World Banks On Better Footing

Oct 13th, 2008 @ 4:24 PM by Alden Smith

Tonight we see more stability on Wall Street, with the largest gain in the history of the exchange for one day. Stocks rallied 11%, meaning a lot of dollars changed hands.

We see this on a move by Great Britain. In 5 days, they accomplished what the US government has been trying to do for a long time.

The European nations pledged $1 trillion Euros for bank guarantees and equity stakes. The US is working on a similar plan.

We have seen the mood change in recent days, with the government making more sounds like they have taken an interest in Main Street. This can only be seen as a good thing, especially in an election year. The presidential candidates are working this into campaign speeches, and the cry is now “fight” in the GOP camp, and “jobs” in the Dem camp. Either way, it can only been seen as a step forward for “Mr. Joe Six Pack”.

The consequences of these actions remain to be seen. Although world markets made great gains today, there is still the problem of tightened credit and job loss for this country to deal with. Unemployment remains at all time highs. Foreclosures are still rampant. We can’t really expect to see any great swing in this for at least till the end of 2009.

Many see this change of focus by the American government as a good thing. It gives the public the opportunity to be a stakeholder in something that many people feel they have no control over. This was the plan in the European nations. The US is quickly following suit, and can only be perceived as positive.

Morgan Stanley is being propped up by Mitsubishi UFJ Financial Group Inc. if talks go as they are planned. The US will likely give support. The U.S. Federal Reserve, the European Central Bank, the Bank of England and the Swiss National Bank said they would lend commercial banks as much U.S. dollar liquidity they needed.

Princeton University economist Paul Krugman, named as the winner of the Nobel Prize in economics on Monday, had this to say: “We’re going to have a recession and perhaps a prolonged one but perhaps not a collapse.” This can only be a good thing. Recession we can live with. Collapse, on the other hand, means disaster with long reaching effects. It is good to see the nations of the world taking strong action. We can only hope that things never get this far out of shape again.

Posted in Mortgage Refinancing, Mortgages
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