Top News: Paulson: Government won't buy troubled bank assets. US Dollar and Stocks turns lower as Paulson unveils change in bailout.
WASHINGTON – The government has abandoned the original centerpiece of its $700 billion rescue effort for the financial system and will not use the money to purchase troubled bank assets. Treasury Secretary Henry Paulson said Wednesday that the administration will continue to use $250 billion of the program to purchase stock in banks as a way to bolster their balance sheets and encourage them to resume more normal lending. He also announced that the administration was looking at a major expansion of the program into the markets that provide support for credit card debt, auto loans and student loans. Paulson said 40 percent of U.S. consumer credit is provided through selling securities that are backed by pools of auto loans and other such debt. He said these markets need support. "This market, which is vital for lending and growth, has for all practical purposes ground to a halt," Paulson said. On the issue of using the $700 billion bailout package to provide help to ailing auto companies, Paulson said the administration preferred an approach that would accelerate support to that industry from other legislation Congress passed this fall. Paulson said the administration is exploring other options, including expanding the program beyond banks to nonbank financial institutions which provide essential credit to both businesses and consumers. He suggested that capital could be provided to institutions on a matching basis in which the government would supply money to those able to raise money on their own. Providing an update on the largest government bailout in U.S. history, Paulson said that the effort was showing results but that more efforts were needed given the most severe downturn being faced in housing. "Our financial system remains fragile in the face of an economic downturn here and abroad," Paulson said. "Market turmoil will not abate until the biggest part of the housing correction is behind us. Our primary focus must be recovery and repair." The administration decided that using billions of dollars to buy troubled assets of financial institutions at the current time was "not the most effective way" to use the $700 billion bailout package, he said. The announcement marked a major shift for the administration which had talked only about purchasing troubled assets as it lobbied Congress to pass the massive bailout bill. The bailout money also should be used to support efforts to keep mortgage borrowers from losing their homes because of soaring default levels, he said.. A proposal to have part of the bailout funds used to guarantee mortgages that have been reworked to reduce monthly payments for borrowers is an approach the administration continues to discuss, Paulson said, although he indicated it would not be a part of the rescue program. He said it went beyond the intent of the legislation Congress passed on Oct. 3. Asked about what he had in mind to expand the rescue effort to support credit card and other types of consumer debt that is backed by selling securities, Paulson said it would probably take weeks to design the new program and then more time to get it implemented, a possible sign that any such proposal would have to be implemented by the incoming administration of President-elect Barack Obama. http://news.yahoo.com/s/ap/20081112/ap_on_bi_ge/financial_meltdown;_ylt=AjUE5A7CLZf9f5if9YO4bf6yBhIF ------------------------------------ Kunjungi situs http://www.info-saham.com untuk informasi seputar saham. DILARANG KERAS MEMOSTING OPINI PRIBADI TENTANG POLITIK DI MILIS INI. Silahkan lakukan itu di milis [EMAIL PROTECTED] [EMAIL PROTECTED] untuk berhenti dari milis saham [EMAIL PROTECTED] untuk bergabung ke milis saham Yahoo! Groups Links <*> To visit your group on the web, go to: http://groups.yahoo.com/group/saham/ <*> Your email settings: Individual Email | Traditional <*> To change settings online go to: http://groups.yahoo.com/group/saham/join (Yahoo! ID required) <*> To change settings via email: mailto:[EMAIL PROTECTED] mailto:[EMAIL PROTECTED] <*> To unsubscribe from this group, send an email to: [EMAIL PROTECTED] <*> Your use of Yahoo! Groups is subject to: http://docs.yahoo.com/info/terms/
