Thursday, October 02, 2008

Thoughtful Response from the Federal Reserve Board to my Inquiry Re: "Bailout Package"

Dear Mr. Smith:

Thank you for your observations and comments regarding efforts underway to relieve the current strains on the U.S. financial system. Healthy economic growth depends on well-functioning financial markets. Consequently, helping the financial markets to return to more normal functioning will continue to be a top priority of the Federal Reserve.

The shortcomings and weaknesses of our financial markets and regulatory system must be addressed if we are to avoid a repetition of what has transpired in our financial markets over the past year. The Federal Reserve supports the Treasury's proposal to buy illiquid assets from financial institutions. Purchasing impaired assets will create liquidity and promote price discovery in the markets for these assets, while reducing investor uncertainty about the current value and prospects of financial institutions. More generally, removing these assets from institutions' balance sheets will help to restore confidence in our financial markets and enable banks and other institutions to raise capital and to expand credit to support economic growth.

Again, we thank you for sharing your views. Please be assured that the Federal Reserve is working diligently to find and implement the best and most sustainable solutions to the current economic challenges.


Board Staff

Original Email Content:

Following is the original e-mail received:

E-mail Content:

As a former Wall Street employee and concerned citizen, I am appalled by the House of Representatives' rejection of the mortgage bailout bill today. There have been a lot of headlines "bailing out Wall Street," I think the press should be focused upon the true issue at hand: saving our economy and way of life. ROME IS BURNING and I am not referring to Jim Rome, the sports reporter! ! ! This mortgage crisis extends much farther than Wall Street, it is a global crisis and if we don't capitate now and I mean NOW, we are going to see job loss, economic dislocation, and widespread global economic malaise for years to come. Congress is playing with fire and too many members of the House are focused upon their reelection campaigns vs. the true crisis at hand. This is a time where we need true leadership, not another Congressman groveling for votes and reelection. While the press chooses to focus upon the $700 billion package size, the real issue at hand is CONFIDENCE. The most important issue to address is the Crisis of Confidence. If the US Congress does not act swiftly the dominoes will fall and the crisis will only get more dire. I wrote this post because I am a patriot and I have no direct means of benefiting from the bailout package.

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