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Paulson Announces New Plans to Buy Equity Stakes in Banks and Revive Credit Markets
The U.S. government yesterday (Tuesday) announced plans to invest $250 billion, more than a third of the $700 billion congressional bailout allotment, into nine of America’s largest banks in an effort to bolster confidence in the financial system. Similar to steps taken by European governments earlier this week, the government will guarantee new debt and take equity stakes in the participating banks.
"Government owning a stake in any private U.S. company is objectionable to most Americans – me included," U.S. Treasury Secretary Henry Paulson said announcing his decision to effectively nationalize the nation’s banking sector. “Yet, the alternative of leaving…
15Oct2008 | Money Morning | Comments Off | ContinuedFederal Reserve to Buy Commercial Paper to Free Up Frozen Market
In a bold move to provide stability to the frozen short-term credit markets, the U.S. Federal Reserve yesterday (Tuesday) announced new measures aimed at boosting liquidity and allowing corporations to maintain daily operations.
But the U.S. markets were less enthusiastic about the Fed’s new measure. Slight gains in early morning trading quickly reversed course to plunge much lower.
At the New York close, the blue-chip Dow Jones Industrial Average Index plunged 508.39 points, or 5.11%, to close at 9,447.11. The tech-laden Nasdaq Composite Index plummeted 108.08 points, or 5.80%, to close at 1,754.88. And the broader Standard & Poor’s 500 Index dived 60.66 points, or…
8Oct2008 | Money Morning | Comments Off | Continued
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