Failed Bank No Big Deal?
I was surprised that the failure of Netbank in the US, coming on the heels of the run on Northern Rock bank in England, did not attract more attention. It failed during the day on Friday, and the stock market seemed not to notice. It apparently has been in trouble for a while, but its failure seems to be linked to the sub-prime mortgage mess. So, doesn’t that indicate that there are some pretty shaky things out there?
We’re approaching the 20th anniversary of the 1987 stock market meltdown, not that that means anything. The stock market seems very happy with its .5% rate cut; maybe that means they expect the Fed to bail them out of any problems, like failed banks, not to mention failed hedge funds.