►Congress is pressed for bailout with dire warnings - Reuters
Wed Sep 24, 2008 3:13pm ED
NEW YORK (Reuters) - Congress must approve a $700 billion banking bailout or see the lifeblood squeezed from the world's richest country, America's central bank chief warned on Wednesday as the U.S. economy showed more signs of stalling.
As Federal Reserve Chairman Ben Bernanke toiled to convince Congress to approve the hugely expensive plan allowing the government to buy up toxic mortgages which have dried up global credit, markets showed extreme strain.
Investors stampeded into cash, briefly pushing one-month interest rates to below zero on fears that lawmakers might delay or change the nature of the bailout. Scarce credit forced overnight lending rates for companies to 6.50 percent.
The U.S. dollar fell against the euro and global stocks seesawed as unease over the rescue plan -- which could cost every man, woman and child in America $2,300 -- kept investors on edge.
A new report showed existing U.S. home prices fell a record 9.5 percent in August, and up to 40 percent of homes on the market were in foreclosure or being sold at a loss.
"There's a tremendous amount of anxiety whether this (bailout) bill will get passed," said Thomas di Galoma, head of U.S. government bonds at Jefferies & Co. in New York. Continue reading here.
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