This was a horrible day for me.? I tried to fix my shaky internet connection, which troubled my access to Bloomberg.? After some time I had some success, but it pushed me into the late hours of the day, even for me.? For now, it seems stable, and for that, I am grateful.

A few notes:

1)? I’ve read Caroline Baum for about 15 years now, and have consistently benefited from her insight.? Her current piece makes the point that the Fed should not have entered into such policies of easing, because now we face the results of those policies, which include low interest rates, and little reason to borrow.? A liquidity trap, courtesy of the Fed.

2)? Okay, so a Rep. Towns of New York proposes that we ease the terms on the bailout of AIG.? Why should the US do this?? There is no good reason — AIG has stabilized, though it has stabilized at a level where common shareholders will get nothing, eventually, unless valuations on financial asset rise even more.

Can’t the US government make up its mind?? It has voluntarily given up value from bailing out AIG twice.? Must it do so a third time?

No, it must not do so , but my odds that they will do so are 50/50.? The US government is given toward bailing out economically sensitive? institutions whether it makes sense or not.

That’s all for the night.? We are in a tough situation, and the US government leans toward politically sensitive institutions, and favors them versus other financial institutions.? It’s bad policy, but it can be good politics for some politicians.