World leaders meet on financial crisis

October 12, 2008 9:34:09 PM PDT
All eyes will be on Wall Street Monday to see if the major markets rebound at all from last week's huge sell off. Both the Dow and Nasdaq have a lot of ground to gain to make up for the losses. The Dow finished the week at 84-51. The Nasdaq 16-49.

Over the weekend, all over the world, leaders raced to prevent another stock market nosedive by infusing banks with cash, in the hopes they will start lending again.

There does appear to be an agreement to deal with the crisis among European leaders who met Sunday in Paris.

The plan includes temporarily guaranteeing future loans among private banks.

"The decisions we make in the next few days are decisions that will affect us for many years ahead," said British Prime Minister Gordon Brown.

The International Monetary Fund and World Bank, which also met in Washington over the weekend, warned that any response will mean less aid for poorer countries, suffering from rising food and fuel prices.

"The World Bank will work with the IMF and other to draw on the full range of our resources and to protect the most vulnerable from the impact of the current crisis," said the World Bank's Robert Zoellick.

Still, the real fear is that a lack of specifics out of the White House may lead to yet another week of historic losses on Wall Street.

"I am hopeful that tomorrow, the treasury will announce that they're doing it, and they have to do it quickly. This cannot be two, three, four weeks. The markets are waiting," New York Democrat Charles Schumer told CNN.

But amidst all the panic, some optimism was starting to emerge. Stocks in strong companies have also been brought down by this crisis, and some investors see a buying opportunity.

"If you have a long time horizon. I think the problem is, in this environment, everyone is looking at their account literally on a day-to-day, almost an hour-to-hour, basis. And so, if you can stomach it, this is the time to be investing because this is when people make money," said Andrew Ross Sorkin of The New York Times.

Barney Frank, chairman of the House Financial Services Committee announced that he will put together an economic stimulus bill when Congress returns to Washington after the November election.


Load Comments