Boring. "Crisis" Over

Boring:

(AP:HONG KONG) Most Asian stock markets recovered Monday after last week's historic sell-off as governments in Europe and beyond intensified efforts to stabilize the world's troubled financial system.

Hong Kong's Hang Seng Index, which tumbled more than 7 percent Friday, rose about 478.80 points higher, or 3.24 percent, at 15,275.67.

In Australia, the S&P/ASX200 index was up 4.71 percent in response to a government plan to guarantee bank and other lender deposits for three years. The benchmark plunged over 8 percent on Friday, its biggest single-day fall ever....

Bah! Humbug!

The region's markets showed signs of life after leaders of the 15 euro-zone countries unveiled measures Sunday to prop up the region's ailing financial institutions. Under the plan, governments would guarantee new bank debt until the end of 2009, allow governments to help banks by buying preferred shares, and vowed to rescue important failing banks through emergency recapitalization.

In the U.S., investors were waiting to see if the Treasury Department's newly announced plan to buy equity in troubled banks would help stabilize the volatility on Wall Street. Lawmakers have urged quick action by President George W. Bush on the effort, to be funded by the $700 billion bailout he signed Oct. 3.

I have my own opinion on the matter and predicted earlier this afternoon that the "crisis" was over. This is my reasoning: I'm bored stiff. Now, of course my being bored has no causal effect on the market but this has to be the dumbest stock sell-off in human history. There are a few hundred billions of bad securities out there. This is in a world market! A few hundred billions is pennies. Yet the lending apparatus is frozen, and because of that, and all the hype that businesses can't barrow, business can't borrow, everybody panicked: Depression! Depression! A Great Depression! The World Will Collapse! Oh for God's sake. Take your lumps. So a few businesses go broke. Send flowers. But to have this huge panic just because lenders are protecting their own skin --and now waiting for government goodies-- is just nuts. The business of business is to do business. If all the governments in the world just went off somewhere and played golf I imagine business would get to business and this whole perturbation would be over in a week.

Which gets to the boredom. The whole sell-off is a sell-off of panic. Just how many days in a row can you maintain panic and not get sick of it? I'm presuming that by now most people have pooped themselves out being afraid and so instead are going to start thinking in terms of opportunity. This sure is a great time to buy, and most companies are solid. I don't know why there shouldn't be a rebound, and I don't know why companies can't get together and for the short term just by-pass the chicken little financials and loan to each other. They don't have to loan much to get leverage, they just have to have a security, and if stocks start going up they've got it.

I do think government is much too impressed with itself, with a Napoleon or three in every cabinet. I sure would like to see them be proven unnecessary. --The government can offer guarantees to businesses infected with bad securities but otherwise sound, but it seems to me that's about all it has to do.