Right now - this very moment - the Hang Seng is down over 1000 points. Dow futures are down 225 points (having bounced up from 246 down) and gold neared 1030 dollars per one oz. coin (size of an old silver dollar) before pulling back to around $1025/oz. The United States Dollar (USD) has hit lows never seen - this very evening.
We are being slapped down by so many forces it is truly hard to keep track of them all.
A small selection of articles are posted below...
Perhaps you have been blinded by the wall-to-wall coverage of our brilliant Presidential Candidates! They are so wonderful, with their swipes and retractions and semi-retractions. 24/7 coverage!
THE REALLY IMPORTANT STORY: We are teetering on the brink of a Systemic, Global Financial Meltdown - caused by - Our Bankers and Brokers!!! Our financial system is crashing all around you.
It's here. It's now. It's your life. And, they want to use your money to bail out the guys who caused it.
(Wouldn't want a run on yachts!)
IMF tells states to plan for the worst
By Krishna Guha in Washington
Financial Times - UK {Gotta register to read}
Published: March 13 2008 02:00 | Last updated: March 13 2008 02:00
Governments might have to intervene with taxpayers' money to shore up the financial system and prevent a "downward credit spiral" from taking hold, the International Monetary Fund said yesterday.
John Lipsky, the IMF's first deputy managing director, said: "We must keep all options on the table, including the potential use of public funds to safeguard the financial system."
The statement by the senior IMF official marks the second radical policy intervention from the IMF this year. It had previously called on governments to consider using fiscal policy to offset the impact of the credit crisis on growth.
Mr Lipsky said: "I fully recognise an appropriate role for public sector intervention after market solutions have been exhausted."
Yes, Bear Stearns is just the beginning:
Bear Stearns Gets Emergency Funds From JPMorgan, Fed (Update5)
By Yalman Onaran
Bloomberg
3-14-08
March 14 (Bloomberg) -- Bear Stearns Cos., teetering on the brink of collapse from a lack of cash, got emergency funding from the Federal Reserve and JPMorgan Chase & Co. in the largest government bailout of a U.S. securities firm.
After denying earlier this week that access to capital was at risk, Bear Stearns Chief Executive Officer Alan Schwartz said today that the 85-year-old company's cash position had ``significantly deteriorated'' in the past 24 hours. The central bank agreed to provide financing through JPMorgan for up to 28 days, the bank said in a statement today.
snip
``I don't think they can afford to let Bear go,'' said Charles Geisst, the author of ``100 Years on Wall Street,'' referring to the New York Fed bailout. ``At this particular moment in time, it would be a devastating blow to the markets.''
But What Does It Mean ?????
Let's find out from Monty Guild, over at JSMineset (Jim Sinclair's site):
Market Panic Forces Governments Into Action
Author: Monty Guild
Posted On: Saturday, March 15, 2008, 3:26:00 PM EST
snip
Bear Stearns is a PRIMARY DEALER IN U.S. GOVERNMENT BONDS. This is a very small and very important club. They have also been a leader in the business of prime brokerage and in the field of trade settlement and clearing - two very profitable mostly fee-based businesses that have been the envy of many other financial institutions. These have been their cash cows and very attractive businesses that have long been sought by other buyers.
Although Bear Stearns is quite large, it is the smallest of the top U.S. government bond dealers. So if someone wants to attack the system they will attack the smallest of the truly powerful bond houses. Bear Stearns, like all major mostly bond dealers and traders, also trades in mortgage bonds and derivatives and this is where its problems arose.
Bear Stearns' CEO said on Wednesday that the company was well capitalized and that its balance sheet is strong. I believe he was telling the truth. However, they are not immune to a run on the bank. IN FACT, NEITHER IS ANY OTHER MAJOR BANK OR INVESTMENT BANK IN THE ENTIRE WORLD.
BEAR STEARNS AS A PRIMARY DEALER CANNOT BE ALLOWED TO FAIL WITHOUT UNDERMIINING THE CONFIDENCE IN THE U.S. AND THE WORLD FINANCIAL SYSTEM.
BEAR STEARNS WAS PROTECTED FROM FAILING TO MEET ITS COMMITMENTS TO COUNTERPARTIES BECAUSE TO LET A PRIMARY DEALER FAIL WOULD MEAN A RUN ON EVERY MAJOR BANKING AND INVESTMENT BANKING INSTITUTION IN THE DEVELOPED WORLD. AND THAT WOULD ALMOST CERTAINLY LEAD TO A MASSIVE GLOBAL DEPRESSION. THIS IS MY CONSIDERED AND FIRM OPINION.
Hmmm... that doesn't sound so good...
But, then, there is this:
Fed Takes Steps to Ease Crisis, Cuts Lending Rate to Financial Institutions to 3.25 Percent
By Jeannine Aversa, AP Economics Writer
Sunday March 16, 9:54 pm ET
WASHINGTON (AP) -- The Federal Reserve, in an extraordinarily rare weekend move, took bold action Sunday evening to provide cash to financially squeezed Wall Street investment houses, a fresh effort to prevent a spreading credit crisis from sinking the U.S. economy.
The central bank approved a cut in its lending rate to financial institutions to 3.25 percent from 3.50 percent, effective immediately, and created another lending facility for big investment banks to secure short-term loans. The new lending facility will be available to big Wall Street firms on Monday.
"These steps will provide financial institutions with greater assurance of access to funds," Federal Reserve Chairman Ben Bernanke told reporters in a brief conference call Sunday evening.
The Fed acted just after JP Morgan Chase & Co. agreed to buy rival Bear Stearns Cos for $236.2 million in a deal that represents a stunning collapse for one of the world's largest and most venerable investment banks. Just on Friday the Fed had raced to provide emergency financing to cash-strapped Bear Stearns through JP Morgan. Days earlier the Fed announced a set of other unconventional steps to thaw out a credit market in danger of freezing shut.
***
Well. Thank goodness they acted when they did...<snark>
'Cause otherwise, we might really be facing a problem! HA! Hang Seng down over a thousand points.... hold onto your - shirt!
Got Gold?