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Greedy bankers are routinely blamed for the credit crisis but one British-based poll of -- well, financiers -- spreads the blame more widely.
Gary Jenkins, head of fixed income research at Evolution Securities, wanted a more specific scapegoat and ran a poll of about 200 mostly fund managers and investors asking them to pick their credit crisis culprit. Former U.S. Federal Reserve Chairman Alan Greenspan was the clear winner, picking up 35
percent of the votes. He has been widely criticised over the past year for low interest rate policies that helped fuel the credit boom.
Former U.S. president Bill Clinton also figured quite prominently with about 10 percent of votes, and British prime minister Gordon Brown got quite a few.
Some bankers were singled out, including Fred Goodwin, former chief executive of Royal Bank of Scotland and Richard Fuld, the head of collapsed Lehman Brothers.
There’s lots of money sloshing around the financial system these days. The Federal Reserve has established a target range of 0-0.25 percent for its key rate, bringing it closer to unconventional action to lift the economy out of a year-long recession.
From Washington, the first package aimed at rescuing the credit crisis-hit banking sector amounted to $700 billion. Treasury can use only half of that amount and it has already pledged all but $15 billion of it. The Senate has refused to pass a $14 billion rescue package for Detroit’s three major car companies last week, leaving it in the hands of the Bush administration to work out a deal.
A London businessman may have to put off his wedding. A baker in Paris fears customers will disappear. A student in Slovenia sees an automobile loan fall out of reach. A real estate agent in Chicago says she’s just plain scared.
And in France, more Parisians appear to be storing their money the old-fashioned way : in a safe.
By a vote of 228-to-205 the House of Representatives rejected a compromise plan that would have allowed the Treasury Department to buy up toxic debt from struggling banks. Is the rejection a “complete disaster” or “a vote for the people who did not issue or accept a sub-prime mortgage?” Join the debate in the comments field below.
Federal Reserve Chairman Ben Bernanke and Treasury Secretary Henry Paulson are urging Congress to act swiftly on a $700 billion bailout plan for the financial system.
Politico.com quotes a former Federal Reserve official as saying, “the alternative is complete financial Armageddon and a great depression.”
In the past year, consumers have been battered by the housing market downturn, surging food and fuel costs, a credit crunch, and a weakening job market.
On Monday, Wall Street had its worst day since markets reopened after the Sept. 11 attacks in 2001, as Lehman Brothers filed for bankruptcy
Equity markets around the world surged on the Fannie Mae and Freddie Mac bailout as hopes rose that the U.S. plan to take control might put at least a temporary floor under troubled financial markets. Together, the two companies back about half of $12 trillion in mortgages in the U.S.”This is a baby step in the right direction,” William Larkin, fixed income portfolio manager at Cabot Money Management in Salem, Massachusetts, said about the plan’s effect on housing and the economy.
Not everyone is convinced. “This euphoria might fade, because Fannie and Freddie are not the problem,” said Christopher Low , chief economist at FTN Financial.
Times are tough for Americans as their wallets take multiple blows from the housing slump, rising oil and food prices, growing unemployment, inflation fears and recession talk. Many homeowners are facing negative equity, with mortgages bigger than their property’s value.
Even as recently as November, households were going into debt to maintain spending, but new numbers show that Americans are saving at the highest rate since March 1995.