Breaking News Alert
The New York Times
Tuesday, February 10, 2009 -- 4:10
Dow Drops 4.6% While the S&P 500 Lost
Major stock indexes slumped after Treasury Secretary Timothy
Geithner unveiled the latest government program to bail
out the banking
system, with the Dow dropping 382 points to
close at 7,888.88 and the broader
S&P 500 index fell 4.9%.
Investors bid up prices of Treasury securities
in a flight to
Every time the Washington partisanocracy comes out with a "bail out" bill, the market reacts negatively. This happened with the Bush administration -- one of its worst blunders -- and the new administration of "Mr. Change" Obama. Neither President has taken the hint. Since policy is now set by President Obama, it is all the more distressing that he has not and has chosen to not change a Bush policy that sorely needs changing. The markets have been not only hinting, but yelling and screaming:
"Please Mr. President, make no bailouts! You have already swallowed all of the credit that business needs and have thereby made private business a bad credit risk. Taking more money out of private investments and into public will just lengthen the time before credit supply is sufficient to assure a reasonable availability of credit for private companies so that they can be credit-worthy."
Oh, I see what the problem is. The Obama administration does not understand market speak. I will translate into a metaphor:
"Please don't send us another bailout hurricane. We have already battened down the hatches and boarded our shop windows from the last one and will not remove the battens and boards until we have some assurance that another storm is not soon coming our way."
Carl Peter Klapper