Why did the Fed provide $180B to overseas banks?

Answer: Because after all the finger pointing is done, the only true reserve is the dollar.

http://www.businessweek.com/ap/financialnews/D939C5085.htm

I usually won't be deferential to people of power or influence, as oftem they are more myth than matter. However I will concede that given the circumstances, and as a agnostic and a pragmatist in economics; that Bernanke and Paulson so far have done as well as could be expected.

Will all this eventually work out? Nobody knows, but at least the FED and Paulson is looking over the event horizon and assuming correctly that a EURO bank would be the next definitive foot to fall.

Trichet ought to be thankful for the utilitarian philosophy of the fed and banking in general and should be more responsive to monetary policy globally when it comes to harmonizing exchange rates, I hope China is learning as fast as Bernanke and Paulson are as well, that it is not always a zero sum game, that keeping the ball in play is as important as winning.

I would have assumed that there would have been a political unwillingness to address a collpase of a European bank, which would have been systemic destruction to banking.

On derivatives:

There needs to be a Bretton Woods III.

How the mechanics and transparency works out will be interesting, but nonetheless it will be interesting to see who sits at the table and helps craft the new reform. It will not be bankers, it will be philosophers more than economists. We would be well represented by Bernanke, his actions are his belief and a basis for trust and cooperation.

Watch money. Money is the barometer of a society's virtue. When you see that trading is done, not by consent, but by compulsion – when you see that in order to produce, you need to obtain permission from men who produce nothing – when you see that money is flowing to those who deal, not in goods, but in favors – when you see that men get richer by graft and by pull than by work, and your laws don't protect you against them, but protect them against you – when you see corruption being rewarded and honesty becoming a self-sacrifice – you may know that your society is doomed. Money is so noble a medium that it does not compete with guns and it does not make terms with brutality. It will not permit a country to survive as half-property, half-loot.

Lets not fool ourselves, there needs to be reform. I heard talk in the media of who is to blame and I say BLAME THE MEDIA.

Look at the news coverage that promoted 'flipping a house' on CATV. That trumped the 'NEW ECONOMY' the schills on SquakBox, MAD MONEY, and the CATV circuit. Where were the voices of restraint? It is as if news has become owned by large corporate interests that are incapable of policing themselves as well as the politicians that they buy and sell.

So no.. I don't blame the FED, don't blame the Treasury, don't blame the banks for not trusting one another. That is a hell of a commentary, where the banks don't trust one another and they are supposed to be institutions of trust.

I would have been very critical if doing nothing had been the option, or.. Bernanke and Paulson had waited for somebody to tell them what to do, or had waited until after the next bank to fail to act. It is so common to see people who work and make decisions like this, the normal reaction and norm.. to evade making a call. It would have been FATAL not to have acted.

But imagining that the pain globally will not be felt, that the short selling of the few blamed for the short selling of others.. hedge funds, speculation of few blamed on the speculation of the hedge funds... uhm

There needs to be a Bretton Woods III.

Because you not only have a crisis of liquidity but a crisis of confidence.

To trade by means of money is the code of the men of good will. Money rests on the axiom that every man is the owner of his mind and his effort. Money allows no power to prescribe the value of your effort except by the voluntary choice of the man who is willing to trade you his effort in return. Money permits you to obtain for your goods and your labor that which they are worth to the men who buy them, but no more. Money permits no deals except those to mutual benefit by the unforced judgment of the traders. Money demands of you the recognition that men must work for their own benefit, not for their own injury, for their gain, not their loss – the recognition that they are not beasts of burden, born to carry the weight of your misery – that you must offer them values, not wounds – that the common bond among men is not the exchange of suffering, but the exchange of goods. Money demands that you sell, not your weakness to men's stupidity, but your talent to their reason; it demands that you buy, not the shoddiest they offer, but the best your money can find. And when men live by trade – with reason, not force, as their final arbiter – it is the best product that wins, the best performance, then man of best judgment and highest ability – and the degree of a man's productiveness is the degree of his reward.


If the sun comes up tomorrow, it is only because of men of good will. That is all there is between us and the devil. ..... You're a good man; your brother is a good man. I assure you there are other good men. Let us hope the will of good men is enough to counter the terrible strength of this thing that was put in motion.

By their works ye shall know them

And don't iamgine a moment I'm weak or the apologist, that I'm not the leather winged demon when required, Dee Illuminati don't play that shit, doesn't pander.. f-ng tells the truth, with a waterboard as my witness...

Just want to point out that the pragmatist and the utilitarian agnostic can see sometimes more clearly over the event horizon. The Fed and Paulson are gonna take heat by the profance and the ignorant, but in a time of crisis, they exemplified the right stuff.

There needs to be a Bretton Woods III.

There's a passage I got memorized. Ezekiel 25:17. The path of the righteous man is beset on all sides by the inequities of the selfish and the tyranny of evil men. Blessed is he who, in the name of charity and good will, shepherds the weak through the valley of the darkness. For he is truly his brother's keeper and the finder of lost children. And I will strike down upon thee with great vengeance and furious anger those who attempt to poison and destroy my brothers. And you will know I am the Lord when I lay my vengeance upon you. I been sayin' that shit for years. And if you ever heard it, it meant your ass. I never really questioned what it meant. I thought it was just a cold-blooded thing to say to a motherfucker before you popped a cap in his ass. But I saw some shit this mornin' made me think twice. Now I'm thinkin': it could mean you're the evil man. And I'm the righteous man. And Mr. 9mm here, he's the shepherd protecting my righteous ass in the valley of darkness. Or it could be you're the righteous man and I'm the shepherd and it's the world that's evil and selfish. I'd like that. But that shit ain't the truth. The truth is you're the weak. And I'm the tyranny of evil men. But I'm tryin', Ringo. I'm tryin' real hard to be a shepherd.

I don't do no fucking pandering, but if there is any hope at all, it is the hope placed in men of good will who are trying hard to get us through this mess.

There needs to be a Bretton Woods III.