The bailout and eventual resolution to this crisis is a long way away. As things get worse, it only underscores how much recovery we have ahead of us, and how much work the next president will have cut out for himself.
One expert says that the recovery from this crisis will dominate the agenda of the next president for two years.
The primary features of the bailout include buying troubled mortgage securities, restraints on executive pay, shareholder stake in firms that sell large amounts of bad debt to the government, and a mandate that the government act aggressively to prevent more foreclosures, reports Steve Lohr for the New York Times.
The markets are down sharply this morning, and financial ETFs are taking a hit:
- Financial Select Sector SPDR (XLF): down 24.8% year-to-date
- Vanguard Financials (VFH): down 20% year-to-date
- iShares Dow Jones U.S. Financial Services (IYG): down 21.6% year-to-date; Wachovia is 7.1%
- Regional Bank HOLDRs (RKH): down 11.2% year-to-date; Wachovia is 10.1%
