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US Government Buys Stakes In US Banks

The United States Government has announced that it is going to buy stakes in American banks–the first time they have done this since the Great Depression.

Treasury Secreatry Henry Paulson mentioned this late friday; after the Dow closed at -128, up from -700.

A lot of financial institutions and governments are trying to prevent a worldwide economic catastrophe. With the recent shake up in American economy, it seems like it has absolutely affected other economies–such as the Chinese, Russian, and Japanese markets as well. The Asian markets went through some drops this week, and there were even some markets that were closed. Yes–just trading was stopped, and they will resume sometime next week.

Britain’s FTSE index ended below the 4,000 level for the first time in five years; Germany’s DAX fell 7 percent and France’s CAC-40 finished down 7.7 percent. Japan’s benchmark Nikkei 225 index fell 9.6 percent, also hitting a five-year low. For the week, the Nikkei lost nearly a quarter of its value. Russia’s market never even opened.

Purchasing stakes in American banks isn’t part of the $700 Billion dollar bail-out plan. The $700billion is going to be used to buy out bad morgages. There was fear that the government would buy enough shares to control the company, but they will be limited to buy shares to a point where they do not have the majority.

Things seem to be picking up… in my eyes. I’m hoping that we are over the worst, and things will start getting a little bit better. Actions are in the works and people are trying to work hard at making sure we can prevent and even more decline in our economy. We will see what happens… hopefully all ends well.