From CPN’s Morning Newsletter–Will Market Surge Continue as Rescue Plan Details Emerge?
- Oct 14, 2008
As CPN reported exclusively in our Daily News REport Morning Edition, (subscribe here), after skyrocketing yesterday, the question is, “will the market maintain its momentum in trading today?” Investors are sure to be paying close attention this morning. President Bush and Treasury chief Henry Paulson have already today announced the genuinely surprising “October Surprise” ahead of the U.S. markets open. The Treasury will plunk down $250 billion for preferred shares with warrants (similar to Warren Buffett’s recent deals) of some major financial institutions. We know what you’re thinking and, if only…but Warren apparently has zero interest in running the U.S. Treasury.Plans call for taxpayers to give $25 billion to Citigroup and JPMorgan Chase & Co.; $25 billion split between Bank of America Corp. and Merrill Lynch & Co.; $20 billion to Wells Fargo & Co; $10 billion each to Goldman and Morgan Stanley and $3 billion each to State Street Corp. and Bank of New York Mellon Corp.”Government owning a stake in any private U.S. company is objectionable to most Americans – me included,” Paulson claimed at the news conference. “Yet the alternative of leaving businesses and consumers without access to financing is totally unacceptable.” All would now appear to agree that, at this point, adherence to the “conservative” commitment to the free market is a luxury few can afford.These latest moves come on the heels of $1.36 trillion efforts by the governments of Britain, Germany, France and other European countries to bail out their banks. Japan’s government is also stepping up. On Tuesday its outlined steps that might lead to the a flow of public funds into regional banks. In other news, the FDIC will be guaranteeing non-interest-bearing bank accounts, typically used by businesses, the President also announced.CPN will continue its ongoing reporting on the markets and the bailout efforts around the globe later today. If you would like to partake of our Upcoming News digest with your morning coffee, please subscribe to ourDaily News REport Morning Edition.