Monday, October 13, 2008

Up 900 points

Some different economic news from today. "Are you idiots?" everyone asked after we saw how banks etc gave loans to people who shouldn’t have gotten them. The last couple of weeks the banks have not been able to tell which banks / institutions are sound, IE which are deserving of loans, who can pay back. So this weekend the governments step in and said….

….. the U.S. Federal Reserve said central banks will offer financial institutions unlimited dollar funds and Europe pledged to guarantee bank debt and permit governments to buy stakes and recapitalize some distressed financial companies…..

“unlimited dollar funds” & “ guarantee bank debt”

If you are a bank why not now make the riskiest loans you can, which will be the highest interest you could earn because of that very risk and if the loan goes bad don’t worry, uncle sam says he will just bill us for it. This is where i read about america getting out its credit card again....

Global Stocks Climb, Oil Rises on Bailout Plan; Banks Advance
By Lynn Thomasson and Adria Cimino

No comments: