♠ Posted by Emmanuel in Casino Capitalism at 9/29/2008 08:35:00 PMI was confident that the $700 billion giveaway package wouldn't pass in the US House. Hence, I was surprised to see the Dow Jones Industrial Average momentarily fall by 700+ points. Except for the cheerleaders at CNBC, did anyone really expect this hackneyed piece of legislation to pass? The folks over at MarketWatch have put a headline in what I reckon is 70-point font to not-so-subtly underline the market tumult. (Click on the image to appreciate just how large it is.) What font size is this according to this Bob Marley and the Wailers fan? "Not Even Jah the Maker Will Save America Now"-size font. Expecting the debt-addled US government to save American financial markets from its current morass is rather delusional.
Some additional thoughts:
(1) Consider that a ban on short selling stocks was in place on the biggest single day decline in the DJIA. I guess these bans don't really work when sentiment is so bad. (The current ban expires on Thursday.)
(2) Some good news overlooked in all this mayhem is that the US savings rate is actually rising. For three consecutive months, personal savings as a percentage of disposable personal income have been at or above 1%--not much, but hey, it's a start given that they have rarely been at or above the 1% level for three years.