Is Wall Street Losing Confidence in Bernanke and Paulson?

July 14, 2008 RSS Feed Print

Just read between the lines in this report from Global Insight regarding the Bernanke-Paulson plan:

The "fire brigade" approach to dealing with the fallout from the extremely weak domestic economy is eroding general confidence in the U.S. financial system and has led to a pullback in foreign capital investment, just at a time when these critical inflows are needed to shore up severely depleted capital positions...The Treasury will need to specify very soon how much capital that it intends to infuse into the two entities, but this capital infusion needs to be very significant—perhaps as much as $20 billion, or higher, for both entities—in order to defuse the speculative selling of GSE stocks that has been unleashed and reverse the negative psychology quickly and effectively.

Tags:
Henry Paulson,
Ben Bernanke,
Wall Street

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Wall Street never had any confidence in Bernanke or Paulson in the first place. Confidence is something that must be built, and Bernanke never did it. Bernanke has been soft on inflation ever since he took office as Fed chairman, and as a result, Wall Street has never had any confidence in him.

Warren Dew of MA 11:03PM October 10, 2008

Capital Commerce

Capital Commerce

U.S. News business reporter Matthew Bandyk examines the issues, people, and debates that shape the nexus of political and economic life in the nation's capital.

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