These are the ramblings of a young married couple in the great City of Chicago.
My dearest cousin’s star is rising! Follow her in the next two weeks as she guest blogs for PBS’s Art: 21 website. That teeny tiny black spot in front of the building that you think could either be a person or a lawn ornament, that is Rachel.
We recorded last night’s debate and this morning I’ve been watching it in pieces during Jonah’s naps. For a long time I had it paused on Joe Biden and Jonah was most interested in pulling up on the entertainment center and smacking the TV. With Jonah awake I cannot watch the debate because he has this to say (very loudly) to Senator Biden and Governor Palin: “Aaaaaaa daaaaaa!!!!” I concur, Jonah.
This handy Economic Meltdown decision tree confirmed it for me. I must retreat back into the “cocoon of academia.”
Democracy in America highlights The Economist’s skepticism toward the Treasury taking large equity positions in the firms that it bails out:
If the Treasury’s big bag fills up with equity rather than debt, the government, acting as regulator/legislator/shareholder, may be tempted to become too protective and anti-competitive. Or, to put it more simply, Lehman Brothers remains more credit worthy than the congressional conscience.
First commenter:
My cat’s litter-box remains more credit worthy than the congressional conscience.
How inconvenienced was I by the massive detour around flooded I65/I80/I94? I heard Peter Frampton’s Baby I Love Your Way three times. Thrice.
Since pig metaphors are all the rage, here’s the one I find most apt:
Discussing politics with a partisan is like wrestling with a pig. You both get dirty, only the pig likes it.
Sarah Palin is over-hyped and the McCain campaign is blatantly lying about her past, but as Jonah Goldberg (who I’ve also mostly lost my taste for reading) rightly points out, it is really disconcerting to listen to the feminist left denounce her womanhood.
Not being a moral relativist, myself, I often observe the horror on people’s faces at the suggestion that something might be Wrong. I feel that I shouldn’t have to explain that believing something is Wrong does not naturally lead to hatred for those who do not and especially not any kind of desire to oppress or silence those of differing opinions. Can you imagine how fast we’d get to Godwin’s Law if I said something along the lines of “People who disagree with me are not really people?” Yowza! Yet with no sense of irony a-tall, leftist feminists come out with “Women who disagree with me are not really women.”
I’ve recently rekindled an interest in Yoga. Part of yoga technique is to set an ‘intention’ for each practice; a mental or spiritual goal. I am going to do the same thing for the remainder of the Presidential race. I will disregard American Idol style political fandom, hot-button topics, and manufactured ’scandals’ from both sides. Just as intense focus on the breath drives out unproductive mental business, it is my hope that actively seeking thoughtful policy debate will drive out the high school level vitriol. Namaste.
As we do most days, Jonah and I took a walk to the supermarket and stopped at the park on our way home. I had been pushing Jonah in the underwear swings for a while when I glanced up at the stroller and noticed a large, fluffy tail sticking out of the basket. I ran over to the stroller and the squirrel popped up, looked me in the eye, dove back into the grocery bags and absconded up a tree with one of my kaiser rolls. Dang it.
Since Fannie Mae and Freddie Mac have officially been “deprivatized” my Reader is en fuego with commentary about why the plan for the government to back covered bonds didn’t work out. This is my favorite and probably the most digestible. Since the formatting is a little off for some reason, here are excerpts:
John Hempton has an interesting take on the Frannie bailout: the markets forced Treasury to take this step by being irrational. It’s almost as though there was some kind of collusion going on.
Remember the prisoner’s dilemma? Given the choice between action A and action B, action B is always preferable from an individual’s perspective, holding everybody else’s actions constant. But if everybody chooses action A, then that’s the best result of all. Here, action A is refusing to buy agency bonds at wide spreads, while action B is believing in the government guarantee and buying them. And in this case, the prisoners didn’t confess.
The bond investors kept agency spreads wide, thereby forcing a government intervention — which is an even better outcome, for them, than a government guarantee which can be rescinded at any time. Yes, the government guarantee was real — but the bond market held out, and got an even better deal. Hempton says he’s “staggered” by this — it does seem to fly in the face of the common conception of how markets work. Which probably says quite a lot about how much we really understand of how markets work.
. . . . . . . . . . . .According to this theory, Fannie and Freddie would have been capable of raising money on their own — but then Paulson went and announced that he might (possibly, maybe, hopefully not) intervene with government cash. And as anybody who saw what went down at Bear Stearns knows, when Paulson intervenes, he intervenes with a vengeance, and shareholders are left with essentially nothing.
So on top of the normal risks of injecting new capital into leveraged entities with trillions of dollars of housing exposure, there was an extra political risk that all that capital could be wiped out at any time by an executive decision at 1500 Pennsylvania Avenue.