Economies work only as long as people believe in them.
Ritual: It seems a foregone conclusion that the FOMC will cut the Fed Funds rate to .50%. It is also generally agreed it will not do any good.
Let's Pretend: In Greece all sides have agreed to pretend that the rioting has been about one case of police brutality. Seems more likely to be about the economic collapse spreading across the world. The crisis isn't over, and may be appearing soon in a neighborhood near you.
Fine Print: The 2007 IPCC report had this line: "Dynamic processes related to ice flow not included in present models but suggested by recent observations could increase the vulnerability of the ice sheets to warming, increasing future sea-level rise." Forget the 18 - 59 centimeters by 2100 cited in the report. The ice flow dynamics suggest a probability of ice sheet collapse. Splash.
The Beat Goes On: The greedy folks who pretended to believe Madoff was a wizard have found another one - Federal Judge Louis Stanton, who ruled that those who lost their ill-gotten gains to Madoff's Ponzi scheme can get their money back from the taxpayers.
Vocabulary: "Quantitative Easing" is econospeak for dumping massive amounts of cash into the system. It is inflationary, but Bernanke thinks he can catch that knife later on.
Presumption: Obama's economic team is reportedly developing guidelines to help the new administration deal with "the complete economic collapse of a large, unstable nation." This assumes two facts not in evidence: 1) that the US has the wherewithal to prevent the collapse of some large nation and 2) that the large nation will not be the US.
Economic Stimulus: The private companies who deliver supplies from Pakistan to NATO forces in Afghanistan survive only by paying the Taliban and other local bandits fees equal to about 20% of the value of the cargo for safe transit. Some hire the Taliban to ride escort on their trucks in order to secure safe passage. We may not be winning, but we are certainly spreading free enterprise.
Broken Carousel: One of the few things to keep the US tottering along the last few years has been the recycling of petrodollars into US Treasury Notes and the stock market. With oil at $40, there is going to be a noticeable drop in this cashflow. Oh, you'd already noticed?
Be Prepared: School districts that drew up plans to reduce the school week by a day to save on bus fuel are now looking at the same plans to reduce costs in the face of falling tax revenues.
Good News Among the Bad: After 25 disastrous years, the Washington Consensus (which was not so much a consensus as a program of organized theft for the owners of the World Bank and IMF) is being recognized as the failure it has nearly always been for those on the receiving end.
Simpleton Math: CA, FL, AR, NV and MI. There you have the worst of the mortgage crisis, right? Wrong. If you look at the number of foreclosures as a percentage of the number of mortgages, it's a different story. For example, Tennessee is far worse than California. Go see the chart.
Ah, The Light: The GOP killed the auto bailout not out of their unfettered hatred of unions, but because "Republicans needed to do something that would make them feel good about themselves."