Well, I guess the die has been cast on the nationalization thing... In order to assuage the markets, Treasury has said: "This administration continues to strongly believe that a privately held banking system is the correct way to go, ensuring that they are regulated sufficiently by this government".
Doesn't that mean it can't happen now? Sure, stock indices rebounded to be only down about 1% on the day (bank of America up 25% after the announcement!), and the market's now only down about 20% since the (small) size of the stimulus plan was announced, but I can't help but think the result of this isn't going to be a whole lot of muddling... And who cares if the stock prices of insolvent banks take a hit?
The crazy thing about how much the stock market was down earlier today (down down 200+) is that January's core CPI was actually up .2%, which was an undeniably good sign. This week we had the housing bill, the stimulus signing, an announcement that another stimulus is on the way, promises not to nationalize the banks, and yet, how did the market do on the week? off 5-6%?
Friday Night Music: Warpaint, Elephants
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