Throttle Linkage Is Not Stuck
In the old day there was an actual metal rod that went through the firewall of cars and opened up the carburetor for gas intake. That evolved to levers with wires doing the work and no many cars just use a computer. Here is some non-stuck linkage!
Best of the Day
From Charles Hugh Smith comes this gem of a credit-housing-government intervention thesis that is a must read:
Housing and the Paradox of Credit Bubbles, Equity and Demand
This should be required reading.
A close second comes from The Automatic Earth and augments the prior piece:
Nobody's Kidding Nobody About Where it Goes
Ben Bernanke's homework assignment: Read the two posts above and write a report on what you have learned.
The End of Quantitative Easing (QE); The Beginning of QE by Other Means
Tell me it is coincidence that on the SAME DAY the FED MBS buys end we get relaxation of already lax lending standards by the government housing Medusa's:
Fannie And Freddie's Caving On Standards Has Officially Begun (NYC Condo Salvation Coming Soon)
Expect to see much more of this kind of thing going forward. A lot more.
Honesty From Across the Pond
In this country we get treated to such things as:
-The banking system is perfectly sound
-The vigorous "Stress Tests" proved banks were rock stars
-Capitalism is our system of markets
Across the pond we get something a bit different (via Mish):
Irish Banks Need 43 Billion in New Capital as "Worst Fears Have Been Surpassed"
The headline just jumps out and grabs you. Here it may have read "Banks need X trillion in Capital, FED says no Worries" but the story has some great nuggets:
Ireland’s banks need $43 billion in new capital after “appalling” lending decisions left the country’s financial system on the brink of collapse.
“Our worst fears have been surpassed,” Finance Minister Brian Lenihan said in the parliament in Dublin yesterday. “Irish banking made appalling lending decisions that will cost the taxpayer dearly for years to come.”
The agency aims to cleanse banks of toxic loans, the legacy of plunging real-estate prices and the country’s deepest ever recession. In all, it will buy loans with a book value of 80 billion euros ($107 billion), about half the size of the economy.
“The information that has emerged from the banks in the course of the NAMA process is truly shocking,” Lenihan said.
I can only imagine that the bank information was shocking because the Finance Minister never worked at Goldman Sachs, like all of our top level players have.
I am 100% sure that costing taxpayers dearly for a long time and shocking banking practices are unique to the Irish Banking system only. They are the outlier, nothing like what we have here in the United States.
Have a good night.
