Monday, May 11, 2009

SAR #9131

Their intent is to restore faith in the system, not to fix it.

Concession Stand: Faced with a near revolution on the part of the governed (the banks), the Fed capitulated and reduced the size of the some capital deficits by a reported 60%. Now the Fed says they don't have to raise that if the banks can manipulate the accounting rules sufficiently to pretend to be profitable for a couple of quarters.

Being Prepared: The FDIC is opening an office in Jacksonville, FL and staffing it with 500 "asset resolution specialists."

Chimera: While Wall Street and the government struggle to return to the heroic days of yesteryear, the American consumer has turned much farther back, to the days of pinching pennies, saving, and paying their debts. Mostly paying their debts. Economists expect this behavior to persist well beyond any hoped for recovery, not because of a sudden return to Puritanism but rather out of sheer necessity.

Keystoned: The White House looks to turn the Fed into the nation's financial supercop. Okay, but who will guard the guards, and who's going to provide on-the-job training?

Time Warp: On the TV talk circuit this week: Former GOP VP Cheney, Former GOP Presidential Candidate McCain, 2012 GOP Presidential Candidate Petraeus , former GOP Speaker of the House Gingrich, and GOP installed Afghan President Karzai. The Democrats were busy running the country.

Mother's Day Present: The BLS unemployment rate for men is 10%, for the ladies, 7.6%. But they did get yesterday off, right?

Recast Resets: Interest rate resets on Option ARMs is not a big problem with today's interest rates, but recasts are - recasts being the resetting of payments to a totally amortizing rate, where instead of making interest only payments, or other 'negative amortizing' payments, the patsy has to come up with real dough, now. Or rather, then, then being next year.

Resourcefulness: A new report cautions businesses to consider their vulnerability to the increasing scarcity of energy, food and water and to take steps to reduce the potential damage shortages could entail. Just what steps was not specified.

Mating Dance: Research suggests that tightwads generally marry spendthrifts. While it may explain my marriage, this sheds no light on the union between Washington and Wall Street.

Criticising the Critic: Akerlof & Shiller's Animal Spirits gives a well deserved thrashing of the 'rational actor' basis for market theory economics, but they still seem to think that people put away their 'animal spirits' when they enter the government. Paulson, Bernanke, Geithner and Obama make a prima facie case that delusions, greed, fear and hope also animate political man.

Eating Cake: Obama's budget clearly says that Fannie and Freddie are private companies, so why is Fannie asking the Treasury for another $19 billion?

The Good Times: Population growth and increased food production have both literally been fueled by the use of ever more fossil fuels. Unending economic and population growth is not sustainable, and will end soon after oil availability peaks.

Taps: Hydrogen fuel cells, once the Holy Grail that would banish global warming and dependence on foreign oil and free the US from fossil fuels has officially been identified as a chimera which will not be practical for decades. Government funding for development of hydrogen powered vehicles will be severely reduced. That's okay, there are no cars in the future. Converting 10% of the 250,000 million vehicles in the US to 100 mpg non-emitting engines would take way over 10 years and not change anything.

Nerds, Inc. The ongoing excitement over improvement in the second derivative of this or that statistic should be seen as grasping at straws. Reality seems to have slapped CNBC upside the head this morning.

Porn O'Graph: Land Ahoy! There's a mountain ahead!


TulsaTine said...

We have seen the enemy and he am us. All of the self flagellation and wailing and thrashing will not undo the manifest destiny that has brung us to the precipice of eternal peril. May as well admit it was a screamer of a ride, tell a few tall tales of the wonder years and prepare to see justice.

CKMichaelson said...

TT - Threatening justice is uncalled for; we're all friends here, right?

But you're right - it's been a great ride. Being born in the 40's was the best bit of timing possible. Thank's Mom.

fajensen said...

US from fossil fuels has officially been identified as a chimera which will not be practical for decadesThe practicality problem is local to the US, I.M.O.

The reason is that Dantherm Power A/S, Haldor Topsoe A/S and IRD A/S together have the key patents and reference designs while the US still needs 10-15 years of basic research before they are at the same level - and none of the above businesses will sell at the start of the 'S'-curve.

TulsaTime said...

The usual exclusion of present company is always extended! And justice is always extended to those other miscreants anyways!

I'm a 54 myself, so I will be tasked with viewing the descent and participating in the impact.

so you favor the blends or the single malts?

CKMichaelson said...

TT - After extensive and expensive research, both here and there, I've settled on one of each: The Famous Grouse (or occasionally The Black Grouse) as a blend, and Highland Park as mu usual single malt.

Case lots of either are acceptable tokens of appreciation for SAR.