Critical Section


back to reality

Sunday,  02/22/09  11:44 PM

So it is Sunday night, I had a wonderful few days immersed in cycling, both pro racing and my own, and now I have to go back to real life.  (Cycling is not real life, unfortunately...)  And real life, at least the larger world outside my own little life, is sucking pretty hard at the moment.  Consider...

The crisis of credit, visualized (+part 2).  If you want to understand what's going on, watch this.  It is 11 minutes, but it doesn't feel that long, and it really explains exactly what's going on very well.  And you'll notice that while it explains the problem, it does not give a solution :(

crisis of credit visualized, part 1/2  crisis of credit visualized, part 2/2

One interesting side note, compare the graphics used for the "good" family with those used for the "bad" family.  Wow.  The good family has two kids.  The bad family has four kids, the parents smoke, and they're overweight.  What an amazing comment...

The WSJ quotes a reader: "Now that those of us who have been making steady, on-time payments on our mortgages for years will be paying off others' mortgages through our taxes, can we claim a tax-deduction for our neighbors' mortgage interest too?"

BofA, City shares fall on nationalization fears.  Drudge links this with the headline "to seize or not to seize".  This just feels inevitable to me now, the government is going to nationalize banking, and it isn't going to be pretty.  This is the only solution I see to valuing all those "toxic assets".

Omaba thinksMark Cantor is glad we have a president who thinks.  Sure, but we had one before too, and now we have one without experience in one of the worst crisis we've faced for many years.  And the current prognosis is poor.

The market is shorting Obama's stimulus.  "The election marked a turning point. Investors looked forward to the economic policies crafted by Democrats in Congress and the White House...  Yet, from Nov. 4, 2008 through Feb. 12, 2009, the DJI overall fell 18% - a larger drop than during the Sept-Oct plunge."  The honeymoon is over.

Here's a less nuanced take: Wall Street gives Obama's first month an 'F'.

It was the worst January for the market in 112 years.  Maybe it would have been anyway if McCain had been elected, and maybe it would have been anyway, period.  But when you sit in the big chair, the buck stops there.  And right now, it is not looking pretty...

Whew, sorry, I guess that was a harsh return to reality.  Sucks, eh?

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