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The Deflation Risk Keeps Rising

The markets were planning to tank on Friday. After the Senate rejected the bill, index futures dropped about 200-300 points for the Dow. The markets even opened slightly down. However, I'm fairly certain that the markets recovered because the White House announced that they were going to give a bailout a shot, as did the Fed.

In any case, next week should be interesting with the FOMC meeting, triple witching,etc.


On Dec 13 01:13 PM Freedoms Truth wrote:

> I have an idea, let's capitalize the failed banks and make them zombie
> institutions. Oh wait, that's what Japan did. "
>
> Hear, hear. This is exactly what the 'bailout' of GM will do, turn
> it into a useless zombie institution that, thanks to the govt teat,
> wont be willing nor able to do the real restructuring it needs to
> do. Note that the bailout failed because the the GOP Senators and
> UAW locked horns over whether the UAW would make labor cost concessions
> in the next year, to bring wage costs to be competitive with folks
> like Toyota.
>
> Here's the reality: Unless and until GM labor costs align with Toyota
> etc., they will be INHERENTLY unprofitable. So the GOP Senators were
> right to demand this, to ensure this bailout wasnt a money pit.<br/>
>
> lastpoint: Harry Reid thursday night lamented the breakdown of the
> negotiations and said that he hated to see what would happen to the
> markets Friday... well the markets did fine. These guys who think
> govt bailout of GM will save anything are full of beans.