Fed Considers Plan to Buy Companies’ Unsecured Debt

[seemslikeadream]

http://www.nytimes.com/2008/10/07/business/07markets.html?_r=1&ref=us&oref=slogin

WASHINGTON — As pressure built in the credit markets and stocks spiraled lower around the world on Monday, the Federal Reserve was considering a radical new plan to jump-start the engine of the financial system.

Under a proposal being discussed with the Treasury Department, the Fed could buy vast amounts of the unsecured short-term debt that companies rely on to finance their day-to-day activities, according to officials familiar with the discussions. If this were to happen, the central bank would come closer than ever to lending directly to businesses.

While the move would put more taxpayer dollars at risk, it underscores the growing sense of urgency felt by policy makers in a climate where lending has virtually dried up.

The plan was being formulated amid cascading losses in global stock markets, as the banking crisis spread across Europe and investors feared dire consequences for the world economy. The Dow Jones industrial average fell as much as 800 points before a late recovery, finishing down 369.88, below 10,000 points for the first time since 2004.

Even before bankers on Wall Street reached their desks, European stocks were plunging. The Russian stock market dropped 19.1 percent, the biggest decline since the fall of the Soviet Union. Major indexes in London and Frankfurt lost more than 7 percent; stocks in Paris fell by 9 percent. Stocks in Latin America and other emerging economies took their worst collective tumble in a decade.

[nadinbrzezinski]

1. There is so much they need to do with little time

ah the summer of '32 all over again

Now that one... in a way been done before, during the depression

[tularetom]

2. As the ghosts of Marx and Lenin high five each other

Capitalism sinks slowly into the sunset.

[nadinbrzezinski]

3. I would not bet on it

at all

and as is, personally marxism has its own problems (just as capitalism has then too)

And neither system can succeed fully since they are utopias

But a mixed economy does, and that is where we are heading AGAIN

[MadHound]

4. Mmm hmm, "put more taxpayer dollars at risk"

Tell ya what, the shit is hitting the fan no matter what. How about we let the taxpayer's dollars stay with the taxpayer at this point so that we can make whatever meager preparations we can for this coming shitstorm rather than throwing it into the raging pyre that is the financial sector.

[Tutonic]

5. Bin Laden msut be doing summersaults in his moldy grave.

We lose.