I don’t mean to overwhelm you with posts, but…

It’s hard not to report this:

$$$ On CNBC they are saying that AIG has asked the
Federal Reserve for some kind of emergency bridge loans. Can the Fed
lend to an insurance company?

$$$ Federal Reserve is dramatically expanding its emergency lending program. It’s now going to take all sorts of collateral, including equity.

$$$ "Take a very deep breath. It looks almost certain
that this week will be the one where we see the financial implosion in
U.S. banking and brokerage that many have been expecting for some
time," Paul Kedrosky says.

With Merrill Lynch, Lehman Brothers and Bear
Stearns gone, everyone is asking whether Morgan Stanley and Goldman
Sachs will survive as independent investment banks.

Addendum: Here are Dow futures, at 10:21 p.m. down about 300 points.  All things considered that counts as good news.


but alex said this housing thing was no big deal

AIG's insurance companies are just fine. The problem is AIG's subsidiary that sells derivatives, which I imagine is eligible for taxpayer-funded bailouts...I mean loans.

Apparently, someone has destroyed very creatively.

Here's what concerns me: BofA couldn't possibly have dug deep enough into Merrill Lynch's books to determine this was a wise purchase. There are still many unknowns that they just agreed to acquire. Even worse, they did so with $44B of stock. No cash. Nothing real; just play money.

All the banking cartel has done is buy itself some time; we have made no gains of stability.

I'm waiting for a Volcker-type to step in. Will BSB serve out his full term? Then again, Luskin in today's WaPo sys that things are not all that bad, by historical standards.


Luskin is heartily mocked here.

Considering that Merrill was bought at a premium, I could guess that you're looking at the wrong group, Yancey.

I took away the other post just to clear room for others. There was nothing incorrect about it. It dealt with the sale of Lehman domain names on eBay.

Pro Privo:

Dr. Paul isn't dismissed as a crook. He's dismissed as a kook.

One reason is that he calls for the elimination of the Fed and most government regulation. Aside from the fact that, you know, we tried that before, and things weren't so good, I for one do not like excessive rat feces in my cereal, with is one of the things our government regulates. Or used to, before Bush II.


Tyler, at moments like this, the more posts the better. Please don't try to restrain yourself at such a time. Anything that pops into your head to post, just do it!!


I think the problem might be that our host realizes that the only fundamentally sound response to these events is a call for abolishment of fractional reserve banking and the accompanying regulatory cat and mouse game of a shadow banking system backed by government guarantees and carried along the whimsical currents of fiat-greenbacks. But this opinion is too much of a marginalized fringe position; perhaps TC is debating internally whether to truly start the marginal revolution. He has credibility in the mainstream, so who knows what might happen if he writes about it in the NYT.

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