[Eli]

The financial system of the US is done, it is over.

The Treasury just bailed out the Fed in an emergency auction. The Fed is broke.

The FDIC has 50 billion to its name, and thousands of US Banks are on the brink of failure.

The money in your checking account and savings is not covered.

For the Treasury to back up the FDIC it would require more money creation, and no one wants US debt.

[IanC]

I for one want to welcome my new ant overlords.

Seriously, where did you get this info? What about credit unions?

-Ian

[cipi604]

More information please.

[Eli]

But Americans are justified to be worried, says Nouriel Roubini, of NYU's Stern School and RGE Monitor, who notes there is already a "slow-motion run on retail banks" occurring nationwide.

That "run" could accelerate as people realize the FDIC fund has about $50 billion to "insure" about $1 trillion in assets at the nation's financial institutions, says Roubini. "They're going to run out of money" unless Congress acts soon to recapitalize the FDIC.

Video link from Yesterday.

Congress can only create funds through taxes, they can only tax us to bail us out.

[burtonridr]

I for one want to welcome my new ant overlords.

Seriously, where did you get this info? What about credit unions?

-Ian

Credit unions?

That is like asking how your leg is doing when your heart just stopped.

[MrMonkey]

The financial system of the US is done, it is over.

The Treasury just bailed out the Fed in an emergency auction. The Fed is broke.

The FDIC has 50 billion to its name, and thousands of US Banks are on the brink of failure.

The money in your checking account and savings is not covered.

For the Treasury to back up the FDIC it would require more money creation, and no one wants US debt.

The fed combined with the treasury can never be broke. They are the ones creating money out of thin air, and thin air, we never run out of

[burtonridr]

The financial system of the US is done, it is over.

The Treasury just bailed out the Fed in an emergency auction. The Fed is broke.

The FDIC has 50 billion to its name, and thousands of US Banks are on the brink of failure.

The money in your checking account and savings is not covered.

For the Treasury to back up the FDIC it would require more money creation, and no one wants US debt.

The fed combined with the treasury can never be broke. They are the ones creating money out of thin air, and thin air, we never run out of

True but the more they print the more inflation becomes a problem.... they sure seems to be printing a lot lately.

[sittinguy]

How can the Fed be broke? They have the press to make all they want?

[heroineworshipper]

Well, China is now more capitalist than US.

[burtonridr]

How can the Fed be broke? They have the press to make all they want?

well to them its just on paper, but anyway you want to twist it..... its still steaming pile of shit

[POAlex]

It certainly is a mess.

Alex

[Daniel_Plainview]

Well, China is now more capitalist than US.

LOL. Yes, it could be argued that, after all of these bailouts, China is more capitalistic than the USA.

Surreal!

[Eli]

Fed asked the Treasury to bail it out.
If the Fed wasn't broke why did they ask the Treasury for more notes?


The Fed gets Treasury notes from the Treasury and makes loans against them. They ran out of notes from which to lend.

We are now at the point where the Treasury will have to issue new notes to cover the FDIC, and foreign Central bank investors are already running from taking on further US debt as the risk of default has increased.


Or Congress will have to step in and fund the FDIC with taxpayer money.

But this makes no sense what so ever, the Congress gets money through taxation. This will be the worst of taking from Peter to pay Paul.

[idiom]

Well, The USSA could annex Canada and make loans against that.

[Dreamtwister]

Well, The USSA could annex Canada and make loans against that.

Let's hope they don't think of that...Oh wait...

[firestarter]

Fed asked the Treasury to bail it out.
If the Fed wasn't broke why did they ask the Treasury for more notes?


The Fed gets Treasury notes from the Treasury and makes loans against them. They ran out of notes from which to lend.

We are now at the point where the Treasury will have to issue new notes to cover the FDIC, and foreign Central bank investors are already running from taking on further US debt as the risk of default has increased.


Or Congress will have to step in and fund the FDIC with taxpayer money.

But this makes no sense what so ever, the Congress gets money through taxation. This will be the worst of taking from Peter to pay Paul.

Ding, ding, ding! Great post.

[dohboi]

The sham that capitalism has always been is coming undone as we watch in stupified horror. What is not and probably never will be reported in all of this is the role of PO in any of this. The house of cards of corrupt money deals could have gone on quite a while if more real capital--ever cheaper energy from oil--was still flowing into the system. But the shrinking availability of this most basic of assets makes it hard to play those funny-money games.

Can we stop pretending to be a capitalist country now? I never want to hear the conservatives of any stripe talk about the magic of the market or the virtues of rugged risk takers. It's all a sham and always has been. Those conservatives are and have been either knowingly complicit in this fiasco or what can only be called criminally naive.

/rant

So what's the next move? Obviously there will be shock-doctrine moves to gut all social programs. But will Bush use this as an excuse to impose marshal law?

We are a society bankrupt in just about every way imaginable. (Sorry, I guess rant is back on )

[americandream]

Well, China is now more capitalist than US.

Bailing out fat cats is fascism dickwad. It has nothing to do with labour socialism!

And.....China is precisely why Americas capitalists seem almost invincible. Whilst you American workers still hold onto the myth of the nation state, they have moved lock, stock and barrel to revisionist China, set up shop with the corrupt kleptocracy and are milking the huge mass of increasingly impoverished, equally stupified labour.

[heroineworshipper]

For the first time in 200 years, economic productivity seems to depend on population size. It's no longer possible at $100/barrel for oil to multiply the productivity of the few. For every $2 you make by being 5 places simultaneously, you have to spend $4 for gas.

[smallpoxgirl]

Yeah. The fed isn't supposed to be Santa Claus. It's supposed to be a lending agency. I don't think it should come as a big surprise that the price of Christmas in September is that they have to print their way out of the hole. For a long time it's been really obvious that when this thing hit, the outcome would be hyperinflation. As long as it's inflation not stagflation, I'm all for it. I've got a lot of student loans at 4% fixed APR. 15% inflation would be great for me.