Special Report: Global Financial Crisis
NEW YORK, Nov. 12 (Xinhua) -- The U.S. dollar rose against most major currencies on Wednesday after U.S. Treasury Secretary Henry Paulson said the government wouldn't buy troubled assets from banks.
Paulson said the 700-billion-dollar financial bailout plan would not be used to buy bad mortgage assets as originally planned. The government currently doesn't think purchasing such assets is the most effective way to use bailout funds, he said.
The administration will continue to use 250 billion dollars of the program to purchase stocks in banks, while looking at a major expansion into other markets providing support for credit card debt, auto loans and student loans.
"Approximately 40 percent of U.S. consumer credit is provided through securitization of credit card receivables, auto loans and student loans and similar products," Paulson said, "This market, which is vital for lending and growth, has for all practical purposes ground to a halt."
Paulson's comments added to investors' worries over the falling financial industry, sending stocks and high-yielding currencies sharply lower.
Risk appetite in foreign exchange trading was also hurt by bad corporate news.
Major retailer Macy's reported big loss in the third quarter. Morgan Stanley outlined plans to cut 10 percent of staff in its institutional securities group. Consumer electronics retailer BestBuy Co. slashed its fiscal 2009 guidance on fears that consumer spending will erode even further.
The Bank of England said Wednesday it expects inflation to fall to the government's target of 2 percent next year, but warned that inflation would then continue falling to below that level as the economy contracts further.
"We are certainly prepared to cut Bank rate again if that proves to be necessary," Bank of England Governor Mervyn King said.
Some analysts expected the Bank of England would cut rate by at least 50 basis points in December. The pound fell to its lowest level in six years against the dollar in Wednesday New York trading.
The euro bought 1.2512 dollars in late New York trading compared with 1.2531 dollars it bought late Tuesday. The pound fell to 1.4966 dollars from 1.5401 dollars.
The dollar was unchanged at 1.1866 Swiss francs. It fell to 95.52 Japanese yen from 97.68 Japanese yen. It rose to 1.2368 Canadian dollars from 1.2030 Canadian dollars.
Rescue package not for automakers, U.S. treasury secretary indicates
WASHINGTON, Nov. 12 (Xinhua) -- U.S. Treasury Secretary Henry Paulson said Wednesday the 700-billion-U.S.-dollar rescue package was designed for financial institutions, hinting that the Bush administration might not use the fund to bail out auto companies.
"We care about our auto industry in the United States. They area key part of our manufacturing industry," Paulson said. But he emphasized that the intent of the package "was to deal with the financial industry." Full story
Paulson says not to buy bad loans, assets from banks as planned
WASHINGTON, Nov. 12 (Xinhua) -- U.S. Treasury Secretary Henry Paulson said Wednesday the U.S. government will not use the 700 billion U.S. dollar rescue package to buy illiquid mortgage-relates assets from the banks.
However, the Treasury will continue to use 250 billion dollars of the package to purchase stock in banks as a way to bolster their balance sheets and encourage them to resume more normal lending, said Paulson. Full story
Wall Street plunges on updated TARP program, weak corporate outlook ¡¡
NEW YORK, Nov. 12 (Xinhua) -- Wall Street plunged again Wednesday as investors digested an update of Troubled Asset Relief Program (TARP) and Best Buy Co.'s worrisome profit outlook.
Treasury Secretary Henry Paulson gave an update of TARP Wednesday, saying the second half of the 700 billion U.S. dollar financial rescue program will not be used to purchase troubled assets as originally planned. Instead, the program will be used to help relieve pressures on consumer credit in such areas as credit card debt, auto loans and student loans. Full story
Dollar rises as U.S. gov't not buying bank assets
NEW YORK, Nov. 12 (Xinhua) -- The dollar rose against most major currencies on Wednesday after U.S. Treasury Secretary Henry Paulson said the government won't buy troubled assets from banks.
The euro bought 1.2512 dollars in late New York trading compared with 1.2531 dollars it bought late Tuesday. The pound fell to 1.4966 dollars from 1.5401 dollars. Full story
Crude oil down 5% on gloomy demand forecast
NEW YORK, Nov. 12 (Xinhua) -- Crude oil slid another 5 percent on Wednesday as the U.S. government lowered its oil demand forecast due to global economic downturn.
Light, sweet crude for December delivery fell to as low as 55.62 U.S. dollars a barrel before settling at 56.16 dollars a barrel, trading down 3.17 dollars, on the New York Mercantile Exchange. It is the lowest settlement price since January 2007. Full story
