The TED spread is up to 3.06, indicating continued severe levels of fear and mistrust. Marketwatch is going on about gold being up on a weaker dollar - I don't know how many monkeys they have writing their headlines, but clearly it's not enough to generate the right ones, since the dollar is mostly flat with a mild trend up both today and yesterday, after a sharp decline on Monday. Meanwhile, three-month T-bills are reportedy pulling interest rates as low as 0.05% (5 basis points, yes, 0.05%, not a typo) indicating another flight to stop-loss; I'm not seeing that here, but I am seeing a sharp spike down regardless. But non-US bond buyers - who basically float the US deficit at this point - are saying recent actions, particularly the bailout, make US bonds much less interesting as investments. That's bad:
"The image of U.S. Treasuries as a safe haven has been tainted by the ongoing financial debacle," said Kwag Dae Hwan, head of global investment in Seoul with South Korea's $220 billion National Pension Fund, which holds about $14 billion of U.S. government debt. "A big question mark hangs over whether the U.S. can deal with an unprecedented amount of debt. That is unnerving all the investors, including me."In somewhat better news, the CMBX (a measure of commercial property loan risk, more or less) continues to decline and the ABX continues to show some signs of partial recovery, so.
In creepy news, Todd Harrison at Minyanville reports "well-respected" DC insiders saying that the reason for the ban on shorts was "economic terrorism, a coordinated short raid that originated in London and Dubai." Oh good, it's all terrorism now. Marketwatch - Marketwatch! - has noted the similarity in approach between this and Iraq (!), calling this another 'trust me' remedy and noting:
...the Bush administration is pressing to get the plan passed quickly before any real oversight can be brought to bear, because even the simplest due diligence suggests that it needs some work if the taxpayer's interests are to be even minimally protected and some real oversight brought to bear on the whole process.Who in their right minds would trust these guys at this point?
Meanwhile, the FBI have launched an investigation into Fannie Mae, Freddie Mac, Lehman Brothers, and AIG, apparently deciding to act finally against some of the blatant, systemic fraud that got us here. Hopefully they'll also be going after some of the government parties involved - HAHAHAHAHAHAHAHAHAHA <cry>
I haven't looked at the video, but Karl Denninger's post this morning explains why the lie being floated about the US government making money on this bailout is a lie, in no uncertain terms. (Presumably this is just like how the Iraq war would pay for itself. Heh.) See also home sales continuing to fall sharply. 24/7 Wall Street has details on how much will be overpaid for these "distressed" products by the government, and Mish notes that the US government will become the world's largest owner of homes under the bailout plan.
Separately, oil inventories took another hit, so oil is sticking to the $105-$110/barrel range. Quietly, the Democratic Congress has allowed offshore billing restrictions to expire wholesale, failing to put in any of the environmental restrictions they'd claimed to hope to add. That won't help enough to notice, but it sure will make a few oil companies another few assloads of money!
eta: Over the weekend, a strong majority of Americans supported the bailout plan. I'd like to see newer polling.
eta2: It isn't being widely reported, but the SEC has expanded the "no shorting" ban every day since the initial set was imposed. Today's adds (list courtesy Mayorquimby at Tickerforum):
MHS Medco Health Solutions, Inc.IBM? Strategic Hotels & Resorts, Inc.?! What the hell is this?!
ABR Arbor Realty Trust, Inc.
DDR Developers Diversified Realty Corporation
HRB H&R Block, Inc.
IBM International Business Machines Corporation
MFA MFA Mortgage Investments, Inc
ASI American Safety Insurance Holdings, Ltd.
LFG Landamerica Financial Group Inc.
PHH PHH Corporation
BAP Credicorp, Ltd.
LXP Lexington Realty Trust
BEE Strategic Hotels & Resorts, Inc.