Eeyores Important News and Views Special Report

What in the world is happening? The economy has just started to show what it is, weak, propped up, that is what happens when you just print money and it is not backed up by anything. They will blame it on anyone but them selves. I live near where the problem is, they want to regulate everything. then when something goes wrong blame it on someone else. The Nations Capital, king of the buck passers. Washing want to regulate your life, but instead of them doing the business they were sent to do they want to argue and posture and yes blame. They would rather go to dinners and parties then watch over the nation. Click on the following article is and example of what i'm talking about
Candidates seek blame in financial 'crisis'
WASHINGTON — Presidential candidates Barack Obama and John McCain called Monday for tougher oversight of Wall Street while arguing over the causes of what both called a financial "crisis."
Republican McCain blamed "self-interest, greed, irresponsibility and corruption" at the top of the U.S. financial system. Democrat Obama cited GOP economic policies that he said favor the wealthy at the expense of everyone else.
"It's a philosophy that says even common-sense regulations are unnecessary and unwise," Obama said while campaigning in Grand Junction, Colo.
http://www.usatoday.com/_ads/interstitial/2008/page/interstitial.htm?http://www.usatoday.com/news/politics/2008-09-15-McCain-rally_N.htm
So here is where we are at and we have not found the bottom yet. Today after a 500 point loss on the Dow, yesterday, Asian markets and European markets down, it would be a good day to have a specail entry on just economic articles.
The Federal Reserve will met again today, US stocks head for lower open ahead of Fed meeting http://wtop.com/?nid=111&sid=1450051
the results will be at least a 1/4 point reduction in the interest rate, maybe a half. If it is a half, you better watch out and batten down the hatches, it will mean they are scared, inflation will increase at a higher rate also. Which is another interesting point, have you been watching oil? Down to 92 dollars (and going lower) a barrel and gas is going through the roof.
Found some of them at Survival Blog and on the news. If you have any interest in the economy you might at least want to look at them.

A Quantum Leap Toward Socialism, by Michael Pento
Unfortunately, we Americans now realize that the decision by Ben Bernanke to slash the Fed Funds rate to 2% (a three hundred twenty five basis point reduction) was just the opening act in this Republican administration's socialism play. At the time some wondered why the government didn't just allow home prices fall to historical averages rather than seeking to lower the value of the U.S. dollar and send inflation to a 17-year high. Now we have learned just this past weekend that the Department of the Treasury has come up with a plan for conservatorship of the GSEs, enacting the largest bailout in the history of the United States.What does the conservatorship plan mean? It means the government will take over the GSEs for the purpose of continuing their operation rather than putting them into receivership, which would seek to sell off their assets and shut down future business. In contrast, the Paulson plan will actually increase the holdings of FNM ["Fannie Mae"] and FRE ["Freddie Mac"] by $144 billion. The total of mortgage backed securities held by the GSEs will be allowed to increase to $850 billion each by December 2009.My Libertarian heart sank when I witnessed Republicans and Democrats slap each other on the back as they congratulated themselves from saving us from the natural workings of the free market. The Republicans reek of hypocrisy, claiming the bailout of FNM and FRE was necessary for the health of the real estate market and the economy. I guess government intervention in the free market is only mandatory if you're a bank, insurance company, foreign government or a pension fund that owns GSE debt.It was especially telling when Hank Paulson's was asked in a CNBC interview how much his bailout plan will cost taxpayers. He responded that he "did not use a calculator" when putting together this scheme. The essence of his response was that he did not care what the bill to taxpayers would be, his main concern was to recapitalize banks and stop home prices from falling.The big problem with this plan is that the government does not have a plausible exit strategy. After Treasury has taken the companies into conservatorship and then expands their operations, it will not be easy to reduce the size of the GSEs. Their intention is to wind down the agencies balance sheets beginning in 2010 at a rate of 10% per annum until they reach just $250 billion each. So let me get this straight, after the real estate market has become more reliant on FNM and FRE to securitize the mortgage market, we will then be able to allow market forces to take hold? That view becomes especially dubious in light of the fact that we will have a new administration in charge when this scale-down is supposed to be taking place.Just as the U.S. has become addicted to artificially low interest rates--unable to raise them without seriously hurting the economy-- we now have most likely permanently socialized a good portion of the real estate market and the economy. Does the administration really believe that it is better to debase our currency and greatly expand the obligations of our government rather than letting home prices fall to a level that can be supported by the market? This move has long-term ramifications on the dollar and the national debt. Thanks to a stimulus package and reckless spending from the administration, annual deficits are already skyrocketing to nearly $500 billion. Now with the Paulson bailout plan, debt could increase even faster. This may torpedo the recent move higher in the dollar and makes its long-term picture even more bearish.Perhaps it will first fall even further in coming weeks, but the need to own honest money (gold) never been more apparent. - Michael Pento, Senior Market Strategist, Delta Global Advisors

If you like what you just read you might want to check out is Podcast also.
Mid-Week Reality Check Keeping Wall Street and your money real
Michael Pento
During each week's 5-minute rant, the host will find the most ridiculous news or quote from the world of economics, then make sense of it for you. Are you an Austrian-school economic thinker? Do you like gold? Concerned about inflation? Listen in-- Pento is your man
http://www.greenfaucet.com/audio/user/38

Black Monday: FTSE plunges 212 points as global markets tumble following Lehman collapse
By Nicola BodenLast updated at 7:47 AM on 16th September 2008
U.S. bank Lehman Brothers files for bankruptcy
Merrill Lynch in $50bn takeover deal
FTSE 100 Index falls nearly four per cent
Bank of England injects £5bn into money markets
Lehman forced to sack all 5,000 British workers
AIG granted a $20bn lifeline to shore-up finances
Global markets plunged today after two of the world's biggest investment banks fell victim to the credit crunch.
The FTSE 100 Index fell five per cent at one stage, down 280 points, after the Wall Street investment giant filed for bankruptcy.
Its larger rival, Merrill Lynch, compounded the financial uncertainty by announcing it had agreed a $50bn takeover to avoid becoming the next credit crunch victim.
The FTSE eventually closed 212.5 points down - its biggest one-day percentage drop since January 21. Shares in Britain's biggest mortgage lender, Halifax Bank of Scotland, fell by more than a third.
In the U.S., the Dow Jones industrial average fell 232 points, or two per cent in early afternoon trading in slightly better figures than some investors had feared.
(the rest of the story can be found at)
http://www.dailymail.co.uk/news/worldnews/article-1055736/Black-Monday-FTSE-plunges-212-points-global-markets-tumble-following-Lehman-collapse.html

Stocks tumble amid new Wall Street landscape
By TIM PARADIS, AP Business Writer Mon Sep 15, 6:22 PM ET
NEW YORK - A stunning makeover of the Wall Street landscape sent stocks falling precipitously Monday, with the Dow Jones industrials losing 500 points in their worst slide since the September 2001 terrorist attacks. Investors recoiled after a shakeup of the financial industry that took out two storied names: Lehman Brothers Holdings Inc. and Merrill Lynch & Co.
The pullback, which erased about $700 billion in shareholder wealth, occurred across much of the globe as investors absorbed Lehman's bankruptcy filing and what was essentially a forced sale of Merrill Lynch to Bank of America for $50 billion in stock. While those companies' situations had reached some resolution, the market remained anxious about American International Group Inc., which is seeking funding to shore up its balance sheet. A faltering of the world's largest insurance company likely would have implications far beyond that of Lehman, already the largest U.S. bankruptcy in terms of assets.
The swift developments that took place Sunday are the biggest yet in the 14-month-old credit crisis that stems from now toxic subprime mortgage debt.
For the first part of Monday's trading, the market was falling, but in a largely orderly fashion as investors seemed to draw some relief from the resolution of Lehman's problems. As the session wore on, and there was no word about AIG, the market suffered another bout of fear that the credit crisis will continue to devastate the financial sector. Selling accelerated in the final hour and then took on more momentum as stock indexes broke through lows set in July — an ominous sign for some traders.
(you can red the rest of the article at the following URL)
http://news.yahoo.com/s/ap/20080915/ap_on_bi_st_ma_re/wall_street

Fed Adds Most Reserves Since 9/11 as Banks Hoard Cash (Update1)
By Liz Capo McCormick
Sept. 15 (Bloomberg) -- The Federal Reserve added $70 billion in reserves to the banking system, the most since the September 2001 terrorist attacks, to reverse a surge in borrowing costs sparked by the collapse of Lehman Brothers Holdings Inc.
Fed funds traded as high as 6 percent, or 4 percentage points above the central bank's target rate for overnight loans between banks, according to ICAP Plc, the world's largest inter- dealer broker. The margin was the greatest since Bloomberg began tracking the data in 1998. The rate dropped to as low as 0.5 percent after the Fed added the temporary reserves.
The central bank uses repurchase agreements, or repos, to buy or sell Treasury, mortgage-backed and so-called agency debt for a set period, to help maintain enough money in the system to keep overnight interest rates close to the target. They don't signal a policy shift. Futures show traders boosted odds to 68 percent that the Fed will cut rates when policy makers meet tomorrow to offset financial market turmoil.
Demand for short-term funds ``dramatically increased,'' said Michael Darda, chief economist for MKM Partners LLC in Greenwich, Connecticut. ``If the Fed puts enough liquidity in the system, the funds rate will come down. It may actually trade below target for a while.''
The so-called effective funds rate was 2.1 percent on Sept. 12, or 10 basis points over the target rate. The Federal Reserve Bank of New York reports daily, for the previous trading session, the effective funds rate. It is a weighted average rate of unsecured overnight lending transactions. A basis point is 0.01 percentage point.
Expanding Collateral Options
The Fed widened the collateral it accepts yesterday for loans to securities firms in an effort to help Wall Street weather Lehman's bankruptcy.
The Fed added $50 billion in temporary reserves to the banking system when it arranged overnight repurchase agreements, or repos, at 11:50 a.m., after providing $20 billion earlier.
``It is rare that overnight operations exceed $15 billion,'' Tony Crescenzi, chief bond market strategist for New York-based Miller Tabak & Co., wrote in a note to clients. ``There is a longstanding pattern in which the funds rate falls in the afternoon, as banks scramble to unload their excess monies onto other banks, lest they get stuck with excesses earning nothing.''
SOMA Lending
When the Fed added the reserves at 9:40 a.m., federal funds, the overnight lending rate between U.S. banks, traded at 4.25 percent, above the central bank's target rate, according to ICAP. The rate was at 6 percent at the time of the second open market operation. Fed funds opened at 3.5 percent today.
A total of $5 billion in repos matures today. Wrightson, an ICAP research unit specializing in U.S. government finance, had expected the Fed to add about $15 billion in repos. Dealers submitted $270.1 billion in bids for the repurchase agreements.
Fed funds' weighted average was 2.1 percent on Sept. 12 after trading between 1.75 percent and 2.9375 percent, according to the central bank.
The Fed also accepted $25.8 billion in collateral as part of its daily System Open Market Account, or SOMA, securities lending program, the largest amount this year, according to Fed data tracked by Stone & McCarthy Research. Dealers submitted $29.8 billion in bids.
The Fed offers specific Treasury securities held by SOMA for loan to dealers against Treasury general collateral on an overnight basis. Dealers bid in a multiple-price auction held every day at noon. The securities lending program is separate from the Fed's Term Securities Lending Facility, or TSLF, one of the three liquidity measures the Fed initiated since the credit crisis ensued last year.
The TSLF offers Treasury general collateral held by SOMA for maturities longer than overnight in a single-price auctions with dealers who program-eligible collateral.
To contact the reporter on this story: Liz Capo McCormick in New York at Emccormick7@bloomberg.net
http://www.bloomberg.com/apps/news?pid=20601087&sid=azabvVyocFac&refer=worldwide

One of the things not as much talked about is the amount of people being put out of work. LeMan Brothers put 24,000 out of work in the US and 5,000 out of work in England.
SAN FRANCISCO (AP) — Hewlett-Packard (HPQ) said Monday it plans to cut 24,600 jobs over the next three years, about 7.5% of its workforce, as it combines operations with Electronic Data Systems Corp., the technology-services company it recently acquired.
Most of the cuts will come from within EDS's ranks, and nearly half will hit jobs in the U.S., HP said Monday after the markets closed.
The announcement marks the first time HP had put a number on how many employees of the combined company would lose their jobs. Before the acquisition, HP had 178,000 workers and EDS had 142,000, a total of 320,000.
http://www.usatoday.com/money/industries/technology/2008-09-15-hewlett-packard-job-cuts_N.htm

AIG Faces Cash Crisis As Stock Dives 61%
American International Group Inc. was facing a severe cash crunch last night as ratings agencies cut the firm's credit ratings, forcing the giant insurer to raise $14.5 billion to cover its obligations.
With AIG now tottering, a crisis that began with falling home prices and went on to engulf Wall Street has reached one of the world's largest insurance companies, threatening to intensify the financial storm and greatly complicate the government's efforts to contain it. The company, whose stock fell 61% yesterday, is such a big player in insuring risk for institutions around the world that its failure could shake ...
http://online.wsj.com/article/SB122148503202636197.html?mod=special_coverage

Bank of America, Merrill Bailout Disguised as Buyout?
Bank of America's buyout of Merrill Lynch seemed laughable to me - that is until I realized the full picture. With a $50 billion all-stock deal valued at $29 per share, at first glance it might appear that Bank of America doesn't stand to lose much considering its stock is at least 50% overvalued by my analysis. However, even at an adjusted price of $25 billion, Bank of America will be responsible for absorbing all of Merrill's losses. Good luck. But wait. They don't need luck, they have the Fed.
I could care less about Merrill's 49% stake in Blackrock. No financial institution is infallible under these conditions and only an idiot would rush in to buy Merrill at $50 billion. They are on the hook for a huge amount of mortgage securities. And their brokerage unit has been fighting a massive decline for years. In fact, I expected them to eventually sell it off.
While I can guarantee you all bank CEOs are lost in the woods, Bank of America's CEO, Kenneth Lewis can't be that stupid. Think about it. Lewis already committed to a buyout of troubled Countrywide well before he realized how bad things would get. How much blind risk can Bank of America handle? A lot if they are given a blank check by the Fed. And the fact is that they have been, along with the rest of the banking cartel. I'm quite confident Lewis was approached by the Fed and U.S. Treasury with promises of extra assistance, if needed, in exchange for buying Merrill. That is precisely why the bank offered a 70% premium for the struggling firm. Think about it. Merrill was on its way to single digits so why not wait? Better yet, why offer a 70% premium to its Friday closing price? This is the worst banking crisis in U.S. history and they're offering 70% premiums? (the rest is at the following)
http://www.marketoracle.co.uk/Article6274.html