1/31/09

Bait and Switch

On Tuesday (1/27/09), CNBC's Steve Liesman (terrible last name for a reporter) reports that the Treasury is closer to making a bad bank to buy the crap assets floating around in the financial system. "Liesman suggests the big advances involve how to value the assets and that the government is closing in on a mechanism for doing just that" (CNBC). The market rallies on this rumor, gapping up the following day.

On Friday (1/30/09), CNBC's Charlie Gasparino comes on the air and says the bad bank idea has been put on hold because they don' t know how to value the crap assets--directly contradicting Liesman's earlier report. The market tumbles.

Aside from these two rumor reports, and news reports about them in other media, there has been no information about the bad bank in recent days. So is this market manipulation, or what? Someone is making a lot of money on this.


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