Major Market Mover: Draft Got Released

The Congress had to reach a verdict this weekend, but the prolonged negotiations and the lack of confidence in the current government is preventing the committee to vote on giving the lump sum of 700 billion dollar to Treasury Security Paulson. They only attained a draft which was released to explain 'Emergency Economic Stabilization Act of 2008' trying to cool down the public that they are not just giving out the money as a bonus to the failed companies.

The Summary of the draft noted 'Taxpayers should not be expected to pay for Wall Street's Mistakes' to calm down the citizens, and logically if we think about it the Taxpayers were not the main reason behind the crisis taking place in the financial markets so that's why their rights must preserved even when the Congress and the Government decide to use their own money.

Also the draft included an important note, incase of a fraud or any such attitudes, the 700 billion dollars won't be given away directly but it will be divided into three installments; they will be given 250 billion dollars at the time being, then if more cash was needed to President has ask for additional cash with about 100 billion dollars, and finally the 350 billion dollars will be given but if the Congress believe that the situation is in no need for this cash they would disapprove.

At first we thought that unprecedented intervention after the Great Depression would help the States but it would create some long term consequences that the states could never escape, but after reading and understanding the bail out plan, I believe signs of recovery in the US markets and their housing sector will be seen soon.

According to this plan, trust in the US dollar will be restored once again, as it's the time for the bulls to flourish once again, as now the dollar will be capable of breaching new support against the Euro such as 1.4320 levels, because at the time being the nor the Euro or the British pound are capable of sighting back the dollar because both of them are facing a threat of a recession.

As for our Agenda, today we have some Personal Consumption data, the Monthly Core PCE rose in August 0.2% inching lower from the previous 0.3%, while the yearly PCE held at 2.4%. The Spending in August improved giving some hope that the American economy is going to recover and growth will won't e falling in a contraction in the third quarter, where recently the Americans faced some enlarged threats of a stall in the spending behavior, also some companies are trying to put some incentives just to attracts spending.

Yet still inflation in the United States is eating away the purchasing power of the dollar, and if the situation augments the feds will be in a shape of rate hike though the current destruction in the financial markets are not giving any signs that the feds will be putting a rate hike into consideration any time soon.

All the attention will be headed toward what would be the vote later today and any data released would be discarded…

Crown Forex

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