Soaring

That's the word that many are using to describe the Dow Jones averages today.. home sales were up last month, and the Fed is going to buy up all the bank's bad decisions.

NYSE Last Net Change
DJIA 7,535.40 257.02


It wasn't that long ago that people were wondering if 8000 would be the "bottom".


.....

Krugman

It’s immediately obvious, if you think about it, that these funds will have skewed incentives. In effect, Treasury will be creating — deliberately! — the functional equivalent of Texas S&Ls in the 1980s: financial operations with very little capital but lots of government-guaranteed liabilities. For the private investors, this is an open invitation to play heads I win, tails the taxpayers lose. So sure, these investors will be ready to pay high prices for toxic waste. After all, the stuff might be worth something; and if it isn’t, that’s someone else’s problem. ...

This plan will produce big gains for banks that didn’t actually need any help; it will, however, do little to reassure the public about banks that are seriously undercapitalized. And I fear that when the plan fails, as it almost surely will, the administration will have shot its bolt: it won’t be able to come back to Congress for a plan that might actually work.

What an awful mess.

Thing is.. this isn't a guessing game of who is "right" and who is "wrong". Krugman wants the government to fix what caused this problem in the first place. Geithner wants to just fix the effects of the problem.

Sullivan calls Krugman "pissy". This is because Andrew Sullivan sees everything through an emotional lens.. which is why he's a religious kook as well.

In the Land of the Loon (and Sully is a charter member), right and wrong doesn't matter. It's how you make your argument.