Another Day in the Dog Days

Thoughts while realizing that in four days sports become totally awesome:

- Oasis never made it too big here in the States, but that’s because we’ve always had drinking bands. Can I be the first to say that Oasis is the first great British drinking band? Seriously, Oasis is a 100 times more fun when half or fully drunk. Seriously, singing “Don’t Look Back In Anger” drunk in a Pub is about as good as it gets.

- Admit it, you’re probably more pumped about fantasy football than the NFL aren’t you?

- Netflix – Awesome

- If you came here looking for an explanation as to why the Fed seemingly bailed out Wall Street last week… I haven’t a clue. As the Economist pointed out, if the reason was because of banks, then we can sort of understand the rate cut:
Banks became wary of lending to each other. The outcome was frighteningly similar to a bank run, but one that affected the entire wholesale money market.

But if the cut was just to prop up the market… well there are two major problems with that.
1) Wall Street, the DOW-JONES Industrial Average and SP 500 are not the American economy. They are indicators, and imperfect indicators at that, of the US economy.

2) The Fed attempted to bail out investors (the DOW has been down about 200 on the week). As the New Yorker pointed out, it creates a moral hazard problem:
The Fed’s decision to flood the system with cheap money will create a textbook case of what’s usually called moral hazard: insulating fund managers from the consequences of their errors will encourage similarly risky bets in the future.
Basically, investors who either invested stupidly or over exposed themselves to the sub prime mortgage market are being ‘awarded’ for their stupidity. The Fed is, in effect, saying to those investors, “It’s okay to be foolish, and we’ll bail you out.” This of course is bad on a bunch of different levels. It protects stupid wealthy people, stupid get rich people, and greedy hedge funds/equity firms.

What does this mean for 95% of America? If you own stocks or have a 401(k), it's good. But if you aren't planing on selling those shares any time soon... it doesn't affect you at all. What will hurt, is that with money now cheaper, inflation, which already was a bit of a problem, will become a bit more problematic. Yep, high foot prices. And not as much as a relief from those high summer gas prices in the next few months. In other words, the Fed made your life a little more expensive.

- Rhetorical Question #289,922,187 – Why are the White Sox carrying 13 pitchers?

- If nothing else, this piece on France, Europe, and Sarkozy is very interesting.

- Shouldn’t the anti-Union, GOP folks work on the first Monday of September? I mean aren’t they against workers? So isn’t it hypocritical for them to take the ‘working man’s holiday’ off?

- Alberto Gonzales… we, America and the free world, won’t miss you. Don’t let that door hit you on the way out.

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