Mike Masnick is a genious: best review of the market crisis yet.

Mike Masnick the prolifically talented founder and contributor over at Tech Dirt, nails it. He has a long post that reviews many of the moving parts involved with the subprime crisis up to today's market blow out.
Read it and understand why we are living in a complex world that requires complex analysis to achieve correct answers. And then thank Mike for taking the time to help unwind the knotted cord.

David Evans is an Idiot: More News Fear-Mongering

This article on Bloomberg.com is amazing in its lack of understanding of simple ethics and economics and its desire to exploit banking failure fears currently inflamed due to IndyMac and other recent failures. The article describes a bank that is run by former FDIC officials that allows wealthy people to distribute their deposits among many different banks and therefore take advantage of the $100,000 deposit insurance provided by the FDIC. Somehow, the author of the article, Mr. Evans, has spun this into a nefarious thing. Apparently if you're rich you shouldn't be allowed to act rationally and divide your deposits amongst different institutions so that you can take full advantage of the insurance. Mr. Evans clearly believes that if you have more $100,000, then you have to deposit only at one bank and let the rest be subject to failure risk.
Have you ever heard anything more absurd?
The article takes to task former FDIC officials for having the foresight to recognize that people who want to secure more than $100,000 in cash deposits with one institution will not want to deal with the paperwork hassle of keeping track of many different deposits. They created a firm called Promontory Interfinancial Network in order to provide this exact service.
It's a genious idea that I wish I thought of because it's so simple and will clearly be in demand.
These officials should be celebrated for their foresight and ability to innovate in creating another great American business.
Mr. Evans should be fired for being an idiot. And his editor that allowed this story to run because it strums current fears about deposit safety in the aftermath of IndyMac and Lehman Brothers, should be fired as well. This is bad journalism at it's...um...worst.

This is disgusting. FRE & FNM's gov't control

Amazingly sad article in the Washington Post that demonstrates just how ineffectual our government has become. I fear that our society has deteriorated to the point of no return. Has the U.S. become Italy?

Foreclosures may not effect home prices much...

"Home prices are quite sticky." This is a story you won't hear much about in the media because, well, they can't think independently. A report from the National Bureau of Economic Research indicates that foreclosures won't impact home prices as much as the hysterical national media (and Nouriel Roubini) thinks they will. This is massive news, but it only made the WSJ's blog section...
Imagine that.

Nouriel Roubini is a joke.

So yes, he did make the call on the current financial malaise. And he did call it for the right reasons. However, I've had him on my feed reader for some time now and I can't say that I agree with much of what he has written since. The guy is a certified hysteric when it comes to the economy (and it doesn't matter whose). I think he was bullied as a child, because he's certainly trying to bully the economy into a recession. You can hear the strain in his writing as he wills a global recession.

Journalists and Economists try to Price Housing

Journalists and Economists are cute. I love it when they try and tie down the vagaries of a market with simple, little rules and declare that they know the answer. For someone who believes in free markets (to an extent), I actually like the misinformation they spread. The more people believe the content they distribute, the more inefficiencies are built into the market!
In this article, the NY Times polls economists on various ways to price real estate and measure that versus the general market. In my opinion, such an effort is laughable. First, when did we start listening to economists? These guys were dead silent in the run-up of this bubble. Second, it's impossible to reduce a market (which is what real-estate is) to small little valuation ratios and get a right answer. If this were possible, then economists would rule the stock market and trust me when I tell you that economists have no place on Wall Street. In fact, the only time economists are employed on Wall Street is when the asset management firms need someone to write their shareholder letters or write research for the retail investing community. The public loves titles and for some reason they love the title of economist! Typically, whenever I read something written by an economist, I do the exact opposite of its conclusions.

World's Greatest Options Trade: Bear Stearns Puts

Finally, it appears the regulators are starting to use common sense and going after the low-hanging fruit. The issue concerns certain options trading that was done in Bear Stearns puts days before their ultimate collapse. Bloomberg has a great story that outlines the details. Basically, the regulators have figured out that by examining options trading right before the event and identifying options trades that are truly outside the realm of even a lucky investor, they may find culprits who had some inside knowledge of a scheme to take Bear down.

Is it pathetic when you root the regulators for finally clueing in?