ARTICLES MODERN

As the government’s financial rescue in a new phase, Wall Street and ordinary Americans, many are wondering the same thing: Is any of this?
The short answer is not nearly as much or as fast as many had hoped.
More than a month and nearly 300 billion $ in the initial effort, many of the nation’s financial arteries by almost sclerotic before they were. Some of them, in fact, seem to be much stronger.
Loans are rare, and for many people, getting scarcer. Home mortgage rates have barely eased. Solid, while corporations can borrow money again on the market for commercial paper - the crucial short-term iou’s based on the fact that companies pay the daily bills - trickier forms of funding remains elusive. Hard-pressed companies are still virtually shut in the capital markets.
Financial lock, real and feared, were displayed on another Thursday during a convulsive day on Wall Street. After three days of losses, each one worse than before, stocks tumbled to their lowest level since 2003 - and then bolted higher in the final hours. Dow Jones industrial closed 552 points, or 6.7 percent.
But with a recession, maybe a long one now at hand, and uncertainty swirling around the current government bailouts more wild swings have become the new normal.

Treasury about-face on Wednesday when it officially abandoned its original strategy of buying troubled assets from banks, did little to ease investors’ anxiety.

Bush administration now says it will try to jump-start stalled credit markets with new lending programs, rather than buying assets from troubled banks. But the line for help getting off the Treasury. A large commercial lender, the CIT Group, applied to become a bank on Thursday in hopes of qualifying for saving money. American Express took the same step earlier this week. And then, of course, is not beleaguered auto industry.

“What has not improved is psychology,” said Max Bublitz, chief strategist at SCM Advisors, an investment firm based in San Francisco. “This has morphed from a bank loan market in a matter in a slump crisis.”

Some parts of the credit markets have become better. Commercial paper rates have fallen significantly in the last few weeks, as key to the London interbank offered rate rate, or Libor, the benchmark for trillions of dollars of corporate loans and home mortgages. Three months Libor fell to 2.15 percent from 4.82 percent in early October, when many banks were reluctant to grant each other.

But in other parts of the market remains frozen. Borrowing costs are still high for creditworthy companies, and for state and local governments. Even banks which receive money from the government are reluctant to give, much to the consternation of the government. The vast market for bonds, debt backed by credit card, auto loans and student loans to close effectively. No new credit card has been issued securities, the crisis has reached a fever pitch in September.

Treasury threw a lot of money at issue. In recent months, the government pumped nearly 300 billion $ in more than 40 banks and financial companies, including American International Group, tottering insurance giant. Banks have until Friday to apply for money in the original.

So far, Treasury has identified only a handful of recipients. The government says that you should not stigmatize companies to accept - or to be refused - government money.

High-takers include nine banks that are likely to dominate the landscape of the new U.S. bank, including Bank of America, Citigroup, JPMorgan Chase and Wells Fargo, and humbled by Wall Street giants Goldman Sachs and Morgan Stanley. The remaining money goes to more than 30 banks, large and small, spread throughout the country.

But now that the Treasury has abandoned its plan to buy toxic assets of banks, other companies, including insurance and student loan companies are lining too. Many on Wall Street say they think the cost of rescue is certain to exceed $ 700 billion, which was originally designated for him.

“Let’s be realistic, the $ 700 billion is not enough,” H. Rodgin Cohen, chairman of Sullivan & Cromwell and one of the pre-eminent lawyers for the firms on Wall Street, said at a conference hosted by business magazine on Wednesday . “I think this is’ T-word,” he said, referring to the $ 1 trillion.

While many banks have yet to receive their money from the Treasury, some are rushing to make loans to companies and consumers need to cushion the economic crisis.

Take Cascade Financial, a bank based in Everett community, with Wash. Hit investments in mortgage giants Fannie Mae and Freddie Mac, Cascade intends to use $ 39 million it hopes to receive from the government to support its balance sheet. Only then will consider the loan.

“As a bank, we would like to make prudent loans,” said Lars H. Johnson, the Cascade chief financial officer. “If we have the wherewithal of the capital, we would do that. But you have to weigh that against what is happening in the economy.”

Starting from 125 billion to $ gave the nine large banks, the government has worked its way down to small community creditors. But not all these banks are in dire shape.

Consider National Saigon, a branch bank three years in Orange County, Calif.. That bills itself as the hometown creditor of the local Vietnamese community. National Saigon is set to receive $ 1.5 million, even though a key measure of financial strength of the bank was four times higher than the minimum required by regulators.

For John J. Kennedy, Saigon National Chief Executive, which applies for a piece of bailout was an easy decision. His bank was well capitalized, he said. But receiving an additional $ 1.5 million for small business - the lowest preliminary award announced by any bank so far - would accelerate the growth plans for its rabid.

“I said,” Let him move to take the money while it is available, “he said.

Unlike many other banks, Mr. Kennedy said, Saigon National government will use the money as Congress apparently intended: to make loans to his community. Other banks hope to use the money to buy weaker rivals and trigger a rapid consolidation of the industry, which seems to be encouraging the Treasury.

But, for some banks, in part, led to no government has not been easy.

“It is the hardest decision I’ve made,” said Curtis L. Hage, chairman and chief executive of HF Financial in Sioux Falls, SD His company, which runs Home Federal Bank, has won preliminary approval for 25 $ million. Now, Mr. Hage should take the proposal to his board next week.