This Week: Financial Summit; Banks' 'Stress Test'
Today begins a critical week for some of the nation's hobbling industries. The Obama administration today holds a financial summit where he will outline some key details of his budget plan, which includes a goal to cut the federal deficit in half by the end of his first term by raising taxes on the wealthy and cutting war spending.
But there are other huge issues looming for the administration. Following the huge decline last week in the stock market, in which the Dow Jones industrial average was brought to a six year low, banks this week face the Treasury department's "stress test" to determine whether they need help. The market has dropped several bank stocks to very low levels out of concern that they could be wholly or partially nationalized. Citigroup executives have approached federal regulators to discuss steps the government could take to strengthen the company, including changing the terms of the investment the government already made in the bank by turning its preferred shares into common shares.
Then, there's the auto industry, which continues to struggle and has already announced it needs more funding than already promised by the government. There is a new report today from the Wall Street Journal that government advisers are making contingency plans to line up debtor-in-possession financing to help General Motors and Chrysler restructure without filing for bankruptcy.
Check back here on these pressing issues for more developments throughout the day.
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