Yesterday, the $700 billion the markets needed to avoid another Great Depression fell through-- at least for a few days. The largest savings and loan in the country, Washington Mutual, was seized by federal regulators and handed off to JP Morgan Chase, and this is the market reaction? An increase in the market capitalization of about $200 billion? I think this reaction from the New York stock exchange is the final proof that the "crisis" is crap. All that seems to have happened is a big spike in interday interest rates- "big" being that they are a massive 3.76%- and all you have to do to get credit at low rates is agree to take out a loan for three months, which gives you a rate which is 2.08% lower. I know that's a record high, but come on- this is not an earthshattering crisis.
Isn't this what markets are supposed to do? There's all this activity in derivatives and other crap which required a spike in intraday lending, and the banks said no, we have people who are doing real things we actually need, and if you need anything, just lock in a rate for three months. That's not a crisis, that's people acting like responsible adults.
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