Re: SC78

http://www.globalresearch.ca/index.php?context=va&aid=10479

Panic grips global financial markets

...............The Fed announced Monday that it would immediately double the amount of cash available to US banks under a so-called “auction facility” it launched last December. Under this program, the Fed extends low-cost credit to the banks and accepts as collateral virtually worthless assets such as mortgage-backed securities.

The Fed increased its credit line under the program from $150 billion to $300 billion, said it would soon raise that amount to $600 billion, and would bring the total of such loans to $900 billion by the end of the year.

The Fed also announced it would begin paying the banks interest on reserves they keep in the Federal Reserve system, another windfall that will eventually be paid with taxpayer funds. This change is one of the provisions, previously unreported in the media, contained in the bailout package signed into law on Friday.

Another is even more far-reaching. It authorizes the US Treasury to guarantee the Federal Reserve against any losses it incurs in pumping liquidity into the banking system. This could potentially cost US taxpayers hundreds of billions of dollars beyond the purported $700 billion cost of the bailout passed on Friday.

Paulson rushed to put in place the machinery to begin buying securities from the banks with public funds. The Treasury named a high-ranking official, Neel Kashkari, to head a new Office of Financial Stability and began soliciting for Wall Street asset managers to oversee the program.

Bush, attempting to calm the markets, made an appearance in Texas and said getting the bailout program up and running would “take time.” This only heightened the panic in financial markets, which are facing a lockdown of virtually all forms of credit.

Notwithstanding the claims of the bailout’s backers, particularly Democratic congressional leaders and presidential candidate Barack Obama, that the process would have “transparency” and “oversight” safeguards to prevent conflicts of interest, the appointment of Kashkari already points to a program rife with insider influence, self-dealing and corruption. Kashkari is a former executive at Goldman Sachs and worked under Paulson when Paulson was CEO of the Wall Street firm.

The global market panic has already demonstrated that the bailout, while covering the losses of the most powerful sections of the financial elite, will do little, if anything, to stem the deepening financial crisis and recession. The scale of worthless paper assets within the global banking system is so immense that the banks themselves have no confidence in the credit-worthiness of their counterparts and are refusing to lend.

Monday’s sell-off was precipitated by a number of factors. The US jobless report issued Friday showed a large increase in the net job loss in September, increasing fears of a deep and protracted recession. A series of bank failures destabilized the entire banking system in Europe. And the European financial summit held Saturday produced no coordinated plan to head off more bank failures.

All of the financial indices on Monday pointed to a general collapse of confidence in the world credit system, which is increasingly undermining the broader economy. Oil prices continued to fall sharply, gold futures soared, yields on US government bonds fell to nearly zero and inter-bank lending rates rose even higher.

The Conference Board in the US reported that its employment trends index fell 0.8 percent in September, leaving it almost 10 percent below the level a year ago. Many economists are now predicting that unemployment in the US will rise sharply, exceeding 7 percent in early 2009.

The investment bank Morgan Stanley warned: “The recession now threatens to go global, with industrial economies on the brink, and trade and financial shocks threatening the developing world.”..........

As stated above, " Another is even more far-reaching. It authorizes the US Treasury to guarantee the Federal Reserve against any losses it incurs in pumping liquidity into the banking system. This could potentially cost US taxpayers hundreds of billions of dollars beyond the purported $700 billion cost of the bailout passed on Friday. " the Fed ( a cartel of elite private central banksters ) will be pumping liquidity into the system by accepting as collateral virtually worthless assets such as mortgage-backed securities, and this fraudulent bailout plan then allows them insurance against any losses incured by taking on the toxic paper. The US Treasury is the insurer meaning the US taxpayer. The fraudulent activitiy in all of this is off the scale. The elites financiers like the Fed will continue to screw the american public with even more ongoing complex finacial machinations. You can bet that Paulson and his new 35 year old Mini Me, Neel Kashkari are working overtime spinning a grand web of new fraudulent mechanisms that will allow the elite finaciers the ability to capitalize on the massive bailout and liquidity moves. These people are literally stealing all our futures, and that of our children.