Michael Gracie

Getting ready for the weekend

Topping the sleaze charts:
• Government officials got big loan discounts from Countrywide. “Friends of Angelo” included, who else, but the heads of congressional banking and finance committees. Note - these folks voted for a government mortgage bailout plan, and no wonder - they’re getting foreclosed on.

Voted “Best Value From Your Stimulus Check”:

• To hell with retail purchases - get “more bang” for your stimulus check dollar. A new “core inflation” measure is just around the corner…ex food and energy and sexual favors.

And last and least:

• A judge recuses himself from obscenity case over a purportedly obscene website, but it seems what was truly obscene was the media’s lack of fact finding standards. The media will continue to cry about the internet killing them, never understanding the simple truth - their product is for shit.

You’re on the board of a couple of big companies. Their business is investing in home mortgages, and you force them to be moderately picky about what they buy. It can’t be too big, and must garner a sufficient rate of interest over a sufficient length of time. You also subsidize these companies through loan guarantees - it’s the only way anyone will buy their debt. Meanwhile, the companies’ management really has your ear because they take you out on the town a lot, and their private-sector brethren foot the bill.

By the way…how are those companies of yours performing? Well, they’re losing tens of billions of dollars each quarter, with little end in sight.

What do you do?

A) Nothing, and let the markets weed out all the garbage over the next two years or so
B) Recommend getting rid of all their analysts, and go party with the CEO
C) Vote for a top management shake-up, and go party with the private-sector folks
D) Relax their investment restrictions, giving them yet more avenues to lose their investors’ money

It’s a tough call. But if you picked “D” you’ve won!

Not politics…just facts.

Nancy Pelosi announced today that Congress will be presenting an economic stimulus package early next week.

The S&P 500 Index reacted by shedding almost 40 points (and the Dow was down a cool 307). Maybe Pelosi & Company should stick to stimulating the gourmet food in the House cafeteria?

UPDATE: The markets didn’t like the Administration’s response either. All most people are going to do with $800 is pay their gas and electric bills.

UPDATE 2: Paul Kedrosky calls the Bush Administration response “rushed” and “panicky”.