September 10, 2008

Wedneday Reading

Bailout fallout edition...

Sep 10, 2008 10:13:35 AM | Miscellaneous

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Fannie and Freddie, Sitting in a Tree, F-A-I-L-I-N-G There are stories so big, and so comprehensively covered everywhere else, that we're inclined to say very little about them. The demise of Fannie and Freddie as we knew them is just such a story. We don't have much to add that isn't new to the broader blogosphere or, for that matter, to this space. But because it's sort of obligatory, a few thoughts on the lessons and implications of all this: Lesson: Implicit government guarantees are guarantees all the same. Lesson: With credit to Herbert Stein, price appreciation trends that can't go on forever won't. Lesson: Speculating with leverage?...
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Friday Reading Could be another interesting weekend for Hank Paulson... The overall economic picture isn't great. As we've noted repeatedly, credit contraction in a system dependent on credit expansion makes for some tough going. But Reuters' James Saft is right to point to lower mortgage rates and energy costs (assuming they stay that way!) as a "welcome tonic" for the U.S. economy. Jeff Matthews notes that another bogey has fallen by the wayside: Naked short-selling wasn't the problem at Fannie after all. The New York Times' Louise Story on career choices as contrary indicators: The case of the hedge fund industry. Two...