$2.8 Trillion Lost on Toxic Debt

According to the Financial Stability Report published by the Bank of England (the British equivalent of the Federal Reserve), total losses on toxic debt now exceed $2.8 Trillion worldwide. Losses in the United States are estimated to be $1.6 Trillion alone.

See page 3 of Report.

Looks Like Everyone Will Be Getting Another Stimulus Check

Fed to Provide Unlimited Liquidity to Central Banks

Press Release

U.S. Stocks Open Strongly After Gains Overseas

NYT

The major stock exchanges in New York followed Europe and Asia higher Monday morning, inspired by efforts over the weekend to reassure investors that government would act to restore confidence in the financial system.

The Dow Jones industrial average was up 5 percent or about 422 points in early trading. The broader Standard & Poor’s 500-stock index was also up 5 percent.

Shares in Europe and Asia also moved higher after European leaders announced plans to inject new capital into troubled financial institutions and guarantee interbank lending, and central banks announced new measures aimed at restarting frozen credit markets.

Paul Krugman Wins the Nobel Prize in Economics

Nobelprize.org

Perhaps our next Secretary of the Treasury? (Let's hope)

Stock Market Advice from 1929.

Kashkari Gives ‘Comprehensive Update’ on Rescue Plan

The first details on the TARP implementation. WSJ

Lehman CDS Settle Today - Writers to Pony Up $270 Billion in Cash

Credit Default Swaps on the bankrupt Lehman Brothers debt settle today (October 10th), the preliminary auction valued the Lehman debt at 9.75 cents per dollar, which means that sellers of Lehman CDS will have to pay 90.25% of the debts value - approximatelly $270 billion in cash (Ouch!). The final price will be determined at the 2:00 auction. Details at Creditfixings.com

Fed to Provide AIG With an Additional $37.8 Billion in Loans

Press Release The New York Federal Reserve will loan AIG and additional $37.8 billion dollars. This is in addition to the previous $85 billion! The AIG executives must want to party more on the taxpayers dollar. After the first $85 billion dollar bailout loan they went on this junket. Spending $442,000 for the week including $150,000 for food and $23,000 for spa charges.

Fed, European Central Banks Cut Rates 1/2% in a Coordinated Move to Halt Financial Crisis - Dow Ends Day Down 189.01

Bloomberg The Federal Reserve, European Central Bank and four other central banks lowered interest rates in an unprecedented coordinated effort to ease the economic effects of the worst financial crisis since the Great Depression.

The Fed, ECB, Bank of England, Bank of Canada and Sweden's Riksbank each reduced their benchmark rates by half a percentage point. The Bank of Japan, which didn't participate in the move, said it supported the action. Switzerland also took part. China's central bank separately cut its key rate 0.27 percentage point.

``We are now looking at the first page of the global- depression playbook,'' said Carl Weinberg, chief economist at High Frequency Economics in Valhalla, New York. ``The only solution is to cut rates as close to zero as you dare,'' pump money into the banking system ``hand over fist'' and increase government spending, he said.

Dow Down Record 800 Points At One Point Today - Closes Down 360

During the first day of trading after the historic 700 billion dollar Wall Street bailout passed congress, the the graph of the U.S stock market looked like the flight path of a Stuka dive bomber, at one point off 800 points before recovering at the end of the day down 360 points to close at 9962 or 3.5%.

The only good thing to come out of this 700 billion dollar wealth transfer from taxpayer to Wall Street is that the FDIC increased it's deposit insurance on bank accounts from $100,000 to $250,000.

It is no longer a Subprime Crisis it is a Global Financial Crisis. Subprime was the spark that started the fire but it is the Credit Default Swaps that are propagating and multiplying the disaster around the globe. To couteract the financial chaos over the weekend, Ireland guaranteed bank deposits for two years, and now Germany has guaranteed bank deposits in that country.