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.