Elsewhere on Friday:
-…Base rates don’t mean much when they fall to silly levels. Look at Japan where even 0 per cent wasn’t enough to kick start an ailing economy for many years
- Brave and bold. But central bankers are still in danger of succumbing to the “Canute syndrome” – failing to keep the receding tide of bank funding from leaving the economy high and dry.
- In the past few weeks, the next generation of M&A failures has begun to take shape…I suspect we will learn more as acquirers and targets struggle further with the new post-August 2007 provisions.
- The euphoric effect that the election hoopla had on Wall Street clearly has subsided, and investors are again reminded that the new guy taking over does not have a magic remedy that will instantaneously make this big economic mess disappear.
- The wholesale scrubbing of the equity market could have something to do with investors’ eagerness to push stocks to levels that reflect the possibility of a truly dreadful [US] jobs release Friday morning.
- We last came across Albert Edwards, arch bear strategist at Société Générale, departing for his honeymoon and speculating whether the break would improve his mood. He is back, and it hasn’t.
- President-elect Barack Obama has said little about his plans for Fannie Mae and Freddie Mac, but a top adviser and contender to Treasury Secretary already has a plan to break up the companies.
- One of the big problems with [mortgage-backed] securities could be called the “Russian roulette” issue….Few of us would play Russian roulette, even if the odds were wildly in our favor, because it is a game no one can lose twice.
- There’s not much liquidity on the Treasury secretary contracts over at InTrade, but for what it’s worth Geithner’s now up at 40, with Summers at 54, and Volcker at 12. Yes, I know that doesn’t quite add up, but as I say, this is a very illiquid market. The only long-shots to trade were Buffett and Romney, both at 5. (Luke Mullins makes up his own odds here.)
