uno?

why cut?

dont solve anything.

appearance of relief, or just more string pushing.

third?

And the $USD begins to fall again, long term interest rates sky, and the fear of hyperinflation begins to rear it's ugly head?

FED holds, looking for Trichet to blink as the pain reaches Europe.

The Asians salivate with dry powder accumulating assets.

CR writes: To surprise the market, the Fed might need to cut by at least 50 bps - maybe 75 bps - and announce the action before the market opens on Monday.

They'd better the careful... the surprise might be a neutral or negative market reaction, which would mean they wasted one of their few remaining bullets for nothing. Best to wait until markets process this bailout thing a bit more.

Chicago Mercantile Exchange dropped T-bill futures, the TED spread is now calculated as the difference between the three-month T-bill interest rate and three-month LIBOR.

3-month- U.S Treasury yield = .47
3-month- Japanese Government yield = .63
3-month- German Government Bond yield =2.05
6-month-UK Government Bond yield = 3.76

This is too complicated for me. What is the end game here -- deflation, or inflation?

No amount of Fed lending to banks will cause them to lend in turn. The only two reasons to lower FFR are fear of a stock market crash or their irrational fear of deflation. Either way they are embarking on fear driven policies that are unlikely to be successful either way.

Give me some of that sweet and low 2% and I'll promise to spend the difference on consumer consumption.

Sarah Palin should replace Hank Paulson immediately. She's more entertaining on TV, and she inspires the same level of confidence.

"The Asians salivate with dry powder accumulating assets."

But those assets keep on depreciatin'.
Yin and yang.

Who gets the nukes when the fel'l govt. goes belly up?

Got GOLD????

Man, relax. Who on this board could not cut personal consumption in half and not be pretty happy?

I would not be surprised by anything this "radical Fed" (hat tip Steve Randy Waldman) does. Look at what they have already done. Setser says that they have about 1.25 Trillion dollars out in liquidity moves already.

I would not be surprised, but the market will be, and nothing I write here will diminish that. Dr. Bernanke's push for the TARP seldom gets so much as a mention on these fora, but his testimony supported Secretary Paulson unconditionally.

The Fed is propping up a shaky worldwide system and while I don't presume to know anything about what their plans are, I just hope they do what is needed when it is needed.

BTW, it usually takes me about three days after a new Fed initiative to figure out what happened, so don't assume I have anything but public information to go by.

We made it through the 21% rate correction and we'll get through this. We're smarter, more tolerant and we've got housing to burn.

Depression 2008:
Depression of 2008 - Times Online

Cut all they want it will not stop this train wreck and more then likely will only make it worse.

Iceland Destroys Europe!

it is always the little ones who suffer : Dynamics of Cats

I, for one, never would have suspected that the Land of Bjork and Sigur Ros would deal the fatal blow to the Continent. But then, I know nearly nothing.

It took Japan 13 years to re-build confidence -- to forgive the sins of the fathers and to allow shame and disgrace time to pass -- are these people so fucking stupid as think this derailed economic engine can be rebuilt and placed on the same track in a matter of days? They refuse to point blame at wall street, refused to disclose details in the bailout, and now everyone will screaming back to banks to refinance loans -- which will be based on higher FICOs, higher rates, higher down-payments, a tsunami of foreclosures, a systemic global banking collapse, un-precidented fraud and corruption, a shit election where no one wins? It would be retarded to use your last few bullets after this bailout bill, because if the bill fails, as it will, they need that fucking ammo for later when things to get worse -- not to mention the fact that lowering rates will increase inflationary pressures, which they obviously don't understand, i.e, when you have people with $800 million, like Paulson, he doesn' t care if groceries are too high, or the cost of living is out of control -- because his focus is to help wall street get more, and more, and more....

Cookie break...

What can we do with the empty houses to make them useful? Burn them for heat? Raise produce on the lawns? What is it that the unemployed ex bankers, mortgage brokers and real estate agents are doing now to produce in this economy. Are they still inputting numbers into their inaccurate spread sheet models justifying the next no doc, 120 % loan to value adjustable rate loan on an over appraised house?

I suppose we can continue to fiddle with the funny paper that has unknown value in the hope that a recession can be avoided or minimized. How long can this be propped up?

It ticks me off that we are now in this wrench twiddling mode trying to repair the broken tractor of the economy, when what could have been done to prevent this would have to been to properly change the oil and keep the cooling system working to prevent the overheating of the engine of the tractor.

I suppose action will be taken, but it is not clear an adjustable wrench can fix a seized credit piston.

Who cares what one-day effect the rate cut has on the stock market?

The market has rallied several times on these "surprise" cuts, but it didn't stop the market from falling 25% or more over the last year. The rate cuts don't seem to have any long-term effects, so I don't see the point whether it is a surprise or not.

It seems to me that in this environment, surprise rate cuts also add to the general panicked feeling that things are really bad (which they are).

With the all the talk of the PPT and other conspiracies, what has the net result been? A huge decline in the market. Maybe short-term swings in the stock market can be manipulated, but over the longer term, the manipulation attempts all fail.

Ministry of Truth writes:
If I am getting less than 2% in a bank account why would I keep cash in a bank?

Well, the banks would be forced to continue to pay some interest since they don't want to lose all deposits... but some deposits leaving treasury bills and bank deposits and floating back into commercial paper probably would not be a bad thing.

And, if you took the money out of the system and spent it - well, that is just being patriotic (joke - but certainly not viewed as such by many).

Re: You get a Howls of Derisive Laughter for the Treasury going BK.
How can they?

See Credit Default Swaps: The amount of contracts outstanding that reference Fannie Mae and Freddie Mac alone is estimated to be up to $500bn. The default was triggered under the terms of derivatives contracts by the US government's seizure of the mortgage groups, even though the underlying debt is strong after the explicit government guarantee.

Re: It seems to me that in this environment, surprise rate cuts also add to the general panicked feeling that things are really bad (which they are).

I agree $777 Billion! The time for a rate cut is later and to add fear and emergency into this is stupid! How many Emergency Rate Cuts has Bernanke done already and to what effect

Bank holiday rumor:

Is Bank Of America Warning Of A Bank Holiday?

This one has quite a few good comments under the article, ranging from "There is no way a BH would ever happen" to "Get ready, here it comes, maybe as soon as Monday."

To me, the idea of a week-long shutdown seems too extreme. However, we've entered the period when almost all of the formely-ridiculous prognostications are coming true. Who knows?

What can we do with the empty houses to make them useful?"

Word of the Year for 2009: Squatting.

1) Take over all insolvent banks
2) Let prices go to freefall
3) Inventory reaches equilibrium.

Sorry if you mistimed your trade. The good news: houses are at an all time level of affordability.

Bob Dylan had it right!

They say that patriotism is the last refuge
To which a scoundrel clings.
Steal a little and they throw you in jail,
Steal a lot and they make you king.
There's only one step down from here, baby,
It's called the land of permanent bliss.
What's a sweetheart like you doin' in a dump like this?

YouTube -

The short sellers can be landlords. We need a job now anyway.

"The absolute dumbest thing would be to let them sit and rot. We burned food once."

Oh yes corn was burned to heat houses in the depression.

A well-written summary of the current phase of the crisis, focusing on the events of Sept 16 and 17:

| New London and southeastern Connecticut | The Day newspaper | www.theday.com

This is useful for those who are relatively new to this site and need some background, complete with names and numbers.

interesting post II:

no money, no cheerios : Dynamics of Cats

Re: "No BK for Treasury"

The government will go on, I'm afraid your right there man, but as to it being a useful and trusted entity that is able to fulfill all its obligations to the common man? Will this ineffective and hollowed out zombie provide leadership in a time of chaos, when it depends on sucking blood from vampires that are running low on victims? How is it man, that these walking dead will build bridges and repair the infrastructure we share? These zombies depend on synthetic fuel and they want us to drink from the poison cup and go along for a drive to hell, but I'm not drinking brother and they can go to hell and stay there and clip Paulson's toenails and not worry about re-using condoms amongst themselves! I'm not going there, but you can join them at your leisure and pump all you want man!

It was the first time the EU appeared ready to invoke a 2005 clause that allows countries to bend the rules laid down in the Stability and Growth Pact if they fall victim to exceptional events outside their control.

EU leaders to ease deficit strictures due to crisis
| Reuters

Bye, Bye, SGP. I would expect a coordinated rate cut by several central banks around the world. It ain't gonna work but that is what I would expect at this point.

News article in the Orange County Register said local school and water districts are asking the county investment fund to buy up their bonds until the market "returns to normal."

I really fear that money managers for these entities are making decisions based on the assumption that the market they have lost recently was "normal" and that it's only a short time 'til we return to it.

How much more trouble will be caused by a mindset that this is just a temporary problem rather than a fundamental structural change in credit?

Somewhere out there, a manager is making decisions based on the assumption that there will be no return to "normal", and that manager may bring whatever they manage through this mess rather better than others waiting for a return to normal.

Nova,

I've heard claims that fragmentation will be key to getting some areas through this mess relatively--relatively--unscathed because that diversity equates to a ton of "little markets", some of which might not be burned as badly.

Nature loves redundancy. The most specialized predators are the first to go after a disturbance. E.g. sabre-tooth cat, flightless birds, mega-fauna of N. America.

The most redundant human system I know of is the space shuttle, and it only has three layers of redundancy in its systems. And it has experienced system failures twice in three decades.

Sarah Palin's "sentences" aren't even sentences. It's time to call gibberish what it is: gibberish.

Interesting Items:
My wife has no inkling of economics or politics agreed with me tonight (we never agree) that we should pull all our money out of the bank on Monday. Trust is gone. The only thing that concerns me is the worth of green paper dollars at the end of next week.

How can anyone believe that a dozen people can best determine the economic behavior of 300 million citizens?

I believe it's called "socialism".

I understand now. I should charge eveything and make a minimal payment on the credit card. If I'm lucky, I'll die or go bankrupt before my credit is cut or I can no longer make the minimal payment.

I'm guessing they want to hold off on any cuts as long as they can, because cutting will expose their impotence. The longer they can hold out the hope that cuts will have meaningful impacts, the longer people will believe the Fed has any bullets left in their gun. They really don't want the majority catching on to the fact that the emperor is naked.

My faith would start to be restored with a large rate increase.

"long Yen, they are paying savers better than America. and they are not panicking, they are the buyers now."

Finally, a yen for Yen.

Getting what it deserves

When a country elects bad politicians it deserves a recession. It’s the only way to knock some sense into its constituents. That’s the current situation in the US, but unfortunately the whole world will suffer

It reminds me of the Roman Empire.

Getting what it deserves - Robert Gottliebsen - News - Business Spectator

LOL, the rest of the world isn't stupid, they see this whole scam for what it is.

Peter-san
Thanks for recommending reading Bernanke's speech on deflation from 2002.
Speech, Bernanke --Deflation-- November 21, 2002
It has taught me that my nuclear family is (as a result of blind dumb luck and lifelong stingyness of mine positioned correctly for a period of general deflation. By Ben's description of what to look for when deflation comes, everything I see going on points in that direction. Whocudanode? Wife says the 1987 movie "Wall Street" is on PBS @ 9 PM.
I remember Gordon GEICO and "greed is good". I spent 25 years as a local yocal in East Hampton, moved to WV in '02 to get away from that type. It's taken 20 years for the mess to hit the fan...but it's in the face now.
If not for CR, I wouldn't bother turning the computer on most days. Thanks for the education in these arcane matters. I know a little knowledge is a dangerous thing...I'm the posterboy for that! Thank mother nature I'm not in charge. I don't want that job.

citizen yogi writes: The sun will heat these houses, as it has all houses in Israel for 40 years.

Israel is on a par latitude wise with Phoenix. If Israel is your strongest suit I suspect the whole argument is weak.

Try solar panels in Minnesota when it's 40 below zero and the sun hasn't shined for three weeks, and when it finally does there's only 6 hours of daylight per day.

When the technology is cost efficient and doesn't look ugly, clumsy, or stupid like wind farms, solar panels, or Priuses, it will sell just fine.

Sorry Ben...

If I were T-SEC I would immediately give Sheila Bair the job and a raise from my own pocket!

Hell! Just change the old ratio of lending 5 out for 6 back to 6 out for 5 back.I'm starting to think that all the world's leaders don't just believe in the Mayan 2012 endtime,but KNOW that it's true and are just kicking the can down the road until then!

Hank Paulson and the Treasury Department are engaging in the most massive tax fraud in the history of the United States by devising a “sham” acquisition structure for Fannie and Freddie which will arguably allow these failed entities to take approximately $80 Billion in tax deductions per year. This tax fraud dwarfs any scheme in history. Why did the acquisition of Fannie involve warrants for exactly 79.9% of the common stock at a price of .00001 dollars per share (essentially zero though by the time Bernanke and Paulson get done debasing the dollar in a manner which would make Stalin and Mao proud, it may be less than zero)? Well, Section 163((6) provides that if a related exempt organization (the Treasury Department) controls a corporation (in this case Fannie) and the exempt organization guarantees the debt of such corporation, the interest expense on such guaranteed debt is nondeductible (or subject to severe limitations) for tax purposes. Treasury has clearly guaranteed the debt of Fannie as defined under section 163((6)(D)(iii). Related person is defined under section 267(b) which provides the corporation must be controlled by Treasury. Control is generally defined by the IRS as owning 80% of the corporation. Thus, Hank and Treasury hope to evade taxes on $80 Billion of income per year based on acquiring only 79.9% of Fannie and thus, defeat their own tax law notwithstanding Treasury effectively owns 100% of Fannie. Interestingly, the Treasury actively throws commoners in jail for life for interpreting the tax law literally as the Treasury argues the non tax paying miscreants violated the spirit of the law under the so called economic substance doctrine (an undefined vague legal concept universally interpreted differently by most courts). In fact, a literal interpretation of 163( via its underlying regulations specifically requires that the transaction be analyzed based on the substance of the acquisition under the 1.957-2 regulations which is a catch all provision for any legal machinations to avoid the tax law. Most of the dudes Treasury puts in jail for life for interpreting the tax law literally are using tax laws which have no literal corollary to 163( (i.e., no legal requirement to look at the substance of the transaction). Hank Paulson may be the biggest tax fraudster in history: not only did he avoid taxes on $100 million of his Goldman stock through the use of 100% controlled private foundations; illegally change the law under Section 382 to provide tax benefits in the realm of $750 Billion to his friends on Wall Street (which under Section 7201 is likely tax evasion (the intentional violation of tax law to avoid taxes)); but now he is engaging in further tax fraud to the tune of $80 Billion of tax deductions per year (for interpretations of the tax law Treasury sends people to prison for life over) yet again for the benefit of his buddies on Wall Street. If Hank was judged by the same standards he judges others, Hank would have to go to jail for life (notwithstanding all of the securities fraud he has engaged in).

Didn't they say that they hoped to drown the fed'l govt. in the bathtub? What better way than saddling it with impossible debt.

I still think that the "credit crisis" is a lack of easy/cheap credit. People have been conditioned to this for several years now; so much so that they are like addicts and crave another fix. A 5% fed rate and mortgages between 6% and 7% is normal.

Gordon Brown must grasp the nettle of the financial crisis
Comment: editorials, opinion and columns - Telegraph

The air is already swimming with fevered speculation about a new world financial deal: a Bretton Woods for the 21st century; a blue print for tomorrow's financial system; an inspirational plan for an international financial regulator to ensure that nothing like this happens again.

It now looks very much as if Paulson is heading down the Nordic route. So too are a number of European countries, although judging by the emergency summit called by President Sarkozy in Paris yesterday, they still haven't made up their mind whether to launch a co-ordinated rescue plan or tackle the crisis state by state. Most likely they will fall on the latter. It is difficult enough to justify spending public money on a domestic bail-out, let alone one for another country.

Which brings us to the UK. As eyes sweep round the table in Washington this week, they will undoubtedly pause when they reach Alistair Darling. He and Gordon Brown have stuck out like a sore thumb for their relative inaction. Before last week this might have been applauded as sure-footedness, but not now.

The British economy is arguably among the most vulnerable of all, and yet its policymakers have done less than almost all their peers to try to mitigate the disaster. Already the effects of the credit crunch are apparent. House prices and mortgage lending have slumped more dramatically than in recorded history; unemployment has started to rise; the economy is almost certainly slipping into recession.

El Cliffo - great points. It is funny that many of the Palin critics seem to be arguing for another Dick Cheney - which of course is the last thing they would want. Chris Matthews has completely lost it. I used to enjoy him even if I didn't always agree with him.

/nosnark

This is good: we ask for an accounting and diagram of where all the money is flowing. Krugman provided a nice summary of the circle in his blog. Then Setser hit us with a couple of great posts in the last few days summing up all the really big numbers and now Krugman again is giving us a macro view with flow charts of the Global situation.

CR even made a pilgrimage to Setserblog yesterday to clarify this and the flow of money between fed and treasury:

bake sale

The one things these guys don't cover though is what happens to the money when it leaves this not-closed system. We need an accounting and trail from the point it enters a company to the point it ends up in numbered offshore accounts and houses and yachts.

/end nosnark

This is such a "half empty" group.

In order to get the "package" passed, they had to spend an entire week talking non stop about the current/next recession in great detail.

No one is talking about inflation and everyone thinks cash is good.

What better time to announce punishment for cash -- rate cut.

The only reason for not doing a cut earlier was the fear of inflation. Not much talk bout inflation now.

"Anon, I repeat:
No BK for Treasury.

As for the Credit Default Swaps.
I foresee this crisis will be long dead and gone and the lawyers will still be arguing about technical default and adequate performance of now fully guaranteed bonds.

What default? They still payin', right?"

The first CDS clearing auction to settle CDS contracts is on Monday. Why do you think they are desperate to get 700B in cash to the Treasury by Monday?

Secondly, the FED is a private banking institution, remember that when you say they can't go BK. Also remember that at the end of the day the FED, as a private institution will decide to save itself, NOT the government and certainly not the citizens of this country.

Thirdly, you stated previously the FED can just "print" another trillion.

Care to explain the ramifications of true "printing"? You, as most people do, seem to ignore that side of the equation.

Remember, there is no free lunch, and yes there are limits to the amount of "printing" that can occur before foreign bond-holders sniff it out and crash our currency.

Fed funds were around 1% late in the week even as they did some draining so a cut is certainly possible.

UB,

How would you rate last week?

Nemo-

I agree with you, I am just amazed at how much money the Fed has pumped into the system. Still the interbank lending is virtually nil. The banks are going to have to resume business at some point or the Fed will give up on them or go around them.

I think the sign that the Fed has given up on the existing banks will be the nationalization of a megabank.

If they decide to go around them they will open a new facility to provide CP directly to businesses that use it for temporary liquidity. This would be an administrative nightmare for the Fed, loaning directly to individual businesses, but they do have a mandate to keep the economy going and they will do it.

Bankers best wake up and do something soon about the lockup or they will find their very existence threatened by an increasingly well capitalized (directly from the Treasury) and activist central bank.

The Fed has grown much more powerful in this crisis contrary to popular perception. Our Fed has combined forces with the foreign central banks to maintain trade in this crisis, if existing banks don't start cooperating and doing what they want they run the risk of being assimilated into a huge new central bank.

OT,

Berkshire Hathaway's investment in Goldman Sachs came with strings attached...

Goldman Executives Restrained From Stock Sales in Buffett Deal

The accord prevents the executives, their families and their estates from selling more than 10 percent of the common stock they own until Oct. 1, 2011, or until Berkshire redeems its $5 billion in preferred stock, whichever comes soonest.

People say that Palin has a low IQ. I say SO? We don't need fancy pants elitists with their logic and reasoning. Hell, it was logic and reasoning that got us into this mess.

We need a plain old gal like Palin. If she aint smart enough, she can just ask a smart person what to do.

We sure cant have a muslin in Opal Office.

It is beyond my comprehension on why clients listen to John Mauldin. Fighting the last war has proven to be a good way to blow your life savings, your municipalities general fund, or your pension plan's balances.

I also can't figure out how the wanker guests on CNBC pay the bills, they have been dead wrong for a year and a half now, and they keep interviewing the same losers over and over again. These people are like the current administration, having no curiousity whatsoever about what is going on at the residential real estate level, the banking capital level, the corporate financing level or the Federal Reserve balance sheet level. And they all think the bailout plan is a winner. Epic fail would be a good outcome.

Palin is a pole-turtle.

The internet sends gold out to cold Minnesota, almost for free. The dot.com business was not a bust. Thanks, speculators.

The banks are going to have to resume business at some point or the Fed will give up on them or go around them.

If the government had simply done that, or even just announced that they were doing that, credit would have freed up in a right hurry.

sue writes:
I nominate a chicken with it's head cut off as the next federal reserve chairman and three blind mice for SEC oversight and the Wily coyote as the next treasury secretary.
sue | 10.04.08 - 9:27 pm | #

Sue-Nah
It won't be a chicken
with its head cut off.
It will be a chicken whose head McCain bite off.
He surely does prize his virility

lawyer liz, I have been canvassing in PA and the economy is very much on people's minds. And by economy they mean jobs, not wall street.

No one has once mentioned Sarah Palin to me.

One of our group was asked what was O's position on UFOs.

There is no normal.

Re: "She is wearing a satin negligee and bunny slippers."

I just lost my dinner, thanks so much for that Alptraum!

It is not that people are not borrowing because rates are too high- they just can't get the money.

Plus once you drop interest rates to zero whats the incentive to keep money in the bank rather than in your mattress. Japan made a major mistake. By dropping rates they took the spending power out from the one group that could have spent - savers.

A glorious demand curve for the lads:

It looks more like an indifference curve.

Here is a small personal anecdote/ data point because that is all I'm good for here.

I work for a small company in NYC. It is not financial or real estate related, although one of our clients was an IB which no longer exists.

OK, it happens. Our company has a good mix of clients and the partner/owners are very tight with money so they should be able to weather this.

Last week two projects were put on hold by two separate clients. Another client who had expressed interest in starting a project said they were going to wait. All of these clients are large firms that should not be having money problems.

I've been reading this blog since Feb or so (because our IB client was scaring me) and have a better handle on what is going on than anyone in my office, but I didn't think it would affect us so fast.

Does anyone have a link to:

The Ballad of Bunny Slipperless Pali

"Would you please leave the political comments for somewhere better suited?"

Sorry but the American conceit that politics and economics can somehow be separated should be painfully clear at this point. What you meant was "say something intelligent."

I heard the the NYC economy is so bad,
The Mafia had to lay off 5 judges!

Bada bing

The market is sooo bad, Scott Paper just touched a new bottom!

Bada Boom

Why@ ZIRP,

I agree with what you're saying in principle on making an end run on the banks if things don't improve, but I'm not sure on the feasibility. There seems to be a lot of support for the Swedish Plan, but obviously not so much in DC or they wouldn't have wasted the $$ on the current relief act.

Would the AIG plan qualify as a stealth nationalization? I guess maybe they don't count since they were the middlemen in the whole "we have conquered risk" way of thinking.
Also, would taking out a zombie bank do anything to unfreeze the other banks? Or would you have to go after a bigger fish?

Just thinking out loud.

TIA,

I just finished a book about Chinese agricultural water problems. It was "The Yellow Stream" by I.P. Freely.

seems like we listen to your jokes and opinions from time to time some OT

A new expose on the sports world. I knew it was coming. "Under The Bleechers." Buy Seymour Butts...

Ross,

Lumber at a 17 year low, this also probably is impacting one of Greenspans old favorite economic barometer, the box index:

John Dizard, in a Financial Times article, "Useful thinking from inside the box," reminds us of a metric that was once used by some savvy investors (the sort who would be interviewed at a Barron's Roundtable) as a reasonable proxy for overall growth trends: cardboard box demand. And the cardboard box indicator is sending warning signals:
Before Alan Greenspan was known for making scary speeches, market people knew he spent a lot of time looking at the market for cardboard boxes. Most things you use are put in a cardboard box at some point, and box use, production, inventories, and pricing are, therefore, useful indicators. Boxes, in this context, are specific to the North American market, as distinct from pulp and newsprint, which are global markets. What is the box world telling us?
The Cardboard Box Indicator « naked capitalism

A new research paper on the Asian economies and how aggressive they are becoming. "The Tiger." by Claude Balls.

Hey, if I have to read this tripe about politics, I need to laugh at myself!

Leftys Liquors & Lubricants writes:
Its not worth sorting through the Palin bashers comments to stay online tonight.

Really? do stick around, you'll miss this classic paragraph:

The truly disgusting thing about Sarah Palin isn't that she's totally unqualified, or a religious zealot, or married to a secessionist, or unable to educate her own daughter about sex, or a fake conservative who raised taxes and horked up earmark millions every chance she got. No, the most disgusting thing about her is what she says about us: that you can ram us in the ass for eight solid years, and we'll not only thank you for your trouble, we'll sign you up for eight more years, if only you promise to stroke us in the right spot for a few hours around election time.

4shzl,

Odd that you should bring that article up. I was just wondering to myself what Hunter S. Thompson would be writing about the current campaign if he hadn't checked out. Fear and Loathing on the Campaign Trail is a great read and there seem to be some parallels (or at least takeaways) to the current campaign.
Taibbi and Juhasz are clearly trying to follow in the footsteps of Thompson and Steadman, but I haven't read his stuff before so I don't know if he actually brings anything to the table.

Liz/City Girl.

I wish I could be so sanguine about people's critical thinking abilities.

Listening to people at work I sometimes think my head will explode.

The previous intermeeting cut was my signal to get the hell out of the stock market and into cash. I figured Bernanke must see something very bad coming up. I've been very happy with that call...

Tenured professorships are safe.

futurist weepstah-

I doubt that the Fed wants to do any of the things I mentioned. What I am saying is that the failure of the existing banks to work toward any sort of solution to the problems they have is strengthening the Fed not weakening it. Dr. Bernanke has urged the banks to do things like write down the principal on defaulting loans, raise new capital and other measures that would mitigate the problem. The banks have failed to do anything to mitigate their exposures and patience has its limits.

To respond to the growing crisis the Fed has increased its balance sheet and tightened its relationship to the Treasury. Power is being concentrated in a few hands not, I think, by design but rather by necessity. A much more powerful Fed has now taken authority over the former mega investment banks, Goldman Sachs and Morgan Stanley by "allowing" them to convert to being bank holding companies. They are now subject to the direct regulatory authority of the Fed, they were not before.

The Fed has had to coordinate policy with foreign central banks to support the dollar and now to directly provide liquidity support to frozen credit markets overseas. More power.

I am not sure that it is a good thing that the Fed is growing by leaps and bounds. If I were a banker I would seriously be questioning my attitudes about interbank lending right now.

Dudes doing own due D. will always be safe.

ridiculous anecdote rounding out depressing story:

Morgan Cavanaugh, proprietor of Moriarty's Pub in downtown Cleveland, has been trying to sell another bar he owns to ease his workload, but the prospective buyer hasn't been able to raise the money.

"He's going to put the loan request in again. It's looking up," Cavanaugh said.

Yahoo! 404 - Page Not Found

Well that should play well in Beijing...

China Says $6.5 Billion U.S. Arms Sale to Taiwan Will Hurt Ties
By Douglas Wong and Yu-huay Sun

Oct. 5 (Bloomberg) -- China protested a proposed U.S. sale of $6.46 billion of weapons to Taiwan, saying it would ``seriously damage'' U.S.-China relations.

``The Chinese government and people firmly oppose this action,'' said Foreign Ministry spokesman Liu Jianchao in a statement late yesterday. The arms sale interferes in China's internal affairs and endangers its security, Liu said.

While Liu called for the sale to be canceled and reiterated China's position that Taiwan is part of its territory, he also said that ``nobody could stop'' a new chapter of peace in relations with the island. China and Taiwan have been administered separately since 1949 and still haven't formally ended their civil war.
China's Defense Ministry Condemns U.S. Arms Sale, Xinhua Says - Bloomberg.com

Given the decline in milage traveled by American drivers, there is some consternation about tire manufacturers, Goodyear in particular. Some believe it will go flat while others believe it will bounce back or at least keep rolling along.

Bata wong...