I don't think this bailout is a sane solution. Neither do the op/ed writers at the NYTimes today.
On Sep 22, 9:25�am, Frank <[EMAIL PROTECTED]> wrote: > U.S. Stocks Fall, Led by Regional Banks; Regions, M&I Tumble > > By Sarah Jones and Elizabeth Stanton > > Sept. 22 (Bloomberg) -- U.S. stocks fell following the biggest two-day > rally since 1987, dragged down by regional banks, on concern the > government's $700 billion bailout of the financial system will hurt > the smallest lenders. > > Regions Financial Corp., Alabama's biggest bank, tumbled 14 percent > and Marshall & Ilsley Corp., Wisconsin's largest, dropped 12 percent > after analysts advised clients to sell small and mid-sized banks. D.R. > Horton Inc. and Lennar Corp. led declines among all 15 homebuilders in > Standard & Poor's indexes. Ford Motor Co. and American Airlines' > parent AMR Corp. lost more than 3 percent as oil had its biggest four- > day gain since 2000. > > The S&P 500 lost 21.93, or 1.8 percent, to 1,233.15 at 10:20 a.m. in > New York. The Dow Jones Industrial Average slid 163.43 to 11,225.01. > The Nasdaq Composite Index decreased 32.46, or 1.4 percent, to > 2,241.44. Three stocks retreated for each that rose on the New York > Stock Exchange. > > ``They really haven't changed the economic fundamentals at all,'' said > Jeffrey Coons, co-director of research at Manning & Napier Advisors > Inc. in Fairport, New York, which manages $18 billion. ``We still have > a debt-laden U.S. consumer facing falling employment. That's going to > be overhanging our economy for some time.'' > > Regionals Pare Rally > > The S&P 500 Regional Banks Index slumped 7.4 percent today as all 12 > of its companies declined. The group rallied 101 percent from its July > 15 low through Sept. 19, more than three times a measure of large-cap > financial companies in the index. Zions Bancorp., the Salt Lake City- > based lender with operations in 10 Western states, led regionals with > a 163 percent advance, while Columbus, Ohio-based Huntington > Bancshares Inc. climbed 143 percent. > > The government's plan to purge banks of toxic assets and crack down on > speculators who bet against shares of financial companies sent the S&P > 500 up 8.5 percent in the final two days of last week. > > For Barclays Global Investors' Russ Koesterich, Treasury Secretary > Henry Paulson's move to shift the burden of subprime- mortgage related > losses to taxpayers ``put a floor under the equity markets.'' James > Swanson, who oversees about $200 billion at MFS Investment Management > in Boston, says the S&P 500 may rise 15 percent after the Treasury > immunized investors from ``the brunt of the economic cycle.'' > > Two-Day Rally > > The S&P 500's rally at the end of last week followed a rout that began > when Lehman Brothers Holdings Inc. filed for bankruptcy, Merrill Lynch > & Co. was sold to Bank of America Corp. and the U.S. took control of > American International Group Inc. > > The Federal Reserve yesterday approved bids by Goldman Sachs Group > Inc. and Morgan Stanley to become banks, ending the ascendancy of the > securities firms 75 years after Congress separated them from deposit- > taking lenders. > > More than $500 billion in losses at banks stemming from the first > nationwide drop in home prices since the 1930s has pushed the S&P 500 > 15 percent lower in 2008. U.S. economic growth may slip to 1.7 percent > this year and 1.5 percent in 2009, the slowest since the last > recession in 2001 and its aftermath in 2002, according to the median > of 80 economist forecasts compiled by Bloomberg. > > Bailout Widened > > The Bush administration widened the scope of its plan to include > assets other than mortgage-related securities. The change to > potentially allow purchases of instruments such as car loans and > credit-card debt may force an increase in the size of the package as > the legislation proceeds through Congress. > > Morgan Stanley rallied $3.23 to $30.44. Mitsubishi UFJ will buy 10 > percent to 20 percent of the securities firm and decide on a price > after conducting due diligence, the Japanese bank said in a statement. > > Goldman Sachs Group Inc. slipped 74 cents to $129.06. The announcement > that the two firms will become banks paves the way for Goldman and > Morgan Stanley, both of which will now be regulated by the Fed, to > build their deposit base, potentially through acquisitions. That will > allow them to rely more heavily on deposits from retail customers > instead of using borrowed money -- the leverage that led to the > undoing of Lehman and Bear Stearns Cos. > > To contact the reporter on this story: Sarah Jones in Copenhagen at > [EMAIL PROTECTED] --~--~---------~--~----~------------~-------~--~----~ Thanks for being part of "PoliticalForum" at Google Groups. For options & help see http://groups.google.com/group/PoliticalForum * Visit our other community at http://www.PoliticalForum.com/ * It's active and moderated. Register and vote in our polls. * Read the latest breaking news, and more. -~----------~----~----~----~------~----~------~--~---
