Fed Heads Back to the Well, Will It Run Dry?

Run the well dry? The fed controls an endless supply of money...Just turn on the Federal money printing machine's. Fiat currency (money backed by nothing) is a dangerous system. The Well? Continued bank failure. we still have 6 rough months. Then the election. Who wins will indicate where we go. There is only one Ross Perot style person in this race...RON PAUL. This type of canadite and principals will reconnect us our economic possibilities.

Bernanke's action amounts to a gift to JP Morgan of whatever the value of guaranteeing $30 billion in "less liquid assets" turns out to be. How did he get the right to use the taxpayers' money that way?

Nothing different here. the fat cats win again and the little guy loses. Just like the upcoming election, what the people want doesn't matter. The powers to be will decide the outcome. So sad.

And the alternative is? One alternative is for America to save a few bucks and stop using credit and debt for everything. I work my but off and try to save as much as I can for the future. It seems like if you are a financial fool the government will bail you out. I feel sorry for the folks who bought so much house they could not afford it. But why should I bail all of them out. But then again I guess I will have a stash of cash to buy all these nice assets both financial and other type of assets at fifty cents on the dollar so I guess I shoild not complain . I will end upi being a big winner out of this. Frugality Rules!!! and Wins in the end!!! LOL

There is no well! They create money so it can never go dry. (period)

Most individuals and households are way over-leveraged (in debt), whether it's home equity loans, car loans, credit cards. As inflation gets worse they will have less to spend. In the past, a generally conservative populace had the cash to buy bargains when the market fell; this is no longer the case. Retirees will move their money to safe havens such as precious metals and overseas funds so they won't bail out the market either. Our entire economy has become based on quarterly returns and speculation versus production. The market is artificially inflated by 40%, it will continue to crash as the inability of individuals and institutions to cover their debt cointinues. It's not about politics but the loss of individual ethics and responsibility. HUGE changes coming to society, put on your crash gear and strap in.

Here's something I've never understood. One of the big causes of the Great Depression was that buying could be done on very little margin (less than 10%). The huge leverage led to a huge crash. So that was made illegal. Derivatives as I understand them do pretty much the same thing. Why are they so unregulated?

Will It Run Dry?.....not until "we the people" stop buying the "red" ink.

some people can't spell 'butt'

if the feds want to see more spending out of the public and to keep the country out of a recesion then put gas prices at a buck fifty a gal. and watch the spending increase hell any extra money spent is going to gas my gosh 21 dollars to fill up a lawn mower get real

what about the american people working class are suffer ,because the banking system are stealing especialy the ceo,cfo, all the board member, think for them self not and employee. what all the home owner out there are sufering , no body care ,but the us goverment can bail out the biggest wall street giant bear stern , but not the owner who paid tax and getscrew all over we need to voice to american people blast in the front page and complaint if we seat around and do nothing do not complaint. i hope every body get this message.........

Did I just see a Ron Paul for President post...good luck...for traders this time is easy, just buy up the Euro and gold and you'll arbitrage...Heck, if I had the money, I'd start up a new exchange in Europe, probably Germany, based off the Euro. Watch all the US companies begin listing on there and watch as it allows both Asia Markets and people living in the US to trade at the same time. The US is losing capital to foreign countries at a fast pace...might as well make money off of it

Vince, you're right, but too few people are frugal today. All of the recent Fed actions are really rewarding chronic spenders, not chronic savers. This was a country that once was financed by saving; now it is financed by debt underwritten by foreign countries. That is an unwise choice, as America has mortgaged its future.

If the "financial geniuses" at Bear-Stearns, CITI etal didn't realize the systemic risks they were creating when they invented CDO's, SIV's etc, what chance do us little guys have of understanding todays financial system. Even worse, when Merrill-Lynch and others are taking billions of dollars in hits, how can we small investors trust their financial advice!! The "crisis in confidence" reaches even our level.

The well is only as deep as the money it prints is worth. The more you print (and release as debt) the less it's worth. So it's not a question of the well running dry it's a question of how many dollars it takes to buy a gallon of water or gasoline. When either or both is $6.00 (and middle America can afford neither) a gallon because the dollar is worth so little, then we'll see how wise or how wrong the Fed is.

God, forgive them for they know not what they do....

Let the bums die a fast death and give all that money to the people that were taken in by sleezy investment bankers and mutual funds. At least that puts the money back in the hands of the consumer, which in turn can put it back to work or spend to pump up the economy.

This is NOT a time for ideological posturing. Too often we see an analysis based on what "should be" rather than "what is." The reality is we have a liquidity crisis, a scared market, and scared consumers. None of the current crop of presidential candidates seem to want to deal with any of these issues. So Bernanke is filling the leadership vacuum. He is dealing with the realities of the situation in a most pragmatic manner. But for him, the markets would have collapsed months ago. It is time for him to contact each of the candidates and educate them so that they can have a suitable quantum of information abou the realities of the financial system.

The solution is to refi as many of the subprime loans as possible. These are mostly 3/1/6 with no PMI, therefore people will ultimately pay up to 6% over there start rate, which was already 2 to 3% ubove prime borrowers. Here is the sloution which MUST be implemented NOW...time is of the essence. Set up a gov backed program...here is how it works....there will be 4 groups....A B C and D borroweres (all of which cannot qualify for anything out there)....A being the best...regular banks and brokers will do the job....each loan will be a 30 year fixed, A=8% with 0.5% as PMI going into a group insurance policy against losses in a defualt. B=8.75% with 0.5% defualt Ins, C= 9.5%, 0.5 defualt, D=10% 0.5% defualt.....all can refi anytime they qual for a better deal..these will be fixed rates.....A,B,C.D will each have guidelines, Like A...credit min 550, 12 mon current on mortgage, B...500 min, 6 month current on mortgage, etc.....base this on statistics....try to save 80% of the best performing loans out there. 603-770-8824

I'm curious to see how all of the executives of these FINE instituions are going to be compensated for their STELLAR ACHIEVEMENTS, while thousands of innocent workers lose their jobs, 401K's. and pensions When Mr. Greenspan was in office he kept a tight lid on money. Mr. Bernake on the other hand, cannot seem to tell the markets to start getting their house in order. Once you start giving handouts and bailing out instituions its hard to stop.