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Strategies & Market Trends : Ride the Tiger with CD -- Ignore unavailable to you. Want to Upgrade?

To: Land Shark who wrote (131795)	9/25/2008 10:06:16 PM
From: Rocket Red	Read Replies (1) \| Respond to of 312322

Bailout of U.S. financial industry is essential for economy: BoC governor THE CANADIAN PRESS September 25, 2008 MONTREAL - Canada's top central banker says the world's economies would be at serious risk without the US$700-billion bailout of the U.S. financial sector that's being put together by the American government. Bank of Canada governor Mark Carney made the comments in a speech being delivered as politicians in Washington, D.C., worked feverishly to finalize details of a massive rescue plan. Carney said Thursday that other countries may need to follow the Americans' lead with similar government rescue packages to help out their domestic financial institutions. He also said Canada is in better shape than most to weather the storm, but will not be immune from the aftershocks. Carney's comments came as congressional Republicans and Democrats in the American capital reported agreement in principle on the Bush administration's plan. President George W. Bush warned on Wednesday in a nationally televised speech that the U.S. economy is in danger of slipping into a deep recession unless Congress passes legislation the bailout. The bipartisan consensus was reported Thursday just hours before the main presidential candidates, Democrat Barack Obama and Republican John McCain, were to meet with Bush in the White House. The head of Canada's central bank, himself a former senior executive with Wall Street investment giant Goldman Sachs, said in a Montreal speech that the problems are far from over. Carney predicted the coming months will bring more losses and significant consolidation in the U.S. financial industry and that the repercussions will be felt beyond the American borders. Carney suggested that the turmoil and the seizing up of credit will have the impact of slowing global growth, and particularly the U.S., beyond what the bank had forecast in July. "Any slowdown in the U.S. economy would have consequences for Canada, but the current situation poses particular problems," he said. On the other hand, a well-executed rescue program would speed the resolution of the crisis and limit its economic cost, he said. Carney said there's no credit crisis in Canada but that the economy has already felt the effects of a slowdown in the U.S. economy, pointing to a drop-off in exports of Canadian-made vehicles. The Bank of Canada also thinks economic growth globally, and particularly in the United States, will be even slower than it forecast in July.