.

He owned the bailout and now his presidency will be stuck with the consequences.

Dumb, dumb, and dumber.

W and his cronies just passed the ball (buck) to the big O, and are now off the hook.

I posted my story last week.

The Crash is Coming…,

with or without this Bail Out. The Bail Out is just that…, a Bail Out of the fat cat investors that run this country. It will accomplish one thing and one thing only. It will “buy” them time to reposition their portfolios and make money from this coming crash.

Well..., it has passed in even worse form than when I wrote it.

I STAND BY MY STORY.

Just as the presidential debates carefully steer away from the China question, the finance people don't want to talk about the real dead hippo in the living room--credit card debt. When that one implodes, no Federal bailout is going to save us. Might as well set up workhouses and debtors' prisons.

During a crisis (financial or otherwise), we follow the crowd

By Maggie Fox, Health and Science Editor
WASHINGTON — Herd mentality rules during a financial crisis because people are wired to follow the crowd when times are uncertain, experts say.

Brain and behavior studies clearly show that when information is scarce and threats seem imminent, people often stop listening to their own logic and look to see what others are doing.

"People are afraid, and the reason they are afraid is there is tremendous uncertainty right now in the markets," Gregory Berns, a neuroeconomist at Emory University in Atlanta who studies the biology of economic behavior, said in a telephone interview.

Berns puts people in magnetic resonance imaging or MRI scanners while he tests their responses to various scenarios, and studies patterns of their brain activation.

One clear pattern — the brain's "fear center" lights up when people are uncertain.

"When people are presented with a situation where they don't have information or the information is ambiguous, we see activation of the amygdala and insula," Berns said in a telephone interview.

And people begin to doubt their own judgment.

Bern's team did an experiment in which they recruited actors and true volunteers. "One real subject went into a (MRI) scanner," he said.

They were asked to do a simple task, assessing shapes.

"We had the group (of actors) tell them the wrong answer sometimes," Berns said.

The volunteers began to change their answers to match what the group said. Perhaps they were merely overriding their own judgments for the sake of getting along, Berns said. But the scanner suggested another explanation.

Running with the herd

"The group changes how you see the world in some way," he said.

"Our brains are really wired to accept the group opinion of the world."

In this case, running with the herd may not make good sense, said Paul Zak of the Center for Neuroeconomics Studies at Claremont Graduate University in California.

"There is this sort of herd mentality over-reaction," Zak said in a telephone interview.

"One of my colleagues actually pulled his money out of Washington Mutual a few weeks ago. He ought to know better."

The U.S. government has taken over mortgage finance companies Fannie Mae and Freddie Mac, Lehman Brothers Holdings has gone bankrupt, giant savings and loan Washington Mutual failed and Bank of America Corp bought Merrill Lynch & Co.

The House rejected a $700 billion bailout Monday, sending stock markets crashing globally.

Zak said the reactions are illogical. "I see no evidence that a depression is coming but it seems like people are behaving that way," he said.

The reason is evolution, Zak said. "We are really hyper-social apes. We learn almost exclusively from each other," he said. "Gossip is really important because it is another way that we learn socially. Separating out rumor from fact is difficult, particularly in these complex markets."

ummm more

My level of education is only at the high school level, but I'm trying to come to grasps with the finacial crisis that is on everyone's mind and how it will affect people like myself.
I've been in the military for 11 years, and most of us don't really understand how this all came to be and what it will all mean down the road. What would happen if the government gave every US Citizen $1 Million dollars. It would cost half of the $700 Billion that was passed and most of it would be dumped back at the economy. I guess that would create a lot of inflation and drive up the prices, but it just occurred to me.

comment!
i posted this also on another thread...Buffett is a smart guy and not necessarilly a Robber Baron...

http://www.charlierose.com/shows/2008/10/1/1/an-exclusive-conversation-with-warren-buffett

1700: "Abolish slavery!"
1800: Woman's Suffrage!"
2000:"World Peace!"