US markets are in turmoil this morning as the CEO of GM has been tossed aside and the government takes a firm hand of the reins and dictates the terms of restructuring. Given government’s sketchy track record of running anything more complex than a demolition derby, it is being greeted with a great deal of nervousness by the markets. If I were a banker, I’d lime up outside the Treasury department with sacks full of hundred dollar bills to get out of the TARP so that the same fate does not befall me…
Concern over the state of he German banking sector have been raised by Finance minister Steinbrueck wo frets over the health of the Landesbanks, the state-owned regional banks scattered throughout Germany. Many have huge liabilitites from the days when they all had AAA ratings that they used to undercut private-sector banks.
EUR/USD has retraced all the gains made after the Fed announced a $1.1 trln infusion into US bond markets a week and a half ago. 1.3275/85 is resistance on rebound near-term.
