Intra-Day Update: Closing Bell

UPDATE 4:30pm EDT: Nice sell off before the bell, wasn’t it? Obviously nobody is comfortable holding in this environment, bailout boondoggle or not. Anyway, here’s a bit of news from Europe, and having been raised in Europe myself I can assure you that these are not idle threats – Germans are usually very reserved and diplomatic and they are fuming over there (not that they are innocent – as a matter of fact Europe has been complicit). It seems there will be consequences for the United States way beyond this financial crisis:

US to Lose Financial Superpower Status: Germany
By Reuters | 25 Sep 2008 | 07:39 AM ET

Germany blamed the United States on Thursday for spawning the global financial crisis with a blind drive for higher profits and said it would now have to accept greater market regulation and a loss of its financial superpower status.

In some of the toughest language since the crisis threw Wall Street banks into financial disarray earlier this month, German Finance Minister Peer Steinbrueck told parliament the turmoil would leave “deep marks” on both sides of the Atlantic, but called it primarily an American problem.

“The world will never be as it was before the crisis,” Steinbrueck, a deputy leader of the centre-left Social Democrats (SPD), told the Bundestag lower house.

“The United States will lose its superpower status in the world financial system. The world financial system will become more multi-polar,” he said.

Chancellor Angela Merkel, whose conservatives rule in coalition with the SPD, and Steinbrueck both pushed the Group of Eight (G8) to agree measures to boost financial market transparency during Germany’s presidency of the G8 last year.

But their drive collapsed amid opposition from Washington and London.

This will have major implications for the Dollar going forward. After WWII the U.S. emerged as the de-facto winner, not having incurred major destruction of its infrastructure and with an industry intact. Preparing to rebuild the international economic system as World War II was still raging, 730 delegates from all 44 Allied nations gathered at the Mount Washington Hotel in Bretton Woods, New Hampshire, United States, for the United Nations Monetary and Financial Conference. The delegates deliberated upon and signed the Bretton Woods Agreements during the first three weeks of July 1944.

The chief features of the Bretton Woods system were an obligation for each country to adopt a monetary policy that maintained the exchange rate of its currency within a fixed value—plus or minus one percent—in terms of gold and the ability of the IMF to bridge temporary imbalances of payments. In the face of increasing strain, the system collapsed in 1971, following the United States’ suspension of convertibility from dollars to gold. This created the unique situation whereby the United States Dollar became the “reserve currency” for the Nations who signed.

Now think about what a Dollar losing its status as a ‘reserve currency’ would mean for our country. If you are upset now about the horrendous amount of money that’s about to be thrown into the laps of corrupt financial institutions, then let me tell you that this is nothing compared with the implications of an international consorted effort to detach itself and its currencies from the U.S. Dollar. It’s the end of the world as we know it – and I don’t feel fine.

BTW, although the video I found is anti-republican I need to point out that this bailout boondoggle is being embraced by more Democrats than Republicans. I hate to say it but I despise both parties equally much at this point. If you think democratic leadership is going to ‘fix’ the immense and systemic problems we are facing, think again.

I’ll post a market forecast later this evening.