If I Were President, Economic Slump Is My Priority to Tackle with
Within one month, from the bankruptcy Lehman Brothers, to Bank of America’s buyout of Merrill Lynch, and Wachovia’s sale to Wells Fargo, in New York City, the biggest issue ahead of the new president – Obama is the financial crisis.
Sub-prime mortgage crisis hit the U.S. economy severely last year with hundreds of houses foreclosed, and rising rate of unemployment in the real estate industry.
Since more and more people cannot pay the monthly mortgage, Freddie Mac and Fannie Mae slumped into the bankruptcy edge. The government rescued the twin housing mortgage giants with $90 billion. Furthermore, Congress voted for a 700 billion bailout plan after its revision, which will plan to buy problematic financial assets, including loans, mortgage bonds, and other junk bonds in the market.
The Federal Reserve Bank cut interest rate twice to encourage lending. However, it has to cut the rate again to bring back confidence. The top executives of financial institutions, who intended to satisfy their greediness with a wealthy compensation package and walk away from the crisis, were under the scrutiny of F.B.I with charges of fraud. Some other managing workers and stock traders lost their jobs on Wall Street.
Since the Dow Jones Industrial Average Index fell more than 700 points, the biggest since the 9.11 terrorism attack, global investors and hedge funds oversea lost confidence on the U.S. Stocks. Millions of the U.S. citizens worried about their retirement plan on 401(K) investment.
The financial crisis affected European countries and even emerging markets in Asia, such as China, India, and Vietnam. Globalization made a New York regional crisis impact badly around the world. How much time we will spend to walk out of the economical recession is an unknown question to most of the economists, bankers, and worldwide residents. And it is the biggest challenge to the new president for his long and hard journey.
