a month of surprises
Several unlikely developments occurred in the past 30 days.
The biggest surprise came from George W. Bush. Contrary to my expectations outlined earlier, the Texan cowboy came up with a stimulous package that was only mindly destructive. I mean, a tax rebate for people who can't even make a paltry $1 mln a year? Has some Bush operator messed up, taking Obama's CD and programming the president as a Keynesian-leaning Democratic candidate? Or, rather, have they been so crazed by fear of recession that they're ready to clutch any straw, even if it's going to be an obvious heresy?
The second surprise is the decision to support weak homebuilders with tax loss carry-forwards. Strange enough. One would think elimination of weaker players was in everybody's interests (except first-time buyers, of course, but do I really need to mention that?): homeowners, bankers, Wall Street, and homebuilder executives themselves (again, except the likes of LEV and TOA). Most likely explanation: Bush's people really intended to save the banks, and builders were included by accident because no one has bothered to cross them out.
And the third place goes to Ben Easy Money Bernanke, who was so frightened by a random price fluctuation that he convened an emergency meating to announce a single largest cut in god-knows-how-many years. Rates are now being cut at a faster rate (no pun intended) than in the two previous recessions. At that rate, we're going to hit 0% pretty soon.