"Ignorance more frequently begets confidence than does knowledge."
Chas. Darwin The Descent of Man
Now Playing: The Treasury is giving the Fed $100 billion which the Fed will then loan to investors so they can buy CDOs backed by credit card receivables, auto loans and student loans. Meanwhile, the Fed is using another $100 billion to purchase Fannie Mae and Freddi Mac's bonds and mortgage backed securities issued by them and Ginnie Mae. Separately, a week after saying he wouldn't, Pinocchio Paulson says he may have to ask for the remaining $350 billion in TARP funds so he can complete his Christmas giving.
A Nation of Sheep, A Nation of the Sheared: The US government has promised to spend $7.5 trillion to rescue the financial system. That's 10 times the cost of the Afghan and Iraqi wars combined. Enough to pay off 50% of all the mortgages in the US. But there'll be no money for health programs, for GM, for people.
New Record: The median price of an existing house fell by over 11% in October from the year before, the largest drop since records began in 1968. Nearly half the houses sold in October were foreclosures.
Crazy Aunt: A US bailout of the Big Three is bound to scandalize its neighbors on World Trade Organization Street, setting off gossip about protectionism and unfair competition. What they won't talk about is the fact that most of them have crazy aunts in the cellar, too.
Quoted: "The problem is that the Bush Administration has so lowered standards that someone who is competent is applauded as a good choice."
Washout: Over one-third of China's land is being seriously eroded, putting both crops and water supplies at risk. Within 35 years the 100 million people in southwest China will lose the land they live on, while yields in the northeast, China’s breadbasket, will fall 40%.
Cupboard's Bare: Only on Wall Street could Andy sell Bob some US Treasury notes, take the money, not deliver the Treasuries and not go to jail. Under the polite rubric of "failing to deliver repos" over $5 trillion in "fails" are just rescheduled for later delivery. Without penalty.
Idle Hands: Unemployment claims have reached a 16 year high. The only bright spots in the data were in the medical and criminal justice fields. Putting people in jail, supervising them and keeping records on them are second only to taking care of sick people, supervising them and keeping records on them. Tell your kids; it's not plastics anymore..
They're Still Here... "Amazing how much damage the lame ducks can do in the time remaining." So much evil, so little time.
Homework Assignment: In preparation for the take-home test on "Friedman & The End of Fiat Money" please read: Double jeopardy for financial policymakers , Wolfgang Munchau (FT) and The Fed is Out of Ammunition , Christopher Wood (WSJ).
Math Quiz: More people + Less Food = (a) 923 million hungry people, (b) increasing starvation, (c) a profit opportunity for Agribusiness, (d) all of the above.
Warning: Most of the Fed's giveaways are run out of the New York Fed, whose president, Timothy Geithner, is Obama’s Treasury Secretary. The only change will be what's left in your kid's piggybank.
Sticks and Stones: According to Don Blankenship, CEO of the nation's 4th largest coal producer, those who want to stop global warming are: (a) crazy, (b) communists, (c) atheists, (d) totally wrong, (e) all of the above. Nothing like a reasoned position. Nothing at all.
Permanent GOP Talking Point: The only serious step needed to (a) reduce the deficit, (b) create jobs, (c) provide decent health insurance, (d) balance the budget, (e) defeat terrorism, and (d)prevent erectile dysfunction is to abolish capital gains taxes.