J. Henderson Archive

A vote of no confidence in the bailout

September 29, 2008 9:51 AM by J. Henderson

The S&P 500 index is plunging 3% Monday following widespread news reports that the $700B government bailout for Wall Street has been agreed to and will be passed today by Congress. Proponents of the bailout had warned of a stock market crash if Congress failed to enact the socialist rescue plan. Credit spreads are wider and markets continue to be seized up, prompting the Fed to double the size of its liquidity injections to $300B. This is a sign from both equity and debt markets that there is little faith that the bailout will solve the financial crisis.

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The heroic Peter Boockvar

September 27, 2008 10:33 AM by J. Henderson

In my opinion, there has been no greater CNBC commentary on the Wall Street bailout than this one by Peter Boockvar, equity strategist for Miller Tabak. His main points: This is a bailout of several failed bailouts. The top banks would have $400B of lending capacity with no taxpayer funds (more than half the federal bailout) if they would simply stop paying dividends to shareholders. We should let the economic cycle run its course. Government intervention slows down the necessary process of deleveraging that needs to take place.

Peter Boockvar - Will Bailout Help

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Markets fail to crash as predicted by financial socialists

September 26, 2008 9:10 AM by J. Henderson

Amazingly, markets on Friday are shrugging off the bailout disarray. The equity market is down just 1%, a normal day, as the solons of DC bicker. No Armageddon in sight. (If markets do drop, this will be more to do with the ban on short-selling as anything else. The ban has sapped liquidity and will prevent short covering should it be needed.) Meanwhile Washington Mutual failed and the market was able to deal with the problem without a taxpayer bailout. Bankrupt Lehman's employees are being snapped up by Barclays and Nomura without government funds. Watch the politicians rush to enact the bailout anyway, in order to prove their relevance.

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Bailout Hall of Shame
2008.09.20 | Comments (5)

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2008.08.05 | Comments (10)

Wacky WSJ Solutions to the Housing Mess
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More state intervention is always needed in a crisis
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