Keane observations about life, politics and sports.

Saturday, March 14, 2009

Sometimes an Assurance of Reliability is Disconcerting

President Obama today said investors should have "absolute confidence" in money placed with the United States. Glenn Reynolds posted that item and asked:
UH OH: Obama: Have ‘Absolute Confidence’ in T-Bills. Did previous administrations find it necessary to issue such attention-getting assurances?
The answer is yes, with an ugly reaction. In 1893, Grover Cleveland's Treasury Secretary John Carlisle made the following statement attempting to reassure the public about the federal financial stability, Carlisle said "Treasury would meet demands for payment in gold so long as it has gold lawfully available for that purpose." That reassurance (as you may well guess) did nothing to calm the public or the markets as people read extra meaning into the bolded portion. It will be interesting to follow the action in T-Bills on Monday.

And distressed investors continue to wonder if Obama is shorting the market.



Anonymous Anonymous said...

Tough times ahead. President Obama's market commentary and related U-turn on near-term U.S. economic prospects this week tell me as much.

I have written about this on my blog, but I remember back in October 2006 the U.S. unemployment rate was 4.4%. Stocks were rockin' - on the way up to 14K one year later. This, we were told, represented the 'worst economy since the Great Depression.'

Karma is a you-know-what.

March 15, 2009 at 5:52 AM


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