"The last time the Fed Funds target rate got this out of line with the effective rate was in 1987, and from a base of over 6% not 2%. On a percentage basis, at three times the target rate the spread is unprecedented. It happened today."
Robroy at 20:06 2008-09-15 said:
I'm not a finance expert, but when the spread between the fed funds target and the actual rate is that high, the banks don't want to lend to each other, let alone average Joe. Forget about a recession. Credit seizure means economic depression. I think we are on the precipice of an economic plunge, the likes of which many of us have never seen. This will make 1990 look tame. $600 Billion of defaulted debt in the Lehman bankruptcy is the largest ever in U.S. dwarfing the $100 Billion or so in the WorldCom collapse. AIG is looking pretty bad too and that could be even bigger if it goes.
Any thoughts as to whether it will be an inflationary or deflationary depression? Permalink
So sad...I cannot wait for a new and different government hopefully Palin kind of thinking ones. There is not enough room in our prisons to jail the swindling politicians and "business" executives that have bankrupted and sold out this beautiful country and lied to the public for the past months, starting with Alan Greenspan. But I pe we make room for them. Naive of me to think that stuff this bad only happened in third world countries. Well, since we have obviously ran out of money, after watching the Fed Funds target rate and spreads today, we obviously have become a Third World broke country that will need to beg to our enemies or create more wars to feel like we are still ruling the world.
Sad week today, and wait until this quarter numbers are disclosed by the financial sector, especially Wells Fargo, HSBC and Citi that have maneuvered them well until now. WAMU will be gone by then with so many others....There is no way AIG will get $70 Billlion and Bank of America, Barclays, Citibank, Credit Suisse, Deutsche Bank, Goldman Sachs, JP Morgan and UBS will continue to steal the little crumbs left on the table. Man, how did we let this happen? Permalink