The Bush Administration and leading lawmakers agree to include mortgage aid and strong congressional oversight in a plan to provide unprecedented help for failing financial institutions, but jitters about the 700 billion dollar bailout plan sent stocks tumbling more than 350 points.
Even with a 700 billion dollar bailout plan being considered by lawmakers, investors on Wall Street are still worried, and it's showing. Not only did the Dow Jones Industrials drop 373 points, oil prices soared 25 dollars a barrel at one point today.
A 700 billion dollar bail out, it’s the largest since the great depression. Treasury Secretary Henry Paulson says it's what the government needs to do. “We felt this was the best way to stabilize the situation, un-clog the system so that it can work.”
The national debt could rise more than 11 trillion dollars, making future generations pay the price.
Don McNay, a Financial Columnist says, “Short term does this mean anything? No. Long term, very dramatic changes. When you start fiddling with the financial system it affects every aspect of the economy.”
There's still no firm timetable for action on the bailout plan, which will let the government buy out bad mortgages, helping large financial companies get back on their feet.
Some say it's taking away the consequences for companies making bad decisions.
McNay says, “I think if you're running with tax payer, particularly tax payer dollars involved and stock holders involved you shouldn't walk away with a yacht.”
McNay says what's happening on a national level is not necessarily affecting Kentucky the same way. “Most of the Kentucky banks did not have a lot of, own a lot of sub-prime mortgages or things that are causing this down turn.”
But McNay says there are still things you should do to protect yourself, but first, don't panic. “If you have money, it's in a retirement plan and its allocated properly, just sit it out.”
McNay also says, pay in cash if you can, even if it's a big investment. “If you get laid off and you don't have a car payment and you have a house you can afford and you don't have a credit card, you can survive just about anything.”
McNay says just don't try and out guess the marketplace.
McNay says if you have the money, it could be a great time to invest in the stock market but only if you have experience and know what you’re doing.