The Bailout Plan proposed by the US Government in order to refloat the US economy was about to fail, finding itself in the crossroads of the interests of the White House, the Congress and the two presidentials, John McCain and Barack Obama.
The original plan consisted in a proposal by the Federal Government to buy up to $700 billion of illiquid mortgage backed securities (known as toxic assets), in order to increase the liquidity of the secondary mortgage markets and reduce potential losses encountered by financial institutions owning the securities.
Yesterday's discussion seems to have been a heated one, with Republican senator John A. Boehner declaring against the plan.
The fate of this project remains unclear, as Treasury Secretary Henry Paulson joined some congressional negotiators later in the night in an attempt to rescue it and to avoid "a long and deep recession." The meeting came to an end when Rep. Spencer Bachus of Alabama left the room. Democrats have blamed republicans for the plan's stalemate.
Tatsuya Kawanishi, junior advisor at FXstreet.com, states that the "Boiling out plan" was proposed to rescue the financial market. However, the working out of the plan has proved to be a difficult process. In addition, the collapse of the Washington Mutual Inc., one of the biggest thrift banks in the US, has driven up the marked wariness. The gradual decline of the greenback could go further until the plan gets enough support to pass.
Related Links
- · Read the Information Regarding Recent Federal Reserve Actions at the Fed
- · The TARP plan at the Wikipedia
In-Depth Analysis
- · Friday Notes - Hang on, help is on its way! by HVB Group
- · Daily Analysis - Market uncertainty as U.S bailout talks stall by Finotec Group Inc.
- · Global News and Fundamentals - Critical Day Today for U.S.: A Survival Guide by fxKnight.com
- · Daily Forex Technical Report - Bailout Plan Negotiations Stall by ActionForex.com
- · Sunrise Market Commentary - US Treasuries lost ground on hopes the Paulson Plan would be approved by KBC Bank
- · Monitor - Financial crisis update by Danske Bank A/S
- · Market Sense - Heated debate, frozen markets by Yapi Kredi Bank
- · Daily Forex Commentary - Politicians… by Jyske Bank
- · Forex Trading Strategies - TARA bailout plan thrown into doubt by last minute Republican gambit by Saxo Bank
- · Start the Day - US $700B bailout plan descends into a chaotic shouting match by Mizuho Corporate Bank
- · Daily Market Briefing - Dollar Rallies After Word Congress Has Agreed On Fundamentals Of Bailout by FXCM
- · Daily Forex Outlook - Progress on US Bailout spurs market optimism and Dollar gains by Easy Forex
- · Asia Market Update - U.S. lawmakers fail to make progress on the eve of the largest bank failure in U.S. history by TradeTheNews.com
- · Daily Forex Strategy Briefing - USD Flat, Congress Tentatively OK with Bailout by CMS Forex
- · Insights Market Outlook - Urgent Appeal: Recapitalize Financial Institutions Rather than Bail Out Debt by Merk Hard Currency Fund
Related News
- · Bailout plan remains unresolved (FXstreet.com)
- · Fed statement on coordinated liquidity provision (Thomson Financial News)
- · US lawmakers to tackle bailout plan again Friday (Thomson Financial News)
- · Stage is set, but will U.S. debate go on? (Thomson Financial News)
- · Asia's decline modest on U.S. bailout doubts (Thomson Financial News)
- · Dollar slips on U.S. bailout plan uncertainty (Thomson Financial News)
- · Asian Stks Fall, US Futures Dn; Bailout Plan Worries (Dow Jones)
- · Dollar dips on U.S. bailout plan uncertainty (Thomson Financial News)
- · Aussie dlr steady, bonds surge on bailout worries (Thomson Financial News)
- · Bush says hopes to seal Wall St. rescue plan soon (Thomson Financial News)
- · Euro Falls Under $1.46 As Congress Said Close To Bailout OK (Dow Jones)
- · US bailout bill has $250 bln 1st installment-WSJ (Thomson Financial News)
- · Spain backs US bailout, urges market transparency (Thomson Financial News)
Blogs Comments
- Chartology - The U.S. Dollar sits and waits for D.C. by Raghee Horner
- El Blog de la editora - El plan de rescate se retrasa by Sandra García [text in Spanish]
