Combo Trades: Three Banks for Aggressive Investors
10/01/08 - 12:58 PM EDT
Tim Melvin
This was originally published on RealMoney. It is being republished as a bonus for TheStreet.com readers.
Now it gets interesting. The House has voted down a deal that many, including me, thought was a done deal. I have played around a little in politics over the years, and I cannot believe that the House leadership bought the bailout bill to a vote without having the "yes" votes all lined up. Politics 101 says that if you control the chamber, you never allow a vote without first doing some basic counting. The anticipation of a package has locked up credit markets. You would be foolish to make or get a loan if the rules governing the transaction were going to change in the next 48 hours. These markets will now remain pretty much locked until some clearer picture begins to emerge in the next several days. This is not going to be good for the economy or the markets. These will be interesting times indeed. Most investors should probably just avoid the markets for now. We have injected a massive dose of political risk on top of the normal economic risks associated with investing. I have made no secret of the fact that I did not like the bailout bill and thought it was the wrong approach. The nation's political and economic leaders did like it, however, and pushed it hard. They assured us that it was the answer. They were unable to convince their own parties, much less reach across the aisle, to get the deal done.
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