As reported by the AP, "The Fed said the action is intended to "expand significantly" the cash available to financial institutions, its latest effort to relieve the worst credit crisis since the Great Depression."
This move was taken by the Fed to boost the confidence in the market and so that these financial institutions would be more inclined to loan to each other as well as business and people.
While Bush and Fed Chair Ben Bernanke have warned if the crisis persists it could plunge our economy into a deep recession. This will happen because it would make it increasingly difficult for people and businesses to borrow money.
While I am not an expert in economics: I would like to know why the DOW did crash by that amount even when the financial markets were infused with billions of dollars in cash and without congress lifting a finger to come to the rescue.
The plan for this infusion of cash would be for the government to buy bad mortgages, dodgy debts held by banks and getting the rotten assets off of their books. The plan was also would be so that banks would be in a better position to raise capital and boost lending.
So, when congress reconvenes to hammer out a new deal will more tax payer money be infused into a battered market. If so, how much more? Will the final cost be well over $1 trillion dollars if you add both figures together?
In reading this plan, no mention was made of helping Main Street America as many Americans are in danger of losing their homes due to foreclosure. It seems to me that this government Bush and Bernanke in particular are rewarding banks for bad behavior.
What should alarm everyone especially those who are hurting during this financial crisis is that the AP reported included in this swap arrangements are the Bank of Canada, the Bank of England, the Bank of Japan the European Central Bank and other foreign banking industries.
While Bush pleaded with congress by saying, "But the reality is we are in an urgent situation and the consequences will grow worse each day if we do not act." Well Bush and Bernanke did act yesterday and the stock market is making somewhat of a rebound.
Republicans and McCain to be specific are all about deregulation and believe in the free-market system, well maybe we should let the markets be free to make these mistakes. Maybe by making these repeated mistakes, people mainly congress and the next president can call for reforms on Wall Street and hold these CEOs accountable for their actions instead of rewarding them. Personally, I would like to see some of these CEOs trade their pinstripes for prison stripes as they raped the economy. Until such time, it is we the tax payer who are forced to clean up their mistakes.
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