The Fed will lend to banks $200 billion each and every month?

[Landis82]

Quote from paysense:

Does that make much sense? So everytime the market goes into a correction or brief Bear Market and new market leaders forge their way to the front we can't expect to make $$$ from short positions, because the Fed/PPT will jump in and affect the normal process?

Why can't markets correct and money be made with short positions without the world falling apart with every 15-30% decline?

Where is the reasoning in that? But this last year they've pulled out all stops to "protect" the market from a normal, healthy drop.

As far as I know, people will still innovate, create companies, work to grow profits and generally mold and adapt to given situations and improve upon them. That is the way of business.

I've noticed that with each market decline for the history of it, new highs eventually are forged and will always be (barring an act of God).

So who really cares if we capitulate and weaker players are replaced by better, nimble ones? Obviously some very powerful people with their own agenda.

pS

The FED's actions are trying to facilitate the DEFLATIONARY elements of the de-leveraging of the U.S. commercial banking system. But because you are not able to think past the typical "conspiracy" theories that run so prevalent on this web-site, you immediately think that the FED's actions are about the stock market, the so-called "PPT" - - - nothing more, nothing less.

Please tell me who the "better and more nimble" economic players will be when there is no banking system to spur economic growth via credit generation?

This is not just some sort of plain vanilla "recession" we are talking about that only concerns the players that are involved in the housing market. You clearly lack an understanding of the MAGNITUDE of what is going on here and the mess that Bernanke is facing.

 

[plugger]

Quote from Landis82:

The FED's actions are trying to facilitate the DEFLATIONARY elements of the de-leveraging of the U.S. commercial banking system. But because you are not able to think past the typical "conspiracy" theories that run so prevalent on this web-site, you immediately think that the FED's actions are about the stock market, the so-called "PPT" - - - nothing more, nothing less.

Please tell me who the "better and more nimble" economic players will be when there is no banking system to spur economic growth via credit generation?

This is not just some sort of plain vanilla "recession" we are talking about here that only concerns the players that are involved in the housing market.

You clearly lack an understanding of the MAGNITUDE of what is going on here.

Bingo. Prize goes to you.

If everyone would stop and think for a moment and think about the ramifications of an insolvent banking system. It's DEFLATIONARY. We are more at risk of deflation than inflation at this point in time.

Think about what happened during the depression and in Japan from the late 1980's to now. In both instances the banking system contracted considerably setting in motion a debilitating deflation. Not good for anyone.

The Fed's actions yesterday were a good step. It is not a bailout. It is simply a measure to try to prevent widescale failures in the banking system which will hurt the average joe and exacerbate the recession even more. It's unfortunate that it looks like a bailout, but it is needed. The banking system is in BIG trouble. If you think it doesn't matter or will hurt you, think again. What will you think when you're broker goes under and all your efforts go up in smoke.

Everyone needs to do some of their own thinking on this. All I see on this site lately are people parroting the same story with very little facts.

 

[Ialwayslearn]

Too little too late.

Of course hindsight is 20/20, but it was the banks and the fed and their "easy money" that got us into this mess.

And yes all those people who bought things they couldn't afford are responsible, but the fed created the "crack" i.e. easy money and everyone smoked it and became hooked.

No easy money = no crack heads!

This injection of 200bn is like a cash advance on your Visa to pay off your Mastercard. This could buy you some time and may be needed if you are without a job, income source, etc.

But eventually you have to change something FUNDAMENTALLY to make it work. This is an ABSOLUTE MUST!!

This will not change anything except WHEN we must face the music, HOW LONG we must face it for and the SEVERITY of said music.