Sorry, Hank,
Sorry, Hank, Bailout Isn’t Working
Excerpt: "
Yes, the price of credit default swaps on the big banks dropped, as traders correctly surmised that these firms are now a lot less likely to go belly up. And bank commercial paper and debt costs dropped, thanks to the new FDIC insurance. And Libor dropped a whisker. And TED a tad.
But Treasury yields are still infinitesimal, LIBOR and TED are still sky high, and the economy is still gasping for air. (See the WSJ chart to left.) Why? Because cash is king, and everyone is scared to death."
More here.
Here’s where lack of confidence is showing up — not the root cause of the crisis, but certainly an effect and a contributing cause to the problems. - Ilene