Senate passes bailout pkg: Will HOR follow suit?

Excerpts from Power Breakfast on CNBC-TV18 Watch the full show » RELATED NEWS Bailout inadequate; see larger offer ahead: Tata MF US Senate passes new bailout package Nifty BSE | NSE 25/05/12 Are Mutual Funds betting on Nifty?

With the Senates go-ahead However, critics of the bailout package are still far from being convinced. The focus is now sharply on the House of Representatives and the vote is due today. 

 

Hear out a few experts debate on what might happen:

 

Gary Schlossberg, Senior Economist, Wells Capital Management said, "The treasury package will take time to take hold and the liquidity conditions would therefore be slow to respond. I do think the package in the abstract does provide some relief on the liquidity side to the extent it can provide greater transparency on these mortgage backed securities. The other issue though is capital; banks have to raise more capital, the impact of this legislation I think is more indirect than direct.

 

Bill Smith, Sam Advisors said," If investors are betting on the passage of this package to solve the near term liquidity issues, they are going to be very disappointed. We're not a big fan of the plan. Though, this is going to be the largest carry trade in the history of the capital markets."

 

"If the plan works in the way it's structured, the US taxpayers may not lose anything. They will probably make a lot of money."

 

Bob Doll, Vice-Chairman and Head of Global Equities, BlackRock said, "I think a lot of passage of the bill is in the markets. Although, given the uncertainties of Monday I am sure there will be some sigh of relief or else there will be an equal positive for the markets tomorrow. The Fed has done multiple things like injecting liquidity at the right time. We will see some more action from the Fed. There is not one thing that is sufficient to solve our problem. There are some things along the way that are necessary and given how far we have gone with the psychology around the bill, it would take some black hole negative possibilities away, reduces the fears and instills some confidence."