Securities Loan Facility along with inventing a Public Private Investment Fund.
The start of Geithner speech was that the economy is in serious need for solutions that could stimulate the economic activity, where jobs must be created once again especially after the world witnessed more than 2.6 million jobs terminated in only twelve months fortifying fears of citizens living in the United States.
The Public Private Investment Fund would be used to cushion the financial system and provide credit to businesses, which is an attempt to revive the economy from the endless failures that would push the United States in a mini depression; this fund will start with $500 billion that might be expanded to $1 trillion if needed.
Adding that loans must be guaranteed to consumers and businesses, as banks continue their hesitation preventing from giving out money to anybody believing that the Credit Squeeze will continue to pressure their companies as they are teetering on the brink of filing for bankruptcy.
Yet Geithner failed to ease down continuous concerns about the housing sector and how the government will succeed in stopping house prices from heading down to more lows, along with how would he remove all the toxic assets from the tumbling banks balance sheets. Those unanswered questions had resulted in pushing terror in markets leading to more losses in the stocks markets.
Dow Jones industrial average fell 4.62% or 381.99 points reaching to 7888.88 levels adding on the total yearly losses reaching to 10.11%; S&P 500 fell 4.91% or 42.73 points reaching to 827.196 levels, pushing the yearly losses to -8.42% and finally NASDAQ lost 4.225 or 66.83 points reaching to 1524.73 levels.
On other hand majors fluctuated; the sixteen economies managed to incline reaching to 1.2932 levels after it recorded a low of 1.2806 levels yesterday, but the British pound could not make use of the US dollar weakness where it also fell for the second consecutive day to currently trade at 1.4441 levels. However, the Japanese yen strengthened against to currently trade at 90.06 levels.
Today fundamentals will continue to pressure the British pound down south as the Unemployment rates in the Royal kingdom are surging to extremely high levels as recession deepens and sector in the economies continue to tumble.
The start will be with the UK Claimant count rate, the median estimate clears that the rates climbed to 3.8% in January from the previous 3.6% with 89.0 terminated jobs where the highest range falls at 110 thousand terminated jobs. Also in that whole bunch of data we will see the ILO Unemployment rate, where a wide range of expectations falls between a high of 6.4% and a low of 6.1% but the median estimate falls at 6.3%.
In addition, we have the Kingdom's inflationary report, the gauge of economic health and projections of consumer prices in the medium and long term, where those reading are highly used by the monetary policy committee to decide whether to continue the harsh rate cuts or not.
Recently markets had witnesses the unprecedented fall in consumer prices, which was supported by the continuous global demand weakness along with the dramatic fall of crude prices that was the main reason behind consumer prices overshooting targets.
Yet the prolonged recession in the United Kingdom which diffused to more than two quarters had resulted in hammering consumer prices down to undershoot the Banks of England's targets; where now the threat of deflation in the Kingdom is augmenting to threatening levels, obligating the central to use unorthodox methods in order to skip this ordeal.
Moving to the US continent, our calendar contains the trade balance reading along with the monthly budget reading. The prolonged weakness of the US dollar compared with other majors in the world will be the reason behind the falling trade deficit alongside to the weakening domestic demand because households no longer have enough money that would keep demanding goods.
The range of expectations falls between a high of -$31.0 billion and a low of -$45.0 billion but the median estimate falls at $-35.7 billion, the internal weakness is obvious and hesitation continues to worlds leading economy.
So let's just keep our eyes today at the United Kingdoms' unemployment data, hoping that the amount of terminated jobs won't exceed markets expectations...