If the “The Root Cause Of Our Economic Problems Is The Housing Foreclosure Crisis” as Senator Dodd States, then all the bad mortgages and the $700 Billion Bailout is not necessary.

Or maybe he is ass backwards and it was Wall Street with their aggressive mortgages and the Federal Reserve who encouraged folks to go out and get adjustable rate mortgages and did not do their jobs anyway regardless of Wall Street.

Remember it is the Federal Reserve that monitors and controls the financial markets in the United States!

Maybe Greenspan should not have raised the target rate 17 consecutive sessions after he went out and told everyone to go out an get adjustable rate mortgages.

Look that one up.

Seems like the Federal Reserve failed to do their job, again!

The Federal Open Market Committee (FOMC) decided today to lower its target for the federal funds rate 50 basis points to 1 percent.

The pace of economic activity appears to have slowed markedly, owing importantly to a decline in consumer expenditures. Business equipment spending and industrial production have weakened in recent months, and slowing economic activity in many foreign economies is damping the prospects for U.S. exports. Moreover, the intensification of financial market turmoil is likely to exert additional restraint on spending, partly by further reducing the ability of households and businesses to obtain credit.

In light of the declines in the prices of energy and other commodities and the weaker prospects for economic activity, the Committee expects inflation to moderate in coming quarters to levels consistent with price stability.

Recent policy actions, including today’s rate reduction, coordinated interest rate cuts by central banks, extraordinary liquidity measures, and official steps to strengthen financial systems, should help over time to improve credit conditions and promote a return to moderate economic growth. Nevertheless, downside risks to growth remain. The Committee will monitor economic and financial developments carefully and will act as needed to promote sustainable economic growth and price stability.

Voting for the FOMC monetary policy action was: Ben S. Bernanke, Chairman; Timothy F. Geithner, Vice Chairman; Elizabeth A. Duke; Richard W. Fisher; Donald L. Kohn; Randall S. Kroszner; Sandra Pianalto; Charles I. Plosser; Gary H. Stern; and Kevin M. Warsh.

In a related action, the Board of Governors unanimously approved a 50-basis-point decrease in the discount rate to 1-1/4 percent. In taking this action, the Board approved the requests submitted by the Boards of Directors of the Federal Reserve  Banks of Boston, New York, Cleveland, and San Francisco.

The Federal Reserve yields enormous power over the health of the nation’s economy AP Personal Finance Editor Trevor Delaney explains how setting interest rates is one of its most powerful tools.

Hi Friends . . . . . I’m against the $85,000,000,000.00 bailout of AIG.
Instead, I’m in favor of giving $85,000,000,000 to America in a “We Deserve It Dividend.”

To make the math simple, let’s assume there are 200,000,000 bonafide U.S. Citizens 18+.

Our population is about 301,000,000 +/- counting every man, woman and child.

So 200,000,000 might be a fair stab at adults 18 and up.

So divide 200 million adults 18+ into $85 billon that equals $425,000.00.

My plan is to give $425,000 to every person 18+ as a “We Deserve It Dividend.”

Of course, it would NOT be tax free.

So let’s assume a tax rate of 30%.

Every individual 18+ has to pay $127,500.00 in taxes. That sends $25,500,000,000 right back to Uncle Sam. But it means that every adult 18+ has $297,500.00 in their pocket. A husband and wife team has $595,000.00.

What would you do with $297,500.00 to $595,000.00 in your family?

Pay off your mortgage - housing crisis solved.

Repay college loans - what a great boost to new grads.

Put away money for college - it’ll be there.

Save in a bank - create money to loan to entrepreneurs.

Buy a new car - create jobs.

Invest in the market - capital drives growth.

Pay for your parent’s medical insurance - health care improves.

Enable Deadbeat Dads to come clean - or else.

Remember this is for every adult U S Citizen 18+ including the folks who lost their jobs at Lehman Brothers and every other company that is cutting back. And, of course, for those serving in our Armed Forces.

If we’re going to re-distribute wealth let’s really do it…we’re going to do a $85 billion bailout, let’s bail out every adult US Citizen 18+!

As for AIG - liquidate it. Sell off its parts.
Let American General go back to being American General. Sell off the real estate.
Let the private sector bargain hunters cut it up and clean it up.
Here’s my rationale. We deserve it and AIG doesn’t.

Sure it’s a crazy idea that can “never work.”
But can you imagine the Coast-To-Coast Block Party! How do you spell Economic Boom?
I trust my fellow adult Americans to know how to use the $85 Billion “We Deserve It Dividend” more than do the geniuses at AIG or in Washington DC.

And remember, This plan only really costs $59.5 Billion because $25.5 Billion is returned instantly in taxes to Uncle Sam.

Ahhh…I feel so much better getting that off my chest.

Kindest personal regards, Birk

T. J. Birkenmeier, A Creative Guy & Citizen of the Republic.

PS: Feel free to pass this along to your pals as it’s either good for a
laugh or a tear or a very sobering thought on how to best use $85
Billion!!

Wells Fargo & Company (NYSE:WFC) and Wachovia Corporation (NYSE:WB) said today they have signed a definitive agreement for the merger of the two companies including all of Wachovia’s banking operations in a whole company transaction requiring no financial assistance from the Federal Deposit Insurance Corporation (FDIC) or any other government agency.

Under the agreement, Wells Fargo will acquire all outstanding shares of common stock of Wachovia in a stock-for-stock transaction. In the transaction, Wells Fargo will acquire all of Wachovia Corporation and all its businesses and obligations, including its preferred equity and indebtedness, and all its banking deposits.

Under terms of the agreement, which has been approved unanimously by the boards of both companies, Wachovia shareholders will receive 0.1991 shares of Wells Fargo common stock in exchange for each share of Wachovia common stock. The transaction, based on Wells Fargo’s closing stock price of $35.16 on October 2, 2008, is valued at $7.00 per Wachovia common share for a total transaction value of approximately $15.1 billion. Wachovia has almost 2.2 billion common shares outstanding. The agreement requires the approval of Wachovia shareholders and customary approvals of regulators.

Speaking before the Senate Banking Committee, SEC Chairman Christopher Cox said commercial banks and broker dealers who sold subprime mortgage backed securities are also being looked at.

“We are investigating whether mortgage lenders properly accounted for the loans in their portfolios, and whether they established appropriate loan loss reserves,” he told the committee.

The Securities and Exchange Commission revealed Tuesday that it has 50 pending subprime related investigations involving residential lenders, investment banking firms, credit rating agencies, and other players involved in the securitization process.

The agency, which is responsible for overseeing bond disclosures on publicly registered securities, said it is investigating whether lenders adequately disclosed the risk profiles of the mortgages they were securitizing.

In late 2006 Lewis S. Ranieri, the co-inventor of the MBS, criticized the SEC in a speech at the National Press Club, saying the agency needs to play a central role in forcing issuers to increase disclosures on bonds collateralized by nontraditional residential loans. At the time, Mr. Ranieri told National Mortgage News that “this isn’t an indictment of the SEC,” but added that “the transparencies are not what they should be.”

Marc Faber said on CNBC on Tuesday that the best (solution) is to let the crisis burn itself out and clean the system, even with pain for people on Wall Street, and the banning short sellers won’t solve anything.