Government bailout hits $8.5 trillion

The federal government committed an additional $800 billion to two new loan programs on Tuesday, bringing its cumulative commitment to financial rescue initiatives to a staggering $8.5 trillion, according to Bloomberg News.

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That sum represents almost 60 percent of the nation’s estimated gross domestic product.

Given the unprecedented size and complexity of these programs and the fact that many have never been tried before, it’s impossible to predict how much they will cost taxpayers. The final cost won’t be known for many years.

The money has been committed to a wide array of programs, including loans and loan guarantees, asset purchases, equity investments in financial companies, tax breaks for banks, help for struggling homeowners and a currency stabilization fund.

Most of the money, about $5.5 trillion, comes from the Federal Reserve, which as an independent entity does not need congressional approval to lend money to banks or, in “unusual and exigent circumstances,” to other financial institutions.

Read moreGovernment bailout hits $8.5 trillion

Commandoes Launch Operations to Clear Luxury Hotels Seized by Gunmen in Mumbai

The Taj Hotel, Mumbai’s landmark hotel, catches fire after an attack in Mumbai, early Thursday morning, 27 Nov 2008

In India’s financial hub of Mumbai, commandoes and troops have mounted an operation to clear two luxury hotels seized by gunmen.

Anjana Pasricha reports from New Delhi, at least 101 people have been killed and as many as 287 wounded in coordinated attacks mounted by terrorists at night.

A crack team of 200 commandoes flew in to Mumbai from New Delhi early Thursday to take charge of rescue operations in two of the city’s most posh hotels – the Taj Mahal hotel and Oberoi Hotel. Soldiers have ringed the hotels.

Sporadic gunshots could be heard outside as commandoes entered the hotels.

Foreign tourist breaks down after being rescued safely from hotel following attack in Mumbai, India, 27 Nov 2008

The two hotels were among several high profile targets attacked by gunmen who fired indiscriminately and tossed grenades late Wednesday. Since then, an unknown number of people – both foreigners and Indians – are trapped inside parts of the hotels, popular with both business travelers and tourists.

Some foreigners are believed to be held hostage by the gunmen.

Some people evacuated overnight

Through the night, fire crews evacuated a number of people from the Taj Mahal hotel where a grenade apparently caused a huge blaze in a part of the building.

Some of the people trapped inside, like this guest at Taj Hotel, managed to communicate what was happening to reporters via their phones.

“Till about 15 minutes ago, near my room, in the stairwell, there was lot of firing going on, automatic weapons,” says a guest. “The hotel management has done a very good job… They told us to turn the lights off, shut the curtains and stay inside and do not answer the door.”

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Americans’ Food Stamp Use Nears All-Time High

Fueled by rising unemployment and food prices, the number of Americans on food stamps is poised to exceed 30 million for the first time this month, surpassing the historic high set in 2005 after Hurricane Katrina.

The figures will put the spotlight on hunger when Congress begins deliberations on a new economic stimulus package, said legislators and anti-hunger advocates, predicting that any stimulus bill will include a boost in food stamp benefits. Advocates are also optimistic that President-elect Barack Obama, who made campaign promises to end childhood hunger and whose mother once briefly received food stamps, will make the issue a priority next year.

“We soon will have the most food stamps recipients in the history of our country,” said Jim Weill, president of the Food Research and Action Center, a D.C.-based anti-hunger policy organization. “If the economic forecasts come true, we’re likely to see the most hunger that we’ve seen since the 1981 recession and maybe since the 1960s, when these programs were established.”

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Max Keiser on the Obama economic team; Global Banking System is still on the cusp of a massive implosion

Max Keiser’s appearance on Aljazeera English on November 24, 2008 as Obama announces his economics team including Tim Geithner and Larry Summers.

Max discusses whether Obama can do anything to rescue the financial system that has already had $7 trillion showered on it. And whether or not the Chinese will continue to finance America’s increasing debt needs.

Finally, will there be a devaluation of the US dollar?

Source: YouTube

Max Keiser Calls Henry Paulson A Financial Terrorist

If you want to see a very emotional financial analyst this is a must see.
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Max Keiser calls treasury secretary Hank Paulson a “Financial Terrorist”. He states America is issuing non collateralized bonds that are worthless.

The Dollar and the Bonds are counterfeit. They have nothing backing them. This will lead to an economic collapse to all countries who play into this Wall Street scheme.

Developing nations are giving away their commodities for worthless paper.

Source: YouTube

Fed Risks `Spitting in the Wind’ With $800 Billion Pledge to Thaw Lending

Nov. 26 (Bloomberg) — The Federal Reserve’s new $800 billion effort to combat the financial crisis is designed to make credit more accessible to shaken consumers who aren’t sure they want more debt.

Households and lenders may not respond much because of the wealth destruction from plunging property and stock values, and the deepening economic slump, economists say. That means banks may end up returning the Fed’s new liquidity through deposits at the central bank.

“We are sort of spitting in the wind,” said Michael Darda, chief economist at MKM Partners LP in Greenwich, Connecticut. “Banks won’t be throwing a lot of loans out there when they fear — rationally — those loans may not be paid back.”

Read moreFed Risks `Spitting in the Wind’ With $800 Billion Pledge to Thaw Lending

China slashes interest rates as panic spreads

The People’s Bank of China cut interest rates by more than 1pc point as the economy crumbles and millions of jobs are predicted to go ahead of Christmas.


Factory workers surround a damaged police car during a protest outside Kai Da toy factory in Dongguan, China. Photo:REUTERS

The move came just one day after the World Bank predicted that China would grow by 7.5pc next year. The level of growth may appear robust by Western standards, but it would represent the slowest economic expansion in China for the last two decades.

It is also perilously close to the 7pc minimum level of growth that Chinese economists believe is necessary in order to create enough jobs for the 6m university graduates who will enter the jobs market next year.


Factory workers smash an office during a protest at Kai Da toy factory in Dongguan, China. Photo: REUTERS

It is the fourth interest rate cut from the Chinese central bank in the last ten weeks as the government desperately battles an evident economic collapse. “China is out to save itself here,” said Patrick Bennett, an analyst with Societe Generale in Hong Kong.

The PBOC reduced its main borrowing rate by 1.08pc points to 5.58pc, the biggest one-off cut since the Asian Financial Crisis in 1997.

In recent weeks, a series of riots across central and southern China have flowered as disgruntled employees aired their grievances at the downturn.

Read moreChina slashes interest rates as panic spreads

Thailand Cancels Flights as Protesters Storm Airport

Nov. 26 (Bloomberg) — Thai authorities warned of flight chaos for thousands of passengers and damage to the tourism industry after anti-government protesters stormed the main terminal at Bangkok’s international airport, closing it down.

Four people were injured by a grenade this morning at the airport, TPBS television station reported. Parnthep Pongpourpan, a spokesman for the protesters, said the injuries weren’t serious and the People’s Alliance for Democracy group will wait for the return of Prime Minister Somchai Wongsawat, whose resignation they are demanding.

The demonstrators, who want Somchai to take responsibility for deadly clashes with police last month, may force him to declare a state of emergency to prevent escalating violence. The prime minister, set to return today from the Asia-Pacific Economic Cooperation forum in Peru, has rejected the resignation calls and police have avoided using force since the Oct. 7 clash in which two people died and 470 were injured.

“Tens of thousands of tourists will be stranded here as we stopped departure flights,” Porntip Hirunkate, secretary-general of the Tourism Council of Thailand, told Thai PBS television late yesterday. “This will hurt our tourism in December, which is our high season. The impact may go further to next year too.”

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Ron Paul: End the Fed!

Saturday afternoon Ron Paul addressed a crowd of about 500 people in front of the Fed building in downtown Houston. They had come together for one of many End the Fed demonstrations throughout the country.

Here’s a partial transcript of Ron Paul’s speech (slightly edited for clarity):

“It is a great event, and I understand that there are a lot of events like this throughout the country. And this should be very significant. We won’t be on the evening tonight, I’m quite sure of that around the country. But we are on the evening news every single night, every single day, and we’re on the minds of the people every single day because there is a crisis in this country that is as bad as, if not worse than the crisis of the Depression of the 30s. That’s on endlessly [on TV], and we know who caused it. It was the Federal Reserve that gave us all this trouble.

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U.S. Unveils New Programs to Ease Credit

Related article: Fed Pledges Top $7.4 Trillion to Ease Frozen Credit


Treasury Secretary Henry M. Paulson Jr. spoke at a news conference at the Treasury Department on Tuesday in Washington.

The federal government unveiled $800 billion in new loans and debt purchases on Tuesday, hoping another infusion of cash can help unfreeze troubled credit markets and make borrowing easier for homebuyers, small businesses and students.

The Federal Reserve said that it would buy up to $600 billion in mortgage-backed assets from the government-sponsored mortgage finance giants Fannie Mae and Freddie Mac. The agency would also buy up to $100 billion in debt directly from the companies and up to $500 billion in mortgage-backed securities.

“This action is being taken to reduce the cost and increase the availability of credit for the purchase of houses, which in turn should support housing markets and foster improved conditions in financial markets more generally,” the Federal Reserve said in a statement.

Separately, the Fed and Treasury Department announced a $200 billion program to ease commercial lending on debts like student loans, car loans or business loans. The Fed would lend up to $200 billion to holders of asset-backed securities supported by car loans, credit card loans, student loans, and business loans guaranteed by the Small Business Administration.

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