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It’s interesting this rumour (KER gets the scoop again) occurs just hours after the US government announces it’s trying to recover from 17 major banks. What a perfect way of getting an ‘out-of-court’ settlement.
I couldn’t see the rumour being true at first as too many big bond holders would stop it, but with the threat of impending litigation against the banks, it’s a perfect piece of the puzzle. What would a bank prefer….paying billions out now, or accepting a lower cash stream on mortgage premiums? I wonder if Vegas is taking bets on this…
HI John,
I too, could not see this as making any sense. But, when I thought about it, I realized that it did, at least for the administration.
First of all, it guarantees re-election. Secondly it puts cash in the government’s hands and thirdly, it puts more cash in people;s pockets so that they can spend, foolishly, more money.
Yep, it would probably work.
Big Al
P.S. What a blow for capitalism.
It’s in some other comments, but someone asked what part of the Constitution would provide the Executive branch to lower interest rates (my wording). It’s a great question, because the answer is “there isn’t any”. Maybe an Executive Order? It worked once for gold.
From (Reuters) – Asian shares and the euro fell on Tuesday on fears that Europe’s sovereign debt troubles are worsening and could trigger a second, full-blown banking crisis.
S&P 500 futures traded in Asia were down 2.7 percent, pointing to a weaker opening on Wall Street as it catches up to European and Asian markets after a long U.S. holiday weekend. .EU .N
European stocks tumbled 4 percent on Monday, with financial shares falling to their lowest in more than two years.
http://www.reuters.com/article/2011/09/06/us-markets-global-idUSTRE77L0AE20110906.
Best