Best of the Week
Most Popular
1. TESLA! Cathy Wood ARK Funds Bubble BURSTS! - 12th May 21
2.Stock Market Entering Early Summer Correction Trend Forecast - 10th May 21
3.GOLD GDX, HUI Stocks - Will Paradise Turn into a Dystopia? - 11th May 21
4.Crypto Bubble Bursts! Nicehash Suspends Coinbase Withdrawals, Bitcoin, Ethereum Bear Market Begins - 16th May 21
5.Crypto Bubble BURSTS! BTC, ETH, XRP CRASH! NiceHash Seizes Funds on Account Halting ALL Withdrawals! - 19th May 21
6.Cathy Wood Ark Invest Funds Bubble BURSTS! ARKK, ARKG, Tesla Entering Severe Bear Market - 13th May 21
7.Stock Market - Should You Be In Cash Right Now? - 17th May 21
8.Gold to Benefit from Mounting US Debt Pile - 14th May 21
9.Coronavius Covid-19 in Italy in August 2019! - 13th May 21
10.How to Invest in HIGH RISK Tech Stocks for 2021 and Beyond - Part 2 of 2 - 18th May 21
Last 7 days
Stock Market FOMO Hits September CRASH Brick Wall - Dow Trend Forecast 2021 Review - 20th Sep 21
Two Huge, Overlooked Drains on Global Silver Supplies - 20th Sep 21
Gold gets hammered but Copper fails to seize the moment - 20th Sep 21
New arms race and nuclear risks could spell End to the Asian Century - 20th Sep 21
Stock Market FOMO Hits September Brick Wall - Dow Trend Forecast 2021 Review - 19th Sep 21
Dow Forecasting Neural Nets, Crossing the Rubicon With Three High Risk Chinese Tech Stocks - 18th Sep 21
If Post-1971 Monetary System Is Bad, Why Isn’t Gold Higher? - 18th Sep 21
Stock Market Shaking Off the Taper Blues - 18th Sep 21
So... This Happened! One Crypto Goes From "Little-Known" -to- "Top 10" in 6 Weeks - 18th Sep 21
Why a Financial Markets "Panic" May Be Just Around the Corner - 18th Sep 21
An Update on the End of College… and a New Way to Profit - 16th Sep 21
What Kind of Support and Services Can Your Accountant Provide? Your Main Questions Answered - 16th Sep 21
Consistent performance makes waste a good place to buy stocks - 16th Sep 21
Dow Stock Market Trend Forecasting Neural Nets Pattern Recognition - 15th Sep 21
Eurozone Impact on Gold: The ECB and the Phantom Taper - 15th Sep 21
Fed To Taper into Weakening Economy - 15th Sep 21
Gold Miners: Last of the Summer Wine - 15th Sep 21
How does product development affect a company’s market value? - 15th Sep 21
Types of Investment Property to Become Familiar with - 15th Sep 21
Is This the "Kiss of Death" for the Stocks Bull Market? - 14th Sep 21
Where Are the Stock Market Fireworks? - 14th Sep 21
Play-To-Earn Cryptocurrency Games Gain More and Is Set to Expand - 14th Sep 21
The CashFX TAP Platform - Catering to Bull Investors and Bear Investors Alike - 14th Sep 21
Why every serious investor should be focused on blockchain technology - 13th Sep 21
SPX Base Projection Reached – End of the Line? - 13th Sep 21
There are diverse ways to finance the purchase of a car - 13th Sep 21
6 Tips For Wise Investment - 13th Sep 21 - Mark_Adan
Gold Price Back Below $1,800! - 10th Sep 21
The Inflation/Deflation debate wears on… - 10th Sep 21
Silver Price seen tracking Copper prices higher - 10th Sep 21
The Pitfalls of Not Using a Solicitor for Your Divorce - 10th Sep 21
Investing in a Bubble Mania Stock Market Trending Towards Financial Crisis 2.0 CRASH! - 9th Sep 21
This Boom-Bust Cycle in US Home Ownership Should Give Home Shoppers Pause - 9th Sep 21
Stock Market September Smackdown Coming Next? - 9th Sep 21 - Monica_Kingsley
Crazy Crypto Markets How to Buy Bitcoin, Litecoin for Half Market Price and Sell for TRIPLE! - 8th Sep 21
Sun Sea and Sand UK Holidays 2021, Scarborough in VR 180 3D! - 8th Sep 21
Bitcoin BTC Price Detailed Trend Forecast Into End 2021 - 8th Sep 21
Hyper Growth Stocks - This billionaire is now using one of our top strategies - 8th Sep 21
6 common trading mistakes to avoid at all costs - 8th Sep 21
US Dollar Upswing, S&P 500 and Nasdaq Outlook - 7th Sep 21
Dovish Assassins of the USD Index - 7th Sep 21
Weak August Payrolls: Why We Should Care - 7th Sep 21
A Mixed Stock Market - Still - 6th Sep 21
Energy Metals Build Momentum; Silver & Platinum May Follow - 6th Sep 21
What‘s Not to Love About Crypto Market Fireworks - 6th Sep 21
Surging US Home Prices and Gold – What’s the Link? - 6th Sep 21

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

Credit Crisis Out of Control- US Government Admission "No One Knows What to Do"

Stock-Markets / Credit Crisis 2008 Sep 18, 2008 - 04:19 AM GMT

By: Mike_Shedlock

Stock-Markets

Best Financial Markets Analysis ArticleIn the wake of Global Financial Seizures that has affected housing, the stock market, and bonds Reid Says `No One Knows What to Do' to Solve Crisis .

The U.S. Congress is unlikely to pass new legislation to overhaul financial regulations this year because "no one knows what to do,'' Senate Majority Leader Harry Reid said today.


"We are in new territory, this is a different game," Reid said at a briefing in Washington. Neither Federal Reserve Chairman Ben Bernanke nor Treasury Secretary Henry Paulson "know what to do but they are trying to come up with ideas," Reid said.

White House spokeswoman Dana Perino said today that the administration is willing to consider a suggestion in Congress to have the U.S. buy distressed mortgages, akin to the role the Resolution Trust Corp. played in disposing of bad debts of from savings and loan associations in the late 1980s and early 1990s.

Senate Banking Committee Chairman Christopher Dodd said the Federal Reserve has the authority to act as an "effective Resolution Trust Fund" to buy up and dispose of bad debt stemming from the subprime mortgage crisis.

"The Fed has the authority to move in this area," Dodd told reporters in Washington.

Resolution Trust Corp Proposal

Bloomberg is reporting Hoyer Says Bad Debt Proposal Won't Be Considered Soon
House Majority Leader Steny Hoyer said a proposal to have the U.S. create an agency to buy distressed debt won't be considered before Congress adjourns on Sept. 26, ahead of the Nov. 4 elections.

Creation of an agency like the Resolution Trust Corp., which took over the assets of failed savings and loan associations almost two decades ago, needs "discussion with the administration" Hoyer said. "I don't think it's going to happen in the next 14 days."

"Chairman Frank indicated he was interested in that, but we have not had any in-depth discussions," Hoyer said. Frank said today his panel will hold a hearing next week to examine his proposal.

"Have assets now been devalued, partly by psychology, to the point where if you could go in and buy and hold them three or four years you could expect to at least break even?" Frank told reporters in Washington. "The next step is to begin to consider that question" because "the private market won't even go to a fire sale."

House Speaker Nancy Pelosi, a California Democrat, agreed that Frank's idea should be studied.

Senator Richard Shelby of Alabama, ranking Republican on the Senate Banking Committee, said, "That might be an option we will look at."

Senator Charles Schumer, a New York Democrat and chairman of the congressional Joint Economic Committee, said today in an interview he also is "looking at the concept."

Federal Deposit Insurance Corp. Chairman Sheila Bair said commercial banks are safe and sound and "we can weather this without any additional government intervention."

The FDIC is "the RTC, that is what we do," Bair said today in an interview with Bloomberg Television in Washington. "When a bank fails, we take the distressed assets, market them and sell them."

Representative Paul Kanjorski, a Pennsylvania Democrat, said Congress should consider creating a "super trustee" to handle large companies that "may be allowed to fail," a day after Lehman Brothers Holdings Inc. filed the biggest bankruptcy in history.

Look at all the clowns on the bandwagon wanting to "do something" even though "No One Knows What to Do".

Clowns On The Bandwagon

  • President Bush via White House spokeswoman Dana Perino
  • Senate Banking Committee Chairman Christopher Dodd
  • Senator Charles Schumer
  • Representative Paul Kanjorski
  • Senator Richard Shelby
  • House Speaker Nancy Pelosi
  • House Majority Leader Steny Hoyer
  • House Financial Services Committee Chairman Barney Frank

The scariest proposals comes from Barney Frank and Representative Paul Kanjorski.

Paul Kanjorski wants to create a "super trustee" to handle large companies that "may be allowed to fail." Not only does this clown want to create a "super trustee", he wants to decide what companies "may be allowed to fail."

Barney Frank believes "The next step is to begin to consider that question [of what assets are worth]" because "the private market won't even go to a fire sale."

Hopefully the next step is to vote Barney Frank and Paul Kanjorski out of office for blatant stupidity.

Thank God We Ran Out Of Time!

Reuters is reporting US Sen. Dodd: no time now to set up RTC-type fund

There is not enough time left in the congressional session for U.S. lawmakers to consider setting up a Resolution Trust Corp-type fund to buy up toxic mortgage assets, Senate Banking Committee Chairman Chris Dodd said on Wednesday.

"That's not going to happen now anyway. We're here for another week. It's a nice debating point," Dodd, a Connecticut Democrat, told reporters on Capitol Hill.

"The Treasury performs that function right now, they have the authority to do that," he said, adding that he thought they should "absolutely" do it.

"The Obama Administration or the McCain administration will have to assess whether they want to propose such an idea. I'm willing to entertain one," Dodd said, referring to presidential candidates Democrat Barack Obama and Republican John McCain.

Dodd also said there were other shoes that could drop before the current crisis is over.

"Until you address the underlying cause of this problem, which is the (housing) foreclosure crisis, this problem is not going to go away," he said.

No time To Do Anything

Thank God time ran out. Otherwise Congress would be doing something even though "No One Knows What to Do". Besides, all Congress can do is make any problem it touches worse by trying to fix it.

The biggest problem is that Congress does not even know what the problem is. And unless you know what the problem is you sure as hell can't fix it. Dodd thinks the problem is the "housing foreclosure crisis".

What The Problem Really Is

  • The Fed
  • Fractional Reserve Lending
  • Congressional Meddling In The Free Market
  • Congressional Spending
  • An Unsound Currency
  • An Unsound Banking System

For more on the banking system, inquiring minds may wish to consider You Know The Banking System Is Unsound When.... and Don't Worry, The Banking System Is Sound .

It's no wonder the global markets are seizing up and gold is soaring given the above list of problems and that set of congressional leaders attempting to "fix" them.

By Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com

Click Here To Scroll Thru My Recent Post List

Mike Shedlock / Mish is a registered investment advisor representative for SitkaPacific Capital Management . Sitka Pacific is an asset management firm whose goal is strong performance and low volatility, regardless of market direction.

Visit Sitka Pacific's Account Management Page to learn more about wealth management and capital preservation strategies of Sitka Pacific.

I do weekly podcasts every Thursday on HoweStreet and a brief 7 minute segment on Saturday on CKNW AM 980 in Vancouver.

When not writing about stocks or the economy I spends a great deal of time on photography and in the garden. I have over 80 magazine and book cover credits. Some of my Wisconsin and gardening images can be seen at MichaelShedlock.com .

© 2008 Mike Shedlock, All Rights Reserved

Mike Shedlock Archive

© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in