Talking the fix that finally works

10/9/08

What will that fix be?! This is the question being asked by everyone over the world now. The US government plan said that they will be injecting capital directly into banks by taking an equity stake this morning has failed to impress the markets again. The theory sounds good and somehow I feel this is a smart option announced by the US government to date so far. Unfortunately, timing continues to be the major debacle of the Bush Administration. The Bailout plan would not start running until the end of the month at earliest. The market wants a fix NOW. However, there are few answers to this. Some economists are calling for another round of coordinated rate cuts while others are calling for stimulus checks and direct loans to small business. CNBC ( the worst sucker in media ) is even talking about the Fed possibly buying equity futures, but ultimately none of these solutions solve the crisis of confidence in the banking sector. All in all, Banks are in the business of taking risk and it is THE TIME that they take on some risk and do unfreezing the credit markets. Also, as I posted before, G7 meeting is next hope. Now, the fool master Treasury Secretary Paulson is asking for an emergency G20 meeting this weekend to discuss the financial crisis. This will be the most significant G7/G20 meeting since the 1985 Plaza Accord which marked a major turning point for the US dollar. At that time there few nations attending the event agreed to intervene in the currency markets and to sell US dollars to reduce the US current account deficit and to pull the US economy out of a serious recession. Would this time could save our ( US ) mess?! It is best to see if they would intervene our currency and enough to surprise the stock markets as well. It is a possibility and let us wish it would work.