What will mkts do if bail out in US approved/rejected?

[mickandpete]

I posted this on a thread entitled "What is wrong with the world"
I think it is relevant on this thread
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DEBT
In particular the reluctance of the USA to live within its means.
The Rest of the World will rapidly decline to fund the excessive lifestyle of Americans.
To borrow more money to "cure" the problems now besetting the American financial system can only hasten its demise.


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POSTED BY MICKANDPETE 13 03 2007

Quote:
Originally Posted by mickandpete
Grant
The US Government,in fact the whole nation consider all foreigners to be working against their interests.
Here again the worm appears to have turned.I read recently that a line has been crossed and foreigners now earn more from their US assets than the US does from its foreign holdings. (Correction or positive data welcome )
As for the idea that everything in the US garden is rosy,the ripples from the Sub Prime mortgage market are deepening.

Those ripples are now a lot deeper
Not quite time for full storm warning
WATCH OVER THE POND VERY CAREFULLY HOWEVER

 

[JTrader]

Stand by for Black Monday: Meltdown as Bush battles to pass mutiny-hit £400bn bail-out | Mail Online

 

[MrGecko]

U.S. reaches outline for bailout deal | Reuters

 

[Paul71]

U.S. reaches outline for bailout deal | Reuters

It's funny how liquidity is pumped into the market at certain times. Looking at the bigger picture, now would be an absolute optimum time for renewed upside on the SP500. I've got 1215 down as a break out of the buying cycle, it's currently at 1213.

 

[JTrader]

Bailout failure 'will cause US crash' - Telegraph

 

[JTrader]

Well if the bailout fails and they do not reach agreement, i know what instrument/s i will be looking to trade tomorrow and the direction i will be trading in..........

 

[JTrader]

washingtonpost.com - nation, world, technology and Washington area news and headlines

Lawmakers Reach Accord on Huge Financial Rescue
Vote is Imminent on $700 Billion Bailout Plan

Congressional leaders and the Bush administration this morning said they had struck an accord to insert the government deeply into the nation's financial markets, agreeing to spend up to $700 billion to relieve Wall Street of troubled assets backed by faltering home mortgages.

 

[MrGecko]

I still think it's too close to call the reaction of the markets; the Bill was always going to go through in the end, the Democrats had enough of a majority in congress to push it through. The stalling is because they don't want it all to be on their head - they are having to make compromises in order to get the Republicans on board, so that the Democrats dont foot all the blame.

The issue is the implication of the compromises made to the bill in order that everyone gets behind it; as I see it, the critical part of the deal is whether the 3rd tranch of $350Bn comes before Christmas; funding for the holiday is going to be an absolute nightmare (just look at the front of the curve last week!!!), and I think this will be on the forefront of the minds of banks everywhere - do we get it all before we need it, or half when it's not so important.

Secondly, if Obama makes it into the whitehouse in November, is this going to disrupt the term structure of the deal? I think we can take as given the 1st $250Bn + $100Bn on the advice of Bush; but if Obama makes it in before the 2nd half is released - before Xmas - then...

Great that the deal went through (as far as I'm concerned anyway); but more IF's and BUT's are not what the market are looking for right now. However, it does mean there might be some excellent opportunities to trade the turn...

 

[JTrader]

Rescue bill or not, either way, the markets are doomed. Sure, investing public money to buy bad corporate debt, all be it wrong, may paper up the cracks in the very short term. However, this socialist policy in the long run will make the problem worse, and the economy is no doubt heading into a perfect storm of a deep recession or depression. The writing is already on the wall, the bailout bill will not help avert a serious global recession.

 

[alexa]

What I don't understand, if you think logically...We were told we are in the
mess as we are borrowing more than we can repay (people I mean), so
ultimately we have a problem...Which we do. Second tier is companies which
do the same borrow to lend at higher interest rate to people who cant pay so
ultimately they can't pay their debt. NOW, government borrows what they are
not sure they can repay and since nobody has money to invest in their stock
they are going to be buying, the answer is simple. Unless Arabs buy US
economy as at present they are the only ones with money and also their economy is not much influenced by the US market as they don't function throug credits. It is not good in any case, but perhaps, it is the time to "even out" the world wealth wise. Hmmm....Don't know!!!