Risk Rap

Rapping About a World at Risk

GOP Scuttles EESA

The Republicans have turned their back on Wall Street and the EESA. Apparently their feelings were hurt when Nancy Pelosi gave a partisan speech that made some GOP’ers cry.

Other then Ms. Pelosi’s rhetorical fusillade that blew a gaping hole in the collective ego of the GOP, I don’t know what their real reason is other then an ideological commitment to a policy direction that has brought the banking system to the brink of collapse.

Oil is way down on the assumption of much lower demand due to an economic slowdown. Gold is going up as a safe haven for assets. The DOW is down 600 points and the yields on Treasuries continue to plunge.

Republicans can boast their populist credentials as they return to their districts for the coming election. They can blame majority party democrats who control both houses for the legislative failure. Maybe their constituencies are sufficiently capitalized to weather this economic storm.

Liquidity in the credit markets is critical. An important barometer will be lending activity of community banks. No liquidity will acutely show itself in community bank lending.

We seem to be entering a state of perpetual crisis. Anything that is perpetual in nature is not a crisis it is the usual state of things. Any condition of perpetuity is a falsehood and cannot abide.

Welcome to the new normal state of things.

Music: Rolling Stones, Gimmie Shelter

Risk: markets, banking

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September 29, 2008 - Posted by | EESA, politics, republicans, rock | , , , , ,

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