Tilted Forum Project Discussion Community - View Single Post

Cynthetiq · 06-03-2008, 11:17 AM

Quote:

Originally Posted by dc_dux

Cynthetiq....to me it comes down to a simple question:

would effective and comprehensive safeguards to protect stockholders aganst future enrons/tycos/worldcoms been implemented voluntarily w/o government regulation?

I don't think so. Criminals are tricky bastards and will exploit whatever they can where ever, and whenever they see an opportunity, regardless of the laws that confront them.

Private investors invest in private companies... with the same kinds of risk.

Caveat Emptor.

When friends asked me to invest in Enron and the rest of those companies, I looked at the information in front of me and thought to myself, "This is too good to be true..." Spectaular profits each and every quarter in emerging markets that have little to no value but potetial of showing income???? I thought the same thing about people investing and flipping real estate. Yes, some people did make some money, but those infomercials of the McCorkle and Calton Sheets buy a home for no money down are just crap. Again, Buyer beware, if it's too good to be true, it's probably not.

back to the credit:

I just read this

Quote:

View: Fed Auctions More Funds for Banks
Source: Time
posted with the TFP thread generator

Fed Auctions More Funds for Banks
Tuesday, Jun. 03, 2008
Fed Auctions More Funds for Banks
By AP/JEANNINE AVERSA

(WASHINGTON) — The Federal Reserve has auctioned another $75 billion in loans to squeezed banks to help them overcome credit problems.

The central bank on Tuesday announced the results of its most recent auction — the 13th since the program started in December. It's part of an ongoing effort to ease financial turmoil and credit stresses.

In the latest auction, commercial banks paid an interest rate of 2.26 percent for the short-term loans. There were 73 bidders for the slice of the $75 billion in 28-day loans. The Fed received bids for $95.9 billion worth of the loans. The auction was conducted on Monday with the results released on Tuesday.

In mid-December the Fed announced it was creating an auction program that would give banks a new way to get short-term loans from the central bank and to help them over the credit hump. A global credit crunch has made banks reluctant to lend to each other, which has crimped lending to individuals and businesses.

The smooth flow of credit is the economy's lifeblood. It permits people to finance big-ticket purchases, such as homes and cars, and help businesses expand operations and hire workers.

Wanting to avert a broader panic that could endanger the entire U.S. financial system, the Fed has taken a number of extraordinary actions to provide relief. In its broadest extension of lending authority since the 1930s, the central bank agreed to temporarily let investment firms obtain emergency loans directly from the Fed, a privilege that only commercial banks had been granted.

The central bank is expected to focus more on these and other efforts to help banks and investment firms overcome any credit problems as it winds down an aggressive rate-cutting campaign that started last September.

To help bolster the economy, the Fed in late April lowered a key interest rate by one-quarter percentage point to 2 percent. However, it signaled that may be the last reduction for some time. The Fed is hoping that its powerful rate cuts along with the government stimulus package of tax rebates will help lift the economy out of its funk in the second half of this year.

At what point do we pay the toll to cross the bridge? or is this just made up as we go along and keep passing it on to the next person or generation like a venerable game of musical chairs, so long as I have a seat, it's a fun game to play.