Like many people around the world, Judy Viitanen is alarmed at today’s market carnage after ‘Paulsen’s Plan’ – the $700 billion bail-out to save the global financial system from potential collapse – was rejected by US politicians. The rescue plan – the result of tense negotiations between the US government and lawmakers – was voted down by 228 votes to 205 votes Leaders in the U.S. House of Representatives say they will reconvene on Thursday instead of adjourning for the year as planned. PRimage view is that it’s going to be an interesting week on both Wall Street and Pennsylvania Avenue!
The immediate repercussions have been seen on the stock markets. The Dow Jones index fell 777 points, a fall of 7 per cent and the biggest drop in a day ever recorded, and the the Nasdaq index fell 9.1%, while markets in Asia and Europe have also seen heavy losses. There were also large falls in the price of oil and the value of the dollar – all of which is likely to cause an expensive headache for some investors! As we have commented before, this whole financial fiasco and debacle has come about mainly because of the social engineering policies which decreed that banks had to lend to people who could not afford home loans!
A key problem is that all this havoc will mean that it will be harder for individuals, small businesses and large firms to get the loans they need – and more costly if they do manage to get access to finance.
PRimage was pleased to see that the Conservative leader David Cameron has acknowledged that the economic crisis is overshadowing his party’s conference in Birmingham – and that both Cameron and shadow chancellor George Osborne are expected to make an unscheduled conference appearance to discuss the crisis. On Breakfast TV this morning he said: “What is happening in the global economy, what is happening with financial institutions and financial markets, and also what is happening in people’s family budgets, that is more important than anyone’s conference and I think that is important to recognise.” We agree!
What’s your view on the current crisis of confidence within the global financial system?