lol, Leanan does have a sense of humor!

by Jason Linkins , The Huffington Post, September 22, 2008

A critical - and radical - component of the bailout package proposed by the Bush administration has thus far failed to garner the serious attention of anyone in the press. Section 8 (which ironically reminds one of the popular name of the portion of the 1937 Housing Act that paved the way for subsidized affordable housing ) of this legislation is just a single sentence of thirty-two words, but it represents a significant consolidation of power and an abdication of oversight authority that's so flat-out astounding that it ought to set one's hair on fire. It reads, in its entirety:
Decisions by the Secretary pursuant to the authority of this Act are non-reviewable and committed to agency discretion, and may not be reviewed by any court of law or any administrative agency.
In short, the so-called "mother of all bailouts," which will transfer $700 billion taxpayer dollars to purchase the distressed assets of several failed financial institutions, will be conducted in a manner unchallengeable by courts and ungovernable by the People's duly sworn representatives. All decision-making power will be consolidated into the Executive Branch - who, we remind you, will have the incentive to act upon this privilege as quickly as possible, before they leave office. The measure will run up the budget deficit by a significant amount, with no guarantee of recouping the outlay, and no fundamental means of holding those who fail to do so accountable.

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My comment: Hey, when you're down 9 trillion, what's one more? Done deal? Oh yes it is.

Your blog spot appeals for higher interest rates for savers. Being a saver I can sympathize with that view. Real interest rates on savings are below zero giving no incentive to save.

However, we still live in a globalized economy. If interest rates rise here, the Japanese, Chinese or the wealthy oil exporting economies of the Middle East will rush to put money into the U.S. economy driving them down again. Savers have to compete with the Japanese whose interest rate is effectively zero and who have lots of money.

Buying appreciating assets like oil, gold or farm land is the only way out of this dilemma for savers IMO. Personally I like farm land. It is hard for anyone to steal it. It makes you an instant business person with the associated tax write offs plus you can live on it thereby reducing living expenses. It is not as easy as putting money in CDs but the reward seems to be higher over time.

"the public is strangled at the gas pumps"
Come on Steve you're having a laugh, Americans pay a ridiculously low price for gas so hardly being strangled. Take a look at European prices.

The big investment banks are already dead, the last two are to convert into tightly regulated bank holding companies. The US taxpayer bail-out of America’s banking sector will reverberate for many years. The US Treasury was already planning to borrow $400bn+ next year to shore up the budget deficit. That could now rise to $1 trillion or more - a significant number. This is not the sort of change you find down the back of the sofa. Failures now have a "get out of jail/bankruptcy free" card. Please tell the voters don't worry TPTB are "doing something".

Unfortunately the gap between the Fed funds rate and the Libor rate (rate at which banks lend to each other) has jumped to the widest for a very long time showing banks don't trust each other. This trillion of extra Treasuries should depress price (more supply less demand) so increasing yields (rates), higher rates will push up mortgage rates etc so slowing the economy. Rinse and repeat, vicious circle??

So as the dollar goes down oil goes up in symetry. Expect more calls against speculators.

Meanwhile over in Denmark, Ebh Bank put itself up for sale yesterday as it cut its profit forecast to zero and removed CEO Strier Poulsen after bad real-estate related loans were larger than expected. Sound familiar? Many senior managers at banks simply did not understand how their institution funded itself. Things have improved but they can still be blindsided by sudden events. That's another fine mess they've gotten us into.

These price swings are crazy...

But it has been noted that the really big jump only happened on the october futures. So the size of the spike there may have had something to do with it being the last day of trading in october futures.

Now that we are looking at november as the front month, there is not such a huge spike in the graph.

http://www.ibtimes.com/commodities/data/chart.htm?page=chart&sym=CLX8&mc...

I wonder if it might be better to only look at spot prices for the poll, to eliminate these kinds of "volatility effects" near the end of the trading cycle.