Bush's $140bn stimulus package

[kuzadd]

as if inflation isn't on the upswing in the US despite the 'impending' recession.

and a great week on the stockmarket

http://www.ft.com/cms/s/0/90e0f850-c5f1-11...00779fd2ac.html

Bush outlines $140bn stimulus package

President George W. Bush on Friday outlined a $140bn fiscal stimulus plan involving temporary tax relief for both consumers and companies in a bid to keep the US economy out of recession.

The administration said his plan would create or safeguard half a million jobs at risk from the economic downturn.

Mr Bush’s comments cap a week of growing bipartisan calls for the government to step in to boost demand amid fears that the brutal housing slump is starting to take its toll on jobs and consumer spending.

It comes at the end of a dismal week for Wall Street, which saw huge writedowns announced by Citigroup, Merrill Lynch and JPMorgan Chase.

The S&P 500 index closed down 5.4 per cent on the week at 1,325.19, its worst weekly fall in more than five years.

wasn't it not too long ago Bush was claiming the funamentals were sound???

wasn't it not too long ago claims were being made the sub-prime crisis was not a big problem?

If the fundamentals were sound and the sub-prime crisis was not a big problem this wouldn't be necessary, this is an act of desperation, an attempt to stave off as long as possible the inevitable market drop , which is well on it's way.

[kuzadd]

But then he has "helicopter Ben" at he helm!

from his infamous speech on deflation...

In the government in a fiat money system owns the physical means of creating money. Control of the means of production for money implies that the government can always avoid deflation by simply issuing more money.

oh really?

isn't that what him and Bush are cooking up, get the printing presses going.

here's the exact excerpt

http://www.federalreserve.gov/boardDocs/sp...121/default.htm

What has this got to do with monetary policy? Like gold, U.S. dollars have value only to the extent that they are strictly limited in supply. But the U.S. government has a technology, called a printing press (or, today, its electronic equivalent), that allows it to produce as many U.S. dollars as it wishes at essentially no cost. By increasing the number of U.S. dollars in circulation, or even by credibly threatening to do so, the U.S. government can also reduce the value of a dollar in terms of goods and services, which is equivalent to raising the prices in dollars of those goods and services. We conclude that, under a paper-money system, a determined government can always generate higher spending and hence positive inflation.

then in the next breath, "helicopter Ben" says

Of course, the U.S. government is not going to print money and distribute it willy-nilly

oh really?

isn't that what there proposing? $140 billion dollars of paper money (fiat currency)

positive inflation?

Edited January 18, 2008 by kuzadd

[Topaz]

The question that Americans are asking, where are you getting the money for this??? The rich will keep it and the rest of America will do what they have to do to their heads above water. One guy said he would pay a computer games and invest the rest outside of the US. The president-to-be is really going to have hard way to go, when it comes to the US debt.

[kuzadd]

http://economictimes.indiatimes.com/News/I...how/2712931.cms

Bears prowl Wall Street as banks lose billions

NEW YORK: Banks are not meant to lose money, but some of Wall Street's biggest commercial and investment banks announced billions of dollars of losses in the past week, sending US stock markets into a sharp tailspin.

Citigroup and Merrill Lynch, two of America's best-known financial franchises, announced combined quarterly losses of almost 20 billion dollars in recent days which they blamed on stricken US housing and mortgage markets.

Other banks including Morgan Stanley have also revealed multibillion dollar losses in recent weeks

.

Then you have 'Northern Rock' , that Gordon Brown is considering nationalizing rather then allowing to fail.

Along with a small German Bank in Dusseldorf.

The sub-prime fall-out is a bigger issue then the Bush administration had ever let on.

Then of course, there is a fact that alot of these sub-primes were bundled and sold as 'investments' to many other investors ,pension funds as an example.

To make it even sweeter, the raters of these investments( Moody's as an example) fraudulently gave the investments better ratings then they actually warranted.

[Guest American Woman]

If I got an $800 tax rebate, Bush could count on me to spend it. I'd spend it on my house, making it an investment, so I'd win and the economy would win.

[WCN]

The US is in a no win situation. This rebate or tax refund program will only provide marginal relief and only to those that spend it on goods and services. The problem becomes when people decide they would rather keep this in the bank for fear of a slow down or they payoff debts instead of going to stores and buying goods.

[kuzadd]

If I got an $800 tax rebate, Bush could count on me to spend it. I'd spend it on my house, making it an investment, so I'd win and the economy would win.

The 800.00 or whatever it may end up being, is equivelent to putting a band-aid on a severed limb.

The sub-prime crisis is far bigger then that.

It seems the 'bribe' is a hope, folly to stave off the problem until , perhaps, someone else is in office.

BTW:

Market falls continue as £84bn is lost on Black Monday

http://business.scotsman.com/economics/84b...nday.3695586.jp

Black Monday again

Toronto sun

http://www.torontosun.com/News/Columnists/...4786629-sun.php

It's a Black Monday as stock markets tank in every corner of the globe

http://www.nydailynews.com/money/2008/01/2...rkets_tank.html

The Bush administration and Sir Alan Greenspan played quite the role in creating the housing bubble.

For temporary gain. Political and otherwise.

[kuzadd]

http://money.cnn.com/2008/01/22/markets/st...sion=2008012207

Wall Street set to plunge

Dow, S&P futures tumble as bearish sentiment takes root; Bank of America, Wachovia post dismal results

It looks like possibly Bernanke is going to announce an interst rate cut prior to market opening today???

let's see what happens.

I remember some months back posting on this forum, that things were looking quite bad economically, the CPP had lost money, people are losing their pensions, homes and jobs.

Banks are in crisis, which could affect your investments, your savings.

How IMO people better stop looking at the boogey man "TERRORIST" as the distraction that it is, because, an economic decline, will affect many more of us, loss of home ,equity, loss of pensions, loss of jobs,economic hardships, far more, then an imaginary "terrorist" under the bed.

It seems this may come to pass.

[bush_cheney2004]

...How IMO people better stop looking at the boogey man "TERRORIST" as the distraction that it is, because, an economic decline, will affect many more of us, loss of home ,equity, loss of pensions, loss of jobs,economic hardships, far more, then an imaginary "terrorist" under the bed.

It seems this may come to pass.

So what? Aren't truth, justice, human rights, and climate change far more important than silly economic growth? LOL!

[jdobbin]

If I got an $800 tax rebate, Bush could count on me to spend it. I'd spend it on my house, making it an investment, so I'd win and the economy would win.

Is that paying debt on your house or upgrading your house? I think this is what the concern is.

When you are in a hole, it is best to stop digging. However, if you are doing okay and have no worry about your job or investments, you spend.

[jdobbin]

Wall Street set to plunge

Dow, S&P futures tumble as bearish sentiment takes root; Bank of America, Wachovia post dismal results

It looks like possibly Bernanke is going to announce an interst rate cut prior to market opening today???

let's see what happens.

I remember some months back posting on this forum, that things were looking quite bad economically, the CPP had lost money, people are losing their pensions, homes and jobs.

Banks are in crisis, which could affect your investments, your savings.

The Fed in the U.S. made a huge emergency cut in the rates.

http://www.msnbc.msn.com/id/22780489/

he Federal Reserve, confronted with a global stock sell-off fanned by increased fears of a recession, cut a key interest rate by three-quarters of a percentage point on Tuesday, the biggest one-day move by the central bank in recent memory.

The Fed said it was cutting the federal funds rate, the interest that banks charge each other on overnight loans, to 3.5 percent, down by three-fourths of a percentage point from 4.25 percent.

However, the stock market is falling fast.

In mid-morning trading, the Dow was down 243.22, or 2.01 percent, at 11,856.08. The Dow was last below 12,000 in March 2007.

The broader Standard & Poor’s 500 index was off 26.76, or 2.02 percent, at 1,298.43, while the Nasdaq composite index fell 60.81, or 2.60 percent, to 2,279.21.

Do you have a cite that CPP is losing money? It is still listed in every independent analysis as one of the only solvent national pensions in the world.

[bush_cheney2004]

However, the stock market is falling fast.

Which stock market.?...the US DOW index is down just over 1% at noon today. Predicting doom is fun, but in the immortal words of Peggy Lee, "Is that all there is (to your doom)".

Are Canadians more prone to economic panic (while fretting over what the Americans are doing)?

[M.Dancer]

Which stock market.?...the US DOW index is down just over 1% at noon today. Predicting doom is fun, but in the immortal words of Peggy Lee, "Is that all there is (to your doom)".

Are Canadians more prone to economic panic (while fretting over what the Americans are doing)?

TSX is up....so is the venture exchange....

[kuzadd]

Which stock market.?...the US DOW index is down just over 1% at noon today. Predicting doom is fun, but in the immortal words of Peggy Lee, "Is that all there is (to your doom)".

Are Canadians more prone to economic panic (while fretting over what the Americans are doing)?

Yup the dow is still down , what with that big interest rate cut announced prior to the opening of the NYSE.

Why?

Cause if the US didn't would the dow have been down by a much larger percentage?

it most certainly would have.

Causing more drops in all the other stock exchanges.

In fact there was even a promise of further interest rate cuts next week.

Still the dow stayed down.

This ain't over.

[kuzadd]

The Fed in the U.S. made a huge emergency cut in the rates.

http://www.msnbc.msn.com/id/22780489/

However, the stock market is falling fast.

Do you have a cite that CPP is losing money? It is still listed in every independent analysis as one of the only solvent national pensions in the world.

jdobbin:

The cpp lost money( in a specific quarter) as was announced ,for the first time ever, some months ago.

No different then any/many other pension plans.

I posted it here at that time.

It was reported in business section of the Star. that's where I read it.

[kuzadd]

http://money.cnn.com/2008/01/22/markets/ma...sion=2008012216

Stocks down at end of rocky ride

Wall Street cuts losses, but still ends lower as investors worry about the global economy. Emergency interest rate cut provides little support.

BC:

Are Canadians more prone to economic panic (while fretting over what the Americans are doing)?

I forgot, this is the global economy now. The US's mismanagement and creation of the real-estate bubble, has affected the global economy.

So I guess Canadians and others had better "fret" over America's mismanagement.

Including Chinese people:

http://www.financialpost.com/story.html?id=253589

Markets fell hard in Asia on speculation the Bank of China, a state-owned lender, may have to write off US$8-billion in tarnished U.S. subprime debt and a Chinese central bank official poured cold water on the idea China's economy would be protected from the U.S. downturn.

[kuzadd]

Given the fact that US banks sold there subprime garbage.....

http://www.nytimes.com/2007/12/06/business/06hedge.html

Wary of Risk, Bankers Sold Shaky Mortgage Debt

The New York attorney general, Andrew M. Cuomo, has subpoenaed major Wall Street banks, including Deutsche Bank, Merrill Lynch and Morgan Stanley, seeking information about the packaging and selling of subprime mortgages. And the Securities and Exchange Commission is examining how Wall Street companies valued their own holdings of these complex investments.

It seems wall street "valued" these subprime investments highly.

Some might say in a misrepresentative kind of way?

http://www.nationalpost.com/news/story.html?id=205908

Subprimes were mixed in with other higher-rated paper to lower the default risk and make them more attractive. Mixed in with other higher-rated bonds, the tranches of debt were still able to attract high credit ratings.

Investors from Tokyo to Toronto lapped the products up. At its peak in 2006, US$440-billion worth of subprime mortgages were securitized and sold; a full 80% of the subprime mortgages originated that year. Subprimes, meanwhile, made up 23% of the US$2.72-trillion in mortgage originations in 2006.

The very process of securitization, however, meant the subprime taint would be spread far and wide.

In this global world, like I said, the US's "mismanagement" possibly fraud, is the globes pain

[jdobbin]

jdobbin:

The cpp lost money( in a specific quarter) as was announced ,for the first time ever, some months ago.

No different then any/many other pension plans.

I posted it here at that time.

It was reported in business section of the Star. that's where I read it.

Was that the CPP investments or the CPP pension? There is a big difference.

[White Doors]

as if inflation isn't on the upswing in the US despite the 'impending' recession.

and a great week on the stockmarket

http://www.ft.com/cms/s/0/90e0f850-c5f1-11...00779fd2ac.html

wasn't it not too long ago Bush was claiming the funamentals were sound???

wasn't it not too long ago claims were being made the sub-prime crisis was not a big problem?

If the fundamentals were sound and the sub-prime crisis was not a big problem this wouldn't be necessary, this is an act of desperation, an attempt to stave off as long as possible the inevitable market drop , which is well on it's way.

are you able to go back outside yet or is the sky still falling in your world?

lol!

[kuzadd]

Was that the CPP investments or the CPP pension? There is a big difference.

jdobbin: to the best of my recollection, it was pension.

If I ever come across the article again, I will repost it.

[kuzadd]

Message from Davos: The recession is coming

http://business.timesonline.co.uk/tol/busi...icle3239801.ece

(apparently the "sky is falling" over Davos?)

Business leaders and economists gave a bleak outlook for the economy which is heading for a 'severe downturn'

A full-blown, prolonged recession in America is now inescapable, with the rest of the world set to be dragged into a severe global slowdown despite yesterday’s emergency US interest rate cut by the Federal Reserve, leading economists said in Davos this morning.

A darkening outlook for the global economy looked set to dominate the week-long World Economic Forum, as plunging stock markets and the Fed’s drastic and dramatic reaction overshadowed the opening of the annual gathering of political and business leaders.

Some of the world’s most prominent economic pundits told an opening session this morning that the Fed’s surprise three-quarter-point cut in US official interest rates was already “too little, too late” to stave off recession in America.

Hmmm, as I said Jan 18th.....

If the fundamentals were sound and the sub-prime crisis was not a big problem this wouldn't be necessary, this is an act of desperation, an attempt to stave off as long as possible the inevitable market drop , which is well on it's way.

or as they said at Davos, to little to late.

The action of the federal reserve wrt interest rate cut, was clearly an act of desperation, resorted to in fear, and the stimulus package is much the same.

Now the bond market is having issues,let's see what goes on there.

[bush_cheney2004]

Given the fact that US banks sold there subprime garbage.....

It seems wall street "valued" these subprime investments highly.

Some might say in a misrepresentative kind of way?

In this global world, like I said, the US's "mismanagement" possibly fraud, is the globes pain

Of course..it's America's "fault" when capital markets collapse as they should, but a great idea when the "global world" rides high?

The poor "globe"....stupid, gullable and easy chumps for the wicked American bankers.

[james rahn]

Of course..it's America's "fault" when capital markets collapse as they should, but a great idea when the "global world" rides high?

The poor "globe"....stupid, gullable and easy chumps for the wicked American bankers.

America's loss is China's gain

[bush_cheney2004]

Yup the dow is still down , what with that big interest rate cut announced prior to the opening of the NYSE.

Why?

Cause if the US didn't would the dow have been down by a much larger percentage?

it most certainly would have.

Causing more drops in all the other stock exchanges.

In fact there was even a promise of further interest rate cuts next week.

Still the dow stayed down.

This ain't over.

Of course it "ain't over"....but not because of your brilliant analysis. Markets go up and markets go down. I was in the market back in 1987 when a much larger DOW excursion happened. I guess we all survived.

[kuzadd]

Of course..it's America's "fault" when capital markets collapse as they should, but a great idea when the "global world" rides high?

The poor "globe"....stupid, gullable and easy chumps for the wicked American bankers.

Who told American banks to bundle their sub-prime garbage and have it rated as better then it was by American raters, then sell it to others.?

Let me guess, it was the "globes" fault, right?

If American banks CHOSE to do that and it appears they did, in cahoots with rating firms, they chose to spread the misery throughout the global economy, and yes, that makes it well within their realm of responsibility.

In fact if one goes back even further the creation of the real estate bubble, which precipitated this was also, largely a made in America hoodwink ( of the American populace) initially. Keep shopping, you have all that "equity" in your home (suckers).

facts are what facts are, the American banks saved there own necks, re: selling of debt as investments, as stated in one of the articles.

accountability to shareholders etc., After making there face off, of the American homeowners.

Edited January 26, 2008 by kuzadd