Lest anyone be overly worried about 2008, we're getting started out with quite the bubble:

Bloomberg.com:
Commodity Futures

This rocket-ship really took off in August, so responsibility for this one should fall largely into Bernanke's lap. Greenspan isn't responsible for all the evil in this world.

Ssh! We NEED the Joseph Lewis(es) of the world (pumping up Bear Stearns) and the Hilltop Holdings (which for awhile was claiming to look at buying Downey Savings).

They make the process of shorting so much more, er, enriching.

But there are signs that Bush and Paulson are getting ready to have another tax cut to put more money in consumers' pockets. Massive government spending together with massive Fed easing may stave off recession for some time.

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Merrill Lynch had a report out, several months ago, that was titled Financials Are Value Traps.

One charlatan appeared on Boob-berg this morning who argued that Citi has lost $140B in market value while the write offs are never going to be $140B. Therefore, C is a great buy. No one taught this idiot that if Citi were to take even $70B in write-offs how much would the reserves be?

Jas

Unfortunately, a President needs Congress for tax cuts and neither the Dems nor Reps will go along this year. It's just Bush/Paulson rhetoric.

The 2001 and 2003 tax cuts (and the extension of those cuts from 2008 to 2010) were huge short-term stimulus with great long-term cost.

Here in Canuckistan, the much-hated GST is being cut from 6% to 5%. My guess is inflation will jump by a little more than 1% as all those pizza slices go from $0.94 to $0.95 (plus GST).

Tanta it sounds like a reformat might help. Have you tried that?

BTW- if neither ConjureBag nor Weather Helm want to take the job of Omsbudsman, I'll do it. I don't have any qualifications to speak of except an unused email address. I would plan on just doctoring up the reply that Weather Helm posted last night occasionally for the sake of variety.

(1) foreign investment in US financials, even if premature, has the benefit of more or less guaranteeing that they will not go bust; they will always be bailed out even at a big cost. But that does not say they are now bargains. As the crisis goes on and on they will be driven further down until no one wants them; that would be the time to buy, as Buffett reminds us.

I hate to keep drawing parallels to the dot-com crash, but jeez, they're simply unavoidable.

All the way down from $80, we had analysts and columnists opining month after month that CSCO was a screaming buy. Cheap on the present earnings, cheap on the earnings growth, cheap on the underlying value of the business, cheap, cheap, cheap. Ditto AMZN, EBAY, and YHOO, and even the Redbacks and 3Coms and Suns of the second tier.

In the parlance of the industry, they were "early."

In the real world, they were what I like to call "wrong."

The problem was that they saw the stocks as cheap on metrics that presumed this or that business was worthless, or this or that revenue stream would stop growing. In other words, the knowable unknowables.

Turns out it was the unknowable unknowables that mattered most ... like how, and in what form, the industry would survive.

Here we are, not even a decade later, and the same companies are spinning the same problems as opportunities through the same channels. And the whole charade is so transparent that I'm reminded of those old Joe Isuzu commercials. All we're missing is that little floating byline reading, "He's lying." We could break it out every time one of these lemmings talks up the "bottom" in the financials and brokerages on a CNBC segment.