market watch

Man, what a crazy few weeks it's been. Like everyone else, I'm caught up with the financial drama that's playing out, only because, as I told my wife, "it's probably important." I studied English and Political Science during my undergrad days, Urban Planning after that, but I've slept through enough econ courses to know that the goofiness with the world's stock markets, while compelling enough, doesn't really get to the heart of the crisis. Yes, it affects your 401k, sure, but it's more like a symptom of the bigger problem: the credit markets and fact that trust is good and dead in the banking world. Part of the problem is that these banks have crummy books, and because everyone knows that everyone else is BS-ing the valuations of these real estate backed assets, nobody wants to play ball. And, it's not like I can blame them. I mean, if you think that Bank X very likely has the financial equivalent of the clap, you're gonna stay home and play video games that night, right?

Anyway, Great Britain was the first to grasp the whole deal and determined that if everyone in the system is convinced that everybody else is sick, the only means to right the ship is to guarantee all the bad debt on the books in exchange for a percentage ownership of the bank. It's this game's version of a clean STD report to waive around, and the best chance to get banks doing business with one another. So, today's big market rally is really a celebration of that waive, pending or otherwise, of the magic wand by the world's governments, but likely doesn't signal that the road ahead will be anything other than bumpy. While we might have done something about these banks that f-ed up their books, we'll still have to deal with contracting growth, increased unemployment, additional credit deleveraging and empty coffers here at home.

I like to check out Calculated Risk, Econobrowser and Paul Krugman for thoughts on the whole deal. I'll often pass off their ideas as my own, so you can think of me as the Cliff Notes version of their collective writings. Be warned, though, that I'm prone to misunderstanding what they write, so it's probably better to check them out yourselves. Just as Cliff Notes never did much for me back in the day ("Sean, did you read the book?" was a fairly common notation on some of my earlier pre-Wikepedia writings on Women's 18th Century literature), I'll more often than not leave you with that empty feeling inside. Not fun times, I know. As Calculated Risk suggests, I'm tracking 3 month treasuries, the TED Spread and commercial paper. I have no idea what I'm looking at half of the time, but I am tracking those babies like a hawk. When I see movement, I note it, nod my head and file it away for nonsensical blogging.

Oh, and horses are good. Tattooed at Fasig Tipton sale. Half to Veiled Reference went for $67,000. That's him above. Good looking sucker, looks a lot like sister. We passed on him for $25 or 30k last December as a weanling, so missing the $15,000-20,000 that we could have pocketed on the flip. He has a bone spur on top of left knee that I couldn't shake (often a sign of other stuff going on, or waiting to go on in the joint), so I shouldn't kick myself too much. Only other filly in play, one by Malibu Moon, went for $100k, waaay more than we would have spent. We'll look at weanlings in December if the TED Spread plays in our favor.