| Topic: |
Politics > Politics-USA |
| User: |
"Harry Hope" |
| Date: |
24 Dec 2007 09:33:29 PM |
| Object: |
Crisis may make 1929 look a walk in the park... |
From The Telegraph, 12/23/07:
http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2007/12/23/cccrisis123.xml
Crisis may make 1929 look a 'walk in the park'
As central banks continue to splash their cash over the system, so far
to little effect, Ambrose Evans-Pritchard argues things are rapidly
spiralling out of their control
Twenty billion dollars here, $20 billion there, and a lush
half-trillion from the European Central Bank at give-away rates for
Christmas.
Buckets of liquidity are being splashed over the North Atlantic
banking system, so far with meagre or fleeting effects.
As the credit paralysis stretches through its fifth month, a chorus of
economists has begun to warn that the world's central banks are
fighting the wrong war, and perhaps risk a policy error of epochal
proportions.
"Liquidity doesn't do anything in this situation," says Anna Schwartz,
the doyenne of US monetarism and life-time student (with Milton
Friedman) of the Great Depression.
"It cannot deal with the underlying fear that lots of firms are going
bankrupt. The banks and the hedge funds have not fully acknowledged
who is in trouble. That is the critical issue," she adds.
Lenders are hoarding the cash, shunning peers as if all were sub-prime
lepers.
Spreads on three-month Euribor and Libor - the interbank rates used to
price contracts and Club Med mortgages - are stuck at 80 basis points
even after the latest blitz.
The monetary screw has tightened by default.
York professor Peter Spencer, chief economist for the ITEM Club, says
the global authorities have just weeks to get this right, or trigger
disaster.
"The central banks are rapidly losing control. By not cutting interest
rates nearly far enough or fast enough, they are allowing the money
markets to dictate policy. We are long past worrying about moral
hazard," he says.
"They still have another couple of months before this starts
imploding. Things are very unstable and can move incredibly fast. I
don't think the central banks are going to make a major policy error,
but if they do, this could make 1929 look like a walk in the park," he
adds.
The Bank of England knows the risk.
Markets director Paul Tucker says the crisis has moved beyond the
collapse of mortgage securities, and is now eating into the bedrock of
banking capital.
"We must try to avoid the vicious circle in which tighter liquidity
conditions, lower asset values, impaired capital resources, reduced
credit supply, and slower aggregate demand feed back on each other,"
he says.
New York's Federal Reserve chief Tim Geithner echoed the words,
warning of an "adverse self-reinforcing dynamic", banker-speak for a
downward spiral.
The Fed has broken decades of practice by inviting all US depositary
banks to its lending window, bringing dodgy mortgage securities as
collateral.
Quietly, insiders are perusing an obscure paper by Fed staffers David
Small and Jim Clouse.
It explores what can be done under the Federal Reserve Act when all
else fails.
Section 13 (3) allows the Fed to take emergency action when banks
become "unwilling or very reluctant to provide credit".
A vote by five governors can - in "exigent circumstances" - authorise
the bank to lend money to anybody, and take upon itself the credit
risk.
This clause has not been evoked since the Slump.
Yet still the central banks shrink from seriously grasping the
rate-cut nettle.
Understandably so.
They are caught between the Scylla of the debt crunch and the
Charybdis of inflation.
It is not yet certain which is the more powerful force.
America's headline CPI screamed to 4.3 per cent in November.
This may be a rogue figure, the tail effects of an oil, commodity, and
food price spike.
If so, the Fed missed its chance months ago to prepare the markets for
such a case.
It is now stymied.
This has eerie echoes of Japan in late-1990, when inflation rose to 4
per cent on a mini price-surge across Asia.
As the Bank of Japan fretted about an inflation scare, the country's
financial system tipped into the abyss.
_______________________________________________
Harry
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| User: "JoeC" |
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| Title: Re: Crisis may make 1929 look a walk in the park... |
24 Dec 2007 10:18:03 PM |
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Harry Hope wrote:
From The Telegraph, 12/23/07:
http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2007/12/23/cccrisis123.xml
Crisis may make 1929 look a 'walk in the park'
As central banks continue to splash their cash over the system, so far
to little effect, Ambrose Evans-Pritchard argues things are rapidly
spiralling out of their control
Dooms day, Dooms day.
They sky is falling.
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| User: "Larry Hewitt" |
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| Title: Re: Crisis may make 1929 look a walk in the park... |
25 Dec 2007 10:06:22 AM |
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"JoeC" <ncoic@us.army.mil> wrote in message
news:47708478$0$9584$4c368faf@roadrunner.com...
Harry Hope wrote:
From The Telegraph, 12/23/07:
http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2007/12/23/cccrisis123.xml
Crisis may make 1929 look a 'walk in the park'
As central banks continue to splash their cash over the system, so far
to little effect, Ambrose Evans-Pritchard argues things are rapidly
spiralling out of their control
Dooms day, Dooms day.
They sky is falling.
Ah, the ostrich approach to economics.
Wonderful.
Larry
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| User: "Rich Keebler, Child Molester" |
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| Title: Re: Crisis may make 1929 look a walk in the park... |
25 Dec 2007 06:56:51 PM |
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"JoeC" <ncoic@us.army.mil> wrote in message
news:47708478$0$9584$4c368faf@roadrunner.com...
Harry Hope wrote:
From The Telegraph, 12/23/07:
http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2007/12/23/cccrisis123.xml
Crisis may make 1929 look a 'walk in the park'
As central banks continue to splash their cash over the system, so far
to little effect, Ambrose Evans-Pritchard argues things are rapidly
spiralling out of their control
Dooms day, Dooms day.
They sky is falling.
Yeah, "they sky is falling", you mental midget. It will fall harder on
morons like you.
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| User: "Werner" |
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| Title: Re: Crisis may make 1929 look a walk in the park... |
27 Dec 2007 11:34:36 PM |
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On Dec 25, 7:56=A0pm, "Rich Keebler, Child Molester"
<uncle_ric...@nambla.com> wrote:
"JoeC" <nc...@us.army.mil> wrote in message
news:47708478$0$9584$4c368faf@roadrunner.com...
Harry Hope wrote:
From The Telegraph, 12/23/07:
http://www.telegraph.co.uk/money/main.jhtml?xml=3D/money/2007/12/23/ccc.=
...
Crisis may make 1929 look a 'walk in the park'
As central banks continue to splash their cash over the system, so far
to little effect, Ambrose Evans-Pritchard argues things are rapidly
spiralling out of their control
Dooms day, Dooms day.
They sky is falling.
Yeah, "they sky is falling", you mental midget. It will fall harder on
morons like you.
It seems the dollar is falling. Even mental giants can't deny it.
Evidently our credit rating is also falling. How will it be possible
to buy votes?
http://capitaldistrict-lp.org/what.shtml
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| User: "Friendly Xenu" |
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| Title: Re: Crisis may make 1929 look a walk in the park... |
25 Dec 2007 11:38:15 AM |
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JoeC <ncoic@us.army.mil> wrote:
Harry Hope wrote:
From The Telegraph, 12/23/07:
http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2007/12/23/cccrisis123.xml
Crisis may make 1929 look a 'walk in the park'
As central banks continue to splash their cash over the system, so far
to little effect, Ambrose Evans-Pritchard argues things are rapidly
spiralling out of their control
Dooms day, Dooms day. They sky is falling.
You have to admit that this Republican economy has been another
disaster for the people of the United States. Foreclosure percapita
exceed that of the Great Depression and the middle class continues
to shrink under this Chruistian terrorist regime.
The sky doesn't have to fall when more and more Americans are going
hungry and homeless thanks to Republinazism.
---
"It is now difficult to keep track of the vast array of publicly endorsed
and institutionally supported aberrations from homosexuality and pedophilia
to sadomasochism and necrophilia." -- Christian theofascist traitor Mike Huckabee
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