Official urges quick action on markets | TSLN.com

Official urges quick action on markets

Chris Clayton
DTN Staff Reporter

WASHINGTON (DTN) – Bush administration officials tried to emphasize to a key Senate panel that the massive proposal to keep the nation’s financial system afloat is needed because if the nation’s financial dam bursts, the collapse will flow downstream to every citizen and business.

The $700 billion bailout is needed to ensure proper credit is reestablished throughout the economy for homeowners, auto sales and Main Street small businesses, Treasury Secretary Henry Paulson told the Senate Banking Committee on Tuesday.

“The best thing we can do is stabilize the markets so people can continue to get loans,” Paulson said. “Small business can continue to get loans, small farmers in your states can get loans, big farmers in your states can get loans, and go forward to make sure this doesn’t happen again.”

While Paulson referred to farmers more than once, the agriculture sector so far doesn’t appear to be as fazed as Wall Street by the crisis. Sen. Charles Grassley, R-IA, told reporters in a weekly press call that he was just beginning to hear speculation among economists in Washington, DC about the possible impacts on small businesses and agriculture, but he was assured the banking industry in Iowa, for instance, remained sound.

“I haven’t heard any people in Iowa raise that issue with me …. but if Congress doesn’t take action on Wall Street, it’s going to affect Main Street,” Grassley said.

Still, commodity producers sell on a global market, and Bush administration officials pointed out that the risk of failure in the U.S. financial system would potentially lead to a meltdown in financial markets around the world. Officials made it clear to senators on Tuesday they did not want to try to foresee a worst-case scenario.

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Senators on the Banking Committee from both parties were skeptical of providing a full infusion of $700 billion into the financial markets without a detailed plan of how administration officials intend to use the money. Paulson and others said their plan needs flexibility to allow them to buy up what is now being called “toxic debt” in a variety of ways, and said the situation is unprecedented in scope. Paulson also told senators it was critical that Congress do something before adjourning in the next several days.

“We hope that this decline can be arrested,” Paulson said. “Until the biggest part of this housing crunch, or crisis, is over, there is no way to have a stable financial system.”

WASHINGTON (DTN) – Bush administration officials tried to emphasize to a key Senate panel that the massive proposal to keep the nation’s financial system afloat is needed because if the nation’s financial dam bursts, the collapse will flow downstream to every citizen and business.

The $700 billion bailout is needed to ensure proper credit is reestablished throughout the economy for homeowners, auto sales and Main Street small businesses, Treasury Secretary Henry Paulson told the Senate Banking Committee on Tuesday.

“The best thing we can do is stabilize the markets so people can continue to get loans,” Paulson said. “Small business can continue to get loans, small farmers in your states can get loans, big farmers in your states can get loans, and go forward to make sure this doesn’t happen again.”

While Paulson referred to farmers more than once, the agriculture sector so far doesn’t appear to be as fazed as Wall Street by the crisis. Sen. Charles Grassley, R-IA, told reporters in a weekly press call that he was just beginning to hear speculation among economists in Washington, DC about the possible impacts on small businesses and agriculture, but he was assured the banking industry in Iowa, for instance, remained sound.

“I haven’t heard any people in Iowa raise that issue with me …. but if Congress doesn’t take action on Wall Street, it’s going to affect Main Street,” Grassley said.

Still, commodity producers sell on a global market, and Bush administration officials pointed out that the risk of failure in the U.S. financial system would potentially lead to a meltdown in financial markets around the world. Officials made it clear to senators on Tuesday they did not want to try to foresee a worst-case scenario.

Senators on the Banking Committee from both parties were skeptical of providing a full infusion of $700 billion into the financial markets without a detailed plan of how administration officials intend to use the money. Paulson and others said their plan needs flexibility to allow them to buy up what is now being called “toxic debt” in a variety of ways, and said the situation is unprecedented in scope. Paulson also told senators it was critical that Congress do something before adjourning in the next several days.

“We hope that this decline can be arrested,” Paulson said. “Until the biggest part of this housing crunch, or crisis, is over, there is no way to have a stable financial system.”

WASHINGTON (DTN) – Bush administration officials tried to emphasize to a key Senate panel that the massive proposal to keep the nation’s financial system afloat is needed because if the nation’s financial dam bursts, the collapse will flow downstream to every citizen and business.

The $700 billion bailout is needed to ensure proper credit is reestablished throughout the economy for homeowners, auto sales and Main Street small businesses, Treasury Secretary Henry Paulson told the Senate Banking Committee on Tuesday.

“The best thing we can do is stabilize the markets so people can continue to get loans,” Paulson said. “Small business can continue to get loans, small farmers in your states can get loans, big farmers in your states can get loans, and go forward to make sure this doesn’t happen again.”

While Paulson referred to farmers more than once, the agriculture sector so far doesn’t appear to be as fazed as Wall Street by the crisis. Sen. Charles Grassley, R-IA, told reporters in a weekly press call that he was just beginning to hear speculation among economists in Washington, DC about the possible impacts on small businesses and agriculture, but he was assured the banking industry in Iowa, for instance, remained sound.

“I haven’t heard any people in Iowa raise that issue with me …. but if Congress doesn’t take action on Wall Street, it’s going to affect Main Street,” Grassley said.

Still, commodity producers sell on a global market, and Bush administration officials pointed out that the risk of failure in the U.S. financial system would potentially lead to a meltdown in financial markets around the world. Officials made it clear to senators on Tuesday they did not want to try to foresee a worst-case scenario.

Senators on the Banking Committee from both parties were skeptical of providing a full infusion of $700 billion into the financial markets without a detailed plan of how administration officials intend to use the money. Paulson and others said their plan needs flexibility to allow them to buy up what is now being called “toxic debt” in a variety of ways, and said the situation is unprecedented in scope. Paulson also told senators it was critical that Congress do something before adjourning in the next several days.

“We hope that this decline can be arrested,” Paulson said. “Until the biggest part of this housing crunch, or crisis, is over, there is no way to have a stable financial system.”

WASHINGTON (DTN) – Bush administration officials tried to emphasize to a key Senate panel that the massive proposal to keep the nation’s financial system afloat is needed because if the nation’s financial dam bursts, the collapse will flow downstream to every citizen and business.

The $700 billion bailout is needed to ensure proper credit is reestablished throughout the economy for homeowners, auto sales and Main Street small businesses, Treasury Secretary Henry Paulson told the Senate Banking Committee on Tuesday.

“The best thing we can do is stabilize the markets so people can continue to get loans,” Paulson said. “Small business can continue to get loans, small farmers in your states can get loans, big farmers in your states can get loans, and go forward to make sure this doesn’t happen again.”

While Paulson referred to farmers more than once, the agriculture sector so far doesn’t appear to be as fazed as Wall Street by the crisis. Sen. Charles Grassley, R-IA, told reporters in a weekly press call that he was just beginning to hear speculation among economists in Washington, DC about the possible impacts on small businesses and agriculture, but he was assured the banking industry in Iowa, for instance, remained sound.

“I haven’t heard any people in Iowa raise that issue with me …. but if Congress doesn’t take action on Wall Street, it’s going to affect Main Street,” Grassley said.

Still, commodity producers sell on a global market, and Bush administration officials pointed out that the risk of failure in the U.S. financial system would potentially lead to a meltdown in financial markets around the world. Officials made it clear to senators on Tuesday they did not want to try to foresee a worst-case scenario.

Senators on the Banking Committee from both parties were skeptical of providing a full infusion of $700 billion into the financial markets without a detailed plan of how administration officials intend to use the money. Paulson and others said their plan needs flexibility to allow them to buy up what is now being called “toxic debt” in a variety of ways, and said the situation is unprecedented in scope. Paulson also told senators it was critical that Congress do something before adjourning in the next several days.

“We hope that this decline can be arrested,” Paulson said. “Until the biggest part of this housing crunch, or crisis, is over, there is no way to have a stable financial system.”

chris clayton can be reached at chris.clayton@dtn.com

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