Why hasn't the bail-out plan lifted stock markets?

The US 'Emergency Economic Stabilisation Act' was meant to save the world's financial markets. But the FTSE is down again and US markets are still looking sickly. So what's the problem? John Stepek explains.

The US 'Emergency Economic Stabilisation Act' (EESA) was meant to save the world's financial markets. Yet so far, the FTSE 100 has fallen by as much as 200 points today. The US markets are looking grim too, and as for the money markets, the Libor-OIS spread (as Bloomberg puts it, "a gauge of the scarcity of cash") hit a fresh record which doesn't bode well.

So what's the problem? Well, it seems that the EESA just hasn't quite turned out to be the cure-all that some were hoping. Here's what we've gleaned so far.

Subscribe to MoneyWeek

Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE

Get 6 issues free
https://cdn.mos.cms.futurecdn.net/flexiimages/mw70aro6gl1676370748.jpg

Sign up to Money Morning

Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter

Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter

Sign up
John Stepek

John Stepek is a senior reporter at Bloomberg News and a former editor of MoneyWeek magazine. He graduated from Strathclyde University with a degree in psychology in 1996 and has always been fascinated by the gap between the way the market works in theory and the way it works in practice, and by how our deep-rooted instincts work against our best interests as investors.

He started out in journalism by writing articles about the specific business challenges facing family firms. In 2003, he took a job on the finance desk of Teletext, where he spent two years covering the markets and breaking financial news.

His work has been published in Families in Business, Shares magazine, Spear's Magazine, The Sunday Times, and The Spectator among others. He has also appeared as an expert commentator on BBC Radio 4's Today programme, BBC Radio Scotland, Newsnight, Daily Politics and Bloomberg. His first book, on contrarian investing, The Sceptical Investor, was released in March 2019. You can follow John on Twitter at @john_stepek.