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I need a vacation...
Sounds like the Fed is about to create a new RTC type structure to "save" the banks...When the street reacts like this (just like they did before the AIG announcement) you know theres some truth in it...only difference is that with the RTC they took over the thrifts, closed them, and liquidated their assets. This time it looks like they are just gonna take the bad debt off their balance sheets and let these greedy risk taking gunslinger banks continue to operate. I am officially disgusted.
http://biz.yahoo.com/ap/080918/wall_street.html?.v=44
AP
Stocks surge on report of en y for bad debt
Thursday September 18, 4:19 pm ET
By Tim Paradis, AP Business Writer
Stocks end sharply higher on report that government will create en y to hold banks' debt
NEW YORK (AP) -- Wall Street rallied in a stunning late-session turnaround Thursday, shooting higher and hurtling the Dow Jones industrials up 400 points following a report that the federal government may create an en y that will take over banks' bad debt.
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A report that Treasury Secretary Henry Paulson is considering the formation of an en y like the Resolution Trust Corp. that was set up during the savings and loan crisis of the late 1980s and early 1990s left investors ebullient. Investors hoped a huge federal intervention could help financial ins utions jettison bad mortgage debt and stop the drain on capital that has already taken down companies including Bear Stearns Cos. and Lehman Brothers Holdings Inc.
Worries about financial land mines on companies' books have hobbled the world's financial markets and led to the intense volatility in the markets this week.
"It's going to take a lot of the bad debt off the balance sheets of these companies," said Scott Fullman, director of derivatives investment strategy for WJB Capital Group in New York, commenting on the possibilities of an en y akin to the RTC. It could alleviate many of the pressures causing the credit crisis, he said, and open up the credit markets again. But Fullman noted, "the devil's in the details."
"Bear markets are very sensitive to news. And on a scale of 1 to 10, this one is a 13," he said.
The report gave direction to a market that had bolted in and out of positive territory for much of the session as investors shuttled between the safety of Treasury bills and gold and the bargains posed by stocks that have been pounded lower.
According to preliminary calculations, the Dow soared 410.03, or 3.86 percent, to 11,019.69, surging 560 points from its low of the day, 10,459.44.
Broader stock indicators also jumped. The Standard & Poor's 500 index rose 50.01, or 4.32 percent, to 1,206.60, and the Nasdaq composite index advanced 100.25, or 4.78 percent, to 2,199.10.
The report of a broader government bailout proved more reassuring to investors than moves before the opening bell Thursday by the Federal Reserve and other major central banks to inject as much as $180 billion into global money markets. The moves were an attempt to keep the credit crisis from worsening; the Fed added another $55 billion in overnight loans Thursday.
But it was only the prospect of a more comprehensive vehicle to sweep up bad debt that emboldened investors. Congress established the RTC in 1989 to buy $394 billion worth of real estate, mortgages and other assets of hundreds of failed savings-and-loan ins utions. The corporation operated for several years disposing of the associations' assets, and then went out of business.
That could help alleviate the grinding gears in the world's credit markets have driven up the cost of borrowing for businesses; banks have become hesitant to make loans even to other banks for fear of what ins utions might be hobbled by soured debt. Investors are also contending with fears that more big-name financial companies could falter.
I need a vacation...
No politician is going to let a bunch of huge businesses just fail before a presidential election.
It'd be nice if they removed some of my debt.
No . I think I will go but a new fleet of trucks for my business and spend a bunch of money on other new equipment and let them take over my debt. this being conservative and not buying stuff I can't afford.
Party at the Richer's house!
So, does this mean I can stop paying my mortgage payments and still get to keep my house?? Awesome.
we need to pull a tyler durden.
This is no longer capitalism. It's some ed up new where our government steals our money, spends it all in Iraq and then in the name and debt of taxpayers, borrows more from China to give to a bunch of lousy banks. America.
Or are they just printing more $ to give to banks, thereby de-valuing the dollars I didn't already pay in taxes? Either way- America.
Remeber the first rule !
i'm talking about blowing up the credit agencies at the end.
I see it everyday SW. Everyday.
It's socialism.
This makes true socialism look like a shining beacon of human accomplishment and morality.
Agreed its BS.
But I can't go as far as to say america.
Ill take america over Cuba, Venezuela or any other ed up country.
what exactly is true socialism? give me a concrete example please
well, no sherlock! Way stick your neck out with that one
You know the 's hit the fan when you begin comparing the US with third world countries...
" America"?
Are you in the States? If you are you can kindly get the out of our great country...if not you and whatever hole you claim as home.
In Cuba and Venezuela they re-distribute monies to pay for healthcare and education. Every single person in Cuba has free medical care. In America they re-distribute monies to pay for a bunch of huge corporations' gigantic and risky mistakes. Meanwhile, in America, there are 45 million people who are out of luck if they need a doctor.
Which is the ed up country again?
Well maybe I should have said the traditional concept of socialism, as opposed to this we're doing now.
well, no sherlock! Way stick your neck out with that one
You know the 's hit the fan when you begin comparing the US with third world countries...
Who yanked your string?
My money shouldn't be redistributed for anything other than infrastructure and defense.
Anything else is a waste and a BS reason for spending my tax dollars.
How long have you lived in Venezuela?
Don't need to. I got wiki. And I'm not saying it's good healthcare. I'd bet it's piss-poor (I know Cuba's is), but that's better than here in America where for 45 million people there is no healthcare whatsoever. I'll take a dirty hospital in Venezuela over a streetcorner in America any day.
Extensive inoculation programs and the availability of low- or no-cost health care provided by the Venezuelan Ins ute of Social Security have made Venezuela's health care infrastructure one of the more advanced in Latin America.
What it is, is a bunch of Conservatives waking up the morning after an awesome party and realizing that they ed some up and need to fix it PDQ...kinda like at the end of Weird Science or Risky Business.
There's just no way we can allow all these banks and companies go under...it would be like 1929 all over again.
you, you flag-sucking halfwit.
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