Credit markets groan at rate cut but fall for monoline rescue hope
The credit and equity markets treated the biggest US interest rate cut for 26 years with indifference, even scorn this week. The 75bp cut on Tuesday failed to halt the rout in markets, as investors are now convinced a US recession is inevitable.
But faith even credulity rushed back on Wednesday when news broke that the New York state insurance commissioner, Eric Dinallo, had urged the US banking industry to supply $15bn of capital to prop up the ailing monoline bond insurers.
Traders grabbed this hope with both hands, ignoring
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