Wednesday September 24 Housing and Economic stories

TOP STORIES:

How Congress Intends To Waste $1.8 Trillion - (Mish at globaleconomicanalysis.blogspot.com) A quick check of the totals shows that is $1.809 trillion dollars that Congress is hell bent on wasting. Stay tuned in. Very shortly I will have a complete email and fax list for every senator in the country, including a list used by various software programs that will allow blasting every senator at once with a fax. The list o 1.8T is presented in this story.

China Blames Wall Street Meltdown On Fed Overissuance of Currency - (www.prisonplanet.com) China’s state media today reports on the real reason behind the Wall Street meltdown and a subject that the mainstream US media dare not mention - the Federal Reserve’s overissuance of currency - which the Chinese say is part of a wider agenda to justify increased control over the global economy. The Bush administration today announced a plan to use hundreds of billions of dollars of taxpayer money to buy up bad mortgages and other debts. The process of injecting more fiat money into an already over-inflated system had the desired effect - the Dow Jones shot up 450 points - but the dollar, following a brief jump, began to plummet. According to numerous Chinese state media news sources today, the Federal Reserve’s continued zeal for propping up the market by injecting illusory liquidity is part of an agenda to gain trust and grease the skids for increased government intervention in financial markets

ALMOST ARMAGEDDON - MARKETS WERE 500 TRADES FROM A MELTDOWN - (www.nypost.com) The market was 500 trades away from Armageddon on Thursday, traders inside two large custodial banks tell The Post. Had the Treasury and Fed not quickly stepped into the fray that morning with a quick $105 billion injection of liquidity, the Dow could have collapsed to the 8,300-level - a 22 percent decline! - while the clang of the opening bell was still echoing around the cavernous exchange floor. According to traders, who spoke on the condition of anonymity, money market funds were inundated with $500 billion in sell orders prior to the opening. The total money-market capitalization was roughly $4 trillion that morning. The panicked selling was directly linked to the seizing up of the credit markets - including a $52 billion constriction in commercial paper - and the rumors of additional money market funds "breaking the buck," or dropping below $1 net asset value. The Fed's dramatic $105 billion liquidity injection on Thursday (pre-market) was just enough to keep key institutional accounts from following through on the sell orders and starting a stampede of cash that could have brought large tracts of the US economy to a halt.

Phone And Fax Numbers For All US Senators; More On What To Do - (Mish at globaleconomicanalysis.blogspot.com) These guys are morons and will pass anything with little debate. We really ought to rally together and take away all their pensions and force them to live off of Social Security like the majority of people, as they are completely ruining the country. From Mish: I am emailing the plan I outlined in Open Letter To Congress On The $700 Billion Paulson Bailout Plan to every senator. Please phone, fax, or email your Senators asking that Congress consider my alternative plan or the Hussman plan. Anything is better than the plan Paulson put together. Please phone and FAX your Senators. Ask 10 people to do the same. Send them this link

Who will bail out American families? - (www.chicagotribune.com) - Lost in the headlines are the families who signed their names to subprime mortgages, not knowing or caring that the pieces of paper they signed would become one of the cards in the house of cards that now threatens the U.S. economy. No less visible are the people who have lost jobs as the economy reverses, the students who can't pay for college without taking on ruinous loans and the millions of families who turned to credit cards and payday loans as they have been caught in the squeeze between declining wages and skyrocketing costs. They are casualties of a financial system that saw them not as customers, but as prey. The secretary of the Treasury and the chairman of the Federal Reserve have told us that now is not the time to assign blame and that we must concentrate on preserving the bedrock institutions of our economy. But the real bedrock of that economy is the American family, countless thousands now in or facing foreclosure, families falling further behind on credit cards or paying 400 percent interest to payday lenders just to keep groceries on the table. The logic is impeccable: The big need protection, and the small pay for it. Whether the Federal Reserve and the Treasury acted prudently, time and the American voter will tell. But there are simple, tangible steps that government can take now.

Amid market turmoil, some patients skip plastic surgery - (www.ocregister.com) …Plastic surgeon Dr. Michael Persky of Encino said several patients have cancelled appointments for surgery or backed out of long-scheduled consultation. He said: The news of the week with the Dow plunging, Lehman going under, Merrill being bought by B of A, AIG being saved, and the rumors of Washington Mutual going under next have definitely affected my practice this week. We have had three surgical cancellations, as well as consultation no shows. Consultations whom in the past would have booked their procedure are now “thinking about it”, or “will get back to us after they discuss things with their husband.”

Fannie, Freddie Subprime Spree May Add $100 Billion to Bailout - (www.bloomberg.com) Freddie Mac Chief Executive Officer Richard Syron stood before investors at New York's Palace Hotel in May last year lauding his company's ``cautious'' avoidance of the subprime-mortgage crisis. What Syron, who was ousted last week, didn't say was that Freddie Mac had been gorging on subprime and Alt-A debt. While it and the larger Fannie Mae bought the safest classes of the mortgage-loan pools, Freddie's purchases totaled $158 billion, or 13 percent, of all the securities created in 2006 and 2007, according to data from its regulator and Inside MBS & ABS, a Bethesda, Maryland-based newsletter used by Federal Reserve researchers. Fannie, which was also seized by the U.S. on Sept. 7, bought an additional 5 percent. The purchases by Freddie and Fannie helped fuel the boom in lending that led to frozen credit markets, more than $514 billion in bank losses and the collapse of two of the country's biggest securities firms. The subprime overhang may determine whether the $200 billion U.S. Treasury Secretary Henry Paulson earmarked for the companies will all be used to rev up mortgage lending. He may have to spend about $300 billion, William Poole, the former Federal Reserve Bank of St. Louis president, said in a Bloomberg Television interview this month.

U.K. Housing Market `on Its Knees,' Rightmove Says - (www.bloomberg.com) The housing market is on its knees and will remain so until financial institutions address the disastrous state of the mortgage funding markets,'' said Miles Shipside, commercial director at Rightmove. ``While this market provides a good opportunity to trade up, it requires a degree of bravery.''
The average asking price for a home fell 1 percent from August to 227,438 pounds ($414,000), Britain's most-used property Web site said today. From a year earlier, prices fell 3.3 percent.
The property market may face further weakness in coming months, provoking a ``painful'' adjustment for many families, Bank of England Chief Economist Spencer Dale said last week. HBOS Plc agreed to a takeover by Lloyds TSB Group Plc after plunging home values and the financial market crisis destroyed the value of the company and added to the threat of a recession.

Short Sellers Keep the Market Honest - (James Chanos at online.wsj.com) We are currently witnessing one of the periodic financial convulsions that inevitably follow eras of easy credit and lax regulation. As someone once said: "Politicians and people who lose money always need someone to blame." So who is to blame now? According to the guardians of our economy, it's the short sellers, those investors who believe certain stocks are overvalued for fundamental reasons. In the latest of a series of constantly changing rules announced overnight without public comment or participation, the Securities and Exchange Commission has imposed a ban on short selling 799 financial companies through Oct. 2. But the regulator has yet to put forward any supporting data, or a clear justification, for this and prior emergency actions against short selling this summer. Meanwhile, the causes of the collapse in the financial sector go ignored. Never mind that months ago short sellers were warning about the problems we now see undermining American capitalism. In the spring of 2007, I joined another fund manager in outlining to finance ministers and central bankers (at a G-7 finance ministers meeting) the looming crisis in credit structures and overleveraged banks and brokerage firms. Our audience listened politely, but, as events now show, failed to take any meaningful action



OTHER STORIES:

Bailout Plan Threat to Dollar ? - (www.ml-implode.com) - "The combination of spending $700 billion on soured mortgage-related assets and providing $400 billion to guarantee money-market...
Bailout Does Not Address The Problem: Too Many Houses - (www.ml-implode.com) - "Paulson has proposed that the U.S. pay for the largest bandaid in history, and the New York Times asks, "Will the bailout work?...
"Uh, Tom, I don't look at it that way" T - (www.ml-implode.com) - Treasury Secretary Henry Paulson on Meet the Press yesterday and Chris Dodd (D-Conn.) and John Boehner (R-Ohio) on This Week wit...
Misdirected credit runs unabated - (www.ml-implode.com) - ``It now appears they didn't appreciate the ramifications for Lehman going under - how this would quickly ignite a run on the co...
Now you see it. Now, you don't - (www.ml-implode.com) - "But there’s another possibility - one which many seem to be resorting to in these “extreme circumstances” - namely bending the ...
U.S. Treasury Widens Scope of Plan to Buy Bad Debt - (www.ml-implode.com)
WaMu, Under U.S. Pressure, Scrambles for Deal or Capital - (www.ml-implode.com)

U.S. Stocks Fall, Led by Regional Banks; Regions, M&I Tumble - (www.bloomberg.com)
Oil and gold lead commodities higher - (www.ft.com)
Oil futures rise on hopes for bailout plan - (www.marketwatch.com)
Leveraged loan values drop to record low - (www.ft.com)

Goldman, Morgan Stanley Bring Down Curtain on an Era - (www.bloomberg.com)
Dollar May Get `Crushed' as Traders Weigh Up Bailout - (www.bloomberg.com)
In Newest Crisis, Hedge Funds Face Chaos - (www.nytimes.com)
U.S. Treasury Widens Scope of Bad-Debt Plan Beyond Mortgages - (www.bloomberg.com)
Paulson Presses Congress to Act On $700 Billion Bailout Plan - (online.wsj.com)
Bailout Question Looms: What's the Real Price? - (www.cfo.com)
Emerging markets face $111bn maturing debt - (www.ft.com)
Commercial space toll worse than S&L crisis - (online.wsj.com)
Big Financiers Start Lobbying for Wider Aid - (www.nytimes.com)
High-risk, big-bucks era wanes on Wall Street - (www.latimes.com)
Few Funds Hit Performance Mark - (online.wsj.com)
High-risk, big-bucks era wanes on Wall Street - (www.latimes.com)
Commercial space toll worse than S&L crisis - (www.ft.com)
High-Performing Hedge Fund Manager Closes Shop - (www.nytimes.com)
Australia Suspends All Short Sales - (online.wsj.com)
Foreign Banks Hope Bailout Will Be Global - (www.nytimes.com)
Hedge funds to sue U.K. regulator over short-selling ban: report - (www.financialweek.com)

Concern as Russian car demand slows - (www.ft.com)
Taiwan limits short-selling - (www.ft.com)
Moscow widens emergency funding - (www.ft.com)
Consumers Cut Health Spending - (online.wsj.com)
The Fed, now with more junk - (www.financialweek.com)
Gas pains hit far-flung suburbs - (www.chicagotribune.com)
Mitsubishi UFJ to Invest Up to $8.4 Billion in Morgan Stanley - (www.bloomberg.com)
Fed OKs Goldman, Morgan as bank holding companies - (www.reuters.com)
Radical Shift for Goldman and Morgan - (www.nytimes.com)

Stores Plan for Weak Holiday Sales - (online.wsj.com)
GM's Credit Move May Fuel Worries - (online.wsj.com)
G.E., a Giant of Lending, Is Dragged Down Along With Banks - (www.nytimes.com)
Ugly Side of Leverage Hurts Morgan, Goldman - (online.wsj.com)
Consumer-electronics stocks may get holiday price cut - (www.chicagotribune.com)
Online advertising hit by spending cuts - (www.ft.com)
Now Uncle Sam Is Hedge-Fund Guy, AAA Needs Review: Mark Gilbert - (www.bloomberg.com)
A long shadow - (www.ft.com)
Leading economist Kenneth Rogoff says bank rescue opens door for other US industries - (business.timesonline.co.uk)