Panic

Sellers, first in trickles and then in crowds, will meet no buyers today. Prices could drop 5%. Or 10%. Or 20%.

My bet is 12%.

* Congress, bailing with forks, thimbles and greasy palms, can’t reach a deal to support banks.
* The Chinese government has asked its banks not to trade with foreign banks.
* Interbank rates are at new highs. (LIBOR at 3.76.)
* The FDIC closed WAMU last night, after depositors pulled $17 billion out of the bank over a ten day period.
* Initial unemployment claims spiked to new highs yesterday, heading us into territory not seen in 25 years.

Any of these nuggets of news, taken alone, would sock prices 2%. Taken together, and coming on the eve of a weekend — a full 48 hours without trading!!! — sellers will take any price for their shares and potential buyers will hide their wallets.

What’s a safe haven these days? I keep calling old friends in finance and nobody has a clue. Gold? (The Chinese have just 2% of their reserves in gold, versus the US at 60%.) Oil or copper? Maybe JPM, who seems to have the Fed, FDIC and Treasury’s full confidence?