Monday, August 8, 2011

CNN hints international credit freeze (quasi 2008) coming, emergency meetings tonight


Is another credit freeze looming? That’s what CNN suggested this afternoon after Wall Street laid its egg today at the end of the session.

Richard Quest confirmed these comments this afternoon, despite the fact that the yield on US Treasuries dropped even in the wake of the downgrade.

It’s not clear if this is the same concern as in 2008, when there was a fear that the global financial system would simply “seize”. But cash “hoarding” could lead to an international freeze, some says, such as this blog by Eric Dixon. This is the sort of argument one used to hear decades ago from the political Left.
Investors could watch the “Ted Spread” (link) and LIBOR.  That would have gone up today if the T-bill interest went down.  LIBOR, or the London Interbank Rate, is said to have risen slightly today (link )

Yet CNN speculates on high-level international finance meetings taking place this evening.

Much of the drop in the Dow occurred at the end of the day, some time after S&P announced additional downgrades and Obama gave his speech.

I conducted some minor business at a Wells Fargo branch recently converted from Wachovia, and the bank conveniently did not display stock market numbers on its jumbotron. 

Let’s see what the pundits say tonight on CNBC, CNN, etc. 

1 comment:

Tutti said...
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