The passage of the economic rescue plan is a disgrace. We reached this point due to leading congressional members of both parties blocking the efforts of the White House and other congressional members to place tougher oversight measures on Fannie Mae and Freddie Mac since 2003. This mess began with a politically motivated policy of the Clinton administration to provide mortgages to lowincome households, a lending risk that no conventional banker would take. Then throw in overly high fuel costs inflating the prices of all consumer goods and disaster soon followed. Many leading financial professionals have stated the rescue plan was unnecessary, but I truly feel that many congressional members needed this plan because without it they would have been caught with their hands in the cookie jar at Fannie Mae and Freddie Mac. I refused to rely upon the news media to accurately report the details of this bill. In less than five minutes I had the entire 451-page bill downloaded from the Internet. To my astonishment I discovered that the plan was attached to the funding of a new mental health facility and a comprehensive energy package that would never be debated in Congress. The passage of this bill is an indictment against the American people. Congress is to blame for the majority of our government ills, yet the people continue to re-elect the same candidates to office. The time has come for the voters to act on Election Day and clean house. Then demand that the new Congress implement term limits on both houses of Congress. I say each member of Congress may serve no more than two terms and each term lasts no more than three years. BILL STARR Scotia
US to buy stake in banks, first since Depression By JEANNINE AVERSA, AP Economics Writer 13 minutes ago
The government will buy an ownership stake in a broad array of American banks for the first time since the Great Depression, Treasury Secretary Henry Paulson said late Friday, announcing the historic step after stock markets jolted still lower around the world despite all efforts to slow the selling stampede.
Separately, the U.S. and the globe's other industrial powers pledged to take "decisive action and use all available tools" to prevent a worldwide economic catastrophe.
"This is a period like none of us has ever seen before," declared Paulson at a rare Friday night news conference. He said the government program to purchase stock in private U.S. financial firms will be open to a broad array of institutions, including banks, in an effort to help them raise desperately needed money.
The administration received the authority to take such direct action in the $700 billion economic rescue bill that Congress passed and President Bush signed last week.
Earlier Friday, stock prices hurtled downward in the United States, Europe and Asia, even as President Bush tried to reassure Americans and the world that the U.S. and other governments were aggressively addressing what has become a near panic.
A sign of how bad things have gotten: A drop of 128 points in the Dow Jones industrials was greeted with sighs of relief after the index had plummeted much further on previous days. The week ended as the Dow's worst ever, with the index down an incredible 40.3 percent since its record close almost exactly one year earlier, on Oct. 9. 2007.
Investors suffered a paper loss of $2.4 trillion for the week, as measured by the Dow Jones Wilshire 5000 index, and for the past year the losses have totaled $8.4 trillion.
It was even worse overseas on Friday. Britain's FTSE index ended below the 4,000 level for the first time in five years; Germany's DAX fell 7 percent and France's CAC-40 finished down 7.7 percent. Japan's benchmark Nikkei 225 index fell 9.6 percent, also hitting a five-year low. For the week, the Nikkei lost nearly a quarter of its value. Russia's market never even opened.
Paulson announced the administration's new effort to prop up banks at the conclusion of discussions among finance officials of the Group of Seven major industrialized countries. That group endorsed the outlines of a sweeping program to combat the worst global credit crisis in decades.
Earlier this week, Britain had moved to pour cash into its troubled banks in exchange for stakes in them — a partial nationalization.
Paulson said the U.S. program would be designed to complement banks' own efforts to raise fresh capital from private sources. The government's stock purchases will be of nonvoting shares so it will not have power to run the companies.
The purchase of stakes in companies would be in addition to the main thrust of the $700 billion rescue effort, which is to buy bad mortgages and other distressed assets from financial institutions. The aim is to unthaw frozen credit, get banks to resume more normal lending operations and stave off severe problems for businesses and everyday Americans alike.
It would mark the first time the government has taken equity ownership in banks in this manner since a similar program was employed during the Depression.
In 1989, the government created the Resolution Trust Corp. to deal with the aftermath of the savings and loan crisis. It disposed of the assets of failed savings and loans.
Paulson and Federal Reserve Chairman Ben Bernanke met with their counterparts from the world's six other richest countries late in the day as the rout of financial markets sped ahead despite earlier dramatic rescue efforts in the U.S. and abroad.
In a statement at the end of that meeting, the G7 officials vowed to protect major banks and to prevent their failure. They also committed to working to get credit flowing more freely again, to support the efforts of banks to raise money from both public and private sources, to bolster deposit insurance and to revive the battered mortgage financing market.
They did not provide specifics beyond that five-point framework.
At the White House earlier in the day, Bush said, "We're in this together and we'll come through this together." He added, "Anxiety can feed anxiety, and that can make it hard to see all that's being done to solve the problem."
He made it clear the United States must work with other countries to battle the worst financial crisis that has jolted the world economy in more than a half-century.
"We've seen that problems in the financial system are not isolated to the United States," he said. "So we're working closely with partners around the world to ensure that our actions are coordinated and effective."
The Dow dropped a little over 100 points while he was speaking.
Fear has tightened its grip on investors worldwide even as the United States and other countries have taken a series of radical actions including an unprecedented, coordinated interest rate cuts by the Federal Reserve and other major central banks.
Besides the United States, the other members of the G7 meeting in Washington are Japan, Germany, Britain, France, Italy and Canada. Finance officials also planned to meet with Bush Saturday at the White House.
"We are in a development where the downward spiral is picking up speed," said Germany's Finance Minister Peer Steinbrueck, who wanted to see an orchestrated response among the G7.
So did French Finance Minister Christine Lagarde, who said a "coordinated, synchronized and rightly timed approach" was needed.
An even larger group of nations — called the G20 — will meet with Paulson on Saturday evening. How the world's finance officials and central bank presidents can better contain the spreading financial crisis also will dominate discussions at the weekend meetings of the 185-nation International Monetary Fund and the World Bank in Washington.
The British, who recently announced a plan to guarantee billions of dollar worth of debt held by major banks, have been pitching that idea to the rest of the G7 members.
The idea behind all these ideas — as well as bold steps previously announced in recent weeks — is to get credit flowing more freely again.
In the United States, hard-pressed banks and investment firms are drawing emergency loans from the Federal Reserve because they can't get money elsewhere. Skittish investors have cut them off, moving their money into safer Treasury securities. Financial institutions are hoarding whatever cash they have, rather than lending it to each other or customers.
The lending lockup — which is making it harder and more expensive for businesses and ordinary people to borrow money — is threatening to push the United States and the world economy as a whole into a deep and painful recession.
In Europe, governments have moved to protect nervous bank depositors. Germany pledged to guarantee all private bank savings and CDs in the country, and Iceland and Denmark followed suit. Ireland went even further by also guaranteeing Irish banks' debts. The United States will temporarily boost deposit insurance from $100,000 to $250,000 in cases where its banks or savings and loans fail.
The Fed, meanwhile, has repeatedly tapped its Depression-era authority to be a lender of last resort, not only to financial institutions but also to other types of companies. Earlier this week, the Fed said it would buy massive amounts of companies' debts, in another unprecedented effort to break through the credit clog.
___
Associated Press writers Harry Dunphy, Desmond Butler, Martin Crutsinger and Deb Reichmann contributed to this report.
Welcome to the dawn of our 'one world monetary system'! Next, coming to a theater near you will be the 'one world order/government'. And if Obama/osama gets elected we will experience the 'one world religion'(Muslim). Enter...the anti-christ!!
When the INSANE are running the ASYLUM In individuals, insanity is rare; but in groups, parties, nations and epochs, it is the rule. -- Friedrich Nietzsche
“How fortunate for those in power that people never think.” Adolph Hitler
First published in print: Saturday, October 11, 2008
The recent Wall Street rescue bill contains $192 million for rum subsidies; $100 billion for NASCAR; $81 billion for Hollywood's motion picture subsidies; and $2 million for wooden arrows for children.
Sens. Charles Schumer and Hillary Rodham Clinton voted "yes" for this bill and so did many of our representatives. Congress could have and should have done better through open debate and deliberation and not succumbed to the fear tactics of the present administration.
With the unemployment rate the highest it has been in five years, gas and food prices sky high, and the present disastrous state of the economy, remember these millions going to Hollywood, NASCAR, rum subsides, arrows, etc., the next time you stand in line at the supermarket paying for your food, or the next time you pay for gas for your car. Most importantly, remember these things when you vote in November.
The expression my grandfather used to use, "Throw the bums out," appears to have gained considerable relevance and importance for the present Congress. Remember this in November.
We need to remember this for a long time. I just recently checked my 401K and I must say that it's a good thing that I have many years to rebuild it. Down 22% since the end of last month, 25% since the end of February. Like I said, it's a good thing I'm young enough to have time to rebuild it and add to it and have the stock market work it's way back to the positive side.
IMF warns of financial meltdown By Lesley Wroughton and Francois Murphy 1 hour, 45 minutes ago
The IMF warned on Saturday that the global financial system was on the brink of meltdown, while France and Germany pushed ahead with a pan-European crisis response to try to prevent the worst global downturn in decades.
At a joint news conference, French President Nicolas Sarkozy and German Chancellor Angela Merkel said they had "prepared a certain number of decisions" to present at a Sunday meeting of European leaders as they work feverishly to restore blocked credit markets to working order.
The United States appealed for patience, but the International Monetary Fund stressed that time was running short after leading industrialized nations failed to agree on concrete measures to end the crisis at a meeting on Friday.
"Intensifying solvency concerns about a number of the largest U.S.-based and European financial institutions have pushed the global financial system to the brink of systemic meltdown," IMF chief Dominique Strauss-Kahn said.
President George W. Bush huddled with Group of Seven economic chiefs and officials from the IMF and World Bank, and said top industrial nations grasped the gravity of the crisis and would work together to solve it.
"I'm confident that the world's major economies can overcome the challenges we face," Bush said, adding that Washington was working as fast as possible to implement a $700 billion financial bailout package approved a week ago.
"The benefits will not be realized overnight, but as these actions take effect, they will help restore stability to our markets and confidence to our financial institutions."
Confidence has been in short supply and panic has swept through global markets, driving stocks to a five-year low on Friday and prompting banks to hoard cash. That has choked off lending to businesses and households, threatening to turn a global economic slowdown into a dangerously deep recession.
U.S. Treasury Secretary Henry Paulson said risks to the global economy were "the most serious and challenging in recent memory."
EUROPEAN UNITY
An emergency meeting of euro zone leaders on Sunday will discuss a bank rescue package, taking a British initiative to guarantee lending between banks as a reference point, a source close to the French presidency said.
France's Sarkozy said euro zone countries were working on a joint solution, but declined to provide specifics. He planned to meet with British Prime Minister Gordon Brown shortly before Sunday's euro zone gathering.
Britain's rescue plan, launched last week, makes available 50 billion pounds ($86 billion) of taxpayers' money for injection into its banks and, crucially, calls for underwriting interbank lending, which has all but frozen around the globe.
Germany was also considering injecting capital into its banks, Merkel said on Saturday.
The world's rich nations vowed on Friday to take all necessary steps to unfreeze credit markets and ensure banks can raise money but they offered no specifics on a collective course of action to avert the recession threat.
In a surprisingly brief statement after a 3-1/2 hour meeting, the G7 -- the United States, Britain, Canada, France, Germany, Italy and Japan -- stopped short of backing the British interbank lending guarantee, something many on Wall Street saw as vital to end growing market panic.
Kenneth Rogoff, a Harvard University professor and former IMF chief economist, said the G7 would have been better served adopting some version of the British plan so that banks would feel confident enough to loosen their grip on lending.
"Saying that they'll take all steps necessary leaves hanging the question of whether they know what is best and necessary," he told Reuters. "It was a signature moment for the G7. I think markets are going to be very disappointed."
European Central Bank President Jean-Claude Trichet said markets needed time to digest a series of dramatic steps taken by world central banks in recent days, including pouring billions of dollars into financial markets and lowering interest rates in the broadest coordinated cut on record.
WORKING AROUND THE CLOCK
U.S. Treasury's Paulson said it was "naive" to think that the G7 would endorse a one-size-fits-all approach to ending the credit crisis because there were major differences between the countries and their financial systems.
He said the Bush administration was scrambling to put together a plan to buy direct stakes in American banks to shore up balance sheets riddled with heavy credit losses from the 14-month crisis that began with failing U.S. mortgage loans.
"We're going to do it as we can do it in a proper way that will be effective. Trust me, we're not wasting time, we're working around the clock," Paulson said late on Friday after the G7 meeting broke up.
But even as Paulson and his fellow finance ministers insisted that they were working as fast as possible, there were signs the economy was credit-starved and deteriorating fast.
The U.S. auto sector has been particularly hard-hit. General Motors has had talks with smaller rival Chrysler LLC about a merger that would combine the No. 1 and No. 3 American automakers at a time when both are struggling to cut costs and shore up cash, according to a source briefed on the matter.
Financial weekly Barron's reported that GM was preparing to approach the U.S. Federal Reserve about borrowing money directly from the central bank because the logjam in credit markets had shut it out of other kinds of borrowing.
(Reporting by G7 team; Writing by Emily Kaiser; Editing by Tim Ahmann)
People that think they should be retireing at 65 must be in a coma- That was fine 50 years ago when people were dying 10 years sooner. Its time to wake up- retirement needs to be age 75-
Keep working- go back to school - get abetter job-- come on quit whinning- work another 10 years make another few hundred grand
What jobs are still available that pay enough to support a family and who can afford to go back to school? Besides some of us are already retired and nobody would hire us anyway except as a Walmart greeter or can you say" do you want fries with that" type places.
People that think they should be retireing at 65 must be in a coma- That was fine 50 years ago when people were dying 10 years sooner. Its time to wake up- retirement needs to be age 75-
Keep working- go back to school - get abetter job-- come on quit whinning- work another 10 years make another few hundred grand
What jobs are still available that pay enough to support a family and who can afford to go back to school? Besides some of us are already retired and nobody would hire us anyway except as a Walmart greeter or can you say" do you want fries with that" type places.
I agree with you Shadow. And I'm not young enough to recoup money I would have lost if I had money in the stock market.
First published in print: Sunday, October 12, 2008
I am a World War II veteran from the Greatest Generation, who served my country with great pride. I have a heart disability and my wife has been on chemotherapy for two years. We survive on a combined income of $27,850 from our Social Security. I am in my 80s and have survived the Great Depression, World War II and many other problems created by our elected leaders who do not care for the middle-class people who voted them into their elected office.
But this $700 billion bailout beats them all.
Let's get all those major companies and all the individuals who created this monster problem because of greed and power; combine all of their assets in the U.S., and foreign countries, and don't forget the islands, and I am almost certain that the amount well exceeds $700 billion.
The government is already raising the retirement age. My full retirement is 65 years of age. My children's full retirement age is 67 years of age. I'msure my grandchildren's full retirement will be much higher than that.
Retirement should be a personal choice based on the need of the individual/family circumstance. Or as Shadow stated, a corporate decision. Personally, I can't imagine myself not working, at something. Even if it was volunteer work. I like the mental stimulation and the interaction with people outside of my immediate family and friends.
At 62 years old, I am allowed to start collecting my social security, at a lower amount of course, and can not earn more than approx.$13K/year. Anything over that amount the government will take $1.00 for every $2.00 I earn. After the age of 65 years old, I can then earn as much as I want without penalty.
I am planning to apply for my social security at age 62 but would also like to work for as long as I can. Or shall I say, as long as my mind and body will allow me to.
In either case, time will tell and all of this can change just as our ever changing economic system dictates.
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