Krugman wonders if the bailout has already failed:
OK, I know that’s premature. And I place no weight at all on the fact that the Dow plunged after the vote.
But it is interesting that short-term Treasury yields are down — only 0.13% on one-month — suggesting that the flight to safety continues unabated. Against this, John Jansen reports some signs that money markets are unfreezing, slightly.
Why do I keep getting the sickening feeling that this is another of those Shock Doctrine big cons? There's certainly a problem and it needs to be fixed. But the logic of the Doctrine is that the "fix" actually makes things worse --- on purpose.
Krugman says we'll know more next week but that we'll likely be asked to consider Bailout Part Deux even before January 20th. Too bad we don't have a president at a time like this.