by Gary Hamby
The highly touted Bush Bailout Plan that was to calm the jittery financial markets world wide, failed miserably in overnight trading in Asia and Europe; despite the announcement over the weekend by the Bundesbank that it will instill liquidity into Hypo, a major real estate lender and guarantee private savings. Recently, other major banks throughout the world have also executed measures to calm investors. However, fear and panic dominated everywhere as investors responded to the decline on Wall Street Friday; following the House approval of the pork-ladened bailout plan that President Bush immediately signed into law.
The markets move down started in New Zealand and spread like wild fire to major exchanges throughout the region and then into Europe. The Hang Seng dropped to a 2 year low and the Nikkei closed at a 4 � year low. The severe reactions of the Asian and European markets appear to press Wall Street as futures trend lower ahead of the open in the New York.
The need to recapitalize the world's banking system has become evident to global financial advisors; and, overtly acknowledged by international leaders. This directly contrasts to the covert recognition of the recapitalization need by the Bush Administration. However, savvy U.S. investors have realized that the bailout plan was a recapitalization effort since Paulson's announcement three weeks ago. The White House's attempt to conceal the true intention by attempting to spin it as a Main Street problem was correctly perceived by the public for what it was intended to be, i.e. a Wall Street bailout.
Instead of instilling confidence in the global markets, the bailout has created concern about why the plan was necessary. After almost 8 years of propounding free markets and providing deregulation without oversight, if the Bush White House now believes it critical to execute such strong government intervention, then is the core problem far worse than originally thought? This question appears to have been in the forefront for global exchanges today. It has also left money managers everywhere deeply concerned and tremendously nervous; a condition that historically does not bore well for market stability.
It also appears that along with the rest of the world, Wall Street questions the viability of the plan; doubting whether it actually solves the underlying challenge of relieving the dire housing market by removing the mortgage crisis. Leading economists have reached the conclusion that a global recession is now inevitable; and that it will be a long, deep and painful one.
The Office of Financial Stability was put into effect over the weekend; however, experts do not expect it to initiate any helpful, short-term action. Instead, most understand that it will take a minimum of one month before this office will become functional. In the fast paced financial environment that the world now finds itself, 30 days is a lifetime. Financial companies are failing in a matter of days as market forces continue to place severe downward pressure on stock prices. This begs the question, "How many companies will go under before the bailout plan starts bailing out started?"
Neel Kashkari was appointed by Secretary Paulson to oversee this new office in his cabinet; however, one must wonder if even Kashkari's noted skills will be able to put the genie back into the bottle fast enough to avoid prolonged financial damage at home and throughout the world.
It appears that the Law of Unintended Consequences is proven valid one more time, that the policies of George W. Bush are foolhardy! The Iraqi War, which was intended to stop terrorism; fueled a global terrorist crisis of extreme danger! The Wall Street bailout plan, intended to sooth troubled financial markets; appears to have instead unleashed a financial crisis of epic proportion!
http://goarticles.com/article/Bailout-Plan-Fails-to-Calm-Jittery-Markets/1170504/
The highly touted Bush Bailout Plan that was to calm the jittery financial markets world wide, failed miserably in overnight trading in Asia and Europe; despite the announcement over the weekend by the Bundesbank that it will instill liquidity into Hypo, a major real estate lender and guarantee private savings. Recently, other major banks throughout the world have also executed measures to calm investors. However, fear and panic dominated everywhere as investors responded to the decline on Wall Street Friday; following the House approval of the pork-ladened bailout plan that President Bush immediately signed into law.
The markets move down started in New Zealand and spread like wild fire to major exchanges throughout the region and then into Europe. The Hang Seng dropped to a 2 year low and the Nikkei closed at a 4 � year low. The severe reactions of the Asian and European markets appear to press Wall Street as futures trend lower ahead of the open in the New York.
The need to recapitalize the world's banking system has become evident to global financial advisors; and, overtly acknowledged by international leaders. This directly contrasts to the covert recognition of the recapitalization need by the Bush Administration. However, savvy U.S. investors have realized that the bailout plan was a recapitalization effort since Paulson's announcement three weeks ago. The White House's attempt to conceal the true intention by attempting to spin it as a Main Street problem was correctly perceived by the public for what it was intended to be, i.e. a Wall Street bailout.
Instead of instilling confidence in the global markets, the bailout has created concern about why the plan was necessary. After almost 8 years of propounding free markets and providing deregulation without oversight, if the Bush White House now believes it critical to execute such strong government intervention, then is the core problem far worse than originally thought? This question appears to have been in the forefront for global exchanges today. It has also left money managers everywhere deeply concerned and tremendously nervous; a condition that historically does not bore well for market stability.
It also appears that along with the rest of the world, Wall Street questions the viability of the plan; doubting whether it actually solves the underlying challenge of relieving the dire housing market by removing the mortgage crisis. Leading economists have reached the conclusion that a global recession is now inevitable; and that it will be a long, deep and painful one.
The Office of Financial Stability was put into effect over the weekend; however, experts do not expect it to initiate any helpful, short-term action. Instead, most understand that it will take a minimum of one month before this office will become functional. In the fast paced financial environment that the world now finds itself, 30 days is a lifetime. Financial companies are failing in a matter of days as market forces continue to place severe downward pressure on stock prices. This begs the question, "How many companies will go under before the bailout plan starts bailing out started?"
Neel Kashkari was appointed by Secretary Paulson to oversee this new office in his cabinet; however, one must wonder if even Kashkari's noted skills will be able to put the genie back into the bottle fast enough to avoid prolonged financial damage at home and throughout the world.
It appears that the Law of Unintended Consequences is proven valid one more time, that the policies of George W. Bush are foolhardy! The Iraqi War, which was intended to stop terrorism; fueled a global terrorist crisis of extreme danger! The Wall Street bailout plan, intended to sooth troubled financial markets; appears to have instead unleashed a financial crisis of epic proportion!
http://goarticles.com/article/Bailout-Plan-Fails-to-Calm-Jittery-Markets/1170504/
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