Credit crisis

As I write, the market is staging a mini-comeback from yesterday's debacle. The inter-bank loan rate has tightened up though, so I guess there's still a chance that we may all end up driving to California in a Model T to pick grapes.

On a more macro level, I see that the dollar has gained against the pound and that US Treasury 30-year notes took a substantial gain yesterday. Continued asinine government intervention may well derail us yet, but I'm hopeful that these macro signs indicate that the dollar's value will stay reasonably strong.

Given this stabilization in the markets, I hope that Congress and Secretary Paulson take some more time to hammer out a deal that the world is going to have to live with for decades to come. Beyond any bailout, I'd like to see a plan that addresses the underlying issues that created the bubble. The particulars of any plan are likely less important than whether the plan succeeds in rebuilding market confidence. A robust regulatory framework that assures the general public that this won't happen again is also crucial, but I'm much less sanguine about Congress' ability to agree on goals for such a regulator, never mind actually building a new agency or division from scratch.

In short, for those of us pursuing startups, I think it's reasonable to expect that the credit crunch is going to fuel a venture crunch in which money becomes even harder to come by.