Monday, September 29, 2008

Uncertainty as financial crisis deepens

US Treasury Secretary Henry Paulson has made a brief statement in which he emphasised the effort to construct a workable plan would not cease. “We need to get something done and were working on it”, Paulson told reporters saying that they possessed the “right tools” to do the job. “We need a plan that works, and we need it as soon as possible” the Treasury Secretary declared. He went on to say the banking system was “holding up very well”, though this seemed incongruous given that across the pond the UK bank Bradford and Bingley was partly nationalised with its other assets sold off to other institutions [BBC].

Paulson went on to say the crisis was beginning to affect ordinary people, referred to as Main Street in US media. “People can’t get loans for a car, or student loans” said Paulson.
The plan could take a long time to come together. An impasse seems to have developed on both political sides. In fact it even appears to have divided the parties themselves. McCain delivered a short statement and asked that all sides come together to solve the problem. And yet it was mostly Republicans that had voted against a bill, which McCain himself appeared happy with. Looking very gloomy and uncomfortable British Prime Minister Gordon Brown said tonight he was “disappointed” and said he and his chancellor would “take whatever action is necessary to maintain financial security for everyone in this country [UK]”.

Today the NYSE felt very uncomfortable at the whole saga and saw massive losses. The Dow closed at 10365.45 down -777 [CNN]. “This will continue until somebody does something” said CNN’s Maggie Lake. Richard Quest was also pessimistic saying that the market had seized up and only “liquidity would get it moving again and that’s oil”. He said the plan failed partly because of a lack of trust. “Who’s going to trust Henry Paulson?” Quest asked rhetorically, “He was a guy who was a CEO at Goldman Sachs one of the companies who have much of this toxic debt” he explained. Becky Anderson pulls him up as Quest edges further towards libellous statements. “What I’m saying is, some of those trying to bail us out from the sinking boat put some of the holes in it” he said.

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