Still waiting for closure

Friday 26 September 2008 - Still waiting for closure

Presented by Andrew Cates


+ The optimism concerning passage of the TARP legislation faded last night after Paulson rejected an insurance scheme that had been proposed by the House Republicans. Senator Barney Frank, the chairman of the House Financial Services Committee, has suggested that if a stalemate continues, there will be no bill.


+ JP Morgan has bought the deposits, assets and certainly liabilities of Washington Mutual's banking operations in a US government brokered deal. This appears to have gone largely unnoticed in the markets despite the history and size of WaMu. This type of consolidation in the industry is perhaps now par for the course.


+ Many observers are worrying about the impact of a bailout plan (if passed) on the US economy's government debt and deficit arithmetic. In the early 1990s, however, after the first RTC was enabled, the government?s fiscal deficit nearly doubled over a 3 year period. Yet it took a year for the US equity market to find a bottom, 2 years for the economy to find a bottom, 3 years for the housing market to find a bottom and 4 years for long-term yields to find a bottom.


+ In the day ahead the US faces the final estimate of US GDP growth for the second quarter and the final estimate of September's Michigan consumer sentiment index. Europe sees some September CPI data from Germany and some consumer confidence numbers for France.

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News & Politics

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• economics
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• washington
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• morgan
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• consilidation