Stocks Surge as U.S. Acts to Shore Up Money Funds and Limits Short Selling

[flowomo]

Source: NYT

Stocks shot wildly upward Friday morning after the federal government moved to try and restore confidence in the financial markets.

The Dow Jones industrial average was up more than 400 points only moments after the opening. The broader Standard & Poor’s 500 was up 4 percent. Markets in Europe and Asia also traded higher.

In a span of about 12 hours, the government took several moves to help restore stability in the markets. The actions began Thursday with discussions between the Treasury, Federal Reserve and Congressional leaders on what could become the biggest bailout in United States history, a plan likely to authorize the government to buy distressed mortgages at deep discounts from banks and other institutions.

Read more: http://nytimes.com/

[Robbien]

1. What a whitewash

the government to buy distressed mortgages

The government is not helping out the mortgages. It is helping out the banks/investment firms by buying up the junk investment vehicles. Homeowners are still on their own when trying to deal with their mortgages.

The government is not helping out mortgages.

[ixion]

4. exactly

[ohio2007]

30. Congress is bailing out and looking out for their own special interests

http://www.bloomberg.com/apps/news?pid=20601087&sid=aSEtGBXG0C0s&refer=worldwide

luckily, nobody is willing to hold them accountable with their white washed explanations on the campaign trails

[RUMMYisFROSTED]

2. The largest theft in history.

And you're the mark.

[Robbien]

5. Forbes 400 billionnaires are throwing a party today

an article posted in the SMW thread said it best:

The bank is empty. Wall Street carted off all the money and bought mansions and yachts in the Hamptons. Now Paulson is proposing we cover all of that thievery and Fannie, Freddie, AIG and all money market funds. Why not? It’s not his money and he’s not going to be around when his house of cards crumbles. So we print more money, but it’s not worth as much as the money that was there. Will the world treat the dollar kindly? No.

You see, I keep hearing how Washington wants to isolate Wall Street’s cancer from Main Street, but it sounds like they just want to transfer Wall Street’s cancer to Main Street.

[dipsydoodle]

6. Might be more accurate to say

the largest transfer of ownership in history. The buyers of the bonds sold to cover the amount will in effect hold title
to a substantial slab of the entire USA housing stock. Say hello to your new landlords.x(

[earthside]

3. Economic Coup d'Etat

Of course, the stock market is up ... the economic eltists are about to win.

And, we are now going to be financial slaves to the banks and the U.S. Treasury Department.

[CitizenPatriot]

7. sorry to be a different voice here

but honestly, I am relieved as hell they did what they did.

If they hadn't, we were looking at not just an american depression, but a global depression.

How did we get here?

The GOP's economic model is an utter, complete failure. Anyone who has been railing about free markets for the last 30 years should resign immediately. Any SANE person knows that some oversight is necessary -- esp when you start allowing companies to merge sectors like mortgages, insurance and investments. A rational person is going to look at that on paper and say, gee, possibilities for conflict of interest and tremendous bad debt accumulation being hidden is there. Let's have some fuc*ing oversight. But NO, not the GOP. Their model is an utter failure. The only good thing that has come out of this is it has finally SHUT down once and for all the free market claim. Oh, the asshats will still shriek for it, but any 101 economy for dummies reader will know that they had RULE and the markets were finally deregulated the way they wanted and THIS was the result. Not going to work again.

Only other good thing is this is good for Obama -- it drives home what he has been trying to tell people for 16 months. The economy is in the crapper. but no, the GOPPERS were singing their songs of assurance (i.e., lying as usual) and their minions were all over the internets saying things were fine, it's a matter of emotional approach and having a good attitude. Seriously.

They've been shut down, thank god.

I am beyond furious at the utter incompetence, the lies, the theivery, the ceo's leaving with bulging pockets while I just lost 1/4 of my net worth. I'm so over these people I can hardly get outraged. Frankly, their performance economically is shameful. They deserve to be shamed publicly for their "free market" mantra. they need to pay back their leaving bonuses, et al.

They put us in another situation where we were blackmailed to bail them out. This being the result of allowing these companies to get so big we can't afford to let them fail. Coming from the "let the market decide" crowd, me thinks their Darwinian fever of superiority is looking like a veil of lies.

They put the entire global economy at risk with their recklessness. The entire world. These are the asshats McCain has on his staff! The largest lobbyists for these industries in Washington! And no one is calling him on it. If he gets into office, we are frankly doomed globally. He is obviously clueless about the economy and does as his Fannie, Enron, USB etc friends whisper into his ear to do. Reckless, careless, dangerous, destructive.

This is no joke.

What will we do now that they have come out and admit we are a Fascist state, by nationalizing corporations which have strong interest for the government?

Lastly, after being taunted with accusations of being a socialist for the last several years, with mounting illogical fury and froth, I sit here watching them socialize the losses of these monoliths they allowed to get too big, they deregulated, they allowed to FAIL epically and I realize that while they are pointing the finger at the liberals, once again....

It is the GOP who have turned a once great democracy into a hideously malformed version of neo-Fascism. And that isn't an accusation; it's the truth.

[Hugin]

9. Very well said.

And I stand firmly by your Right to say it.

[CitizenPatriot]

12. thank you

:hi:

It is one of the few rights we have left, and I intend to use it. :-)

That said, these people need to be brought to account. If we continue to allow lawlessness to rule the land by not holding the wealthy and powerful accountable, this country is indeed a lost cause. Mad Max comes to mind.

New word: Subpoena; you must appear or go to jail.

[gratuitous]

10. The situation got so bad, it probably had to be done

But what I'd like to see most of all is the extraction of some iron-clad promises (as in, "do these things or you go to prison") from industry titans, re-regulation of financial markets, and just for good measure, some provision that the profits as well as the losses get a little more socialized. I don't think Wall Street is in a very strong bargaining position, and I for one am ready to leverage some concessions in exchange for footing the bill for their latest party.

[CitizenPatriot]

11. absolutely. without such measures, there will

or should be a massive strike by the people.

[NeoConsSuck]

27. Great point, but also

I would have insisted before they get one penny of taxpayer money, strong regulations get put in place so this greed cannot happen again. And at this time, it would be hard for Wall Street to scream 'No regulations, let the free markets work their magic', since all their magic is nothing more than transferring taxpayer money onto their balance sheets.

Free Markets, my effing ass.

[AlphaCentauri]

33. Let the investors absorb the losses and pardon those losses to the home owner

[stubtoe]

16. I think this should be it's own OP. This is a very good analysis! n/t

[CitizenPatriot]

17. thanks!

What an honor:-)

Hard to believe McCain is blaming Obama for this. Where to start with that crazy bit of rhetoric? Obama's only been in US senate for 4 years, as mcCain keeps reminding us. And his signature isn't on the Gramm bill...but McCain's most decidedly is. What a pathetic, dishonorable man McCain is showing himself to be.

[Greyhound]

21. Do you not get that this is inevitable? This latest theft will only delay

what is coming, the difference is that we have now put our pathetically small gold reserves up against a mountain of debt that is already know to be bad and get no assets nor possibility of repayment. Your great grand children will curse your name for what you advocate today.

The spigot is opened and they are lining up with their hands out.

How many times do you have to get robbed before you get that it is not going to end, this is you future. Are you going to fight it or learn to like it?

[Mesteryo]

24. we don't even know the plan's details..

Yet you're saying that the govt. is simply buying up debt with this. I'll wait to see the details before I rush to judgment.

I do agree this proves we need to restructure how we run our money system, it's based on individualistic libertarianism.

[jwirr]

8. Bandaid economics for the rich only. This will not work and it is only

a matter of time before the main issue of the economic division between the classes raises its head again to challenge capitalism in all its greed.

[CitizenPatriot]

14. certainly

this is only the beginning of the process.

This is not a fix for the economy; it is a drastic and desperate attempt to stave off global depression. It may cause the dollar to become worthless -- so the risk is high. Careful, deliberate and wise leadership is IMPERATIVE at this point. We are teetering on the brink of disaster.

I'd feel a whole lot better if the people/ideology who/which caused this mess weren't trying to fix it.

[Spinzonner]

19. Apparently you don't suscribe to

Geckonomics

[FreeStateDemocrat]

13. They need to attach a massive tax increase for the wealthy to pay for this give away.

Capital gains tax should also be doubled. Too bad there are no real Democrats in congress anymore so none of this will happen. All our Democratic elected officials are "farting through silk" and will benefit from their own actions. Fuck the ruling class.

[Odin2005]

22. I'm sure that will happen when Obama gets in. Your bashing of the Dems is Congress is ridiculous. n/

[Mesteryo]

35. even if Democrats pass legislation to..

Double capital gains Bush would veto it. Secondly if Democrats demand totally unreasonable things then we won't make progress on other things more important to us like a universal healthcare

[Delphinus]

15. And, how, exactly,

is this good for the people in this country, you and I, the working stiffs who are just barely managing to get by?

[Amonester]

18. Yes. Methinks HYPER-INFLATION will be the result of these...

MASSIVE "overnight-printing" of "out-of-thin-air" currency-based bailouts.

Although HYPER-INFLATION already begun to hit the less fortunate in many states and countries, just wait until AFTER this election cycle is over and we'll see the very worst of it STRIKE.

That's what these GOP THUGS WANT.

[NotGivingUp]

20. Methinks you're absolutely right. eom

[Mesteryo]

25. so you oppose the Fed increasing money supply

To get out of recession? Didn't know we had Mises followers on DU.

[Odin2005]

23. It keeps the bottom from falling out of the financial system.

This is not an ideal situation, but the sector needs support while the shit gets cleaned out. If Obama is smart he'll use this once he gets in office to force the Have-Mores to accept tax-increases if they want to survive.

[indio55555]

26. For how log?

I don't like this bail out plan either. There's going to be a huge line when the shop opens up, but if we don't pay who will? I don't mind if it helps the country, but I want the exceutives to pay for this. They can't just walk away free.

[Mesteryo]

28. well this is why

The marginal tax rate should be higher but beyond that I'm not sure we should've just sat back and said "Let the executives pay for it." The govt. would never act if we just let the private sector handle market shortfalls.

[ohio2007]

29. Pelosi, Kerry May Share Investor Pain as AIG Stakes Evaporate

Looking out for our best 'interests' with these snap judgement bailout funding behind closed doors

Sept. 19 (Bloomberg) -- The market storm that brought down Lehman Brothers Holdings Inc., American International Group Inc. and other pillars of U.S. finance may have also blown holes in the portfolios of House Speaker Nancy Pelosi, Senator John Kerry and more than 50 other members of Congress.

Pelosi, in her most recent financial disclosure form, reported that her husband owned between $250,000 and $500,000 of stock in AIG, which ceded majority control to the U.S. government this week in exchange for $85 billion of loans.

snip
http://www.bloomberg.com/apps/news?pid=20601087&sid=aSEtGBXG0C0s&refer=worldwide

this bailout is congressional approved socialized B$
Don't ever say Pelosi wasn't interested in $aving wall street
:sarcasm:

[Mesteryo]

31. why shouldn't we have saved AIG?

If AIG and Wall Street collapsed it would've hit anyone with a pension or Social Security. You don't think banks shutting down would effect the rest of us too?

[AlphaCentauri]

32. Milton Friedman must be scratching his head

this is not what the economic genius teach about self regulated free market

[Mesteryo]

34. since when do progressives/liberals..

Care what Friedman says...I'm a Keynesian personally. Friedman is a conservative supply-sider.

[bronxiteforever]

36. The post was ironic

and welcome to DU Mesteryo

[AlphaCentauri]

37. Because progressives/liberals are under Friedman's law

:hi:

[Mesteryo]

38. what do you mean?

n/t

[cosmicsheep]

39. my thread on this over at "presidential" forum

http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=132x7135372