eor

The President just proposed a $700 billion bailout for the US banks. That means we, the people, get to buy all the bad assets while the banks keep control of the good ones and the speculators can move on to their next target, starting the whole game over again. $700 billion is a fair chunk of change. Let's see, around $2,300 for every man woman and child in the US. Or around $6,000 per household. Of course, we won't pay that right off, because we're not going to increase taxes. Instead we'll let some interest build up and leave it for the next generation to pay.

Yet another shift of responsibility. The boomers want to retire prosperous, at any price. They'd rather sell their children down the shitter than live within their means. This house of cards looks like an Escher wetdream already. Or maybe the sarcophagus at Chernobyl.

If you're in the US and you're under 50... you didn't even get a kiss.

I was half listening to a piece on the radio today about some commodity trading at record highs. I didn't differentiate, because there are so many commodities that are trading at very high levels.

I thought of conservation of mass.

Massive influx into 401(k) retirement plans from baby boomers trying to save for retirement creates Internet bubble. Internet boom goes bust when people finally figure out that the investments were grossly overvalued. Money moves out of stocks into mortgage backed securities. Housing goes crazy and prices rise well beyond the value of the assets. Deja vu? Housing goes bust and there is a credit crunch. But that retirement investment has to go somewhere because now that housing is in the tank no one can sell their house and retire. Commodities go up in crazy ways. You can't convince me that the demand for all these commodities has gone up 30% or more in a matter of months. Nor has the supply gone down 30% or more in the last few months.

Speculation. Conservation of mass.

In the meantime there are food riots and lots of other fun for the people on the ground floor and huddled in the basement. Wouldn't want to invest all that money in something worthwhile like clean energy, cure for aids, or landmine clearing. Not when we can sell oil at $115/barrel, aids cocktails on a daily regime, and new carbon fiber prosthetics.

"Thought you were chasing a destiny calling,
you only earned what we paid you." -- The Who "The Punk Meets the Godfather"

"You have got to have shitloads of em oh en ee why money." - Liz Phair "Shitloads of Money"

People often look to the words of the Fed for wisdom on financial matters, perhaps they should look to the catwalk instead. Gisele Bundchen has specified all her contracts will be in euros from now on. Apparently Gisele and her sister, who is also her manager, understand currency risk. I can understand her concern. If I were earning $30m a year I wouldn't want to kiss $5m goodbye just because the Fed got desperate to shore up the house of cards the week before I got paid.

Let's be franc, sometimes you're feeling pounded by the exchange rates and you get a yen for a bit of euro cash, you're not won over by the dollar.