Washington Mutual is gone. National City Corp is next. Wachovia is hanging in the balance.
Pretty broad weakness right now across financials and the VIX is up nearly 10% to 35.96. At the same time, money is flowing out of 13wk bonds, where the yield has increased 19.72% to 0.85%. On the long end of the curve, 10 year bonds are down 1.63% to 3.79%. We’re seeing the yield curve flatten a bit on those moves.
In foreign exchange markets the dollar has lost its luster and is now losing ground against the GBP and JPY. Both seem to be trading in a limited channel.
In metals, gold prices are up 1% touching $890. We’re definitely seeing $900 act as a key level of resistance.
In energy, oil has slid to $104, but seems to be finding support at that level. Natural gas is down to $7.6, but may see some seasonal strength as we enter the Winter months.
The falling dominoes of the credit market are leading to credible potential for a global equity market disruption regardless of whether the bail out is passed. The only thing the bill would do is delay the market capitulation. The question is do we have some more inflation or do we experience the asset deflation crisis immediately…
