1. Remember in the summer of 2008, all TOO important announcements were made on Sundays. We have a dangerous alphabet soup today Friday: NFP (too much), EFSF (too little) and TBTF (too late). Is it time to buy back?
2. Expect bank runs--who wants to have the liquidity and credit risk of a bank when u can earn more money at home? BONY is charging 13 bp to institutional depositors! This will KILL MMFs within days--we're talking about maybe 3 trillion dollars plus in funds that will be withdrawn at say a couple hundred billion per week...ouch.
3. WHICH MEANS WE ARE BACK TO THE SUMMER OF 2007 (!!) when MMFs had to be saved by the Fed otherwise the entire inter-bank trading system would have failed. Actually, it did go dead stop for two days--August 6th and 7th. IS HISTORY GOING TO NOT ONLY RHYME BUT ALSO GO ALL IN SYMMETRIC ON US?
4. Forget the superstitious calendric coincidence. Questions:
(a) on the opening of the FTSE MIB, will the two Italian banks that were halted yesterday, go even deeper into suspension and not trade? This will definitely cause MASS PANIC. So! Expect govt injection and then limit down and maybe suspension.
(b) on the other side of the Atlantic, we have non-farm payroll. If figure comes in worse than before, then short covering, and then, mega dive.
5. Because all of the above seems so obvious, it may turn out that nothing happens. That would be a surprise.
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