0 HTTP/1.1 200 OK Cache-control: no-cache="set-cookie" Content-Type: text/html; charset=UTF-8 Date: Sat, 23 Mar 2019 01:03:48 GMT Link: ; rel="https://api.w.org/" Link: ; rel=shortlink Referrer-Policy: no-referrer-when-downgrade Server: nginx Set-Cookie: AWSELB=C3795FED14B35CF5BE2CA58B214B373EA663E3F908CBD71421400C2344014D567B28FB1963665FD5D34B6CD829E02BCF69D15C3A95F055CFE825210B1631D54A5936BC89B3;PATH=/;MAX-AGE=30 X-Content-Type-Options: nosniff X-Frame-Options: SAMEORIGIN X-Pingback: https://auth.icis-explore.rbi.web.internal/chemicals-and-the-economy/xmlrpc.php X-XSS-Protection: 1; mode=block transfer-encoding: chunked Connection: keep-alive 8e8 ‘The biggest bailout in US history’ – Chemicals and the Economy

‘The biggest bailout in US history’

Currencies, Economic growth, Financial Events, Futures trading, Leverage

Does the US Treasury read the blog? Just hours after the chart below was posted, rumours began to circulate of a major government initiative to try and stabilise financial markets.

The aim, according to Bloomberg, is to move ‘troubled assets from the balance sheets of American financial companies into a new institution’. Bloomberg adds that the ‘effort is a recognition that Paulson’s and Bernanke’s efforts 687 have so far failed to revive financial and housing markets’. The sums being talked are huge, at $800bn for purchasing these assets, and another $400bn to insure money-market funds.

The Wall Street Journal says that the new body may be modelled on ‘the Reconstruction Finance Corporation, a Depression-era relief program formed in 1932 to inject liquidity into the market’. And the New York Times comments that ‘it would be the biggest bailout in US history’. It says that legislators may also decide to bail out homeowners faced with foreclosure, as well as the banks that lent them the money.

The question that has not yet been raised in the discussions, it seems, is ‘Who pays the bill?’ The US Treasury had to borrow an extra $200bn in a hurry this week, to finance the bailouts already agreed (Fannie Mae, Freddie Mac, AIG). Will foreign investors, who initially lent the money that financed the US housing boom, now also be prepared to support the cost of cleaning up after it?

The US$ rallied recently back to ¥110, on hopes that the economy might be about to recover. But major financial market declines rarely end without a currency crisis. The blog noted last November that ‘a fall below 100 yen would take us into uncharted water’. Hopefully, if 2d42 the US Treasury is indeed reading the blog, they will take this issue into account when they make their proposals to Congress.


The global stock market decline


Does the US Treasury read the blog? Just hours after the chart below was posted,...

Learn more

Financial 'toxic waste'


Does the US Treasury read the blog? Just hours after the chart below was posted,...

Learn more
More posts
Ageing Perennials set to negate central bank stimulus as recession approaches

The world’s best leading indicator for the global economy is still firmly signalling recession...

BASF prepares its UK supply chain for Brexit

BASF has been working with Ready for Brexit (the online platform I co-founded last year) as part of ...

Companies and investors have just 30 working days left to prepare for a No Deal Brexit

Companies across the UK and EU27 are suddenly realising there are now just 30 working days until the...

The BoE’s pre-emptive strike is not without risk

The Financial Times has kindly printed my letter below, arguing that it seems the default answer to ...

Flexible working is key to reversing today’s collapse in fertility rates

Women in most parts of the world are not having enough children to replace our population. This is o...

No Deal Brexit remains UK law unless MPs reverse their previous votes

“That couldn’t happen” are probably the 3 most dangerous words in the English lang...

CEOs need new business models amid downturn

Many indicators are now pointing towards a global downturn in the economy, along with paradigm shif...

Stock 16b7 markets risk Wile E. Coyote fall despite Powell’s rush to support the S&P 500

How can companies and investors avoid losing money as the global economy goes into a China-led reces...


Market Intelligence

ICIS provides market intelligence that help businesses in the energy, petrochemical and fertilizer industries.

Learn more


Across the globe, ICIS consultants provide detailed analysis and forecasting for the petrochemical, energy and fertilizer markets.

Learn more

Specialist Services

Find out more about how our specialist consulting services, events, conferences and training courses can help your teams.

Learn more

ICIS Insight

From our news service to our thought-leadership content, ICIS experts bring you the latest news and insight, when you need it.

Learn more