Game Changer
The US government has announced it’s latest bailout package… just in time for the long weekend before the inauguration. Expect the stock markets to be up today… probably 100+ points on the Dow and 15 on the S&P. Treasuries were trading down in Europe and continue to do so in the pre-market.
Up until today, we had an odd situation. No matter how much junk the Treasury hoovered up from the banks, Treasuries continued to trade up. I think the cat is now out of the bag. The problem is that the Fed is going to do everything it can to support low yields across the curve.
All this nonsense avoids the fundamental issue. They’re playing hot potato with all the toxic assets, but at the end of the day, someone has to eat them.
So the big question – why should I the taxpayer eat the losses instead of Bob Rubin the shareholder of Citi or Kenneth Lewis of Bank of America? The obvious answer is I shouldn’t.
The crooks at the banks have resorted to using the Federal taxing authority to paper over their losses. We should start a class-action RICO suit against the banks and the federal government collectively. What a sham.
