Maybe It’s Time To Hit The Bank This Weekend And Bring A Little Cash Home… Just In Case Monday Turns Into A Blood Bath…
The near-collapse of US investment giant Bear Stearns and its Federal Reserve bailout on Friday stoked fears that the worst is not over.
Bear Stearns, so far the hardest hit by the collapse of the US subprime mortgage market, said it was getting an emergency loan from JPMorgan Chase backed by the Federal Reserve after its liquidity position had “significantly deteriorated.”… (Translation… THEY WENT BROKE!!!)
“Obviously, the Bear Stearns story rapidly gave rise to worries that it might not be the only firm with similar problems,” said Gregory Drahuschak, analyst at Janney Montgomery Scott.
We’re all waiting to see Which bank is going to follow the Bear … Chris Whalen, of the Wall Street consultancy Institutional Risk Analytics, said: “This is going to go all the way up the chain. “I would not be surprised to see an emergency bank holiday announced. That hasn’t happened since Roosevelt.” … During the Depression, 75 years ago almost to the day, Franklin Roosevelt declared a four-day bank holiday, which stopped a frantic run on banks.
Is that what will happen Monday after what analysts described as a classic run on the bank last Thursday?… Mr Whalen added that should banks such as Lehman continue to be unable to sell the billions of dollars of mortgage-backed securities held, they were doomed.
The Bear Stearns news “has sent reverberations throughout all markets worldwide, not only because this is another ‘too big to fail’ scenario, but also because it has strong implications for a domino effect in the already weakened financial services industry and beyond,” added Sherry Cooper, chief economist at BMO Capital Markets.
IN THE MEANTIME… The dollar sank below 99 yen, to the weakest in 12 years, and slumped to a record low versus the euro after JPMorgan Chase & Co. and the New York Federal Reserve bailed out Bear Stearns Cos., as credit market losses widen.
And good ‘ol G.W. Bush say’s that “Our economy will prosper.” but said Americans could counter the downturn if they do one thing: spend.
What do we have to spend George?!?… Oh! You mean the change left over from paying for gas?… Guess you didn’t notice that At the pump, gas prices set records for the fourth straight day, rising 1.3 cents Friday to a national average price of $3.28 a gallon, according to AAA and the Oil Price Information Service… And that average prices are nearing $4 in some parts of Hawaii.
And never mind that Gold hits $1,000 for first time as oil sits around $110 a barrel… And that Diesel, meanwhile, rose 2.9 cents to a new record national average of $3.94 a gallon… A new record… Those trucks that deliver all the groceries and goodies to Wal-Mart?… Guess what they run on?
We’ll just hold out for that rebate check in May… We’ll just hope that if the Banks tighten, or even freeze, home equity lines of credit … We can still pay our rising Credit card APRs that keep going up despite Fed rate cuts
This Story as well as the Next Story make it seem that our 80 year old auntie may be onto something when she insists on keeping a few bucks under the mattress…
Maybe we will just stop by the corner ATM before Monday… And maybe we’ll pick up a lottery ticket or two.. Sounds like a safer bet than the markets.