Treasury Talks and Markets Tank
Is this mere coincidence? Treasury Secretary Henry Paulson says he’s considering using funds from the $700 billion rescue package to help homeowners avoid foreclosures. Paulson made the remarks at a news conference on Monday. He didn’t go into any other details.
Calculated Risk notes that also on Monday, the markets nosedived, with the Dow alone dropping by 680 points. In a post entitled “Paulson Speaks, Market Crashes,” CR asked, “I wonder if anyone in Treasury notices the correlation.”
It used to be that when former Federal Reserve Chairman Alan Greenspan uttered anything, the markets would react, and usually in positive manner. Cable shows used to run a stock market ticker next to a shot of Greenspan testifying before Congress, so viewers could watch the market’s instant reaction.
These days, I guess the Paulson factor is just the opposite. Maybe he ought to rethink that next news conference, if he wants to keep investors from getting any more nervous than they already are.