Forbes magazine said the United States is now facing perhaps the worst financial crisis since the banking panic that former President Franklin Roosevelt faced in 1933.
To help grease the financial plumbing Monday, the Federal Reserve pumped a total of billion ( billion and then another regularly scheduled billion were injected in temporary reserves) into the nation’s financial system through open market operations to help ease credit stresses.
Lehman Brothers, the country’s fourth-largest investment bank, filed for bankruptcy protection. A weakened Merrill Lynch, deciding it couldn’t go it alone anymore, found help in the arms of Bank of America. Now, the insurance giant American International Group (AIG) is dangerously wobbling. Against this backdrop, Wall Street on Monday plunged 500 points, the most since the September 2001 terror attacks.
"Fed pumps B into nation’s financial system"
http://news.yahoo.com/s/ap/20080916/ap_on_bi_ge/fed_credit_crisis
"Wall Street is now at the mercy of Washington."
"Facing reporters at the White House on Monday, Wall-Street-titan-turned-Treasury-Secretary Henry Paulson deflected questions about whom to finger for the meltdown, saying simply: “I’m playing the hand that was dealt to me.” So is Wall Street, and it’s folding."
"No matter who’s elected, the next administration might have a much easier job of watching over the investment banking industry simply because it will be so tiny."
http://news.yahoo.com/s/politico/20080916/pl_politico/13486;_ylt=AkuWHsbzw.Qro8y4ZaffrHms0NUE
On the trail… latest from our future leadership…
McCain: Fundamentals of Economy Remain Strong
On the campaign trail, Senator John McCain said that the fundamentals of the economy remain strong.
Sen. John McCain: “You know that there’s been tremendous turmoil in our financial markets and Wall Street. And it is—people are frightened by these events. Our economy, I think, still, the fundamentals of our economy are strong, but these are very, very difficult time. And I promise you we will never put America in this position again. We will clean up Wall street. We will reform government. And this is a failure.”
Senator Barack Obama accused McCain of subscribing to the same economic philosophy as President Bush.
Sen. Barack Obama: “For eight years, we’ve had policies that have shredded consumer protections, that have loosened oversight and regulation and encouraged out-sized bonuses to CEO’s while ignoring middle-class Americans. The result is the most serious financial crisis since the Great Depression. And I certainly don’t fault Senator John McCain for these problems, but I do fault the economic philosophy he subscribes to, because it’s the same philosophy we’ve had for the last eight years.”
All this has been happening since yesterday when the stock market dropped over 500 points and the ripple effect being felt around the world. Economists are all warning us this is a huge problem, it may be hard to get loans for cars, houses, etc. The state of the economy could get exponentially worse. People are being encouraged to withdraw from the banks and sell their stocks, etc.
I wrote about this last night (per FDIC not being able to deal with the trillion dollars potentiall at risk, etc.), and got some very interesting answers, please refer to that too for some keen insight and additional information…
Is American in trouble? Are bank deposits for once at risk?
http://answers.yahoo.com/question/index;_ylt=Api3DBdrJ1_y2c_kH0Rmw9Xsy6IX;_ylv=3?qid=20080915212838AAJlEea
What I want to know is… Are we really in this deep of trouble, What the economists are saying.???..
"Once in century kind of phenomenon!"
"This is the financial storm of the century!"
"Congress must recapitalize FDIC immediately!"
"1 trillion at risk, FDIC can only cover billion!", etc…
Someone please explain what is going on and what is going to happen, or your opinions on this please.
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