Friday, September 26, 2008

US - No deals on bail out plan

Bush Discussions in Washington between George Bush and top representatives from both political divides have failed to come to an agreement of a rescue plan for America’s financial institutions. Many republicans couldn’t agree with George Bush’s proposals to bail out financial institutions to the tune of $700 billion. It was, according to some reports, a fiery meeting with heated exchanges from all sides. Speaking after the meeting, President Bush said “the legislative process is sometimes not very pretty”. But he spoke optimistically of achieving a result. “We shall rise to the occasion” he added. Barack Obama was also upbeat. “I am optimistic”, he said, “There is real progress”. He went on to claim the “markets appear to be calm at this point”, but on the street traders were less positive. One trader told the BBC that there was still concern on Wall Street with many “sitting on the sidelines to see what happens” [BBC / Sky News].

Gordon Brown, who flew into Washington to talk with President Bush, told reporters he was in favour of a rescue plan, “in principle”. But then anything that would relieve pressure on UK markets would be welcome for the beleaguered PM who has faced much pressure at home. Britain has seen countless jobs lost as a result of the collapse of Lehman Bros. and today HSBC announced that it was laying off over 1000 staff [Sky News].

Back in the US, many ordinary taxpayers across the country are unhappy that their tax dollars are going to be used to bail out people they see as gamblers, speculators and city slickers. “If they go under because they make the wrong decisions and lend money to someone who can’t pay it back that’s fine, that’s capitalism” one member of the public told a BBC new crew.
But Vincent Reinhart says “there is no choice”. The former director of the federal reserve told the BBC “The taxpayer will have to bear the burden” because, he said bluntly, “the financial firms are holding the US to ransom”. The bail out plan was needed he insisted; “It’s trying to jump start the financial market”. It is a market that saw another collapse today as Washington Mutual went under its being bought up by JP Morgan [BBC].

Tonight both Presidential candidates were on their way to Oxford, Mississippi for the first of three debate. Less than 24 hours ago it was unclear whether McCain would even attend. He had previously said he wouldn’t attend unless a deal had been struck in Washington. But since his rival would have perhaps gone ahead without him he was forced into it. The debate will not be a pleasing one for McCain who himself has admitted is no great economist [BBC].

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