Best of the Week
Most Popular
1.UK House Prices Momentum Crash Threatens Mini Bear Market 2017 - Nadeem_Walayat
2.Perfect Storm - This Fourth Turning has Over a Decade of Continuous Storms to Come - James_Quinn
3.UK House Prices Momentum Crash Warns of 2017 Bear Market - Video - Nadeem_Walayat
4.Billionaire Investors Backing A Marijuana Boom In 2017 - OilPrice_Com
5.Emerging Markets & Basic Materials Stocks Breaking Out Together - Rambus_Chartology
6.Global Currency Reserve At Risk - Jim_Willie_CB
7.Gold and Silver: Your Stomach Is Probably Wrenching Right Now - The_Gold_Report
8.Warning: The Fed Is Preparing to Crash the Financial System Again - Graham_Summers
9.Basic Materials and Commodities Analysis and Trend Forecasts - Rambus_Chartology
10.Discover Why A Major American Revolution Is Brewing - Harry_Dent
Last 7 days
4 Insights for Adjusting Your Portfolio in a Rate-hike Environment - 19th Aug 17
Gold Direction Indicator - 19th Aug 17
Historical Inevitability and Gold and Silver Ownership - 19th Aug 17
You Are Being Lied To About “Low” Gold Demand - 19th Aug 17
This is Why Cocoa's Crash Was a Perfect Setup - 19th Aug 17
Gold, Silver Consolidate On Last Weeks Gains, Palladium Surges 36% YTD To 16 Year High - 19th Aug 17
North Korea Is Far From Being Irrational… It Has A Plan - 18th Aug 17
US Civil War - FUNCTIONAL ILLITERATES TRYING TO ERASE HISTORY - 18th Aug 17
Bitcoin Hits New All-Time High Over $4,400 As It Catches Paypal In Total Market Cap - 17th Aug 17
3 Psychological Ingredients behind Great Web Content - 17th Aug 17
The War on Cash - Rogoff, Orwell and Kafka - 17th Aug 17
The Stock Market Guns of August, Trade Set-Up & Removing your Rose Tinted Glasses - 16th Aug 17
Stocks, Bonds, Interest Rates, and Serbia, Camp Kotok 2017 - 16th Aug 17
U.S. Stock Market: Sunrise ... Sunset - 16th Aug 17
The Next Tech Crash Could Delay Your Retirement by a Decade - 15th Aug 17
Gold and Silver Precious Metals Nearing Breakout - 15th Aug 17
North Korea Showdown: Pivotal Market Turning Point - 15th Aug 17
Tech Stocks DOT COM Bubble Do-Over? - 14th Aug 17
Deep State Conspiracy or Chaos - 14th Aug 17
From the Trans-Atlantic Axis and the Trans-Asian Axis - 14th Aug 17
Stock Market Intermediate Correction Underway - 14th Aug 17
The Islamic State Jihadi Pivot to Asia - 13th Aug 17
Potential Pivots Upcoming for Stocks and Gold - 13th Aug 17
North Korean Chinese Proxy vs US Military Empire Trending Towards Nuclear War! - 12th Aug 17
Gold Stocks Coiled Spring - 12th Aug 17
Neil Howe: The Amazon-Walmart Rivalry Will Determine the Future of Retail - 12th Aug 17
How to Alton Towers Half Price Discount Entry 2017 and 2018, Any Time, No Pre-Booking! - 12th Aug 17
Top 3 Technical Trading Tools Part 2: Relative Strength Index (RSI) - 11th Aug 17
What Makes Women Better Investors - 11th Aug 17
Crude Oil Price Precious Metals Link in August - 11th Aug 17
Influencer Marketing Predictions All Businesses Should Take Into Account - 11th Aug 17
Really Bad Ideas - Government Debt Isn’t Actually Debt - 10th Aug 17

Market Oracle FREE Newsletter

3 Videos + 8 Charts = Opportunities You Need to See - Free

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

© 2005-2017 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

Catching a Falling Financial Knife