Prediction Market Traders Optimistic Following Bush Bailout Speech
The DOW closing higher Thursday than the previous day had a 62 percent chance of occurring overnight with minimal betting volume taking place at intrade.com, the financial predictions market based in Dublin, Ireland. This activity came following US President Bush's televised address Wednesday night urging Congress to act on his "Government Bailout Plan".
"We're in the midst of a serious financial crisis, and the federal government is responding with decisive actions," Bush warned.
The aggressive plan calls for $700 billion to be infused into the financial market.
"I'm a strong believer in free enterprise, so my natural instinct is to oppose government intervention," he said. But "these are not normal circumstances. The market is not functioning properly. There has been a widespread loss of confidence.
"Without immediate action by Congress, America can slip into a major panic."
There was still plenty of resistance heading into Thursday. Bush has invited Congress and both Presidential candidates to the White House Thursday to discuss this bailout further.
"I don't know why we don't change the name of the US Treasury to the Sovereign Wealth Fund because we're borrowing money from other countries in order to bail out these institutions," Democratic Representative Marcy Kaptur said on Wednesday before Congress.
"Taxpayers did not get their fair share of the upside, but they are getting all of the downside and a huge IOU. While Wall Street is made whole, the folks on Main Street are getting the bill. What has mama given us here? Are Mr. Bernanke and Mr. Paulson giving them any bet on the upside? They're not even helping them on the downside."
It was unclear whether news out of Asia would offset the perception that a "bailout" could come soon.
For the first time since the Asian financial crisis more than a decade ago, Hong Kong has faced a bank run.
Hundreds of depositors lined up at the city's third-largest lender Bank of East Asia Ltd. yesterday as the bank hit out at ``malicious rumors,'' and Chairman David Li rushed back to Hong Kong from the U.S. to reassure clients and investors. The city's central bank jumped to BEA's defense and police said they're investigating phone text messages questioning its health.
``The rumors were groundless,'' Li, 69, told reporters at Hong Kong's airport late yesterday. ``The bank has no problem.''
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Jagajeet Chiba, Gambling911.com
