The “euphoria” surrounding the passage of the TARP package didn’t even last until the final tally. Once the bill went over the top, sellers came into the stock market. focus shifted back to the factors that existed in the run-up to the vote. Once the “special” was over, it was back to regular programing, as they used to say on TV.
One problem has been addressed but many more remain. Hedge funds still have redemption requests to deal with and will have them for months. The TARP process is going to take a few weeks to get up and running. The economic slowdowns in the US, Europe and emerging markets are will be with us for months to come but will hopefully be shallower than they otherwise would have been without efforts to lubricate credit markets.
The buck ends the day on a firm note, smack in the middle of a 2-cent range, just above 1.3800 while EUR/JPY is selling off more sharply as stocks accelerate to the downside.
Sometimes the conventional wisdom, like buy the rumor/sell the news, is conventional because it is right. That turned out to be the case today.
Have a great weekend all and keep your risks modest!
