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

September 29, 2008 Posted by | EESA, politics, republicans, rock | , , , , , | Leave a comment

Economy Starts to Freeze Up

They say if they don’t get this TARP deal done the credit markets will freeze. Heck they were saying that all this afternoon on CNBC. Its amazing how tempers are flaring even on CNBC about this bailout. They are trying their best to sell it, but Americans don’t like to be told what they must do. God bless em. Barney Frank and Nancy Pelosi have been trashing McCain all day. They think a deal will be struck by this weekend. The markets are hopeful this will be the case.

Today US equity markets were mixed with the S&P 500 up and the Dow is holding tough at 11,000 plus. Incredibly the DOW was up by 121 points after the FDIC seizure of WAMU and sale of assets to JP Morgan. Next up for seizure is Wachcovia and National City. Fortis the large Belgian Bank said today that it is sufficiently capitalized to remain solvent. As the banks continue to fall like so many cascading dominoes pretty soon the severity of the economic crisis will be more apparent. Make no mistake we are in a rough spot. The US dollar remained stable and US Treasuries yields are falling as money seeks a safe haven.

The Labor Department expects employment to fall by 90,000 jobs in its September Employment Report. Today the Commerce Department revised down second quarter GDP by .5% to annual growth of 2.8%.

This debate looms large and Obama and McCain have lots to talk about. Good thing McCain put country first and decided to show up. His countrymen want to hear what he has to say and don’t deserve a cold shoulder from this old warrior.

Heres a great song by Ray Charles and Betty Carter Baby its Cold Outside.

Risk: political apathy

September 26, 2008 Posted by | banking, credit crisis, EESA, jazz, McCain, Obama, politics, TARP | , , , , , , , , , , | Leave a comment