Senator Harry Reid: "No One Knows What to Do" To End Economic Crisis

[Better Believe It]

September 19, 2008
Harry Reid: "No One Knows What to Do"
The Point of No Return
By MIKE WHITNEY

Presently, "there is roughly $6.84 Trillion in bank deposits. $2.60 Trillion of that is uninsured. There is only $53 billion in FDIC insurance to cover $6.84 Trillion in bank deposits. Of the $6.84 Trillion in bank deposits, the total cash on hand at banks is a mere $273.7 Billion." (Mish's Global Economic Trend Analysis)

$273.7 Billion is a paltry sum, insufficient to meet the needs of even a minor run on the banking system. The storm hasn't even touched ground yet in middle America, and already the system is buckling. 2009 will be bleak, indeed.

The battered and over-leveraged US financial system is facing its greatest challenge in the months ahead. The frantic search for capital has already begun, but with predictably disappointing results.
Neither China nor the Saudi princes are buying any more failing investment banks. They'll leave that for the US taxpayer. What started off as a brilliant plan to pedal garbage mortgage-backed paper to gullible investors around the world has suddenly backfired and now threatens to bring the entire system crashing down and change the geopolitical power paradigm for the forseeable future.

On Monday night, Senate Majority Leader Harry Reid was briefed on the gravity of the situation in a secret meeting with the Treasury Secretary and Federal Reserve Chairman. Reid's remarks are the best summary yet of the events of the last 14 months. He said, ""We are in new territory, this is a different game...No one knows what to do."

Please read the entire article at:

http://www.counterpunch.org/whitney09192008.html

[FVZA_Colonel]

1. I wonder how long it will take the Righties to spin that phrase.

[Ichingcarpenter]

2. Harry needs to suggest a strongly worded letter to someone

I'm sure that would be the first course of action for him.

[Better Believe It]

3. Perhaps Even A Firmly Worded Letter!

I'm afraid you got that right.

[AdHocSolver]

4. The deregulation of the financial system and the repeal of Glass-Steagall allowed this massive fraud

So Harry Reid is confused about what to do now. How about some serious prosecution of the crooked executives who masterminded these schemes.

How about taking over these crooked companies and replacing the crooked executives with some competent (and hopefully honest) managers who will "uncook" the books to find out what condition these companies really are in. And, for these crooked executives, instead of billions in golden parachutes, how about some serious jail time.

How about reinstituting some regulation on corporations to show some seriousness in dealing with this problem. Just moaning about it is not going to convince anyone to help out.

The Chinese and the Saudis don't want to invest any more in the U.S. because this incompetent government is going to let the crooks get away with their scams.

The financial companies are run by swindlers, the sheriff is on the take, and the public is totally bamboozled.

What else is new?

[Better Believe It]

5. That's A Good Start!