Thursday Update: Treasury Mulls Investment in BanksIn an unprecedented move, U.S. Department of Treasury sources say the federal government may inject funds directly into troubled banks in order to get banks to begin lending -- another move to try to stabilize the shaky stock markets.
The European markets rallied behind the news that leaked yesterday, and the US stock markets were up 100 points at the open. If the Treasury steps in to aid banks, it will follow a move made by the British government earlier this week when it came to the rescue of several UK-based institutions that were hit with liquidity problems resulting from the credit crisis.
The markets around the world have shed trillions, as investors panicked by the credit crunch were reluctant to stay in the market. The Dow has dropped 1600 points this week and fell below the 10,000 mark for the first time since 2004.
The news that a third bank in Iceland was taken over by the government follows the call by that country for a loan from its neighbors. The country's cash-strapped government didn't get any takers except Russia, which gave it a multi-billion dollar loan.
On the mortgage foreclosure front, Cook County, Illinois' Sheriff Thomas Dart told the public on Wednesday that he is suspending foreclosure evictions in Cook County, which includes the city of Chicago. Many foreclosure evictions in Cook County, he says, are renters who are thrown out of their apartments because the owners of the building fall into foreclosure. This year mortgage foreclosures in Cook County are expected to be over 43,000.