Any bank which is not illiquid should still be providing credit, using responsible practices, like they always have. It's not like there's a big mystery about where the creditworthiness issue starts and ends. If anyone needs a Bush pep-talk about what the nation's expectations of them are, it's the banking industry.
Like I said, it's a matter of severity, if every bank except a handful fails, that's not a good thing.
Whether it is the right thing or not, governments will bail out failing banks if enough of them can fail. It's just money and ultimately, that's just paper.
If the fed doesn't bailout US banks and other countries do for their own (like the following), you will be banking at Bank of LBelfium thus the race goes on.
Quote:
European banks: Dexia the latest to be bailed out | Business | guardian.co.uk
European banks: Dexia the latest to be bailed out
Dexia is the world's biggest lender to local government but also has more than 5 million retail customers
Dexia, the troubled Belgo-French municipal lender, today became the third European bank to be bailed out within 48 hours, as governments and shareholders injected €6.4bn (£5.08bn) to keep it afloat.
An emergency overnight meeting saw the Belgians agree to invest €3bn, an amount matched by the French state which is to become a 25% shareholder. Luxembourg is supplying the remainder.
Dexia, which is the world's biggest lender to local government but also has more than 5 million retail customers, saw its shares slump 30%
Congress takes a hard look at marking-to-market By Matt Andrejczak, MarketWatch
Last update: 3:26 p.m. EDT Sept. 29, 2008
SAN FRANCISCO (MarketWatch) - Congress is looking at playing with mark-to-market accounting rules as part of the now-stalled $700 billion-dollar bailout plan for the U.S. financial system.
A provision in the bill, whose adoption was in doubt after the House of Representatives rejected it Monday, gives the Securities and Exchange Commission the right to suspend -- by rule or order -- mark-to-market accounting under Statement Number 157 of the Financial Accounting Standards Board.
...
The bailout package and the fair-value accounting provision may never come to pass.
Monday afternoon House Democrats were hoping to come up with a new plan. Any legislation would have to be adopted by the Senate and then signed into law by President Bush. The Senate was expected to meet this week on the bill.
I have prayed for something like this to happen my entire life. I love destruction and turmoil.
A holy man may only pray for what is inevitable.
__________________
-Marty
Firstly you must always implicitly obey orders, without attempting to form any opinion of your own regarding their propriety. Secondly, you must consider every man your enemy who speaks ill of your king; and thirdly you must hate a Frenchman as you hate the devil. -Horatio Nelson
A new poll by the Pew Research Center found weakening public support for the bailout. The September 27-29 survey said Americans only backed the plan by a 45 percent to 38 percent margin.
Obama...
Quote:
Obama told thousands at an outdoor rally in Reno, "It is not a time for politicians to concern themselves with the next election. It is a time for all of us to concern ourselves with the future of the country we love. This is a time for action."
The maverick changes tune... I thought it was due to Pelosi's bitching.
Quote:
McCain said he believed one reason Congress did not approve the package was because "it hasn't really sunk in that the people who are hurting and are being hurt are Main Street families, small businesses, those kinds of people that are the engine of our economy."
You do know that this will also affect the credit market for small, medium and large businesses who will either not be able to get capital or have to pay more for it, don't you? The result of that will be closed small businesses and more large businesses sending jobs offshore. That increases unemployment which continues the circle.
Here is Obama echoing bear and throwing his full support to the bill
Quote:
Obama Pushes Passage of Wall Steet Rescue Bill | The Trail | washingtonpost.com
RENO, Nev. -- Sen. Barack Obama, initially only a reluctant supporter of a Wall Street rescue agreement Congress reached over the weekend, has shifted to aggressively pushing passage of the bill, describing a nightmare scenario in which "thousands of businesses could close around the country, millions of jobs could be lost, a long and painful recession could follow" without it.
"We must act and we must act now," Obama told thousands at the University of Nevada at Reno. "We cannot have another day like yesterday. We cannot risk another week or another month where American businesses are afraid to extend credit and lend money."
"For the rest of today and as long as it takes, I'll continue to reach out to leaders in both parties and do whatever I can," Obama said. "To the Democrats and Republicans who opposed this plan yesterday, I say -- step up to the plate and do what's right for this country."
Both Obama and his running mate, Sen. Joe Biden, will appear for a vote on the rescue package, according to aides. And Obama planned to appear in interviews on all three major networks to press for the bill's passage as well.
Obama said the bill has been "misunderstood and poorly communicated."
"When it's called a bailout, nobody is in favor of a bailout," Obama said. "This is not a plan to just hand over $700 billion of your money to a few banks on Wall Street. If this is executed the right way, then the government will temporarily purchase the bad assets of our financial institutions so that they can start lending again, and then sell those troubled assets once the markets settle down and the economy recovers."
In the speech, he repeatedly highlighted how the crisis on Wall Street affected all Americans.
"Over one trillion dollars of wealth was lost by the time the markets closed on Monday," Obama said. "And it wasn't just the wealth of a few CEOs on Wall Street. The 401Ks and retirement accounts that millions count on for their family's futures are now smaller. The state pension funds of teachers and government employees lost billions and billions of dollars. Hardworking Americans who invested their nest egg to watch it grow are now watching it disappear. "
He added: "If all that meant was the failure of a few big banks on Wall Street, that'd be one thing. But that's not what it means. What it means is that if we don't act, it will be harder for you to get a mortgage for your home.... Thousands of businesses could close around the country. Millions of jobs could be lost. A long and painful recession could follow."
Obama used the speech to blast GOP efforts to deregulate the market, but at the same time said, "This is one of those defining moments when the American people are looking to Washington for leadership. It is not a time for politics." He invoked Franklin D. Roosevelt's "fireside chats" during the Great Depression as a reminder of how Americans could come together in hard times with the right leadership.
"There is plenty of blame to go around -- and many in Washington and Wall Street deserve it," Obama said, adding: "All of us now have a responsibility to solve this crisis because it affects the financial well-being of every single American. There will be time to punish those who set this fire. But now is the moment for us to come together and put the fire out."
Obama aides say that he has contacted President Bush, Treasury Secretary Henry Paulson and congressional leaders over the last two days.
Obama also is now lobbying Democrats who voted no to support the bill, and one target this morning was Rep. Jesse Jackson, Jr., Obama's Chicago colleague and one of the many Congressional Black Caucus leaders who voted against the plan. A spokesman for Jackson refused to disclose details of the conversation, including whether his boss had changed his mind about the package. But he did confirm that it had taken place this morning.
The credit freeze, which is shifting into overdrive heading into the holiday season, is expected to hit consumers harder than corporate America.
As banks continue to refuse credit even to qualified borrowers, business will feel the pinch but consumers will feel it even more. Companies have alternate ways to raise money, such as selling stock and bonds. But consumers have few options besides bank loans and credit cards, which are harder and more expensive to get.
So they will borrow less and thus spend less, setting up a potentially ugly fourth quarter not only for corporate earnings but the entire economy.
"The consumers just don't have anything to spend right now," says Rick Pendergraft, market analyst at Investor's Daily Edge newsletter. "As long as that's the case, we're not going to see any improvement in the economy."
Because consumer spending accounts for roughly two-thirds of economic growth, a sharp slowdown could push the US into a recession.
"If consumers can't spend and make acquisitions of goods," Pendergraft adds, "that's not going to help corporate earnings at this point in time unless they're doing a lot of business overseas."
The credit freeze, which is shifting into overdrive heading into the holiday season, is expected to hit consumers harder than corporate America.
As banks continue to refuse credit even to qualified borrowers, business will feel the pinch but consumers will feel it even more. Companies have alternate ways to raise money, such as selling stock and bonds. But consumers have few options besides bank loans and credit cards, which are harder and more expensive to get.
So they will borrow less and thus spend less, setting up a potentially ugly fourth quarter not only for corporate earnings but the entire economy.
"The consumers just don't have anything to spend right now," says Rick Pendergraft, market analyst at Investor's Daily Edge newsletter. "As long as that's the case, we're not going to see any improvement in the economy."
Because consumer spending accounts for roughly two-thirds of economic growth, a sharp slowdown could push the US into a recession.
"If consumers can't spend and make acquisitions of goods," Pendergraft adds, "that's not going to help corporate earnings at this point in time unless they're doing a lot of business overseas."
Good find. What the article didn't put enough focus on was the folks who have been, for the past bunch of years been using the equity from their homes as backfill for their credit cards. Run them up, pay them off with equity loans. Once that stopped [or slowed down seriously as credit tightened and equity went red] the credit market dried up both on the supply side AND on the maintenance side [ability to shuffle debt from cards to equity].
Unless something really REALLY pops out of all of this, this is going to be a bleak couple of quarters on the Consumer side. Incenting folks to Buy, Buy, Buy might actually do more harm than good so I am not sure there is a solution to this on a macro level.
The credit freeze, which is shifting into overdrive heading into the holiday season, is expected to hit consumers harder than corporate America.
As banks continue to refuse credit even to qualified borrowers, business will feel the pinch but consumers will feel it even more. Companies have alternate ways to raise money, such as selling stock and bonds. But consumers have few options besides bank loans and credit cards, which are harder and more expensive to get.
So they will borrow less and thus spend less, setting up a potentially ugly fourth quarter not only for corporate earnings but the entire economy.
"The consumers just don't have anything to spend right now," says Rick Pendergraft, market analyst at Investor's Daily Edge newsletter. "As long as that's the case, we're not going to see any improvement in the economy."
Because consumer spending accounts for roughly two-thirds of economic growth, a sharp slowdown could push the US into a recession.
"If consumers can't spend and make acquisitions of goods," Pendergraft adds, "that's not going to help corporate earnings at this point in time unless they're doing a lot of business overseas."
Why can't us consumers spend the money we have in out pockets and that which we ear every week at work? You don't need credit to purchase things if you only purchase things you need instead of things you want and can't afford.
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