House Passes Rescue Plan; Stocks Tank
A: Tally up the debts! Lets just all pray that the committee appointed to buy these toxic securities, is prudent in the price willing to pay for them. Although that goes against the overall goal, to try and recapitalize the banks & spark private sector interest back to the secondary mortgage markets. The heroin was administered, the high lasted a few days leading up to the peak, and now it appears the hangover is beginning early as the markets realize this just didn't do much to solve the fundamental problems; hopefully the credit markets react favorably from this approval, or else it wasn't worth it!
As I said Wednesday, ..."Clearly, traders are betting on a positive outcome which begs the question, if it does pass, will it be another buy the rumor sell the news situation?".
Yes it will! I guess this is better than stocks being down 900 if the plan didn't pass, but then again, now we have massive treasury issuance upcoming to fund this concept and a good amount of pork to go with it! Instead of $700Bln, the add-ons to convince some to vote yes for the plan is likely to add another few billion to the tab. What a world we live in.
Let us pray that the foreign institutions that buy up our debt via treasuries, have no plans on selling those assets to support their own people as the global slowdown continues to evolve.
