FED RESERVE Pumps Billions in to Foreign Markets?

[Care4all]

so, not only the $700 Billion in to US markets, but hundred plus Billions in to Foreign Markets....and as swaps? what does that mean?

WHAT in heaven's name is going on here? How can less than 10% of our total mortgages going in to foreclosure be the TRUE root cause of this worldwide mess?

I thought i got it???

But i still don't get it?

Anyone know what our total real estate/mortgage obligation is in this country? trying to figure out what $700 billion is of that...?

Fed plows $30 billion in money markets overseas
http://apnews.excite.com/article/20080924/D93CT8480.html


Sep 24, 1:42 AM (ET)

By JEANNINE AVERSA

WASHINGTON (AP) - The Federal Reserve, in coordinated action with foreign central banks, plowed $30 billion into money markets overseas Wednesday, part of an ongoing effort to fight a global credit crisis.

The Fed's action - taken at 1 a.m. EDT - sets up temporary "swap" arrangements to supply dollars to the central banks of Australia, Denmark, Norway and Sweden in exchange for their currencies.

"These facilities, like those already in place with other central banks, are designed to improve liquidity conditions in global financial markets," the Fed said in a brief statement.

"Central banks continue to work together during this period of market stress and are prepared to take further steps as the need arises," the Fed added.

The new swap arrangements will provide up to $10 billion each to the central banks of Australia and Sweden and $5 billion apiece to the central banks of Denmark and Norway.

Last week, the Fed and other foreign central banks pumped as much as $180 billion into money markets overseas. The European Central Bank, the Bank of Japan, the Bank of England, the Swiss National Bank and the Bank of Canada participated in that maneuver.

The global credit crisis poses a danger not only to the U.S. economy but also the world economy.

Finance officials from the world's major economic powers pledged this week to do all they can to provide relief.

The Group of Seven countries said they welcomed the extraordinary steps by the United States to stem the crisis, including a plan for the Treasury Department to buy $700 billion in bad mortgages and other toxic assets held by banks and other financial institutions. Those dodgy debts are at the heart of the crisis. Besides the United States, the Group of Seven is made up of Japan, Germany, France, Britain, Italy and Canada.

 

[Kevin_Kennedy]

See, the Federal Reserve is actually the cause of the problem.

 

[CrimsonWhite]

so, not only the $700 Billion in to US markets, but hundred plus Billions in to Foreign Markets....and as swaps? what does that mean?

WHAT in heaven's name is going on here? How can less than 10% of our total mortgages going in to foreclosure be the TRUE root cause of this worldwide mess?

I thought i got it???

But i still don't get it?

Anyone know what our total real estate/mortgage obligation is in this country? trying to figure out what $700 billion is of that...?

Foreign banks invested in our debt. Since that debt is not solvent, then their invetments are not solvent and their banks will collapse behind ours. This due to the banks foreclosures not paying off because there is no one willing to buy the property that has been foreclosed on. If that property does sell then the bank takes a loss on the transaction and the foreign bank inveted in that debt in the form of bonds, then those bonds are worthless as well. So basically the world economy is propped up by Joe Blow in Iowa making his mortgage payments.

This is of course as I understand it. I could be completely wrong.

 

[Toro]

This is done to meet demand for dollars in the eurodollar market. Eurodollar LIBOR was trading at 3% over the t-bill today, which is huge. What that means is that banks are afraid to lend to one another. To alleviate fears, the Fed pumps money into the system to lower the interest rate. They provide swaps to meet the demand for dollars abroad.

I have no problem with this at all.

 

[Care4all]

Foreign banks invested in our debt. Since that debt is not solvent, then their invetments are not solvent and their banks will collapse behind ours. This due to the banks foreclosures not paying off because there is no one willing to buy the property that has been foreclosed on. If that property does sell then the bank takes a loss on the transaction and the foreign bank inveted in that debt in the form of bonds, then those bonds are worthless as well. So basically the world economy is propped up by Joe Blow in Iowa making his mortgage payments.

This is of course as I understand it. I could be completely wrong.

if the whole world markets are involved, how can $700 billion be anything other than itty bitty bandaid, at most?

is this gonna be like the Pill Bill where we were told the cost would be $400 billion for 10 yrs but the true cost is in the trillions?

how can $700 billion do anything at all in a $47 TRILLION DOLLAR ECONOMY World wide? how can we go in to a deep recession and $700 billion will save us from that....?

 

[CrimsonWhite]

This is done to meet demand for dollars in the eurodollar market. Eurodollar LIBOR was trading at 3% over the t-bill today, which is huge. What that means is that banks are afraid to lend to one another. To alleviate fears, the Fed pumps money into the system to lower the interest rate. They provide swaps to meet the demand for dollars abroad.

I have no problem with this at all.

What he said. lol

 

[editec]

Foreign banks invested in our debt. Since that debt is not solvent, then their invetments are not solvent and their banks will collapse behind ours. This due to the banks foreclosures not paying off because there is no one willing to buy the property that has been foreclosed on. If that property does sell then the bank takes a loss on the transaction and the foreign bank inveted in that debt in the form of bonds, then those bonds are worthless as well. So basically the world economy is propped up by Joe Blow in Iowa making his mortgage payments.

This is of course as I understand it. I could be completely wrong.

I think you basically got it, CW.

The house of cards doesn't stop at our borders.

Every other national bank is linked to our and ours to theirs.

 

[AVG-JOE]

I think you basically got it, CW.

The house of cards doesn't stop at our borders.

Every other national bank is linked to our and ours to theirs.

I still think that this 'crisis' is as genuinely scary as WMD's in Iraq was. This is a power grab by a lame-duck republican administration that sees a regime change in Americas future.

Tax payers should help everyone who wants to refinance their mortgage on any house that they are living in. What would that entail... loaning out a couple of billion to a wide variety of people, 90% or better who will pay it all back?

-Joe

 

[editec]

I still think that this 'crisis' is as genuinely scary as WMD's in Iraq was.

Oh it's truly much much worse, AJ.

This is a power grab by a lame-duck republican administration that sees a regime change in Americas future.

Based on the structure of this proposed bailout, I'm inclined to think you're absolutely right.

Tax payers should help everyone who wants to refinance their mortgage on any house that they are living in. What would that entail... loaning out a couple of billion to a wide variety of people, 90% or better who will pay it all back?

-Joe

YES!

And consider that despite the fact that your proposal is the model we used in the last depression, consider that that actually worked our well for the American people, what does it SAY about these people, that they're doing EXACTLY the opposite thing by bailing out the banks who CAUSED the problem to begin with?

What it says is they STILL think the trickle down theory of economic is the way to go, doesn't it?

They're going to save the rich at the expense of the workers.

They're more than willing to let millions of people lose their homes, while paying $700 billion to the bankers so they can keep their mansions.

If this doesn't show most of us that we've been in an undeclared class war for the last three decades I'm not sure what it will take to wake people up.

 

[Care4all]

the great depression model worked DAMNIT, why are they doing the bail out in this manner????

Bible prophesy, is being fulfilled, right before our eyes and we don't even recognize it...

''A full days work, for a quart of wheat''.....a days work for a loaf of bread ....for the common man, while the greedy (who follow the beastly system)prosper....

i'm sorry to mention the Bible on this, but this is what its prophesy states will happen...

well hells bells, we certainly are on our way....