Has the big US bailout hit some turbulence?
As the Bush administration struggles to navigate a quick passage through Congress for the $700 billion US bailout it seems that stock markets around the world may have jumped the gun a little in their call of the end of the credit crunch. While it seems inevitable that the bailout will be agreed in due course, each day sees the situation worsen and more family homes put at risk, not to mention a further shakeout of the financial sector.
Federal Reserve chairman Ben Bernanke and Treasury Secretary Henry Paulson, two of the big names behind the scheme, have been very vocal in their quest to make sure the bill passes through Congress with as little delay as possible. However, opposition parties have decided to use the bailout as a political pawn to push through some of their own bills - bills which would have, or have seen, opposition from the Bush administration.
What happens if the unthinkable were to occur and Congress was to dismiss the bailout bill?
If the bill was to be thrown out of Congress that would put the worldwide markets in an even worse position than they were when the bailout was announced. Liquidity would dry up in the money markets, confidence would ebb to a new low and we would see more and more well known companies go to the wall. But rest assured it WILL NOT happen!
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