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A Wall Street Week Of Biblical Proportions

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Richard D:
A Wall Street Week Of Biblical Proportions
With Talk Of An Impending Financial Armageddon, The Gov't Takes Unprecedented Action. But Where Will It Lead?

(CBS) We're taking stock this morning of the economic whirlwind that swept from Wall Street across the world this past week. Our Cover Story is reported by Martha Teichner:

At least the Dow ended the week up … 410 points Thursday, 366 points Friday, a glimmer of optimism that the economy might not be allowed to implode after all.

From the moment word reached Wall Street Thursday afternoon that Treasury Secretary Henry Paulson was about to meet with congressional leaders about a massive bailout plan, stocks soared.

The photo op after the meeting was a picture of cooperation and bipartisan unity.

Then there was Paulson, looking like a man in a hurry, announcing his plan:
"We must now take further, decisive action to fundamentally and comprehensively address the root cause of our financial system's stresses."

And President Bush, speaking to an audience larger than Wall Street, on Friday morning: "Investors should know that the United States government is taking action to restore confidence in America's financial markets so they can thrive again."

Confidence … there is no more ephemeral, or essential, component in what amounts to a huge gamble that our leaders can pull our economy (perhaps even the global economy) back from the brink of collapse. Yes, that's apparently how bad things had gotten.

"These are the most difficult times I think our markets have faced in the last 200 years," former Securities and Exchange Commissioner Harvey Pitt told Martha Teichner.


Pitt spent a dozen years at the SEC and was its head from 2001-2003.

"Certainly it's been historical; it could've been Biblical," said Mark Zandi, chief economist of Moody's Economy.com and author of the book "Financial Shock: A 360º Look at the Subprime Mortgage Implosion, and How to Avoid the Next Financial Crisis" (FT press). "I mean, I was waiting for the locusts to fly through my office at one point."

"This could be comparable to the Great Depression in terms of just its effect on financial markets," said Robert Reich.

Now a professor at Berkeley, Reich was Labor Secretary under Bill Clinton. We asked him what lots of Americans are asking: How did it come to this?

"The people who were issuing warnings were not listened to," he said, "partly because Wall Street is very powerful in Washington. Wall Street kept on saying, 'Well, don't worry about anything, we have everything under control, we don't need more regulation.'"

Regulatory firewalls were put in place to prevent the financial excesses that led to the Great Depression. By the 1970s, banks and securities firms, caught up in major turf wars, lobbied for deregulation … and got it.

"We had over-leveraging in many of these firms," said Pitt, "and the net result was that people were leveraged, in some cases, as high as 100 to one."

People were also making piles of money by trading in packages of questionable mortgages and complicated, unregulated securities, called derivatives.

Stevernator:
Yes this is a serious issue that I have been following for a little less than a year. I think there are some changes ahead. We can prepare for the worst and hope for the best. It may be an opportunity to take our eyes off ourselves and learn to rely more and God and support each other. I know a bit but I am not an expert so I hope people can research for themselves and take any necessary precautions.

Kent:
The sooner God brings their new world order crashing down on their heads, the happier I will be. Even if I die in the process.

I find it oddly humorous when men in monkey suits, nice ties, hair all stylish, look all scared and shocked because of their lost and worthless money. They care so much for something so useless. Money is a tool. Hoarding it is as silly as a carpenter hoarding hammers.

Stevernator:
Right after I posted I thought of this scripture.

Matthew ch 6
33But seek first his kingdom and his righteousness, and all these things will be given to you as well. 34Therefore do not worry about tomorrow, for tomorrow will worry about itself. Each day has enough trouble of its own.

Beloved:
I have a question if I invest a million dollars and the stocks drop to 10 cents on the dollar, where did 990,000 go....who has the money?  The company's assets are still the same and the company is still doing business..

It seems to me that all of this is just a ploy they are just suckering more people to buy because stock because it appears cheap , just to drop the price later and repeat the cycle on another sucker.

The rich who are manipulating the market are basically stealing from all of the various retirement plans and also individual stock owners. they are moving a good deal of their money out ahead of the downturns.  

I also find it odd that the banks and AIG all bailed out after all the big financial losses from these storms, perhaps they can get out of paying for the damages or if they do pay  end up paying the home and business owners less after legal negotiation.

beloved

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