Obama's bailout trilogy results

Now that the financial and economic crisis is far from over, the Obama administration may have to deal with more problems, but the initial success of the bailout trilogy will undoubtedly add more confidence to the black president's future administration.　　In particular, the means of increasing market supply through a large release of currency liquidity, and thus depressing market real interest rates, had been seen as damaging to the stability of the dollar and could pose a threat of stagnation, yet the actual effect of implementation added a new impetus to the smooth operation of the real economy. President Janshan Obama can finally breathe a sigh of relief these days: Since his inauguration, the Dow Jones Index, which was the worst of the 90 years since he took office, was back at the end of his inaugural day earlier this month, with the Nasdaq and the S & P 500 rising for the year. America's financial markets have warmed up after a long fall, and the real economy has seen clear signs of good, thanks to Mr Obama's Bail-out trilogy after taking office.　　Although the bailout trilogy focuses on a different focus, the focus is on restoring and improving investor confidence through various initiatives and severing the negative cycle of the financial and economic crisis.　　One of the trilogy: Stabilizing the mortgage market to try to rebuild consumer confidence and ability. Mr Obama's first move, after signing the landmark $787 billion stimulus bill, plans to spend $275 billion to bail out the property market, easing mortgage pressure on troubled homeowners by reducing mortgage-monthly payments and allowing refinancing.　　On the other hand, by setting up a homeowner stabilisation fund to help homeowners who are severely defaulting on their mortgages to keep their homes in the offing, at the same time, continue to subscribe to the "two-room" bonds and increase their financing lines to continue to help them to provide low-cost housing loans, so that the default rate of home loans will not continue to rise, weakening its impact on the U.S. financial system.　　At the same time, Mr Obama has increased the household income of American consumers through a range of welfare and tax rebates, allowing the real spending power of US consumers to continue to rise without a sharp decline, thereby reducing the likelihood of further economic decline.　　By stabilizing the mortgage market and increasing consumer real incomes, Mr Obama managed has raised consumer spending power and confidence, and the housing market is starting to show signs of stability, but consumer spending in the US is still at a good level, helping the real economy through its toughest period, despite rising unemployment. The second trilogy: Conducting stress tests and enhancing the risk-resistant capabilities of the banking industry the turmoil in financial markets in the United States is an important factor in the deepening of the financial and economic crisis. To save the moribund US banking industry, Mr Obama's answer is to stress tests that measure the level of capital required by U.S. banks with rigorous test conditions, and to boost banks ' ability to resist risk by prompting them to replenish their share of common tangible equity, through potential government nationalisation threats, Increased market investor confidence in the banking sector from the fall in share prices and assetThe continued shrinkage, which in turn leads to a further decline in credit ratings and a negative cycle of asset shrinkage, ultimately prompts the banking sector to fully recover its lending capacity and willingness to provide the necessary liquidity for the real economy to operate. At the beginning of the stress test, the market has reacted very negatively, with worries about the nationalisation of the banking sector, with bank shares headed by Bank of America and Citigroup pouring in, but with the US government backing the banking industry, determined not to let any big bank that is important to the U.S. economy fail, and in a series of injections,　　With the help of revised accounting standards, the U.S. banking sector reported a sharp improvement in earnings in the first quarter, a surge in share prices and a weakening of the market's concern over stress tests. The results of the stress tests also surprised the market with the gradual rise in banking financing, with 10 of the 19 banks in need of financing, but much smaller than market expectations, which began to rise for some of the previously badly hit bank ratings, Most banks that need additional capital can easily get the money they need from the market by issuing common stock. Although the future of the banking sector may face new challenges, but the most difficult time has been quietly passed, the results of the stress tests also become investors to restore confidence in the banking industry, the investors have a fundamental change in the attitude towards the banking sector.　　This will help financial markets emerge from the gloom of the crisis and provide more support for the real economic recovery.　　Trilogy Three: the implementation of quantitative easing policy to unfreeze credit market liquidity. Since the credit crunch is an important factor in the real economic downturn, the Obama rescue economy has focused on boosting market liquidity and easing credit tensions after helping to help the housing and banking sector. In order to achieve this goal, in addition to stabilizing the real estate market and strengthening the banking industry's ability to resist risk, it has become an important tool for the Obama administration to increase market supply by releasing a large amount of currency liquidity and thereby depress real interest rates in the market. To that end, the Federal Reserve has again taken the initiative to buy long-term government debt for quantitative easing since the 1950s, a move that has been attacked by conservatives as damaging to the dollar and likely to pose a threat to stagflation. However, from the effect of actual execution, certainly played a role: the 10-year long-term Treasury bond rate was successfully limited to below 3% by the end of April, and the spreads on credit markets measuring liquidity tensions began to fall, with 3-month dollar Libor falling below 1% for the first time since June 2003, The spreads (Libor-ois) between the overnight index swaps (OIS) fell to their lowest level since June last year, and many other measures to measure financial risk fell sharply.　　The gradual thawing of credit markets has strongly supported investor confidence and added a new impetus to the smooth operation of the real economy. Now that the financial and economic crisis is far from over, the Obama administration may have to deal with more problems, but the bailout's trilogy has begun to bear fruit.Will no doubt add more confidence to the black president's future administration. (The author is China Eastern Airlines financial registered financial Analyst)