Crisis spreads as bailout focus on House
Shockwaves from the global credit crisis spread on Thursday rattling industries around the world and raising the stakes for Congress to finish up a $700 billion bank bailout.
U.S. economic data amplified warnings that a recession is near, and European Central Bank President Jean-Claude Trichet said Europe’s economy was weakening, opening the door for the first interest rate cut there in five years.
Business leaders from hoteliers to automakers warned that a crisis that began with risky lending to the overheated U.S. housing market was on the cusp of a dangerous new phase.
“There are thousands, maybe tens of thousands of jobs at stake in our company alone, and we are typical,” Marriott International Inc Chief Financial Officer Arne Sorenson said in urging Congress to pass the bailout.
Backers of the rescue plan, including Treasury Secretary Henry Paulson, called on members of the House of Representatives who opposed a similar measure on Monday to change their vote free credit report instantly. The Senate passed the bill Wednesday night and the House is expected to vote again on Friday.
Investors around the globe scurried for safety, betting that frozen credit markets would slam the brakes on global economic growth.
Latin American currencies tumbled and stocks sank, led by a nearly 8 percent drop in Brazil’s benchmark stock index, as concern grew that the U.S. rescue package would be too little and too late to head off a deeper downturn.
Stocks dropped more than 3 percent, while U.S. and euro-zone government bonds drove higher in a renewed safe-haven rally.
Filed under: management by TheDoor