Thursday, October 02, 2008

Memory hole revisited

It looks like I was not the only one who finds the story of Sept 29, 2008 on Oct 1-2, 2008, beardy.
First off… let me make a couple of observations. If you watch the financial news, you would get the impression that without the Paulson Plan, (of whoever's name is on it now) the entire financial system will come crashing down. If you watch the network nightly news, the Financial Crisis of 2008 is just another news item. When I first saw the original hearings and House members didn't sound sold, the people I talked to in the markets told me I was wrong… this is just for show to the voters back home… I was told. Passage is a done deal. Then the bill failed. Wall Street was shocked and mortified at the initial defeat. And now they are now saying yesterday's rally was on news of the resurrection of the Plan in some other form. If you ask me, equity prices were already recovering BEFORE House members tried to resurrect the "Plan". Maybe there was some talk going around on Monday night to try again, but from what I saw, Asian and then European markets were stable to higher well before there was serious talk that the Plan could still be passed. Besides, if the rally were really based on a resurrection of the plan… why was the dollar up so sharply with gold lower in the aftermath of the defeat? My conclusion; we are dealing with heavily tainted news and analysis from Wall Street.


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