Big CEOs (Lloyd Blankfein from Goldman, John Mack from Morgan Stanley, and Vikrim Pandit from Citigroup) are all meeting with officials from the Fed and Treasury at this moment to agree on a financial market stabilization initiative.
Expectations are that they will match the European initiatives, which include guaranteed interbank lending, and perhaps broader deposit insurance. We can also expect more details on how the U.S. plans to make capital infusions into banks.
Meantime, the Congressional leadership is meeting to scratch out a second stimulus package, which may include a job creation component.
Not surprisingly, there are a lot of plans for change floating around, some of them bad.
Barack Obama's plan to allow 10 percent penalty free withdrawal from IRAs is bad for the stock market and bad public policy. We want more people to keep their savings, and we don't want to make it easy to withdraw. We did this with real estate this decade, making it easy to withdraw money from our homes. As a result, equity declined dramatically.
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One thing's for sure: this October is becoming the month of Big Pronouncements, but that will soon end, to be replaced by a long succession of implementation details. While important, they will not have the titanic weight the initial announcements had.
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