While the Senate made Paulson and Bernanke sweat, the concerns seemed to be to be manageable in scope, even though Chris Dodd is talking tough to the press.
The House Democrats plan to make executive compensation an issue could slow progress of the bill and help destabilize markets once again. Evidence of those fears is seen in credit markets where short-term bill rates have fallen back toward zero. A good quality corporate credit like Caterpillar today had to pay 320 bp over Treasuries to sell bonds today as opposed to 200 bp the last time the came to market. If that persists and the economy slows at a result there will be a big political price to be paid.
the dollar has weakened this afternoon even as stocks have stabized near unchanged. Oil is up about $2.50 from its lows but still down on the day.
