On Eve of Debate it's OFFICIAL...We Are In a Recession

On the eve of the debate tonight, the Federal Reserve has made official what many of us have know now for over a year. America is in a recession! So states the head of the San Francisco branch of the Federal Reserve, Janet Yellen .

This official pronouncement could greatly change the flavor of the debate tonight if the moderator brings it up as a question early on in the debate. This news further makes the point that all other issues including Ayars take at best a second seat to the economy.

Federal Reserve Official: U.S. Economy in Recession

Tuesday, October 14, 2008

NEW YORK — The United States has slipped into recession, the head of the San Francisco branch of the Federal Reserve, the nation's central bank, said Tuesday.

"The recent flow of economic data suggests that the economy was weaker than expected in the third quarter, probably showing essentially no growth at all," said Janet Yellen Tuesday in an address in Palo Alto, California.

"Growth in the fourth quarter appears to be weaker yet, with an outright contraction quite likely," she said. "Indeed, the U.S. economy appears to be in a recession."

Yellen spoke just hours after official data showed the budget deficit tripled in size in the 2007-08 accounting year to $455 billion, or 3.2 percent of gross domestic product.

Her remarks also followed a dramatic period that saw the U.S. government, for the first time since the Great Depression, partially nationalize major banks in its latest move to restore confidence to badly-shaken financial markets.

Economic downturns are a double blow for government budgets because they reduce tax revenue for governments and increase the need for social security spending in the form of unemployment benefits.

The United States of Socialized Banking

According to Secretary Paulson, affectionately called GOD at the Federal Treasury, the bailout bill passed by Congress would give the treasury the right to give banks direct cash infusion in exchange for ownership in those banks! With everything else he has tried failing, Paulson seems about to WADE INTO SOCIALIZED BANKING in yet another attempt to restore confidence in America's financial sector. Here is a CLUE Mr. Paulson...use that money to buy out all first home mortgages in America directly from the property owners, and then remortgage said loans at FED interest rates for 30 years. You can use the interest collected to begin paying down the NATIONAL DEBT. While you are at it, rescend China's Most Favorite Nation trading status.

U.S. May Take Ownership Stake in US Banks

By EDMUND L. ANDREWS and MARK LANDLER

Published: October 8, 2008

WASHINGTON — Having tried without success to unlock frozen credit markets, the Treasury Department is considering taking ownership stakes in many United States banks to try to restore confidence in the financial system, according to government officials.

Shawn Thew/European Pressphoto Agency

Treasury officials say the just-passed $700 billion bailout bill gives them the authority to inject cash directly into banks that request it. Such a move would quickly strengthen banks’ balance sheets and, officials hope, persuade them to resume lending. In return, the law gives the Treasury the right to take ownership positions in banks, including healthy ones.

FED Quietly Funding SECOND Wall Street Bailout! WAKE UP Main Street

A story that should be GRABBING headlines seems to be getting little notice today. It seems that the Fed is creating and funding a SECOND WALL STREET BAILOUT by buying up massive amounts of Short Term paper! Short term paper is a 90 billion dollar a day business...just HOW MUCH OF THIS PAPER IS BEING BOUGHT, and are we on Main Street again FUNDING THIS BUYING SPREE? Wake up Main Street, it's time to get some answers on this breaking story.

Fed to buy massive amounts of short-term debts

From the Associated Press

6:38 AM PDT, October 7, 2008

WASHINGTON -- The Federal Reserve announced today a radical plan to buy massive amounts of short-term debts in a dramatic effort to break through a credit clog that is imperiling the economy.

The Federal Reserve will buy "commercial paper," a short-term financing mechanism that many companies rely on to finance their day-to-day operations, such as purchasing supplies or making payrolls.

The $99.4 billion daily market for this crucial financing, which relies on investors rather than banks, has virtually dried up. That has made it increasingly difficult and expensive for companies to raise money to fund their operations. Commercial paper is a way of borrowing money for short periods, typically ranging from overnight to less than a week.

The unstable situation has left many companies vulnerable. The notion under the plan is for the government to provide a "backstop" that would give companies a new place to get cash, the Fed said. The action makes the Fed a source of credit for nonfinancial businesses in addition to commercial banks and investment firms.

The Fed said it is creating a new entity to buy three-month unsecured and asset-backed commercial paper directly from eligible companies.