Things must be bad. We haven't had any rumours about an Asian consortium buying Lehman yet today.
But the market did manage to shrug off some awful employment numbers. Good 'tone' and 'money on the sidelines.' Bottom is in and time to buy, with money in your hands and tears in your eyes.
Yowza yowzer.. Get yer hot stocks and nekkid ladies.... and now for the news.
Former Fed Chairman Volcker Says Current Crisis is Most Complex He's Seen
By Steve Stecyk
Fri Sep 5, 2008 13:47pm
(CEP News) - Speaking at a conference in Calgary, Former Fed Chairman Paul Volcker said the current financial crisis is the most "complicated one" he's ever witnessed.
Delivering remarks at the Spruce Meadows Forum, Volcker said he expected losses from the crisis to total more than $500B and that the U.S. economy would grow at the slowest pace since the Great Depression.
Volcker added that banking regulation must expand with any safety net.
Volcker Says Finance System 'Broken,' Losses May Rise
By Steve Matthews and Doug Alexander
Sept. 5 (Bloomberg) -- Former Federal Reserve Chairman Paul Volcker said the U.S. financial system, dependent upon securitization rather than traditional bank loans, is broken, and may contribute to the weakest expansion since the 1930s.
''This bright new system, this practice in the United States, this practice in the United Kingdom and elsewhere, has broken down,'' Volcker said today at a banking conference in Calgary. ''Growth in the economy in this decade will be the slowest of any decade since the Great Depression, right in the middle of all this financial innovation.''
The former Fed chief projected ''a lot'' more losses from the collapse in the mortgage-backed debt market, after the more than $500 billion tallied so far, should the U.S., European and Japanese economies fail to pick up. He urged changes in financial regulations, echoing calls among sitting officials and legislators.
''It is the most complicated financial crisis I have ever experienced, and I have experienced a few,'' said Volcker, who has endorsed Democratic presidential candidate Barack Obama. Volcker ran the Fed from 1979 to 1987, and engineered an increase in interest rates to 20 percent to quell inflation that exceeded 10 percent.
U.S. growth has averaged 2.3 percent so far this decade, down from 3.4 percent in the 1990s. The current growth rate is the weakest since at least the 1940s, when the government began compiling figures on quarterly gross domestic product....
''Changes are going to have to be made'' to the global financial system, Volcker said. Banks three decades ago accounted for about 60 percent of U.S. credit; that later declined to about 30 percent as securitization -- where financial firms package assets into bonds and other instruments and sell them on to investors and other companies -- spread.
Volcker said he agreed with descriptions of the current financial system as ''dysfunctional. That is a polite way of saying it failed.''
The U.S. government, not the Fed, should take the lead in rescuing any financial institutions when ''push comes to shove,'' he said, echoing comments by former Fed Chairman Alan Greenspan.
The Fed rescued Bear Stearns Cos. from bankruptcy in March, facilitating the firm's merger with JPMorgan Chase & Co. by loaning against $29 billion of Bear securities.
Bernanke has also made central bank loans available to nonbanks for the first time since the 1930s and lowered the rates at which banks can borrow from the Fed.
