The Bush administration is urgently preparing a massive intervention to revive the U.S. financial system, including a plan to sweep away the unpaid loans that are choking banks and blocking the flow of money to borrowers.

Congressional leaders gave bipartisan support to the administration’s efforts after a meeting last night with Treasury Secretary Henry M. Paulson Jr. and Federal Reserve Chairman Ben S. Bernanke.

Paulson and Bernanke presented a "chilling" picture of the state of the financial system, according to a participant in the meeting who spoke on condition of anonymity. Lawmakers were told that the consequences would be grave if they failed to pass legislation by the end of next week. Sen. Harry Reid (D-Nev.) and Rep. Nancy Pelosi (D-Calif.) committed to meeting that deadline.
Seems like somebody has an idea of what to do.

Written By: Neo
URL: http://
Seems like somebody has an idea of what to do.
I’d guess it’s more an idea of something to do.

Written By: Arcs
URL: http://
I often wondered - how does one go about shorting houses?

Perhaps part of the problem is lack of such a financial mechanism?

Written By: Joseph Somsel
URL: http://
If you want to pretend that short selling is "just" a mechanism for market adjustment, then, of course, banning it is, at best, nonsensical.

A hammer is a very efficient mechanism for driving nails, but it can also be used to smash a skull. Short selling has other uses/effects, too, and today, those effects - in many cases, a deliberate attempt to control the market not to establish the optimum price, but to artifically move money from investors to speculators pockets - banning short sales for a temporary "cooling off" period is not a stupid move, but rather a recognition of the influence of herd mentality.

That said, none of the moves I see being planned are more than a bandaid, and will not address the underlying problem - size. We have BIG companies, BIG labor, and BIG government. We need to reduce the size of all. A competitive market works, but is easily distorted when there are all of 3 humongous players.

Written By: bud
URL: http://
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Written By: 3

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