Bailout was the right thing to do

Yes things are F'd up.

But I want to point out some things to readers here.

Russia halts trading after 17% share price fall

http://www.ft.com/cms/s/0/6ff9306c-83f1-11dd-bf00-000077b07658.html

the Bank of China cut interest rates for the first time in six years and lowered capital reserve requirements for its smaller banks.

http://www.moneymorning.com/2008/09/16/central-banks/

I guess the argument of China was, when on thin ice, reduce reserve requirements~~

The ECB allotted roughly $43 billion (30 billion euros) in a one-day money-market auction that was more than three times oversubscribed,


http://www.bloomberg.com/apps/news?pid=newsarchive&sid=a4CbU4pfZ9kc



Sept. 16 (Bloomberg) -- The risk that European banks won't repay their debts exceeds the chances of non-financial companies defaulting for the first time since March, according to prices in the credit-derivatives market.

The point in all of this is that the EURO cannot be counted on to raise capital from say Spain and France to bail out say a bank in Germany.

There will be those who say that the dollar is in bad shape, and indeed the markets are F'd up. But make no mistake about it..

Smart money will go to the dollar as the overall effect is capital destuction and deflationary and not inflationary.

The US markets have the flu, which means that the global markets are damn near fatal.

The fact that all experts agree that the result is deflationary, that deposits are safer in the US, and that there is no refuge in alternate currencies, even gold is a bad choice due to the deflationary destruction of consumption, as an example jewelery sales will be slow XMAS, and as capital assets shrink the greater fool or capital to support the price of gold erodes.

Yesterday I posted you should double check FDIC status, and that pulling money was foolish.

I stand by that advice to stick to cash, US cash.

The effects overseas will be more dranatic long term than what we will experience here.

The dollar rallied on the news of the lehman collapse amd will do so even more..

Again:

Don't bet on the politics of a country in Europe to want to bail out a neighbor in the Euro.

Sept. 16 (Bloomberg) -- The risk that European banks won't repay their debts exceeds the chances of non-financial companies defaulting for the first time since March, according to prices in the credit-derivatives market.

Sticking to US cash and T-notes is the best bet.