There Was Supposed To Be An Earth-Shattering Kaboom!

I spent a good amount of time on Monday night watching Day 2 of the Tokyo Nikkei stock exchange freefall. Watching it open for Tuesday morning and lose 300 points in 45 minutes was amazing, the road to it's ultimate 752.89 point loss was frightening knowing the US markets would open Tuesday morning after MLK day in response to nearly 1200 points of loss overseas in two days.

The Fed, whose Chairman has apparently been expressing private fears of near-recession to his inner circle, bailed out the impending US reaction on Tuesday morning with a freakout .75% cut in the federal funds rate, the largest single whack in 20+ years.

I have basically nothing in the market so for me watching the Nikkei tank and the Fed panic is like knowing Brett Favre is due to underthrow the corner-route in overtime. Bits of entropy and schadenfreude floating in a lovely soup of entertainment.

It's one thing to trumpet the merits of free market economics, but it really is a fantasy to think that the global economy is like the tides and happily ebbs and flows along in some sort of circadian rhythm when the recent reality has been a corporate economy resembling Tom Hulse's character in Parenthood, sponging off the parents, scoring the occasional massive victory that makes it all better, then the string of successful hits on 19 results in a change of dealer, and we end up with Tuesday morning, where the economy was thrown out of a moving car onto the front lawn at sunrise.

I've had numerous arguments in the last few days, people defending the situation as a correction. It sure is, but what it is correcting isn't a natural free market high. This is the corporations and financial institutions, knowing that the Government That Doesn't Believe In Government doesn't like to bother with all that troublesome oversight stuff, stretching their profit aspirations to the limit. There are laws and enforcement to prevent me from conning you out of $20 on the street, but there's nothing preventing large companies selling you a subprime mortgage loan worth more than you have, then collateralizing their more conventional investment vehicles inside those crap loans for higher yields.

This free market high economy was apparently hiding a rather large smack habit, and at some point this weekend it woke up in the tub again. It corrected itself, alright.

The Perpetual Lie

_{"Surge To Nowhere", guest editorial by Andrew J. Bacevich, professor of history and international relations at Boston University, Washington Post, 1/20/08...}

_{"In only one respect has the surge achieved undeniable success: It has ensured that U.S. troops won't be coming home anytime soon. This was one of the main points of the exercise in the first place. As AEI military analyst Thomas Donnelly has acknowledged with admirable candor, "part of the purpose of the surge was to redefine the Washington narrative," thereby deflecting calls for a complete withdrawal of U.S. combat forces. Hawks who had pooh-poohed the risks of invasion now portrayed the risks of withdrawal as too awful to contemplate. But a prerequisite to perpetuating the war -- and leaving it to the next president -- was to get Iraq off the front pages and out of the nightly news."}

_...

_{"McClellan Points Finger At Bush, Rove", Politico.com 11/21/07...}

<sub>Former White House press secretary Scott McClellan names names in a caustic passage from a forthcoming memoir that accuses President Bush, Karl Rove and Vice President Cheney of being "involved" in his giving the press false information about the CIA leak case.

McClellan’s publisher released three paragraphs from the book “WHAT HAPPENED: Inside the Bush White House and What’s Wrong With Washington.”

The excerpts give no details about the alleged involvement of the president or vice president.

But McClellan lists five top officials as having allowed him inadvertently to mislead the public.

“I stood at the White house briefing room podium in front of the glare of the klieg lights for the better part of two weeks and publicly exonerated two of the seniormost aides in the White House: Karl Rove and Scooter Libby,” McClellan wrote.

“There was one problem. It was not true.”

McClellan then absolves himself and makes an inflammatory — and potentially lucrative for his publisher — charge.

“I had unknowingly passed along false information,” McClellan wrote.</sub>

_{“And five of the highest ranking officials in the administration were involved in my doing so: Rove, Libby, the vice president, the president's chief of staff and the president himself."}