Treasury Secretary Paulson said on Wednesday that the bailout plan finally approved by Congress gives him wide authority to inject capital in the banking system which he will excercise urgently. Hearing him say that is great relief since we don’t need a failing banking system in our country.
The downer side of his speech was his recognition that we have tough times ahead and things will not get better anytime soon. Banks are just not lending money right now which severely restricts the expansion of business and limits the number of people able to buy homes. I think the loosening of credit markets will signal an end to these rough times and I hope it’s sooner than Paulson suggests.
It also looks like the credit default swaps that are causing problems here are also affecting financial institutions around the world. Europe has also announced problems with their banking system in recent days. All of us have also seen our retirement accounts and stock portfolios shrink quite a bit this past week.
At least we’re doing something about it and I sure hope our leaders know what they’re doing. It also seems like the recovery of the real estate market that so many experts are predicting in Q2 of 2009 is a long shot.