LIVE: Bush speaks about financial crisis
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Despite earlier hints that a bi-partisan deal was at hand to implement the White Houses's $700 billion financial rescue package, US Democratic presidential candidate Barack Obama said no consensus had been reached on "the core concepts of the plan."
White House and Capitol Hill bi-partisan discussions over a 700billion dollar finance rescue plan hit problems late on Thursday, dashing hopes for a quick recovery of the banking and market sectors.
As he emerged from an unprecedented emergency meeting with his rival John McCain and
“The congress doesn’t really want the plan -- no-one really wants the plan-- but the alternative is too bad to contemplate”, Jan Lambregts of Rabobank global financial markets told Reuters.
“A political theatre”
McCain rushed back to
“John McCain did nothing to help, he only hurt the process”, senate majority leader Harry Reid said after the White House emergency talks convened by President George W. Bush with both presidential candidates and congressional leaders.
Earlier Thursday, an optimistic Senate banking committee chairman Christopher Dodd emerged from Capitol Hill talks to announce “a fundamental agreement on a set of principles” between Democrats and Republicans. Overall hopes of clinching a deal before the day was out were high.
Later that day, however, hopes for a deal unraveled at the White House talks. “What was supposed to be a spectacular top-level agreement turned out to be a spectacular top-level disagreement”, says Jean-Bernard Cadier,
“A right-wing revolt against big government”
At the core of the disagreement lies “a revolt from the right-wing base of the Republican party”, explains Cadier. “They won’t accept the plan for ideological reasons, because they are against big government interventions. Some have even called the plan a ‘socialist intervention’ and refuse it categorically.”
It is unclear whether John McCain instigated the revolt or whether he is just subjected to its consequences. He insists that that Democrats had been premature in talking up prospects for a deal, given the high level of Republican discontent at the Paulson plan.
“Apparently McCain said almost nothing during the entire meeting, and his opinion on the bailout plan remains unclear”, says Cadier, adding that “he will eventually have to clarify his position.”
As for President Bush, he appeared very much the lame-duck president, unable to make his own party accept his proposals.
Money markets have stabilized somewhat but lending between banks remained sluggish, and confidence low. The US dollar weakened against the Yen and Swiss Franc, two currencies associated with stability.
“What’s really required at the moment is the
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