Tensions mount over bail-out
By Krishna Guha, Harvey Morris, Andrew Ward and Daniel Dombey in Washington and George Parker in Manchester
Published: September 21 2008 19:13 | Last updated: September 22 2008 03:47
A high stakes game of political poker was under way in Washington on Sunday as Congress prepared to vote this week on a plan to create a $700bn fund to buy toxic assets from banks and thereby ease the credit squeeze.
Democratic legislators pressed for a housing component to be added to the bill and demanded assurances that President George W. Bush would not veto a subsequent second stimulus bill.
The Bush administration was trying to hold out for a "clean" bill that dealt only with the financial rescue, while Republicans in Congress said they would fight a hasty compromise that included many add-ons.
The danger here is not that this might slow things down, but that perception and fear which governs markets will place itself on the side of safety and the credit market of the USA, and then the world will seek the saftey fo the smallest loss, and a selling panic will set in, which will leave Main Street in the position of Australia, On the Beach
If you have money market accounts, what would stop you from getting your cash tomorrow morning if you conclude the democratic majority is going to make this a partisan issue with winning the election more important than saving the economy?
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