Bears beware. The New Deal of 2008 is in the works. The US Treasury is about to shower households with rebate cheques to head off a full-blown slump, and save the Bush presidency. On Friday, Mr Bush convened the so-called Plunge Protection Team for its first known meeting in the Oval Office. The black arts unit – officially the President’s Working Group on Financial Markets – was created after the 1987 crash.
It appears to have powers to support the markets in a crisis with a host of instruments, mostly by through buying futures contracts on the stock indexes (DOW, S&P 500, NASDAQ and Russell) and key credit levers. And it has the means to fry “short” traders in the hottest of oils.
The team is led by Treasury chief Hank Paulson, ex-Goldman Sachs, a man with a nose for market psychology, and includes Fed chairman Ben Bernanke and the key exchange regulators.
Judging by a well-briefed report in the Washington Post, a mood of deep alarm has taken hold in the upper echelons of the administration. “What everyone’s looking at is what is the fastest way to get money out there,” said a Bush aide.
It will take a lot more than that to save the Bush Presidency.
Mike,
Ah yes … the Bush presidency … in such a mess the democratically controlled congress was unable to enact any of their core goals. I guess maybe the President isn’t as out of touch as the Speaker of the House had hoped.
Brian
Prediction: Despite this (breathlessly-reported) effort to save it, the Bush presidency will expire, in January, 2009.
Let’s hope Bush doesn’t get any of these Hoover/New Deal-esque boondoggles passed…they are exactly what we do not need.