Friday, November 21, 2008

Geithner

So Geithner for Treasury, it's an interesting choice, but also looks like Summers will be replacing Bernanke in 2010. The Dow suddenly got a 500 point bounce, who are these idiots? One would have to believe that it's only the interregnum and uncertainty which are killing the market. (other observations on the market below the fold)

Meanwhile, Merrill-BofA deal spread is widening, i.e. the "market" or what is left of it is betting against the merger going through under current terms. Which reminds me, I have to remember to vote. This is probably a consequence of TARP. Since Paulson abandoned the original plan of providing relief to the troubled assets, the valuation has changed. However, it's extremely difficult to believe in the wisdom of the market right now; the deal spread could simply be impacted by fund redemption. Also most of the arbitrage players on whom the market depends to close the gap, are out of business, so efficient market theory doesn't apply. Consequences of this deal not going through could be significant, not only for Merrill & Co. but essentially most of the TARP investments would also blow up in smoke as Merrill's debt brings down the remaining players. The market is simply broken right now. [For anyone who cares, all this is from public sources, I have no insider knowledge :(]

In other news, Hillary accepts state. What's annoying to me are the huge number of leaks and rumors which are spreading since the election starting with Emanuel. No-drama Obama is being dragged into the Clinton culture. But then Geithner's appointment was of course orchestrated to have the bounce. One thing that's going around is that you don't hire someone you can't fire. But I think Obama can always lure Hillary to the Supreme Court. All people complaining about too many Clintonites in the administration needs to think that anyone in the Democratic party with any talent had to be associated with the Clintons somehow, they have simply dominated the party for the last sixteen years.

Team of Rivals is shaping up (I wonder how much money Goodwin is making off this, not that I mind; the press simply creates an idea and milks it for all its worth). But when will the liberals get any appointment?

1 comment:

River Bolden said...

Its interesting to see that Obama is selecting many of the Clinton era people.

Not exactly change.

In any case, the next few years will be interesting and bumpy.

-RB