Government bailout won't buy troubled bank assets after all
source: http://news.yahoo.com/s/ap/20081112/ap_on_bi_st_ma_re/wall_street
-
-
- InformedTexan
- added this
http://news.yahoo.com/s/ap/20081112/ap_on_bi_st_ma_re/wall_street
NEW YORK – Wall Street remained weary Wednesday, disheartened by more signs of economic stress — including dismal reports from major retailers, a bleak outlook for the nation's auto industry and additional job cuts in the already beaten-down financial sector. News that the government won't buy banks' soured mortgage assets as originally planned further discouraged investors. The Dow Jones industrials fell nearly 300 points, and all the major indexes dropped more than 3 percent as the market retreated for a third straight session.Investors sent stocks lower on Monday and Tuesday on concerns that a severe pullback in consumer spending will exacerbate the weakened economy. Remarks from Treasury Secretary Henry Paulson on Wednesday, however, underscored the anxiety that remains about the health of the financial system. After being down in early trading, stocks plunged further following his speech.
Paulson said the government's $700 billion financial rescue package won't purchase troubled assets from banks after all. He said that plan would have taken too much time, and that the Treasury instead will rely on buying stakes in banks and encouraging them to resume more normal lending.
While the market had been pleased by the government's decision weeks ago to buy banks' stock, investors still hoped to see the financial industry relieved of the burden of the mortgage assets whose decline in value helped set off the nation's financial crisis.
-
- groups:
- Community, News and Politics
-
- tags:
- News, News and Politics, Economy, Bailout, 3 more
-
-
AveryMoore
-
So exactly what is that $850,000,000,000 paying for?
At least with mortgages there is an existing collateral, a tangible and resellable asset - now are we just subsidizing bank profit shortfalls and getting absolutely zip in return?
We're buying "stakes" in banks that are ready for the receivers and with no real control? We're "encouraging" the resumption of "more normal lending." How about a direct order instead - 'Resume lending or we pull the plug?'
Why was there that great rush to agree to a deal that now suddenly has shifted, without notice or a by-your-leave. from what was "originally planned"? Is this another 'noboyy knew!' fiasco? Isn't this called bait-and-switch?
We signed a blank cheque that started with an $850,000,000,000 finder's fee?
It's time some heads started rolling, and some people in Washington with spines started telling the truth.
- 4 years ago
-
AveryMoore
