The U.S. government today indicated it is considering taking an ownership stake in banks here, as the U.K. government did yesterday (Oct. 8), in a continued effort to restore confidence to the world financial system.
And, House Speaker Nancy Pelosi yesterday proposed an additional $150-billion bailout. Despite last Friday's $700-billion plus bailout, the Dow has lost 1,500 points or $2 trillion in value in the last five days.
The boost given stock markets by yesterday's unprecedented, coordinated interest-rate cut by the world's major central banks may not be enough, observers say.
The Associated Press today reported confirmation by an unnamed Administration official that the U.S. government is considering a direct stake in banks here. That possibility was echoed by the New York Times and The Wall Street Journal, which noted as indicative "a marked shift in rhetoric" by Treasury Secretary Henry Paulson.
Britain yesterday injected roughly $90 billion (50 pounds Sterling) into its biggest eight banks and the government took in return preferred stock ownership in them.
As the U.S. stock market opened today, U.S. futures and European shares were finally up, following yesterday's orchestrated half-point cut by The Federal Reserve, the European Central Bank, and the central banks of England, Switzerland, and Sweden.
However, reaction was mixed, with the Asian markets closing down at the end of Wednesday's trading.