Fed Takes New Steps To Ease Financial Crisis

[Purveyor]

Source: Associated Press

(03-16) 16:31 PDT WASHINGTON, (AP) --

The Federal Reserve announced a series of new steps Sunday to help provide relief to a spreading credit crisis that threatens to plunge the economy into recession.

The central bank approved a cut to 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 steps are "designed to bolster market liquidity and promote orderly market functioning," the Fed said in a statement. "Liquid well-functioning markets are essential for the promotion of economic growth."

The new lending facility will be available to financial institutions on Monday.

It will be in place for at least six months and "may be extended as conditions warrant," the Fed said. The interest rate will be 3.25 percent and a range of collateral will be accepted to back the loans.



Read more: http://www.iht.com/articles/ap/2008/03/16/america/Fed-Credit-Crisis.php

---

SUNDAY action by the Fed? Interesting and scary...indeed!

[skooooo]

1. I feel like we've reached to top of the roller coaster....

...and we're about to start going down almost free fall...weeeee!

[blayne]

21. What a great analogy.

That's too funny!

[Celebration]

2. should be interesting!!

related to the very low price of Bear Stearnes, I am sure

[dkf]

3. Not good.

[nashville_brook]

4. the Fed is lowering rates on Sunday to avoid a meltdown on Monday

[bulloney]

16. Am I reading too much into the fact that the Fed is doing something like this on a Sunday?

Seems like there's a sense of real urgency when they're taking such action on what's normally down time.

[Demeter]

18. No. Especially Since The Fed Meets Tuesday

Guess Tuesday came early in Leap Year.

[nashville_brook]

20. that's my sense -- given the enormity of the crisis i HOPE they're working on the weekend!

but, no -- you're not reading too much into this. it's not business as usual.

[swag]

5. Now back to your Netflix queue, Ben.

Then try to get a little sleep. You'll need it this week.

[Ichingcarpenter]

6. And a whole point by the end of the week

Manic, Madness, March, Market, Meltdown, Monday!!!

[Robbien]

7. This just feeds the panic.

What is with these guys.

Blood is in the water and panic is in the air, and our wise old financial sages are throwing chum into the mix.

[bronxiteforever]

8. Kick & R-Smells like fear

:scared:

[CatholicEdHead]

9. Sunday New York time is for the Asian markets this evening

and overnight (US time).

[Speck Tater]

13. Three asian markets opened 15 minutes ago.

All three (AORD, NZ50, KS11) are down by around 1.7% to 1.8% or so.

http://finance.yahoo.com/intlindices?e=asia

[Robbien]

15. US STOCKS-Futures turn lower after Fed cuts discount rate

U.S. stock index futures erased their initial gains and fell sharply on Sunday evening after the Federal Reserve unexpectedly cut the discount rate and said it will allow primary dealers on Wall Street to borrow at the discount rate.

S&P 500 futures SPc2 fell 20 points and Dow Jones industrial average futures DJc2 sank 142 points. Nasdaq 100 NDc2 futures tumbled 32.75 points.

http://www.reuters.com/article/marketsNews/idUKN1646560920080317?rpc=44

[Tashca]

17. Let them know.

Looks to me like someone needs to let the Asian markets know they have been saved.....

[louis c]

10. Injection of Liquidity

or, translated into common English, keep printing f*@#ing money with nothing to support it. You know, like they did in Germany in the 1920's.

[Frank Booth]

11. Meanwhile, inflation will now get even worse.

But nobody seems to care about inflation, because inflation doesn't matter to the investment bankers.

What a disaster.

[Spazito]

12. Holy shit! For the Fed to act on a Sunday means it is beyond

ugly out there and they are scared as hell, imo.

[Greyhound]

14. On the reality of this...

The Fed working on Sunday is nearly unprecedented, they do it when they don't want people to know what they're doing.

Could this be why?
http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=102x3229487#3229555

From the article; "The Fed has hit a new low with this, they did nothing to protect consumers from predatory lending and now their response is to bail out one of the most notorious enablers of predatory lending with no benefit to struggling consumers"

[sarcasmo]

19. When they do this shit on a Sunday you know we are in panic mode.

[bhikkhu]

22. Flashback to this time, last Sunday

The Nikkei was off 4%, Asian markets reacting to structural problems in the world credit markets and US dollar weakness. "Just watch, the Dow will be in freefall in the morning" was the prediction.

In fact, the Fed announced it would pump 200 billion into the credit markets, and the Dow had a wonderful day. 200 billion doesn't buy what it used to, apparently, as the shine wore off the markets by the end of the week and here we are again in the same boat.

I don't think .25 is going to do a thing, nor do I think .50 or .75 would do a thing...what happens when the smoke and mirrors don't work anymore, and the bag of tricks is empty?

[jordi_fanclub]

23. U.S. Fed Cuts Discount Rate

Source: Bloomberg

March 16 (Bloomberg) -- The Federal Reserve, in an emergency weekend decision, cut the rate on direct loans to commercial banks (note: from 3.5%) and opened up borrowing at the rate to primary dealers in government securities.

In an announcement before the start of trading on the Tokyo Stock Exchange, the Fed lowered its so-called discount rate by a quarter of a percentage point to 3.25 percent.

Read more: http://www.bloomberg.com/apps/news?pid=20601087&sid=asg0H5x.VQ4g&refer=worldwide

[Fresh_Start]

24. on a Sunday

it's unbelievably bad when they are making panic moves like this

[BeatleBoot]

26. It's not good at all.

shit.

[TML]

25. I'm off work tomorrow

I guess I'll be watching Bloomberg in the morning to see how bad things are at the opening bell. Any reaction from the overseas markets on this yet?

[Fresh_Start]

27. japanese market down 3% in first hour

just for starters

[BeatleBoot]

29. down 440 points.

See thread above in "Latest"

[TML]

32. Damn

I've got Bloomberg on now in the background.

[thunder rising]

28. Wait! Bush is going to dance a jig today and everything will be OK.

[saigon68]

31. Actually he is going into the mens room

With Cheney to perform the sin of Onan

For those not familiar

http://www.straightdope.com/mailbag/monanism.html

[Thickasabrick]

30. On a Sunday...and only a quarter of a point.....this is getting kinda

scary. I heard the Japanese markets have tanked already - I guess it's already Monday there?

[TML]

33. Yeppers

And the European markets should be opening up in about four hours or so.

[masmdu]

34. Fed acts Sunday to prevent global bank run Monday

Source: MarketWatch

One hell of a week coming up!

Read more: http://www.marketwatch.com/news/story/fed-acts-sunday-prevent-global/story.aspx?guid=%7B43265631%2D1656%2D4697%2D8377%2D55F05D859B76%7D&dist=TNMostRead

[DJ13]

35. Stock market futures tanked

DJIA INDEX 11,775.00 -209.00
S&P 500 1,259.50 -33.50
NASDAQ 100 1,677.75 -46.75

http://www.bloomberg.com/markets/stocks/futures.html

[Speck Tater]

36. And I quote...

"Today's moves by the Federal Reserve are the desperate acts of failing men,"

[masmdu]

37. BTW...I will be BUYING this week

[DemocratInSoCal]

38. Good Luck On That One

The only thing I'll be buying, is more Gold.

[masmdu]

39. Good luck to you too! SP Futures here

[bhikkhu]

40. Wow - now that's a headline.

Recall last Sunday though - some fund was going under (I forget which), the Nikkei was tanking, and everyone was dreading Monday morning on Wall Street. What happened was the Fed released 200 billion to fund credit markets, and instead of panic there was a good day or two.

This time, .25% prime rate cut? It makes me think first that the bag of tricks is about empty, and second that the tricks are not working. How far are we into these bailouts now, and the path still leads relentlessly to wrecked markets and worthless dollars?

[Liberty Belle]

41. FEDS ACT TO RESCUE FINANCIAL MARKETS

Source: New York Times

WASHINGTON — Hoping to avoid a systemic meltdown in financial markets, the Federal Reserve on Sunday approved a $30 billion credit line to engineer the takeover of Bear Stearns and announced an open-ended lending program for the biggest investment firms on Wall Street.

In a third move aimed at helping banks and thrifts, the Fed also lowered the rate for borrowing from its so-called discount window by a quarter of a percentage point, to 3.25 percent.

The moves amounted to a sweeping and apparently unprecedented attempt by the Federal Reserve to rescue the nation’s financial markets from what officials feared could be a chain reaction of defaults.

...In a potentially even bigger move, the Federal Reserve also announced its biggest commitment yet to lend money to struggling investment banks. The central bank said its new lending program would make money available to the 20 large investment banks that serve as “primary dealers” and trade Treasury securities directly with the Fed



Read more: http://www.nytimes.com/2008/03/17/business/17fed.html?_r=1&hp&oref=slogin

---

Heaven forbid the Bush robber-barons would offer any help to homeowners conned by predatory lenders, but they'll spend billions bailing out their buddies in the investment banking industry.

Biggest winner? JP Morgan, which paid just two bucks a share for Bear Stearns. A year ago, Bear Stearns stock was trading at $170 a share. That's one serious crash!
http://www.nytimes.com/2008/03/17/business/17bear.html?hp

Foreign investors aren't exactly calmed by news of the bailouts. Asian markets are crashing in reaction:
http://www.nytimes.com/2008/03/17/world/asia/17market.html?hp

[WCGreen]

42. But let the people pull themselves up by their bootstraps...

JP Morgan's legacy lives on...

Fuckers...

[Liberty Belle]

44. that, and big donors to Bush-Cheney campaign.

[better tomorrow]

47. isn't he the "Creature From Jekyll Island" guy?

Seriously? Have you ever heard that story about how they all went in the dark of night to Jekyll Island and formed this mess?

[Up2Late]

43. How many BILLIONS more is this SNAFU going to cost us all now?

Ah, the beauty of "smaller Government" (A.K.A. Fewer Laws) :mad:

[Liberty Belle]

45. You'd think even the rich would be ready to impeach these bastards by now.

How many of them lost their shirts in this fiasco?

[magellan]

46. None who matter. n/t

[No DUplicitous DUpe]

48. Todays update of..."How To Protect Yourself From The Coming Financial Crisis"

(posted with permission) Read the whole column which started on Nov 20 2007
http://saneramblings.com/phpBB/viewtopic.php?t=217&sid=22393c1b97dc5ee1cdcad785fa1518b0

Last week the dollar hit a record low against the Euro and it approached a record low against the Yen. Gold briefly hit a stunning $1000 an ounce and oil also went to an all-time high, $111 a barrel.

These numbers will fluctuate up and down, but the U.S. government is not solving the underlying problems, and so they will grow much worse.

Meanwhile on Friday, Bear Stearns Cos., one of America's largest investment banking firms began to collapse until the U.S. Federal Reserve intervened. 85-year-old Bear Stearns survived The Great Depression and two World Wars but it would have crashed without Federal Reserve action.

This shows you how fast the situation is deteriorating, despite U.S. government assurances to the contrary.

Bear Stearns isn't the only huge financial firm stuffed with potentially bad mortgages and packed with other liabilities from the recklessness of recent years. Many giant financial firms are at the brink of disaster.

Please be very careful in how you spend your money and where you save it, making sure where you save it is FDIC insured, so if the bank collapses you can still get your money back.

If you have large credit card balances outstanding, immediately try to pay them off or pay them down. Take a 2nd job or overtime if possible, sell unneeded items to raise cash and also contact your credit card companies to negotiate a reduction in the balances or at least reduced interest rates and fees on those balances.

America hasn't seen anything like we're about to face, since The Great Depression, and the financial fallout will impact most of the rest of the world as well. Please take the actions I've recommended, to protect yourself and your family.

Please also share this article "How To Protect Yourself From The Coming Financial Crisis" on this website: www.saneramblings.com with others, so they too can take protective action. Thank you.

Dick