It’s feels almost routine. Another unthinkable government intervention, and we barely bat an eye/ Investors are rejoicing as the US government comes to the rescue of Citigroup with a huge package of backstops to make sure that this extremely systemically important institution remains solvent.
It looks as though other banks may use this same game plan moving forward, putting the original role of the TARP in play (buying bad assets) in a slightly different form.
The markets are rebounding strongly this morning with the S&P up about 2.5% in pre-market trade. EUR/JPY is at fresh session highs of 122.50. Next resistance is not until 124.30 followed by 126.00.
