If you’re are keeping score at home we had Sunday night/Monday morning “save the world” press releases in August 2007 (cut of the discount rate), December 2007 (TAF), January 2008 (ease 75 bps), March 2008 (Bear) and July 2008 (first Fannie/Freddie rescue) and now September. Anyone want to believe this is the last one (which will be the sixth in 14 months) will be the one that finally works and saves the world?

Bianco went further than we did above, and listed what the Times, Wall Street Journal. WaPo, Financial Times, and Bloomberg had to say. No convergence. Nada (looking at Bloomberg, it quoted WaPo on some matters and cited earlier "analyst opinion').

Under the plan, which could prompt one of the most sweeping government interventions in financial markets in U.S. history, federal officials would place the firms under a conservatorship, a legal status giving the government the option and time to restructure and revive the companies, the sources said. The value of the companies' common stock would be diluted but not wiped out, while the holdings of other securities, including company debt and preferred shares might be protected by the government.

Instead of giving each company a big capital infusion upfront, the government could make quarterly injections as the companies' losses warrant, the sources said. This would be an attempt to minimize the initial cost of the rescue.

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The answer, in Paulson's plan, is that holders of preferred shares and subordinated debt, a riskier but higher-paying class of debt, might be made whole. Government leaders were reluctant to allow holders of those assets to incur major losses because they are widely held by banks, and major losses could cause a wave of bank failures.

Placing the companies in conservatorship, rather than receivership, could signal that the government does not intend to nationalize or liquidate Fannie Mae and Freddie Mac. Instead, under the terms of a federal law passed this summer, conservatorship is designed to allow the government to restructure the companies and return them to private control. Treasury officials have previously compared the process to Chapter 11 bankruptcy.

For years, nobody has questioned the USTBond as the only viable parking lot for surplus capital, the largest and most liquid market in the world. Times will change. Third World bonds do not flourish!

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The fragile trade relationship that the US depends so critically upon hinges upon continued USTreasury Bond support. Do not consider it assured. The USTreasury Bond is the quintessential point of vulnerability to the entire US financial, economic, and military system. A pre-emptive attack against the USTBond must be taken seriously. That is the story that has come to my desk in recent weeks.

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Encircling the Big Bear has led to a powerful reaction, one that comes. It is planned, and awaits execution in an event-driven scenario. Quietly, physical demand for gold & silver has grown to monumental levels. Do not be deterred or distracted by the falling gold & silver prices. The price mechanism has totally broken, as supply is absent and vanishing.

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The gold & silver markets are downtrodden in a harsh correction, when their safe haven status is actually improving. Something is soon to erupt, and it will change the world, especially the United States. The gold & silver prices will suddenly find themselves at 50% to 100% above their current prices, after the upcoming planned pre-emptive event staged against the USTreasurys.

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Amidst profound changes soon to be forced upon the United States, the principal losers will be the USDollar &USTreasury Bond, with the big winners being gold & silver. Foreigners, some with newly forged alliances, are preparing for the next global chapter. That new era will NOT have the United States at the helm, or even at many tables for decision making.

Bank stocks in Europe and the UK fell sharply and the risk of owning their debt leapt on Thursday after the European Central Bank declared a crackdown on abuses of its bank liquidity operations.

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This year it emerged Macquarie Bank had constructed a deal backed by Australian car loans that could be used at the ECB and Lehman Brothers had formed a huge collateralised loan obligation of risky buy-out debt to use at the central bank.

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Only a “small fraction” of collateral would be affected. Banks’ ability to take part in its financing operations would be unimpaired, the ECB president said.

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Analysts at Barclays Capital said the extra haircuts would mean banks might have to post an additional €25bn-€45bn of securities for collateral purposes. “That could cost €375m to €450m annually to banks ... Not in­significant, but probably bearable,” said Laurent Fransolet, analyst at Barcap.

It has been on a buying binge in the United States over the last seven years, snapping up roughly $1 trillion worth of Treasury bonds and mortgage-backed debt issued by Fannie Mae and Freddie Mac...

The bank’s capital, just $3.2 billion, has not grown during the buying spree, despite private warnings from the International Monetary Fund.

Now the central bank needs an infusion of capital. Central banks can, of course, print more money, but that would stoke inflation. Instead, the People’s Bank of China has begun discussions with the finance ministry on ways to shore up its capital, said three people familiar with the discussions who insisted on anonymity because the subject is delicate in China.

This is silly. So China has actually been slacking on moves to convert dollars to Yuan, and the central bank decapitalized itself by holding too many dollar assets! In other words, no net "rebalancing" has happened yet. This is what you get when you build a system on intervention.