A scientific, quantitatively driven, adaptive approach to economic analysis and money management.
Thursday, September 18, 2008
Rebound Day - RTC the Sequel?
The market turned in a strong performance Thursday on the heels of rumors the government is looking at creating a mechanism to take bad assets off the balance sheets of financial companies. This mechanism might be similar to the RTC (Resolution Trust Company) which the government put together in 1989 to help deal with the savings & loan crisis. This move would show a more comprehensive, systemic approach to solving the financial system's problems, as opposed to the recent string of ad hoc measures to deal with the crisis, putting out fires as they arose. The SEC has also imposed a temporary ban on short selling (betting against a stock), similar to what the UK did earlier in the day. And, $180 billion of liquidity was pumped into the global markets via a coordinated approach by several world banks. Yet another day of non-stop developments, but cast in a much more optimistic, constructive light.
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