Can the U.S. Treasury cause a market crash if they want to? Will they?

[Newsjock]

Over in LBN, the talk is about this story in London's Sunday Telegraph, that says:

The US stock market could suffer a devastating crash with shares losing a third of their value this week if Hank Paulson’s financial bailout plan fails, US Treasury officials have warned.

... One Republican said that the message from government officials is that “the economy is dropping into the john.” He added: “We could see falls of 3,000 or 4,000 points on the Dow . That could happen in just a couple of days.

Perhaps it's hyperbole, perhaps it's not. We just don't know. But there is one interesting thing to consider as I confidently don my tinfoil hat: If this regime thought it in their long-term best interest to cause a short-term collapse in U.S. financial markets, could they make it happen? And if they could, would they?

There's already a sense that we're being held hostage in a high-stakes game of economic blackmail. Would it be worth it for the fat cats to lose a few billion now so they could swoop in and pick up everything they don't already own -- and do it at fire-sale prices?

What say you?

[sendero]

1. So what?

The stock market has been in La La land for over a year. I've listened to financial "pundits" opine about how there isn't really a problem, and how we've hit "bottom" 5,000 times.

The dow goes down 4,000? So fucking what, that IS WHAT IT IS WORTH, AND EVENTUALLY ITS GOING TO REFLECT REALITY.

I'd prefer it sooner, before the election, than later when they be able to blame it on Obama and some morons will believe it.

[Mist]

2. I think Treasury has lost control of the markets, as the corporations now

rule the country, which is by Rethug design. It's private corporate businesses who are pushing this bail-out with the Teasury being the instrument.

[dweller]

3. stock tip

Alcoa


dp

[Rockholm]

6. Do they make Reynolds Wrap?

[Sebastian Doyle]

4. Treasury and "the market" have become one and the same.

Bush Crime Family cabinet appointees always come from the industries that they are supposed to be regulating. Paulson isn't looking out for the taxpayers, he's looking out for Goldman Sachs. Just as Cheney still looks out for Halliburton.

[FarCenter]

5. Foreign holders of US debt have the power to cause a crash

And they will if it is not guaranteed by the US government, so that it is secured by the government's power to tax.

The US has lost its "superpower" status, economically.

Note that many of the "foreign holders" of US debt may be wealthy US citizens. It is just that the money is held in their overseas accounts and corporations.