Gold9472
10-07-2008, 08:31 AM
‘Mini-panic’ strikes as world awaits bailout $$
President Bush: Be patient, bailout will ‘take awhile’
http://www.bostonherald.com/business/general/view.bg?articleid=1123951
By Jay Fitzgerald
Tuesday, October 7, 2008
Wall Street nearly suffered a nervous breakdown yesterday as investors realized that the $700 billion Wall Street bailout plan won’t immediately save the economy and that the credit crisis was spreading to the rest of the world.
After gut-wrenching trading on European and Asian markets yesterday, the Dow Jones industrials plunged as much as 800 points, the largest one-day point fall in its history. A rally boosted stocks late in the day, but the Dow still finished down 369 points to 9,995, the first time since 2004 it closed below 10,000.
The latest Wall Street gyrations came after European banks reeled yesterday, with governments scrambling to come up with a common policy to confront the financial crisis. Central banks across Europe feared bank runs by consumers who may have lost all faith in governments’ abilities to solve the crisis.
“We’re in a mini-panic,” said Ned Riley Jr., chief executive of Marshfield’s Riley Asset Management. What was once thought to be a “contained crisis” in the U.S. turned into a “global disease” yesterday, Riley said.
President Bush yesterday urged patience as the federal government prepares to implement the $700 billion bailout plan passed last week by Congress. Bush said stabilization of credit markets is “going to take awhile.”
Massachusetts Gov. Deval Patrick said yesterday the effect of the bailout plan would not be known “for a week or two.”
U.S. Rep. Barney Frank (D-Newton), a key player in negotiating the historic bailout package, also said it will take time for federal government actions to make a difference.
While there are “no guarantees” the bailout plan will even work, Frank said he’s hopeful credit markets will ease in coming weeks.
In an attempt to calm markets, the Federal Reserve announced that it’s doubling its auctions of cash to banks to as much as $900 billion and considering other steps to unclog a credit system that’s now not lending.
Treasury has begun hiring experts to join its financial rescue team, with the hope it can be organized by next week.
But markets signaled yesterday that it may be too late to stem the tide.
Bank of America, the nation’s largest commercial bank, yesterday announced huge losses - while other financial institutions’ stocks were pounded.
A big local test of credit markets will occur today, as Massachusetts Treasurer Tim Cahill tentatively plows ahead with a planned $750 million short-term debt issuance to help pay state bills. Last week, Cahill postponed the offering after credit markets dried up.
President Bush: Be patient, bailout will ‘take awhile’
http://www.bostonherald.com/business/general/view.bg?articleid=1123951
By Jay Fitzgerald
Tuesday, October 7, 2008
Wall Street nearly suffered a nervous breakdown yesterday as investors realized that the $700 billion Wall Street bailout plan won’t immediately save the economy and that the credit crisis was spreading to the rest of the world.
After gut-wrenching trading on European and Asian markets yesterday, the Dow Jones industrials plunged as much as 800 points, the largest one-day point fall in its history. A rally boosted stocks late in the day, but the Dow still finished down 369 points to 9,995, the first time since 2004 it closed below 10,000.
The latest Wall Street gyrations came after European banks reeled yesterday, with governments scrambling to come up with a common policy to confront the financial crisis. Central banks across Europe feared bank runs by consumers who may have lost all faith in governments’ abilities to solve the crisis.
“We’re in a mini-panic,” said Ned Riley Jr., chief executive of Marshfield’s Riley Asset Management. What was once thought to be a “contained crisis” in the U.S. turned into a “global disease” yesterday, Riley said.
President Bush yesterday urged patience as the federal government prepares to implement the $700 billion bailout plan passed last week by Congress. Bush said stabilization of credit markets is “going to take awhile.”
Massachusetts Gov. Deval Patrick said yesterday the effect of the bailout plan would not be known “for a week or two.”
U.S. Rep. Barney Frank (D-Newton), a key player in negotiating the historic bailout package, also said it will take time for federal government actions to make a difference.
While there are “no guarantees” the bailout plan will even work, Frank said he’s hopeful credit markets will ease in coming weeks.
In an attempt to calm markets, the Federal Reserve announced that it’s doubling its auctions of cash to banks to as much as $900 billion and considering other steps to unclog a credit system that’s now not lending.
Treasury has begun hiring experts to join its financial rescue team, with the hope it can be organized by next week.
But markets signaled yesterday that it may be too late to stem the tide.
Bank of America, the nation’s largest commercial bank, yesterday announced huge losses - while other financial institutions’ stocks were pounded.
A big local test of credit markets will occur today, as Massachusetts Treasurer Tim Cahill tentatively plows ahead with a planned $750 million short-term debt issuance to help pay state bills. Last week, Cahill postponed the offering after credit markets dried up.