I guess the avalanche of comments over the weekend tired everyone out as yesterday was pretty quiet. Kevin chimed in and Economic Disconnect was again happy to see Ilargi from The Automatic Earth swing by to take a look.
The front lawn is now "done" in the sense I have 4 new inches of loam and a hydroseeded lawn. The old lawn was so messed up the new "in the works" lawn looks better! I know turn my attention to building a stone patio in the backyard. If you know any tips or tricks to setting a stone patio please drop a comment.
Funny Dilbert Cartoon and the Rise of the Onion
On more than a few occasions I have written that the markets and the government had better get their act together in a hurry before both became jokes. While at this point we are at the staging of just how big a joke they both are, they are still far from totally discredited. That may change is things keep the same course.
Consider the comedy news site business section of "The Onion". While dripping sarcasm and humorous plays on headlines are as old as the hills, consider just how close to real business headlines the site tracks now that the euphoric green shoot crowd has taken over mainstream media:
Nation Ready To Be Lied To About Economy Again
WASHINGTON—After nearly four months of frank, honest, and open dialogue about the failing economy, a weary U.S. populace announced this week that it is once again ready to be lied to about the current state of the financial system.
Tired of hearing the grim truth about their economic future, Americans demanded that the bald-faced lies resume immediately, particularly whenever politicians feel the need to divulge another terrifying problem with Wall Street, the housing market, or any one of a hundred other ticking time bombs everyone was better off not knowing about.
Congress Working On Credit Card Reform
The House Financial Services Committee has approved a "Credit Cardholders' Bill of Rights" designed to control the detrimental habits of credit card companies. Here are some of the reforms suggested:
-Companies must offer more badass card designs, such as a Sherman tank or the Motörhead insignia
-When you've gone over your limit, someone from the credit card company will come hang out at your place to prevent you from going out
-Agents can no longer use the phrase "it's like free money" when describing their product.
-Card issuers not allowed to even imply that the "platinum" designation holds any sort of prestige
-Lenders should make it clearer from the outset that they actually want their money repaid
Pushpin Industry Thriving In Recession'In Tough Times
People Need To Tack Things Onto Walls,' Analysts Say
While a bit of a stretch, these fun stories are longer clearly comedy.
Even the comic strip "Dilbert" gets in on the act with the fall of capitalism theme, hat tip TAE:
The comic highlights the very real feeling many now have that almost nothing can be believed due to, well, being lied to for so long.
I have opined that when things are failing the "laugh test" then the situation had become unstable. We are getting very close.
Two Chances to Make a Difference
As an ardent critic of government policy I must always be ready to flip the switch and get behind good policy or proper action, should they come about. Tonight there is news that there could possibly be some real action taken involving two key areas of market lack of credibility: Mortgage Fraud and Derivatives Regulation
I think the single most galling aspect of the entire mortgage mess was watching stupid "home flipping" shows where the flippers discussed openly that they used fraud to get a mortgage on the home they were flipping. I guess nobody at the banks or the FED watches TV. A close second was the constant cheer leading of the housing market by housing players as they dumped stock hand over fist at the top of the market. While you could argue they just had amazing timing, I would offer they knew the last batch of mortgages were sure losers and were bailing out while pumping the stocks.
The poster child for this kind of thing was the Countrywide (now BAC) CEO Angelo Mozilo. During conference calls this guy was the biggest bull you ever heard. Even as the markets was dissolving he was in full force with the optimistic talk and overly positive estimates for the future.
Word out tonight is that Mr. Mozilo MAY face fraud charges by the SEC based upon his words and stock sales disconnect. Clusterstock has the short blip, full length is at the WSJ which is subscriber only this evening.
I will only highlight that the story says the SEC may recommend charges and not "SEC files charges" so at this point it is not a done deal. If followup is forthcoming this would be a step in the right direction.
I am going to be very upfront and tell you the readers that OTC derivatives are a bit beyond my pay scale in economics (I get paid $0 an hour). While my understanding of these instruments and their complex effects on markets is limited, we have many sources to draw upon.
Calculated Risk has a headline run down, and the comments section is usually a great place to get solid information:
Regulatory Reform for Derivatives
Karl Denninger of Market Ticker has been calling for this very step for a very long time now. He is behind this move, if it is true:
Caution: Flip-Flop Alarm is Ringing
The creation of a central clearing house for derivatives will pry away the secretive manipulation of various instruments that the big brokerages currently hold. Goldman Sachs will not like this move, which makes all the more amazing that Tim Geithner is behind this idea (either voluntarily or forced makes no difference).
These are two very positive and very necessary government sponsored moves. And yes, I did just type that! The only qualifier I would add right now is that none of this is firm and we have no idea what a final charges/derivatives regulation may look like. If this is another "stress tests that really were not" kind of deal i will be disappointed. Until then, I give credit for some moves that will make a real difference.
Have a good night.