Tue, September 23, 2008
With very little still known about Treasury Secretary Henry Paulson's unprecedented $700 billion bank bailout - Wall is Street is growing skeptical. Jitters send the Dow down nearly 400 points and the rest of the market down nearly 4 percent.
President Bush tried to put a positive spin on developments. He said legislators are making "good headway" but in a warning to lawmakers said:
"Failure to act would have broad consequences far beyond Wall Street. It would threaten small business owners and homeowners on Main Street."
On the street....the reaction seems to be in favor of the government stepping in.
Jim Sasso works in the Financial District.
SOUNDBITE: Jim Sasso, Financial District worker (English) saying:
"Companies made a lot of mistakes, they were allowed to make the mistakes, whether it be by government, consumers or whoever. Consumers took advantage just as much as companies took the advantage to make the money. I hope that when the government comes into it they put these restrictions in place and then hold them accountable."
But Wall Street is less confident, fearing the legislation bringing about the largest bank rescue plan in history will be bogged down by partisan wrangling. And then there are the details....
Hugh Johnson of Johnson Illington Advisors
SOUNDBITE: Hugh Johnson, chief investment officer, Johnson Illington Advisors (English) saying:
"Like to see more detail about what the government's going to pay for those so called toxic assets that are owned by large financial institutions. So we need to see some of that detail, but much more importantly what we need to see is progress towards the implementation of that plan."
Meanwhile, the financial services industry is doing what it can to try to put this historic turmoil behind it. Goldman Sachs agreed to become a bank holding company - under greater Federal Reserve scrutiny. Morgan Stanley made a similar move....and agreed to sell up to a 20 percent stake to Mitsubishi UFJ.
Conway Gittens, Reuters
