PrintOctober 13, 2008
US Stocks open higher after rally overseas
Wall Street is giving a vote of confidence in the plan by major economic powers to flood the markets here and overseas with billions of dollars, buy up stakes in large banks, guarantee more billions in loans, and generally overthrow the old financial order overnight and substitute what amounts to a worldwide socialization of the planet's financial system.
The news has sent stocks way up in early trading today:
Moving swiftly to restore confidence, central banks around the world flooded the financial system with billions of dollars in liquidity. Britain, France, Germany, and several other European nations announced aggressive plans to guarantee loans, take ownership stakes in banks and prop up ailing companies with billions in taxpayer funds.
The moves amount to a drastic reshaping of the world of high finance. While stock markets in New York, Europe and Asia all moved higher on Monday, doubts still lingered that investors would be able to fully shake off the fears unleashed by last week's enormous sell-off, the worst on Wall Street since 1933.
At noon, the Dow was 537 points higher, a 6.3 percent gain that sent the blue-chip index above 8,900. The broader Standard & Poor's 500-stock index gained 6.6 percent, and the Nasdaq was up by 7 percent.
Gains were even bigger in European markets, with the German DAX index rising 11.4 percent and the CAC 40 in Paris up 11.18 percent. The FTSE-100 in London rose 8.2 percent.
It may very well work to ease the crisis, but at what cost? What has happened the last 48 hours has been nothing short of a revolution.
And it happened with barely a peep of protest from anyone.
Was this the only solution to the crisis? Was their a more market oriented track that could have been tried? I don't have a clue. But it is extremely unsettling to see these monumental changes to our financial system taking place in this country without benefit of debate, or discussion. Only in the rarefied atmosphere of the central banks where almost all of us are not privy to what goes on behind closed doors were these decisions debated.
No one knows what effects will linger from these decisions. No one even knows if they will work. I only know that today I have a profound sense of loss and I don't even know what it is that's gone.
