Fed Reacts to Save Markets, Global Markets Tumble
It’s going to be a rough ride when the market opens in the morning.
For the first time since the Great Depression, the federal government took control of a major financial institution, by backing JPMorgan’s $30 Billion purchase of Bear Stearns. That’s approximately $2.00 for each share of Bear Stearns.
In an another act of desperation, the central bank also dropped its rate a quarter of a point to 3.25 percent.
In another bold move, the Fed established a "lending program" to make money for the 20 largest investment banks. So much for the poorer, lest fortunate blokes.
But as the markets opened in Tokyo, they were not overly pleased with the work of our MBA President.
Major Asian stock markets fell sharply in early trading on Monday as pessimism continued to spread despite the Fed’s dramatic moves over the weekend, sending Tokyo’s benchmark index to a three-year low.
The markets responded negatively to the purchase of Bear Stearns over the weekend by JPMorgan Chase. The acquisition, backed by the Federal Reserve, underscored the severity of the credit crisis in the United States and the weakness of the American economy.
Yet we spend $12+ billion per month in Iraq, how much in Afghanistan??, and Cheney’s out window shopping for another war so maybe the price of gas at the pump will be $30/gallon. before he and George leave office. Yep, that’s about right; it puts filling the average car up somewhere near $500 a pop.
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