The government is floating the idea of taking up to a 40% share in the
common equity of Citigroup, which is about as close as you come to
admitting the bank is insolvent.
How are the markets reacting? Government coupon-debt is sharply lower on the news. It's being taken as a positive, reducing the need to hold Treasury paper as a safe haven. Stock markets will climb on the open.
Here's a canary in the coal mine: Canada's CPI has fallen four months in a row, which hasn't happened since the early Thirties. Our CPI is under pressure (it's being held up by slightly higher gasoline prices, as supply ratchets down to meet lower demand), but producer and wholesale prices so far are holding steady. That news is mixed and unconclusive.
How are the markets reacting? Government coupon-debt is sharply lower on the news. It's being taken as a positive, reducing the need to hold Treasury paper as a safe haven. Stock markets will climb on the open.
Here's a canary in the coal mine: Canada's CPI has fallen four months in a row, which hasn't happened since the early Thirties. Our CPI is under pressure (it's being held up by slightly higher gasoline prices, as supply ratchets down to meet lower demand), but producer and wholesale prices so far are holding steady. That news is mixed and unconclusive.
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