Capitalizing Your Adventure

Once again some of the most poignant commentary on the financial crisis is emanating from the Daily Show. Funny how a satirical news show gets it right more often than some of it cable news brethren.

Follow the link to Stewart's one on one with Mad Money host Jim Cramer if you have not seen the it yet. Cramer sat in with his shirt sleeves rolled up ready to match up against Stewart, his recent antagonist. Too bad he had his lunch handed to him by Stewart. Maybe it had something to do with the video footage of Cramer revealing tips on manipulating markets to juice a short position.

It's not all bad. I'll give Cramer some credit, he did sound the tocsin during his infamous "You Have No Idea!" rant of 2007.

Fed Takes Out the Trash

The guys who brought us the magic of the deregulated mortgage market are finding new and creative ways to make amends. The plan announced today by the Fed was ambitious enough to coax very a large gain out of the market and has the cutsey name Term Securities Lending Facility. The Fed is basically allowing large financial institutions to borrow liquidity (cash or safe Treasuries) and use the mortgage backed securities that have led to the liquidity woes as collateral. My favorite twist on the proposed credit line is this, any securities that hve a premium rating will be accepted as collateral.

This is of course is meaningless since many of the "premium" credit ratings were assigned with a wink from S&P and Moody's to the future detriment of investors. At this point in the game the mere act of accepting this garbage as collateral is soothing enough to the calm everyones' nerves for the time being.

The Fed is going to lend up to $200 billion as of his program. It would be nice to think the same helping hand may soon be extended to local government issuers who have been stung by the collapse of the auction rate securities market. A collapse brought on by the aforementioned players now on the receiving end of the Fed's generosity. For more information on that mess check out Mayor Bloomberg's little financial news site.