Let's see... The Dow's up 900 points! Wall Street loves the bailout! Woohoo--crisis averted! Oh, wait. That was October 13. Today the Dow is down again, about 700 points as of 4:00 p.m. Hey, you guys need another bailout? I guess not everyone is happy with the sweetheart deal Paulson gave his old friends in "forcing" them to accept government investment. Besides, the bailout wasn't really supposed to make stock prices higher, it was supposed to free up lending among financial institutions. I haven't heard from informed observers how that's working, but the TED spread remains pretty high, as shown in the chart from Bloomberg below.
And whether the bailout works or not, it's too little, too late to prevent a pretty severe recession. The Democrats ought to be thinking about a much bolder, much bigger stimulus package than the $150 billion plan they've publicly discussed. Unfortunately, they don't seem to be in a hurry even with their too-small plan.
And whether the bailout works or not, it's too little, too late to prevent a pretty severe recession. The Democrats ought to be thinking about a much bolder, much bigger stimulus package than the $150 billion plan they've publicly discussed. Unfortunately, they don't seem to be in a hurry even with their too-small plan.
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