Where to start?
Most recent, I suppose.
The stock market’s in a huge tumble following four days of financial turmoil and huge federal bailouts. almost a 950 point drop in two days.
http://www.nytimes.com/2008/09/18/business/18markets.html?_r=1&hp&oref=slogin
Stocks Slump as Investors Run to Safety
return encodeURIComponent(‘The financial crisis entered a potentially dangerous new phase as investors worldwide frantically moved their money into the safest investments, like Treasury bills.’
Published: September 17, 2008
The financial crisis entered a potentially dangerous new phase on Wednesday when many credit markets stopped working normally as investors around the world frantically moved their money into the safest investments, like Treasury bills.
Richard Drew/Associated Press
Christopher Crotty worked on the floor of the New York Stock Exchange on Wednesday.
As a result, the cost of borrowing soared for many companies, while the stocks of Wall Street firms like Goldman Sachs and Morgan Stanley that only a couple of weeks ago were considered relatively strong came under assault by waves of selling. Investors were so worried that they snapped up three-month Treasury bills with virtually no yield and they pushed gold to its biggest one-day gain in nearly 10 years. Stocks fell by nearly 5 percent in New York.
And confidence in the giants Morgan Stanley and Goldman, Sachs is reoding fast.
The Feds bail out AIG, Fannie Mae and Freddie Mac with billions in loans.
http://www.nytimes.com/2008/09/18/business/18fed.html?hp
A New Role for the Fed: Investor of Last Resort
Win McNamee/Getty Images
The Federal Reserve, with help from the Treasury Department, led by Henry Paulson, above, is taking more risk from markets.
Published: September 17, 2008
WASHINGTON — The mighty Federal Reserve is being stretched to its limits, both in the range of problems it is being asked to fix and in its financial firepower.
Susan Walsh/Associated Press
The Federal Reserve, led by Ben Bernanke, is being stretched.
The central bank has also transformed itself almost overnight into the Fed Inc. by essentially taking over American International Group after already taking on hundreds of billions of dollars in mortgage securities to help ailing financial institutions.
Instead of just setting monetary policy in its Ivory Tower-like setting, the Fed now must wear several hats — that of insurance conglomerate, investment banker and even hedge fund manager.
“This is unique, and the Fed has never done something like this before,” said Allan Meltzer, a professor of economics at Carnegie-Mellon University and author of a sweeping history of the Federal Reserve. “If you go all the way back to 1921, when farms were failing and Congress was leaning on the Fed to bail them out, the Fed always said ‘It’s not our business.’ It never regarded itself as an all-purpose agency.”
The Fed has often been described as the nation’s lender of last resort — the one institution that would lend money when everything else had failed. But by acquiring almost 80 percent of A.I.G. in exchange for lending it $85 billion, and holding $29 billion in securities once owned by Bear Stearns, the Fed is now becoming the investor of last resort as well.
Locally, this is going to have an impact. Reports are that retail and restaurant patrons have been staying home. Who else is feeling it?
And the state seems poised to pass a budget over Governor Schwartzenegger’s veto. There are some aspects of the budget that are going to negatively impact us locally, possibly many of our small business owners who are losing one of the “tried and true” safety nets, the ability to deduct business losses. We’ll all see higher withholding for income taxs with a payback in the future, sans interest.
We’ll have to watch to see how i all impact us locally — and whether steps are taken locally to soften the blow.
Paul
