The Long Slide Down

By: Great Blue
Published On: 9/19/2008 8:05:36 AM

Amid all the talk of bailouts and buyouts and impending bank failures, two ominous developments this week deserve notice.

This morning the SEC banned short-selling in financial companies.

On Wednesday the three month treasury bill rate dropped to 0.0203, the lowest level since the early dark days of World War II.

So the three month treasury bill has essentially become a mattress for investors to hide their money under until times improve.  If times get worse, the money will still be there.  And the only way to stop the market from immediately capturing the real decline in value of financial companies is to outlaw (or more accurately delay) it.

As with wage and price controls in the '70s, this may just postpone the day of reckoning.  Richard Nixon, call your service.
Cross-posted at www.vagreatblueheron.wordpress.com

Comments



And (Great Blue - 9/19/2008 8:58:02 AM)
on the money market front, check this out.

What's next, WPA?