Hours Later: Bailout Plan May Qualify for Epic Fail

October 4, 2008 at 10:39 am (Political Ponderings)

Color me surprised. Not.

Credit markets to Washington: Bailout isn’t enough
Friday October 3, 6:24 pm ET
By Madlen Read, AP Business Writer
After House OKs bailout, credit markets tighten on fears the plan isn’t enough to help economy

NEW YORK (AP) — The credit markets finally got a bailout bill, but the stranglehold hasn’t let up — a troubling sign that lenders and investors believe the package will only be a baby step in the long road to economic recovery.

The credit markets, where companies go to get cash loans, have seized up since the bankruptcy of Lehman Brothers Holdings Inc. and in anticipation of the $700 billion plan initially voted down by the House. The House passed a revised version of it Friday following the Senate’s approval earlier this week, but anxiety about its effectiveness kept demand for Treasury bills high and nearly nonexistent for other types of debt.

After the House’s vote Friday afternoon, the yield on the three-month Treasury bill slipped to 0.50 percent from 0.70 percent late Thursday. There has been no decrease in demand for T-bills, seen as the safest assets around, even though they are offering extremely low returns. The discount rate on the three-month was 0.47 percent.

The stock market sank after the House passed the plan, sending investors back into longer-term Treasurys.

(Source)

Yup – the bill got passed, and the market didn’t care – it went down anyway. But hey at least I, you, our kids, and our grandkids get the privilege of paying for absolutely nothing…

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