Let's review Bagehot

We woke up to snow this morning. It was granular and not the kind of snow we had last week. The dogs loved it.

So it seems like everyone now thinks a bad bank deal is all but done. I would not be so sure but they could maybe make Shitigroup the bad bank since it seems to be the one that has all the bad debts and is still not bankrupt in name. I did see after the close that Shitigroup has begun operating under a regulatory agreement with the federal government. One step closer to nationalization is the way I see it.

Walter Bagehot was someone who wrote extensively on how to successfully run a reserve banking system. To prevent panics he said the reserve bank has to provide tons of liquidity but at a high cost and with good collateral. Many may think the Fed has ignored this as they have cut rates to a range of 0-0.25%. But if you look at what the Fed is doing in the corporate paper market with their support facility you will see the are actually following Bagehot's advice.

Speaking of the Fed I miss the days that everyone waited with bated breath for their decision. What they do in the FOMC meetings now doesn't really matter since they took rates to zero. What does matter though is if and when they are going to start buying Treasuries. They will they basically said as much but apparently everyone wanted them to start today.

Fouad Ajami had an interesting editorial in the WSJ today. I think what I took away from it was that in order for hostilities to end and people to be friends both sides have to want it. It is possible that some of the people who don't like us don't want to be friends and end hostilities.

Holy shit the gym was teeming with hot guys tonight. Sayville was there with a shirt that was torn so you could see his nipple. Lacrosse boy is new- not new at the gym but new in his scruffy hotness. There were quite a few others too who don't have names yet but they will in time.

Tomorrow night we are going to see the Kings Of Leon in concert. We are going to happy hour before hand with a former co-worker of mine who did us a favor so we are buying her drinks.