Special Report: Global Financial Crisis
WASHINGTON, Oct. 21 (Xinhua) -- The U.S. Federal
Reserve announced Tuesday that it will start buying commercial paper from money
market mutual funds to provide liquidity to U.S. money market investors.
This is the Fed's latest effort to battle the credit
crisis that threatens to plunge the world's largest economy into a recession.
In a statement, the U.S. central bank said it is
tapping its Depression-era emergency powers and creating a new facility to buy a
vast array of commercial paper -- a crucial short-term funding mechanism that
many companies rely on for day-to-day operations --from the funds.
Money market mutual funds have been under pressure as
investors demand withdrawals. Many companies rely on commercial paper to pay
workers and buy supplies.
The situation has led to an intense credit crunch for
companies depending on commercial paper.
"The short-term debt markets have been under
considerable strain in recent weeks as money market mutual funds and other
investors have had difficulty selling assets to satisfy redemption requests,"
the Fed explained in the statement.
By buying an array of commercial paper from the
funds, the Fed hopes to improve "the liquidity position of money market
investors, thus increasing their ability to meet any further redemption requests
and their willingness to invest in money market instruments."
"Improved money market conditions will enhance the
ability of banks and other financial intermediaries to accommodate the credit
needs of businesses and households," the Fed said.
Wall Street retreats on weak corporate
earnings
NEW YORK, Oct. 21
(Xinhua) -- Wall Street retreated Tuesday as many big names reported gloomy
earnings and weak outlook.
DuPont Co., the third-biggest U.S. chemical maker,
declined after the company said third-quarter profit fell 30 percent as demand
declined and cut its forecast. Full story
Poll: 3 out of 4 Americans believe
country's economy in recession
WASHINGTON, Oct. 21 (Xinhua) -- About three-fourth Americans believe that their
country is going through economic recession now, according to a poll released on
Tuesday.
The survey conducted by CNN and the Opinion Research
Corporation from Oct. 17 to 19 found that 76 percent of the 1,058 respondents
believe the country's economy is in a recession, and about 40 percent think it
would descend into a depression within one year. Full story
Bernanke says more government stimulus
"appropriate"
WASHINGTON, Oct. 20 (Xinhua) -- U.S. Federal Reserve
Chairman Ben Bernanke told Congress Monday that consideration of more government
stimulus is "appropriate" as the economic outlook is "exceptionally uncertain."
"With the economy likely to be weak for several quarters,
and with some risk of a protracted slowdown, consideration of a fiscal package
by the Congress at this juncture seems appropriate," Bernanke said in his
testimony before the Budget Committee in the House of Representatives. Full story
Dollar rises on comments from Bernanke, signs of credit recovery
NEW YORK, Oct. 20 (Xinhua) -- The dollar rose against major currencies on Monday amid comments from U.S. Federal Reserve chairman Ben Bernanke and falling inter-bank lending rates.
U.S. House Speaker Nancy Pelosi of California and fellow congressional Democrats are pushing an economic stimulus package that could cost as much as 150 billion dollars. Full story
