They had me at the melting cow

Gawker, that is: It's The "Absurd Financial Product Some Rich Person Actually Bought" Contest!, but I stayed for the story.

Today's decision by the Bush administration to stick us with even more debt (to the tune of half a trillion US$) is just insane. Re-inventing the RTC was a semi-decent idea yesterday, but it's morphed into a massive bailout for the entire economy. These idiots are re-financing the United States. Hell, they're re-financing BAD DEBT.

Ye gods and little fishes. Why the hell didn't we impeach the Clown College when they lied and invaded Iraq?

CNN wants to know, Will it work?

Um.

Those securities were backed by home loans, many made to buyers with bad credit or without proof of income. As housing values fell and foreclosures shot to record levels in the past two years, the value of those securities plunged. That in turn caused massive losses in the financial sector.

This week it reached a crisis situation. Banks and investment firms stopped making the loans to each other as they hoarded cash to protect against any sudden liquidity crunch as well from unknown problems on their partners' balance sheets.

No.

"I'm confident this will work," said Mark Zandi, chief economist with Moody's Economy.com. "The federal government is committed to backstopping the nation's financial system and will do whatever is necessary to make sure the system does not unravel. The details are important but secondary."

The Devil's in the detail Mr. Zandi. This bailout is going to cost more the Iraq war, which has already saddled the US with a multi-trillion dollar debt.

"If this doesn't work, we're in trouble, because there's not much more the government can do," said Jaret Seiberg, a financial services analyst at the Stanford Group. "They've left very few arrows in the quiver."

Good point Ms. Seiberg.

I'm a lot less optimistic than I was yesterday.

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Text of Paulson's news conference Friday

Paulson, Bernanke Expand U.S. Power to Rescue Markets

Rescue cost: Hundreds of billions

It's not that we're in a recession or anything...

Merrill posts $4.9 billion loss, sells Bloomberg stake

We're going from bad to worse. But Freddie is looking at offering US$10 billion in new shares. I really wonder who would be insane enough to buy them.

The main buyers for any new-stock issues are likely to be existing shareholders worldwide, the paper said, citing one person involved in the discussion.

Any sale would have to offer a high rate of return to attract buyers, given the near-14 percent yield on Freddie's preference shares, the paper added.

During the last major recession faced by the US, the Japanese came to the rescue by buying up the United States, mostly in real estate. I'm thinking this time it might be the Chinese, though they seem to be a tad busy in Africa these days.

We have a "bad air" alert in CT for the weekend. Tomorrow night I'm going up to the Casino with my sister and friends to celebrate another friends impending doom... um, marriage. Hen party, bachelorette, I'm not sure what we're calling this, but it will involved gambling and alcohol and food in air conditioning, so I don't care.

If you're not afraid of the "bad air" we're going to be having in CT this weekend, you might be interested in a road trip. I spotted this article,
134 miles of Yankee Charm in the NYT this morning. It's not a cheap trip given current gas prices, but it would be a nice one. Probably better to do in October when it's cooler and the leaves are peeping.