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Money-Good

Cal

Well-known member
http://corner.nationalreview.com/post/?q=NGUyZDhkYjEzNzM0MDNmM2U1M2Y1NTM4Y2IzMmE3Mjg=

Monday, August 06, 2007

Money-Good [Larry Kudlow]


Wall Street stabilized today with a triple-digit Dow gain as of this writing. All those Bear Stearns rumors on Friday were totally over-baked and hyperactively alarmist. The firm is money-good, and its daily security positions are being financed by its top lenders, including Citibank and J.P. Morgan. What’s more, the two credit rating agencies, Moody’s and S&P, gave Bear Stearns a positive and sound outlook with respect to liquidity and credit. S&P downgraded because of the possible likelihood of lower earnings over the medium term. But S&P said liquidity is fine. All the negative speculation and rumors about the firm are just wrong.

Meanwhile, I still believe the Goldilocks economic scenario is alive and well. Jobs came in at 120,000 for the private sector, and if government teachers had contributed 30,000 as usual (probably due to a statistical estimating error, they didn’t), then the jobs report would have met consensus.

Unemployment has essentially been unchanged at 4.5 percent to 4.6 percent for a year. Weekly jobless claims are low. Wages are running ahead of inflation. The ISM report suggests at least 2.5 percent real growth. The global economic boom continues as commodity indexes are holding the high ground. In the U.S., business loans are growing about 12 percent.

Second quarter profits are running 15 percent on a market-cap basis, 11 percent on a net income basis, and 9 percent for continuing operations. Those profits are two-to-three times higher than consensus expected. Corporate bond spreads and yields are normalizing, but sources tell me that new money is coming in from petro countries and China to bottom fish cheaper corporate loans. All of which are money-good.

The sub-prime mortgage virus is still the biggest issue and no one can be sure how large the total damage will be. But with a global boom abroad and Goldilocks at home, the stock market is in better fundamental shape than so many commentators would have us believe.

Call it money-good.

08/06 03:46 PM
 

Goodpasture

Well-known member
Unless there is some serious addressing of the subprime issues, there is a bomb about to go off on wall street......I don;t care what the talking heads say.

the problem is that the subprime market loaned billions to people who were marginally able to make payments. And they loaned on terms that were fixed at 4.5% and 5%....there were a lot of "option arms" where people could actually chose to pay a full payment, a partial payment or a 1% payment each month. Needless to say those that paid the lowest amounts had what are called reverse mortgages. They borrow $100,000, pay 1% and end up owing, in a couple of years, $120,000 on a house that is worth maybe $90,000. The option period expires. payments of $450 a month jump, overnight, to $1400. Nearly half of all mortgages in this country that were made in the past three years are this kind of mortgage. The fixed rates are about to kick in....some already have. between now and 2009, if the fed and FHA doesn't do something, we are going to have a real estate crash that exceeds 1929.
 

backhoeboogie

Well-known member
Goodpasture said:
......I don;t care what the talking heads say.

That is inherently obvious.

But, if we have the 1929 crash, I will jump in and buy up lots of things. You can also bet there are many like me. Hence, the crash wouldn't last.
 

Goodpasture

Well-known member
http://money.cnn.com/2007/07/09/real_estate/resets_are_coming/index.htm?postversion=2007071009

NEW YORK (CNNMoney.com) -- More than two million subprime adjustable rate mortgages (ARMs) are poised to reset at much higher rates in coming months, worsening an already suffering housing market.

Borrowers who took out hybrid ARMs in 2004 and 2005 to secure low "teaser" rates for the first two or three years of the loan may see their monthly mortgage payments climb by 35 percent or more.

Consumer groups and politicians worry that hundreds of thousands of subprime ARM borrowers will be unable to keep up with their mortgage payments and will lose their homes.

"In October alone more than $50 billion in ARMs will reset," according to Mark Zandi, chief economist and co-founder of Moody's Economy.com. That's a record, according to Zandi.

As a result, Doug Duncan, chief economist for the Mortgage Bankers Association (MBA), is expecting as many as 600,000 home owners will get into trouble with perhaps half of them actually losing their homes.

One of the reasons for the worsening situation, according to Zandi, is that just as the number of subprime ARMs being underwritten was reaching a high, the quality of loans was hitting new lows.

"There were increasingly poor quality loans made starting in the spring of 2005," he said, "with the poorest of all made during the fall of 2006."

Lenders approved many borrowers who had little chance of being able to afford the payments two and three years out. They approved applications without any proof of income or assets ("liar loans") and others that barely could make the low teaser-rate payments. Some borrowers chose interest-only ARMs, which left the principal of the loan untouched
 

Faster horses

Well-known member
And some politicians think these people should be BAILED OUT???????

I just don't get it. No one FORCED them to get that kind of financing.
Time to pay the piper, if you ask me.

Remember the FMHA loans that were forgiven in the '80's?
 
A

Anonymous

Guest
Faster horses said:
And some politicians think these people should be BAILED OUT???????

I just don't get it. No one FORCED them to get that kind of financing.
Time to pay the piper, if you ask me.

Remember the FMHA loans that were forgiven in the '80's?

The most interesting thing of all today- was that GW admitted to Cavuto that there actually was a problem-- and that these foreclosures were actually happening- after weeks of denying it to be of any concern :roll:

I will agree with you that there should not be bailouts-- they got themselves in their own hole....

But that said-- you have to put some blame on these banking and lending institutions that were climbing over each other to hand out money--much of it to folks that had terrible credit histories and any sound money lender should have known would never be able to/or would pay it back....

I'd get 2-3 letters a week from loan companies or credit card outfits offering me $100,000- $200,000 loans or unlimited amounts on these credit cards they kept sending me that I cut up and put in the garbage....

GREED-GREED- GREED from all sides...The corporate and banking world at its worst, trying to take advantage of some of those that don't realize that if it looks too good to be true-- it probably is...But theres a sucker born every minute--and these lending companies preyed on that...
Just like the scamming outfit that Billary and Hitlary are involved with that scammed Altzheimers patients and the elderly...Some of these lending outfits are nothing more than legalized shylocks--requiring a vig of 50-75-100+%--same as what used to be illegal activity of the mafia has been legalized as good business now-- all in the name of GREED......
 

Goodpasture

Well-known member
As an appraiser, I see Loan Officers trying to have us push values all the time. "If you can get $150,000 for this house I have five other assignments waiting for you." And there are a lot of appraisers who succumbed to the temptation. For the past several years I have been doing review work for major banks. Citi, Indymac, Merrill Lynch, etc.....and the garbage appraisals I have seen is appalling. I have set as a hearing officer for several hearings by the appraisal board and been expert witness on several others.....most of which ended up with the appraiser losing his license.....and I am scheduled for four others between now and mid-September. The amount of fraud that went into inflating values, inflating paychecks, inflating deposit slips is amazing.

It is very much like the savings and loan meltdown of the 80's.
 
A

Anonymous

Guest
Yep--Goodpasture-- I see the same as a Judge...While the county has dropped in population by about 10% in the past 10 years the filings for collection actions and garnishment of bank accounts and wages has gone up 400%.... While much of it is because of the ease of getting this easy credit money-- the sad thing is a lot is on what I consider a necessity- medical and hospital bills....Medical Insurance rates have gotten unaffordable for many- and with the loss of so many of the old type jobs most of these new service jobs don't provide an insurance plan.....
 

Goodpasture

Well-known member
Oldtimer said:
While much of it is because of the ease of getting this easy credit money-- the sad thing is a lot is on what I consider a necessity- medical and hospital bills....Medical Insurance rates have gotten unaffordable for many- and with the loss of so many of the old type jobs most of these new service jobs don't provide an insurance plan.....
Of the top 25 economies in the world, we are the only nation that has had anyone file for bankruptcy because of medical bills. medical bills account for more bankruptcies than all other reasons combined.

Now add mortgage debts to the mix, theworking man has little chance of making it to retirement without filing bankruptcy at least once in his life.

Want to see something interesting? http://ml-implode.com/ It lists the lenders who have gone under since December of last year. As of today, it's 114 lenders.

In addition to the 114 that have gone under, the following are in serious trouble. You may not know them, but they are well known to the loan officers and bankets of the country.

14. National City Home Equity
13. NovaStar Mortgage
12. Option One
11. CIT Home Lending
10. FNBA
9. GreenPoint Mortgage
8. All Fund Mortgage
7. Quick Loan Funding
6. Accredited Home Lenders
5. Ocwen Loan Servicing
4. Doral Financial Corp.
3. Evergreen Investment/Carnation Bank
2. Coast Financial Holdings, Inc.
1. Residential Capital, LLC*




Quote of the Week:

The main fallacy in monetary theory and policy is the confusion of money and wealth. ... Money -- and financial assets easily converted to money -- may not be wealth for society as a whole if the production of goods and services has not kept pace with claims on it. Early spenders may have some success, but inflation will dilute the buying power of others. The bottom line is that real wealth has to be produced; it can't be printed.

—Bob McTeer, former Fed governor
 

Sandhusker

Well-known member
Goodpasture said:
Unless there is some serious addressing of the subprime issues, there is a bomb about to go off on wall street......I don;t care what the talking heads say.

the problem is that the subprime market loaned billions to people who were marginally able to make payments. And they loaned on terms that were fixed at 4.5% and 5%....there were a lot of "option arms" where people could actually chose to pay a full payment, a partial payment or a 1% payment each month. Needless to say those that paid the lowest amounts had what are called reverse mortgages. They borrow $100,000, pay 1% and end up owing, in a couple of years, $120,000 on a house that is worth maybe $90,000. The option period expires. payments of $450 a month jump, overnight, to $1400. Nearly half of all mortgages in this country that were made in the past three years are this kind of mortgage. The fixed rates are about to kick in....some already have. between now and 2009, if the fed and FHA doesn't do something, we are going to have a real estate crash that exceeds 1929.

Reverse mortgages are where you sell your house over a period of time. You own the house and monthly payments are made to you until all the equity is gone. They're not necessarily bad deals. Say you're 70 years old and are short on income, you can do a 25 year reverse mortgage to bolster your income, you don't have to move, and you'll probably be dead long before you have to move out.

The problems with sub-prime lenders is that they are making loans like they're credit cards. Some actually help the people, but most are just trying to make a buck. They make the loan, bundle a bunch of them up and then sell them, taking a fee for their efforts. They're not worried what happens when people can't make their payments, the loan isn't theirs anymore. Of course, if too many of their loans go South, they'll have a hard time selling more, but they're just betting on the come. They'll find another job - they were looking for one when they found this one. Meanwhile, they take advantage of people who came to them for help and make their fast bucks. We all pay the price.
 
A

Anonymous

Guest
Stocks Plunge on Rising Credit Anxiety


http://biz.yahoo.com/ap/070809/wall_street.html?.v=24
 

Sandhusker

Well-known member
ff said:
Stocks Plunge on Rising Credit Anxiety


http://biz.yahoo.com/ap/070809/wall_street.html?.v=24

I used to be an investment advisor and three weeks ago, I did something that I preach against - I moved almost all of my investments out of the market and into cash. We had a big run and I think this credit problem will start a string of dominoes. Way too much credit has been extended to people who can't support it. When interest only loans become an option to the general populace, you know things are pretty frothy. We've got a lot of problems, folks.
 
A

Anonymous

Guest
Sandhusker said:
ff said:
Stocks Plunge on Rising Credit Anxiety


http://biz.yahoo.com/ap/070809/wall_street.html?.v=24

I used to be an investment advisor and three weeks ago, I did something that I preach against - I moved almost all of my investments out of the market and into cash. We had a big run and I think this credit problem will start a string of dominoes. Way too much credit has been extended to people who can't support it. When interest only loans become an option to the general populace, you know things are pretty frothy. We've got a lot of problems, folks.

I think you made a smart move Sandy...I see where the Dow ended the day down 387 points at close of trading-- and I think we are just seeing the beginning....As more lending money is frozen or called in and money gets tighter- much of whats invested in the stock market will have to be used to cover it...A start of a snow ball....

On Dobbs today they said that there will be over 200 million families lose their homes- and many house borrowers soon facing 25- 50-even 100- 150% raises in their monthly mortgage payment with these variable rate loans....Which they may be able to cover- but will take away from all the rest of their spending-slowing the entire economy more- continuing the downward fall that I predict will put 2007 in history the same as 1929....

Like I've said for sometime-- the inflation rate put out by Government is a LIE-- and its been affecting those in very rural areas for sometime already (its always said--we're the first to feel a recession, and the last to feel a recovery)....Parts of the nation is already in a major recession....

Now we have housing starts dropping (which will only get worse with large housing prices devaluation and tighter loan money)- and lead to greater unemployment-- followed by this subprime crisis which could create a huge problem in the entire lending industry....

Both the Canadian Banks and European Banks had to pump in money to their financial systems today to help hold confidence and keep them and their markets from seizing up-- but I don't know how long that can last- nor how much the world that holds all our money and our debt anymore, will aid us.....

Dobbs- tore GW-and his lending industries neocon cronies and all D.C. a new rear end on this and the Chinese tires again tonight- since it was revealed that almost all of our tire industry is gone, with most now being imported- with China being the leading exporter....

Echoing comments he made a day earlier, Bush said low inflation
Code:
a government lie which is actually 6-8% rather than the juggled 2-3% put out by Government
, a strong job market
Code:
Much weakened by the shifting of the higher wage/benefits jobs overseas and replaced by subpar jobs
and global economic growth
Code:
Which has put most of our wealth and all of our debt in the hands of foreigners- some of which would love to see America destroyed
were helping to support the U.S. economy, and that markets had enough cash to allow them to function efficiently.

"The fundamentals of our economy are strong," Bush told reporters. "I'm told there is enough liquidity in the system to enable markets to correct."
Code:
I'm curuous which neocon corporate buddy told him this-- the Asian, European and Worldwide Bankers don't seem to have that confidence...They're already moving to keep their heads above water when our butts go under....


Tomorrow and the days to come could be interesting to see who else freezes assets and calls in notes....
 
A

Anonymous

Guest
Financial Intelligence
with John Browne

Subprime Panic Points to Taxpayer Bailout

Earlier today, BNP Paribas SA, France's largest bank, announced that it froze three asset-backed securities funds because it’s no longer able to fairly value the funds’ holdings due to "the complete absence of liquidity in certain market segments of the U.S. securitization market …"

Our readers will not be surprised as we have long warned of this growing credit disaster.

In response to BNP Paribas’s announcement, the European Central Bank pumped 94.8 billion euros ($130 billion) - the largest amount ever - into the European banking system in an effort to prevent a credit crunch.
Meanwhile, President Bush, looking worried, said in his press conference this morning, "All the evidence in the housing markets, points to a soft landing."

Given the real fear, of which Jim Cramer allowed us a brief glimpse in his "meltdown" interview on CNBC last Friday, the President’s statement was nothing short of amazing.

If that were not enough, the President had previously claimed, in his prepared introduction, that, "The American economy is the envy of the world." Try telling that to the foreign exchange markets!

These statements were not just amazing, they were frightening.

Of course, our leaders are expected to sound upbeat in the face of reality. But upbeat statements must have credibility. If not they sound out of touch and create yet more concern.

The President's statements clearly had no credibility and certainly had us more worried.

We are increasingly concerned that our government is asleep at the switch and is merely reacting with soothing words, when the truth of the underlying economic and financial problems, that have long been clear to people like us, emerge into the open.

What is needed is decisive leadership as we urged on the Fed earlier this week.

Something meaningful has to be done to allow cooler heads to revalue the denial of real risk, over the past few years of greed.

It is understandable that banks like BNP are unable to assign a fair value to their assets. This is for three prime reasons.

First, derivatives are often very complex. Many in top management do not fully understand them. Least of all are they certain where the ultimate risk is being held.

Secondly, the liquid, traditional subprime credit market has effectively dried up. So there is no "normal" market price.

Plus, if the owners of this unwanted debt were to offer their assets for auction, they may be able to fetch only a fraction of their value. This would trigger a revaluation of other similar assets. If a significant write down of assets were to happen, it could place many major financial institutions in liquidation.

So the third reason is an acute fear of admitting the reality of a fall in their asset values and an unwillingness to sell.
So they freeze their funds to prevent their investors (clients) from selling.

(On this point, Aug.15 could become a key date. It is the last date, by which hedge fund holders have to give notice of a sale, for the last quarter of 2007, the very quarter that we believe could prove to be traumatic.)

As we said yesterday, Bear Stearns has even sought the protection of offshore jurisdiction to allow it to avoid investor claims.

Aside from soothing words, it now appears that our politicians are thinking of bailing out the greedy lenders in what was a subprime lending boondoggle.

And that means throwing ultimate liability onto the back of the taxpayer. How’s that for capitalist, free market accountability?


How does all this affect the ordinary investor, who is not directly involved in the subprime lending scandal?

As my colleague David Frazier so ably points out today in MoneyNews.com, the sad news is that the subprime lending crisis is only a sideline. A most important sideline, but a sideline, all the same.

The real problem, for the bulk of our readers is that there is increasing and cumulative evidence that American consumer spending is slowing down. This is the really serious problem, still denied by most of Wall Street, its media cheerleaders and by our senior politicians.

Consumer spending accounts for some 70 percent of our GDP. Any slowdown will affect both our economy and our equity markets severely.

Already, we are seeing large institutional money managers who are paid to be in equities, rotating into defensive stocks such as healthcare, consumer staples, and utilities. (The later, as they appear to be anticipating a Fed rate cut, as our government wakes up to the seriousness of our economic position.)

[Editor's Note: Sector Investing is the Key to Profiting from a U.S. Recession and Stock Market Crash. ]


Earlier this week, I used a boxing analogy, when describing the antic of the Fed. Continuing on that vein, we believe that the subprime debacle will prove to be a major shock.

We also face other potential shocks.

If the Chinese do actually sell dollars, as they have suggested they might do, in the event the U.S. imposes tariffs on Chinese imports - even some of their U.S. dollar holdings - it would provide an additional shock.

If our Fed were forced to raise rates either to combat stealth inflation, we have long told you about, or to defend the U.S. dollar from a meltdown, it would provide yet another severe shock.

Now, a boxer, who may be tired but is still strong, can absorb the shock of even severe blows. On the other hand, when he is weak, one major blow can put him on the canvas.

Contrary to the siren words of Wall Street, its cheerleaders and our senior politicians, we believe that our economy is turning down and has been for some three months or so.

This means that, in boxing terms, we are now (economically) weak.

We are now in so much danger that a shock, such as a severe credit crunch, could put us on the floor, economically.

So, the importance of the subprime debacle is not restricted to even the vast debt markets. It can easily spill over into economic depression.

We do not believe that today’s Presidential statement, "Our economy is the envy of the world," is credible right now and the price of our dollar reflects that sentiment.

We urge our readers to remain cautious.
 

Goodpasture

Well-known member
Oldtimer said:
....... we believe that our economy is turning down and has been for some three months or so.

More like more than a year since Merit and acoustic collapsed:

2006-04-14: Acoustic Home Loans - story
Buybacks a "major factor in collapse", according to the Businessweek article.

Mish points out that this company was the 27th-largest subprime originator.

2006-05-06: Merit Financial - Subprime Lender - story story story
This major Washington state-based subprime lender collapsed in spring last year under the weight of buybacks of low-quality issuance and fraud complaints, as refis slowed down. The company was started in 2001 by former Huskies football player Scott Greenlaw, who apparently ran the company like a frat house (as the first article above adequately illustrates).

Merit allegedly originated around $2 bln (not sure if this was in 2005 or from 2001-2005) and reached 410 employees at its peak. I have seen claims that it was the #1 wholesale lender in Washington state as of 2005 (by what metric, I am not sure). More than 300 were laid off all at once in the May 2006 collapse, with further lawsuits created as many (most?) of them were not paid.
 
A

Anonymous

Guest
One major credit card company is raising their interest rate on their good customers. What will that do to people already in a financial strain?

http://www.msnbc.msn.com/id/20201030/site/newsweek/site/newsweek/
 

Goodpasture

Well-known member
by the way, here is the letter from Deutsche Bank:
August 9, 2007

Dear Valued Deutsche Bank CLG Sellers:

We have important news to share with you concerning current Deutsche Bank CLG product offerings. After carefully considering and weighing all of the options, we have decided to take the steps outlined below.

Effective today, Thursday, August 9, 2007, CLG will begin the process of consolidating its operations into the Closed Loan Purchase Division of MortgageIT (a subsidiary of Deutsche Bank) ("CLP"), which is located in Madison, Wisconsin and is under the leadership of Keith Bilodeau.
In the coming weeks, all loans previously locked will be reviewed for purchase by CLG if the loan file is delivered on or before the lock commitment expiration. If the loan file is acceptable, CLG will be diligent in purchasing the loan in a timely and efficient manner.
The CLP team will be contacting you shortly to discuss this transition as it relates to products, operations and the opportunity to continue selling closed loans to Deutsche Bank through CLP.
We know that these changes will bring many questions and we are committed to answering all of them with time sensitive urgency. Please direct any questions by email or telephone as follows:

e-mail box: [email protected]
or voice mailbox: 608-821-8979

Thank you for your continued support.

Keith Bilodeau
SVP, Closed Loan Purchase Division

What Keith is saying is that EVERYTHING in the pipeline is being looked at, and if it isn't solid, it will be canceled, PROVIDED they already have a lock on it. It appears they have not canceled the Clear to Close stuff, but everything else is on the table and nothing new is being accepted. Deutsche Bank is the last of the major funding correspondents. Even Bear Stearns is trying to move off shore so they are protected from bankruptcy.

Ladies and gentlemen....despite what spinning george says, we are facing a world wide economic crash that is unparalleled in history. If the Chinese start dumping the dollar, the United States will be bankrupt. Think it is nice to get $3.00 t-shirtsand $10.00 jeans? If the Chinese dump the dollar, and we can't ake it at home, the price will hit double digit (maybe triple digit) inflation overnight. Imagine, gas jumping to $10 a gallon, a Big Mac at $12.00 a pair of Rustler Jeans at $40. IF the dollar devalues, that is not only possible, it is probable.
 
A

Anonymous

Guest
Goodpasture said:
Even Bear Stearns is trying to move off shore so they are protected from bankruptcy.
.

Bear Stearns' Legal Surprise

John Browne
Thursday, Aug. 9, 2007

We noted with considerable interest and dismay a Bloomberg item, "Bear Stearns Caymans Filing May Hurt Bankrupt Funds' Creditors."
According to the item, "Bear Stearns Cos.' decision to liquidate two bankrupt hedge funds in the Cayman Islands instead of New York may limit creditors' and investors' ability to get their money back."

The item goes on, "While most of their assets are in New York, the funds filed for bankruptcy protection July 31 in a court in the Caymans, where they are incorporated."



Talk about protecting the clients' interests as a richly rewarded "custodian"!

It reminds us of the current TV advertisement in which the customers of a bank are robbed by their bank manager who shouts, "Get down on the floor!"


Hedge fund owners are very highly paid. We have no objection to that.

But, when a hedge fund goes offshore to evade the legal, American protections offered to its clients, we are shocked. We feel that such conduct is immoral, even for corporate lawyers.

However, Bear Stearns only went offshore for part of the deal.

As the Bloomberg article reported, "The bank [Bear Stearns] also used a 2005 bankruptcy law to ask a U.S. judge in Manhattan to block all lawsuits against the funds and protect their U.S. assets during the Caymans proceedings."

So, it appears that, in order to shield themselves from their clients (for whom they had lost 100s of millions of dollars) Bear Stearns did not merely go offshore, but cherry-picked between U.S. domestic and offshore legal jurisdictions to work against the interests of their clients.

Talk about integrity, morality and the American Way!

Of course, the rot, as it so often does, started at the top.

In order to deny prisoners of war their internationally recognized legal protections under the Geneva Convention and U.S. citizens their inherent protections under the law, our government established an illegal looking prison, offshore at Guantanamo Bay.

Also included in this neo-con dragnet, were citizens of allied nations.

Today the Financial Times (FT) ran a front page item stating, "U.K. seeks U.S. detainees." This of course, was the latest in a series of repeated requests that have embarrassed the British government at home and helped to cause Tony Blair to lose the office of Prime Minister.

The FT article continued, "Britain has asked the U.S. to release five U.K. residents held at Guantanamo Bay in a policy reversal that could mark a tougher stance on the Bush administration's detention policy."

The frightening message for all our citizens is that neither our government nor big business is embarrassed to go offshore to circumvent the laws of our land.

In our view, this bodes ill for all of us over the long-term and must be stopped in the interest of law and order.

http://www.newsmax.com/money/archives/articles/2007/8/9/080342.cfm
 

Red Robin

Well-known member
Don't bet the house on the dollar collapse.

http://www.dailyfx.com/export/sites/dailyfx/story/special_report/special_reports/Guest_Commentary___Don_t_Bet_1156139159298.html
 
A

Anonymous

Guest
Breaking News from MoneyNews.com

Fed Takes Emergency Action, Pumps
Money into Banking System


The Dow Jones fell sharply early Friday as the Federal Reserve took a dramatic step to stave off a collapse of global credit markets by pumping $24 billion into the U.S. banking system. In apparent coordination, the European Central Bank responded to the credit panic by pumping $130 billion into their banking system.
 
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