BUT FIRST...

...before we head off to yet another wedding and the graduation of our granddaughter from the eighth grade which will keep me out of action for a week, I thought I would briefly comment on the financial regulation bill winding its way through Chris the Crook's committee.

But first (clever, eh) I though I would let you know I'm in trouble.  Hans rang up yesterday.

"Charlie!  What for the hell you do that, Ja?!!!"

"...And a very Gutten Tag to you mein leiber freund.  Do what?"

"You know what. Ackermann!"

"What about him?"

"You call him ein Deu,,,ah,,,German.  For Damn, Charlie, you knows he is Swiss!"

"Oh come on Hans, alles ist mir wurst, nein?"

"Nein, nein, nein!  Alles ist nicht ! They are not us!  Nein!"

"Hans, be honest.  In '46 you were all Swiss."

"Ach, Charlie zu...zu...zu..."

"Hans, I know German can be wonderfully expressive but it's so difficult to formulate.  Use Ein-lish!"

"You are a sh*%!

"But a lovable one!   How's the Frau?"

"Gut.  She loves you, Charlie, but you are still a sh*%!"

I must be more careful next time.



Anyway, last week in Congress there was a slight glimmer of intelligence and another monstrous example of stupidity and cynical arrogance within the Democratic majority in the Senate.  Maria Cantwell of Washington, one not usually given to intelligent pronouncements joined with Rep. George LeMieux in proposing an amendment to Chris the Crook's legislation that would remove the congressional impremator on the rating agencies.  That, sportsfans, would be a hell of a good thing as it would force those good folks who will invest in any old crap as long as it has the appropriate rating into doing the jobs for which they are paid, namely, managing risk.  Remember my comments about institutions that would be designated as being so big as to propose systemic risk?  The market would take that to mean TBTF and rush in.  This is precisely what happened with risk ratings provided by institutions designated by the government as THE ONLY ONES authorized to provide such ratings.  Who would have thunk that the U.S. Government would allow a bunch of dummies to get it so wrong.
The operative word is government...a synonym for dumb.  Let's see where this goes.  It's a big deal

Unfortunately, the junior Senator from the state of Minnesota has other thoughts.  Al Franken, a dreadful creature at best, proposed an amendment that would memorialize the activities of the agencies in yet ANOTHER governmental body to be overseen by the SEC and each would, if I understand it correctly, be assigned certain categories of risk to rate.  In other words, rather than having a government sanction for their actions, the rating agencies would now be under DIRECT government control.  Might I remind you, dear reader, that government control in matters such as the extension of credit often doesn't work out too well to which Fanny, Freddie and the FHSA can bear witness.  As you mull this over, keep thinking what that "sh%* Charlie keeps saying, "$1Trillion in losses."  Imagine if he's right.




There was a real hit piece on the New York Fed in the Wall Street Journal the other day.  I'll try to get to the bottom of it but I have the suspicion that The Bair of Very Little Brain was behind it somehow.   Things are getting ugly.

See you when I can.