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Contributed by J. R. Ransom
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 Jim Jubak It turns out the bankers who bought derivatives based on mortgages didn't read the fine print, says Jim Jubak, the Webs #1 investing columnist. Now they're learning that the senior investors who bought the safest pieces of the deals can grab all the cash flow and force other investors to sell.
"If you want to know why the financial crisis is going on for so long, why the banks can't put the sub-prime mortgage crisis behind them more quickly, focus on this. Just as individual homeowners got into trouble on their individual mortgages because they didn't really read or understand the fine print, it turns out the banks didn't read the fine print either. The didn't read the fine print on the derivatives, the packages of mortgages and the things based on the packages that they were buying and selling..." |
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Contributed by Max Keiser
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 Max Keiser "The world's financial markets are truly feeling the pinch. The lack of money and credit, falling housing market, and banks folding. Things are so bad that some are predicting that we are heading towards financial Armageddon. Governments and central banks are trying to cushion financial markets from a complete meltdown.
"So the US Federal Reserve, the 'Fed', and central banks have come up with a plan to pump more cash into the global financial system to ease what's being called 'the credit crunch'. The other banks involved are the Bank of England, The Bank of Canada, European Central Bank, and the Swiss National Bank.
Part of the plan has been the reduction of interest rates which is really good news for mortgage holders and banks on the verge of collapse, but it's bad news for savers..." |
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Contributed by J. R. Ransom
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 Jim Jubak "The real puzzle in this recession or 'near-recession' is that, while it may feel like a recession to many people in the economy, the official numbers don't show it. We've still got unemployent below 5%. That's an extraordinaryily low number if the economy is really as bad as the economy feels to many people.
"So, why? Well, I think there are two possibilities. One possibility is that there is a lag in the numbers - that the official numbers don't reflect the real state of the economy..." |
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Contributed by J. R. Ransom
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 Jim Jubak "Here's a good rule of thumb: If the government in Washington, D. C. announces some new regulatory program of Wall Street and the stock market goes up, you can be pretty sure there's absolutely nothing in it that's meaningful. That's the kind of reaction we got from the market after Treasury Secretary Paulsen announced a big new ballyhooed package of reforms for Wall Street. |
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Contributed by J. R. Ransom
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 Ex-Chairman Greenspan "During the 1960s, the US government was trying to meet the cost of massive social welfare programs at home and the Vietnam War abroad. By printing more money President Lyndon Johnson believed the US government could accomplish its goals without raising taxes, which may have caused a taxpayer revolt. In other words, he could have both guns and butter.
"But the more money the US printed the more it eroded the value of the dollar. Nervous foreigners began redeeming their dollars in gold as they were entitled to do..." |
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