America’s moneymen, and their counterparts worldwide, may sleep a little easier this weekend after the unveiling of the United States’ government’s plan to solve Wall Street’s woes.
Share prices rebounded around the globe after the White House made clear hundreds of billions of dollars could be used to buy up bad debt.
But few think it would end the crisis.
“I think for people who have been complaining, understandably so, that it is very hard to get credit, whether it is consumer credit or mortgage credit, that’s going to continue for a while longer until the financial community works out these problems. And so for the consumer, the acquisition of credit which has supported spending for two to three decades now, is going to remain very difficult until this situation works itself out,” said Milton Ezrati, senior economist and market strategist with Lord Abbett.
Other analysts say the Bush administration obviously deems the problem so huge it is abandoning budgetary discipline.
“America is facing unprecedented challenges,” President George W. Bush told the nation.
Bush acknowledged public worries over the use of tax payers’ money but said it could cost far less
in the long run.
The financial landscape is being dramatically reshaped. Many are asking how companies have been allowed to get so big that it is impossible to let them fail.