We just heard from friends visiting New Zealand (we stayed at their place when we went a couple of years ago).It's tomorrow there and the world did not end.
New Zealand is officially in a recession but the news from the US is causing a lot of concern there which is interesting for several reasons.
2 comments:
The futures market (which may actually include trades from NZ!) tells us that the Senate's approval means nothing. At 1.25a NYT, the E-minis are trading off 13pts. (-1.2%)
At "merely" 1%, this means nothing with the VIX at 40.
But seriously, if the House does not pass the bill the Senate passed (as pork laden as it may be), the credit markets will go back into the deep(er) freeze, and more little banks will be running out of cash, and we may see some honest to goodness runs (imagine the Indymac and Northern Rock queues coming to a bank near you!).
My hope is that it doesn't pass - but that the Congress wakes up and starts doing some triage legislation: increase the FDIC limits, effect the accounting changes required, plus one or two others from the current bill. And then, if someone would slap Hank up the side of the head and tell him to say/order: "cut the damn dividends", and we'd see a bunch of capital emerge from nothing. (Bank investors have no place to run - those that sold out and went to treasuries are already gone, and we could see that a dividend suspension might actually have the perverse (but understanable) effect of causing the stock price to rise.
Great stat on the Newshour tonight (yesterday): the overwhelming majority of reps in Congress are up for re-election in 30 days. Those phone calls threatening no vote if bailout wall street may actually be forcing democracy on them. Such as it is.
R in NY
technically, everyone on congress is up for reelection; two year terms.
senate is six year terms, right?
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