September 30, 2008


Stunning day for Dow: Closes up more than 450 (AP, 9/30/08)

Wall Street has ended sharply higher as investors bet that lawmakers will salvage a $700 billion rescue plan for the financial sector. The Dow Jones industrials surged nearly 500 points to the 10,860 level.

The rally offset Monday’s 778-point rout, one of the biggest selloffs in years. The recovery wasn’t unexpected as carnage on Wall Street often attracts bargain hunters.

However, the seized-up credit markets where businesses turn to raise money showed no sign of relief. A key rate that banks charge to lend to one another shot higher, a tightening of the availability of credit that could cascade through the economy.

Senate Republican 'Adults' to Guide House Kids on $700 Billion Bailout? (Paul Bedard, 9/30/08, US News)
We're hearing lots of talk this afternoon that with the House unable to quickly come up with an alternative to the $700 billion bank bailout it rejected Monday, the Senate is ready to take the lead. It's being described this way, says a source: "It's time for the adult body to take over." And that's from a Republican.

Dem Leaders Pledge Cooperation with White House, GOP (The Page, September 30th, 2008)
Pelosi, Reid express their willingness to work together on pushing an economic rescue package through Congress in a letter to the President.

“We welcome your statement this morning and are committed to working with you and our Republican colleagues to enact a bipartisan bill without further delay.”

Obama presses Dems to back the bailout (CARRIE BUDOFF BROWN, 9/30/08, Politico)
Barack Obama on Tuesday stepped up his advocacy for the Bush Administration’s endangered $700 billion bailout plan by making a round of calls to rank-and-file Democrats in the House and casting congressional inaction in dire, real-world terms. He also massaged his pitch, no longer using the word “bailout” to describe the bill.

In a speech laden with warnings about the impact on average voters, Obama made his strongest push yet for the financial package rejected Monday by the House, saying the upheaval was “no longer just a Wall Street crisis – it’s an American crisis, and it’s the American economy that needs this rescue plan.”

FDIC wants to temporarily boost deposit insurance limits (LA Times: Money & Co., September 30, 2008)
The Federal Deposit Insurance Corp. will seek authority from Congress to temporarily raise deposit insurance limits, the agency’s chairwoman, Sheila Bair, said today. [...]

Raising the limit "would provide the dual benefits of providing additional liquidity to banks for lending as well as provide some additional reassurance to depositors above the current limits," Bair said.

Higher limits could be particularly helpful for smaller banks as they struggle to hold on to deposits amid public fears of rising bank failures because of loan losses.

Posted by Orrin Judd at September 30, 2008 3:19 PM
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