As a follow-up to my "Anatomy of a Bailout ", this post from Felix Salmon is more than interesting

Who's Gaining from the AIG Unwinds?

Salmon is onto something but misses the big point--or forgot it for this article. The whole point was to bail out Goldman Sachs. This is something. Not only did the Geithner/Paulson brigade create havoc in the Fall, but they are forcing unwinds in major size---thus giving the banks even more profits. Again, as I bore even myself, why are we unwinding these to begin with? Why should the Street get to pick the bones dry? This rip-off is as old as Wall Street itself. My favorite "I love Lucy" character, William Lucy of the University of Virginia, has indirectly shown that these CDS are likely to be significantly undervalued. You realize who is getting ripped off don't you? Did you see that person this morning brushing their teeth in the mirror? That's who.

(posted at 8:45 pm by Mike Rulle)

Hoover Institution Research Fellow, Dave Henderson, follows my "lead" in comparing the Obama administration to previous Fascist economies Obama Throws the F-Bomb.In an essay last week, The Banality of Timothy Geithner, I made the point that when central governments direct strategic decisions in private enterprises, they mimic the "new way", originally created by the ex-journalist, "Il Duce" Benito Mussolini. Recalling Newsweek's Evan Thomas comment last Fall on the Charlie Rose show about Obama's "deeply manipulative" behavior and his "creepy cult of personality", one senses there is more to my Fascism meme than merely economic decision making. Mussolini made the trains run on time, and Obama makes sure your muffler warranty is still sound.

(posted at 10:00 am by Mike Rulle)

Economist Don Boudreaux of George Mason and Cafe Hayek discusses the fundamental difference between free market thinkers and central planning thinkers. In a letter to the NY Times, he references a quote by Princeton's (and the NY Times) Paul Krugman in a Newsweek article by Evan Thomas. Krugman is quoted "Social science, he says, offered the promise of what he dreamed of in science fiction—"the beauty of pushing a button to solve problems. Sometimes there really are simple solutions: you really can have a grand idea." Push a button? Boudreaux's hot button was pushed. In his letter he states "I was attracted to economics for a reason quite the opposite of the one that appealed to Mr. Krugman, namely, because it helps explain how incalculably complex and productive social orders emerge from billions of individual actions, where no one of these actions is meant to achieve anything more than improvement in the welfare of the individual actor.  This type of economics - associated most famously with Adam Smith - teaches that it is hubris of the most extreme sort to imagine that problems can be solved by pushing buttons.  Social-engineer wannabes such as Mr. Krugman might mean well, but they are dangerous; they suffer from what another Nobel laureate economist, F.A. Hayek, called "the fatal conceit." I could not agree more. If you understand this, you understand almost all there is to know about the nature of economic activity.

(posted at 9:45 am by Mike Rulle)

When reading the Zombie paper, the NY Times, I make Heinlein's "Stranger in a Strange Land" (a story about a human raised by Martians) feel like Grandma at Christmas dinner. Here is a line from an "objective" news story Upstate New York House Race Is Too Close to Call about the virtual tie in the special election to replace Democrat Senator Kirsten Gillibrand in the House of Representatives. "{Democrat} Mr. Murphy, a Missouri native unknown in the district until he began running television ads in February, faced a huge Republican registration advantage and an advertising onslaught by outside conservative groups". The contested seat is in New York State as Gillibrand replaced Hillary after the bizarro failure by Caroline Kennedy to waltz into the Senate. Yet, somehow the Times seems agitated that "an onslaught by outside conservative groups" was involved. Meanwhile, the Democrat candidate is an "unknown native of Missouri". Is Missouri a town near Albany? This "unknown native" is president of the Upstate Venture Association of New York. They excitedly discuss the Democrat's 65 vote lead despite the Republicans "huge registration advantage". It is also a referendum on Obama's economic recovery plan. Get the point? A huge republican district. Still, they need "outside groups" to even keep the election close, against a guy from St. Louis no less. It is really about Obama's spending programs. And the Democrat is leading. Therefore, Obama's initiatives must be very popular. That really is amazing. Yet, in this "huge" Republican district, somehow the previous Congressperson, the Democrat Gillibrand, received the most votes of any New York incumbent in the 2008 election. Isn't the Time's "lede" backwards?

(posted at 9:14 am by Mike Rulle)

Have you ever known something really well but some newbie amateur comes along and presumes to tell you that you are wrong? Lets say you have an expertise is something highly technical and even counter intuitive. But my straw man "newbie" insists the incorrect "intuitive" position is correct. Not only do they confidently express this opinion, but are smug in their moron-ness. One want's to either laugh, or be a "heartbreaker with your 44". Tom Friedman of the NY Times makes me feel that way. In  Market to Mother Nature Friedman simultaneously shows ignorance on two fronts. I admit, I could not get past the opening paragraph so maybe he was only kidding. He writes if he had his wish, the G20 would adopt “Market to Mother Nature accounting. Why? Because it’s now obvious that the reason we’re experiencing a simultaneous meltdown in the financial system and the climate system is because we have been mispricing risk in both arenas — producing a huge excess of both toxic assets and toxic air that now threatens the stability of the whole planet". Where is my 44? He equates a mismanaged California housing bubble with an imaginary "climate system meltdown". This is exactly how our Administration thinks. It is hopeless, and getting worse.

(posted at 8: 32 am by Mike Rulle)

Maureen Dowd in Dowd: Hummer Nation is experiencing a mental barrage of cognitive dissonance. She seems to realize something is not quite right about the Obama plan to "out socialize" the Europeans. She also finds it bizarre that the Department of Health and Human Services posts advice on its website on how to cope with the economic crisis, including listing warning signs that one might be suicidal. One of those "signs" was "looking for ways to kill oneself". She can't help herself as she even mocks Michelle Obama "who landed in London with a huge Obama entourage, wearing a daffodil yellow dress and looking like a confident ray of U.S.A. sunshine". But Maureen must feel guilty about mentioning the obvious nakedness of our new Emperor. She needs to balance the scale for who knows what reason. Somehow, she segues into this statement; "The cowboy push by W. and Dick Cheney to be a hyperpower and an empire left America a weakened and tapped-out power, straining to defend its runaway capitalism even as it uneasily adapts to its desperation socialism" Huh? Maureen, stick with your gut. You will find it much more clarifying.

(posted at 8:02 am by Mike Rulle)