Economic crisis

Sorry for putting the entire article on the blog but when i go back and check to make sure the link works it says website is not available.

Bernanke: Quick Economic Rebound Not In Cards
President Meets With Cabinet On Economy

WASHINGTON -- The country's economic health won't snap back quickly even if badly needed confidence in the U.S. financial system returns and roiled markets finally calm, Federal Reserve Chairman Ben Bernanke cautioned on Wednesday.
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"Stabilization of the financial markets is a critical first step, but even if they stabilize as we hope they will, broader economic recovery will not happen right away,"
The government's new powers under the $700 billion financial bailout package signed into law two weeks ago should help reduce risks to the economy, Bernanke said.
Tapping that new authority, the Treasury Department announced Tuesday that it will inject up to $250 billion in U.S. banks in return for partial ownership. It is hoped that banks will use the cash infusion to rebuild their reserves and lend money more freely to businesses and consumers.
The government also plans to buy rotten mortgages and other bad debts held by banks, another new power granted by the bailout package.
The rationale behind capital injections and buying bad debts is to unclog credit. That should help financial markets function more normally again and -- in time -- help the wobbly economy get back on stronger footing.
Bush: Bailout For 'Working People' As Well
President George W. Bush said Wednesday that a government bailout plan is not just designed to help Wall Street.
He said the government intervention is also aimed at helping everyday Americans -- "working people" and small-business owners.
Bush also said the government will be a "passive investor" in shoring up banks and that the financial industry rescue plan is designed to preserve -- not replace -- the free enterprise system.
In a meeting with his Cabinet at the White House on Wednesday morning, Bush said he's confident that in the long run the economy will "come back."
On Tuesday, his administration announced a $250 billion cash infusion for selected banks to help stabilize the system and nudge banks into lending again. Despite the plan, Wall Street remains wary of job losses, the housing crisis and consumers' decision to curb spending.
Bush called the plan a short-term measure to insure the viability of America's banking system.
This partial, temporary purchase is being done in concert with the European allies. This weekend, Bush will host French President Nicolas Sarkozy and European Commission President Jose Barroso at Camp David.
Bush and his top advisers are making it clear they're not crazy about the idea of the government buying into the nation's banking system. But they say it's necessary to free up credit.
The first bank to take advantage of the new program was Bank of New York Mellon. It announced that it's selling $3 billion in preferred shares to the Treasury.
Earlier, Treasury Secretary Henry Paulson said he expects improvement in the condition of the economy over time but that there will be "a bump in the road" along the way.
He said Wednesday that the next several months are going to be rough ones for the economy.
But, he said, the government's decision to buy into the nation's banking system with an investment in nine large banks at the outset should stabilize the financial system and loosen the tight credit market.
The secretary was interviewed on ABC's "Good Morning America." He acknowledged that he initially opposed government intervention into the banking industry but that new facts changed the circumstances in recent days.
Paulson said, "There's no doubt that the way to get the maximum bang for the taxpayers here was to invest in banks."
He said it's "not what we ever wanted to do," but it's "what we must do to restore confidence to our financial system."
Ups, Downs On Wall Street, Abroad
Stock prices were lower in early trading Wednesday. The Dow Jones Industrial Average was down about 150 points in early going.
The Nasdaq Composite Index was off 30 points and the Standard & Poor's 500 Stock Index was down 23 points.
On Tuesday, a day after the Dow saw its biggest one-day gain, the key averages gave some ground.
The Dow closed at 9,310 after a loss of nearly 77 points.
Most Asian stock markets slipped a bit Wednesday after a two-day rally, though Japan bucked the trend.
The Nikkei average was down in early trading but finished about 1 percent higher. The benchmark surged 14 percent in the previous session. That was its biggest single-day gain ever.
Hong Kong's Hang Seng Index lost 5 percent after rising more than 13 percent the previous two days. Markets in Australia, South Korea, China and Singapore were also lower.
Concerns linger that worldwide efforts to revive the financial system won't be enough to stave off a global recession.