How Will Markets React to Senate Action?
Yesterday, the markets roared out of the opening gates and rallied throughout the day on the possibility that some version of the $700 billion Wall Street rescue package would be passed.
Let's see what the markets do today with the Senate poised to vote on a marked-up version of the defeated House bill by tonight.
Critics of the plan pointed to yesterday's 485-point surge by the Dow as a sign that a rescue bill is not needed at all.
Backers of the bill, however, said the Dow jump was merely the market responding in anticipation of some relief -- yesterday's rally did nothing to alleviate the credit crisis underlying the current crisis.
This morning, all the major credit sign posts -- the spreads, the Libor -- continued to paint a tough picture for consumers and businesses trying to get loans.
Speaking of Libor strife, take a look at this story explaining why there's a credit crisis by The Post's Neil Irwin.
Neil writes: "At the core of the financial crisis is a simple problem: Banks don't fully trust each other. So they hoard cash and only lend to each other if the borrowing bank pays enough to justify the risk."
-- Frank Ahrens
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