Headlines...

NEW -> Contingent Buyer Assistance Program
Bank run in Britain: <a href="http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2007/09/14/bcnnorth414.xml">www.telegraph.co.uk/money/main.jhtml</a>
 
Yeah I know 99% of IHB readers get the patrick news but the <a href="http://www.thestreet.com/s/funny-money-subprime-solution/newsanalysis/funnymoney/10379778.html?">Funny Money</a> is a must read.
 
<p>For an opinion on just how important the Fed funds rate is:</p>

<p><a href="http://www.hussmanfunds.com/wmc/wmc070917.htm">http://www.hussmanfunds.com/wmc/wmc070917.htm</a></p>

<p>I had never heard this before, so it is quite a shock to me and is still sinking in.</p>
 
The infection is spreading to England. . .





<a href="http://biz.yahoo.com/ap/070917/britain_northern_rock.html?.v=12">biz.yahoo.com/ap/070917/britain_northern_rock.html</a>
 
This is interesting. . . inflation still an issue? I guess it depends on how you look at it.





<a href="http://www.cnbc.com/id/20829650">www.cnbc.com/id/20829650</a>





"U.S. producer prices fell by a much larger-than-expected 1.4% in August as energy


prices slumped, government data showed on Tuesday, but a key measure of core inflation at the producer level rose slightly more than forecast.





<strong>The Labor Department said it was the largest fall in producer prices since a 1.5 percent decline in October 2006, while the 6.6 percent decline in finished energy prices last month was the sharpest fall since April 2003, when they dropped 8.0 percent.</strong>

<p class="textBodyBlack">Gasoline prices also posted a sharp decline, falling 13.8 percent last month, marking their largest drop since September 2006 when they fell 15.9 percent, the Labor Department said. </p>

<p class="textBodyBlack">Economists polled by Reuters forecast producer prices -- a gauge of the prices paid at the farm and factory gate -- would fall 0.2 percent last month from an unrevised 0.6 percent gain


in July.</p>

<p class="textBodyBlack"><strong>Stripping out volatile food and energy costs, producer prices rose 0.2 percent in August following an unrevised 0.1 percent increase in July. Economists had expected core producer prices to rise 0.1 percent last month.</strong>"</p>




<p class="textBodyBlack"> </p>
 
<p>Countrywide and NorthernRock; anybody want to speculate on which financial instituiton will incur the next "bank run"?</p>

<p>I will guess Indymac. </p>
 
<p>From the FMOC:</p>

<p id="prContentDate"><em>Release Date: September 18, 2007 </em></p>

<em>For immediate release </em>

<p><em></em></p>

<p><em>The Federal Open Market Committee decided today to lower its target for the federal funds rate 50 basis points to 4-3/4 percent.</em></p>

<p><em>Economic growth was moderate during the first half of the year, but the tightening of credit conditions has the potential to intensify the housing correction and to restrain economic growth more generally. Today’s action is intended to help forestall some of the adverse effects on the broader economy that might otherwise arise from the disruptions in financial markets and to promote moderate growth over time. </em></p>

<p><em>Readings on core inflation have improved modestly this year. However, the Committee judges that some inflation risks remain, and it will continue to monitor inflation developments carefully. </em></p>

<p><em>Developments in financial markets since the Committee’s last regular meeting have increased the uncertainty surrounding the economic outlook. The Committee will continue to assess the effects of these and other developments on economic prospects and will act as needed to foster price stability and sustainable economic growth.</em></p>

<p><em>Voting for the FOMC monetary policy action were: Ben S. Bernanke, Chairman; Timothy F. Geithner, Vice Chairman; Charles L. Evans; Thomas M. Hoenig; Donald L. Kohn; Randall S. Kroszner; Frederic S. Mishkin; William Poole; Eric Rosengren; and Kevin M. Warsh. </em></p>

<p><em>In a related action, the Board of Governors unanimously approved a 50-basis-point decrease in the discount rate to 5-1/4 percent. In taking this action, the Board approved the requests submitted by the Boards of Directors of the Federal Reserve Banks of Boston, New York, Cleveland, St. Louis, Minneapolis, Kansas City, and San Francisco.</em></p>

<p>A 50 basis point cut, followed by a 175 point gain (as of this posting) on the DOW. My flabber is gasted.</p>
 
My understanding, and please feel free to correct me if I am wrong, is that Bernanke can do whatever he wants, no matter what the vote. The vote is for appearances only, so maybe Poole and the others think they should vote as one unit to show solidarity.
 
mino - Isn't that a crack up? Can you imagine if you could run your finances that way? Keep on borrowing, and when you can't pay the money back, threaten your lender with, "If you don't approve me for a bigger loan, I will default."
 
Usually raising the debt limit is an opportunity for political grandstanding in Congress. However, the Republicans no longer care, and the Democrats never did, so where will the fight come from this time? <a href="http://www.ronpaul2008.com/">Ron Paul</a>?
 
It's like a big Ponzi Scheme almost.





Yeah said to say it but the Republican party has swayed from one of its cornerstones which was fiscal conservatism. They now spend more than ever thought was possible.
 
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