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Tuesday - premarket summary

Tuesday, September 16, 2008, 7:50 AM

AIG is down another 34% in the premarket.  Something wicked is brewing
over there, despite the "lending pool" announced last night.

There are reports of AIG policy
holders cashing in their policies while they still can.  The report I
read was about people in Singapore doing this...either they are more on
top of things over there, or we just don't report on such stuff
happening in the US, for whatever reason.

Stock futures were, predictably, ramped up in the overnight markets, which is a typical ploy of the PPT...the overnight markets are thinly traded, so it takes less effort to create a boost in futures prices.

Unfortunately, those efforts have now failed, and we are facing a very strong move down at the open.

S&P 500 futures are off 23 points at the moment (9:00)

Gold and silver were heading up in the overseas markets, but, as has been the case for a couple of months now, walls of paper selling happened right at the open of the US Nymex markets at 8:30.

There are rumors that AIG was a big player on the short side in the silver market, so I have my suspicions about what the motives might be for dumping even more massive paper shorts at this time.

The Fed replaced its massive liquidity positions from yesterday with new ones...so the system still have more Fed liquidity than at any time since planes were flying around crashing into buildings.

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1 Comment

phredd's picture
phredd
Status: Member (Offline)
Joined: Sep 9 2008
Posts: 16
Fed Relaxes Lending Rules

Chris-

I was wondering if you might comment on this story, as reported by NPR this morning.

I don't know about you or the other readers of the site, but I found this some of the scariest news of yesterday. Nothing like explicitly attaching bad debt to my savings account to make sure that I can feel Wall Street's pain. In some sense, perhaps a move like this was inevitable, but it sure seems like a desperation move and makes me even more anxious to move all of my assets into something a lot more tangible than a bank account. The article doesn't really address what happens when the government itself is out of money, but it certainly seems like a very natural question to ask at the end of the article.

Here is the Fed's press release as discussed in the NPR story. And here is Section 23A of the Federal Reserve Act, as referred to in the press release. None of this is phrased in a way that makes it easy for the layman to understand, so I sure would like to hear your more expert reaction to the story.

Thanks again for all your work on the site.

-Phredd

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