Based on those comments Barack Obama will set some regulations to prevent any manipulation of tax money later today in order to diffuse back some confidence.
When the Credit Crisis intensified and confidence slipped heavily taking the world indices to an extreme bear market the US government decided to intervene just to spread some tranquility by pushing the banking system to start lending out money to markets once again, but this was not the case as hesitation still resumed and Libor rates surged to higher levels.
Where it came evident that the bailed out banks did not really use this money to spur the money circulation in markets but it decided to use this money in order to acquire other banks, rage diffused in markets and disapprovals took place. Due to that and to stop the continuous whining Obama is about to set some rules and regulations on banks that received federal assistance.
Obama is going to restrict the compensations for only $500 thousand for top executives, where any additional compensation must be given out in stocks where those stocks won't be really owned by executives till the money taken from the feds is given back. It did not really stop at that, restrictions will be taking place also on resources usage, no unnecessary private jet usage along with renovations and holiday parties are allowed, the money spending will take place carefully only to spur up the lending process.
But it did not really stop at those levels; General Motors, Chrysler and Ford Motor are facing more obstacles where they need to take deeper restructuring attempts in addition to another federal assistance. The surging unemployment rates along with the long lost confidence had reduced the demand on the car industry where now citizens are not considering investing huge amounts of money especially at those harsh times their economy is facing.
The problem is that those three companies got a deadline to meet which is in March and not being able to get back on track will put them under severe questioning from the congress, yet we can't totally blame them because the weakening global demand had crippled their production badly as they are now short on cash to continue working.
Those gloomy data did not really have any affect on the US indices yesterday where the three major indices managed to close green, supported by the climbing earnings to more than markets anticipated for companies such as Merck & Co and Schering- Plough Crop. Dow Jones industrial average added 1.78% or 141.53 points reaching to 8078.36 levels pairing the total losses that was recorded since the beginning of the year reaching to -7.95%, S&P 500 gained 1.58% or 13.07 points reaching to 838.51 levels and NASDAQ inclined 1.465 or 21.87 points reaching to 1516.30 pairing losses to only 3.85%.
The optimism retrieved in the US markets had diffused into the Asian markets, where Nikkei Index added 2.73% or 213.43 points reaching to 8038.94 levels and Hong Kong Hang Seng index inclined 2.12% or 270.28 points reaching to 13052.56 levels