Wednesday, October 8, 2008

Not Much Help

If the $700B bailout was supposed to instill confidence in the U.S. economy, it’s not working. This morning the rest of the world’s markets are showing how they feel: like crap.

Meanwhile, the British are getting in on the bank bailout act:

As European leaders continued to clash over measures to ease the financial crisis, Britain announced a three-part multibillion-dollar bailout for its beleaguered banks, and Spain moved to mount a separate rescue of its own banking sector.

At a news conference, Prime Minister Gordon Brown insisted that the crisis had begun in the United States. “This problem started in America with irresponsible actions and lending by some institutions,” he said. “In some cases nobody actually knew what irresponsible lending was done.”

As a result of the crisis, he said, “the global financial market has ceased to function.”

He depicted the British measures as far more radical than had been forecast and farther reaching than America’s $700 billion bailout.

“We have led the world today with a proposal to restructure our banking system,” Mr. Brown said. “We are taking the steps that I believe other countries will take in the future.”

A statement from the British Treasury said at least $350 billion “will be made available to banks under the special liquidity scheme,” doubling the size of a credit line from the Bank of England established as the financial crisis began and designed to unlock frozen lending between banks.

Additionally, the British government pledged $87 billion in direct support for eight major banks.

The move amounted to a partial nationalization of some of those institutions. Minutes after the announcement, the British stock market fell by almost 5 percent.

You just can’t “turn the page” past this.