Get Hat, Hold on to Hat

Okay, movie reviews up, food post up. Here's my poker summary:

What a fucking disaster. Couldn't win a damned thing. Doom switch is back on at FT for me - laid traps get tripped up, tricks get foiled by runner-runners, terrible preflop calls get rewarded. Bah. Glad I don't play for high stakes.

And that's the poker summary. Now to the economy, and then politics.

Note to the US: You're fucked. Economically speaking. This Fannie and Freddie takeover is a panic move by the government. As I was leaving work on Friday, I turned to a co-worker and said, "You can't merge them unless the government takes 'em both over. It's the only way they can save them." I'm generally against bailouts, but this was necessary with the $5.3 Trillion in mortgages here. The feds are trying to stave off a depression. The Great Depression was triggered from overmargined accounts leveraging waaaaay too much money on the stock exchange. New rules, and new checks and balances were put into place to stop this from happening again. As it was crashing, the super-rich of the time tried to support the market buy buying large positions. It didn't work.

So now Joe Average can't easily have a 10% margin holding millions of dollars in stock. Of course, there are still derivatives, but they've been buffered by their comparative complexity for the average investor.

But houses... oh houses were the new margin account. It used to be that you didn't think of buying a home until you could afford it. But the sub-prime mortgage boom meant people could buy a house without having any savings at all, and terrible credit. Good call there. What you end up with is people owning trillions of dollars of real estate without actually putting up the money for it. The companies that DID put up the cash are now suffering, and if they close, they take those houses with them. No way the government can allow that to happen - it would be a disaster of unheard of proportions. So they buy up the bulk of the problem, restructure it, and hope for the best.

But it's stop-gap. The bigger underlying problems are still there. Every time the government bails out the mistakes, it sends the message of "we won't let you fail." Well guess what? They need to let failure happen, that's the other side of capitalism. There is ZERO need for investor protection, that's what makes it investing. But like I said, Fannie and Freddie are a special case as GSEs and the huge affect their bankruptcy would have on the nation... not that it's protection for the equity holders by any means.

As for the dollar? There's nothing good in the fundamentals about the US$. Its rise is due to the rest of the world's currencies sucking just as much, and the equilibrium resetting. Don't think for a second that it's a sign of improvement. But it will continue to rise if the technicals are to be believed.

All that's being done is a finger in the dike here. There are BILLIONS more in homes that will be lost in the next 2-4 years in the US, the mortgages just haven't reset yet. Any time somone talks about a "bottom", I laugh. There's still a long downward ride here. If they're lucky, the government will keep it as a recession, and not worse.

And United isn't going bankrupt... that was actually kind of funny. Some intern got fired at the Chicago Tribune for that one.

And so comes politics.

The October 14th election date for us Canucks is set. The ads are unveiled, and once I watch them, I'll be sure to criticise. I will say, the Harper ads that are just him talking about family, and the country, and whatnot? Those are MUCH better than the crap I had up here earlier. Some are almost heartwarming. He's still a tool though.

An no, I don't thin Dion is any better. Or Layton. Or anyone for that matter. Actually, if it wasn't for the whole separatist thing, I'd like Duceppe.

As for the states? McCain just took the lead vs Obama in the latest polls! Yah, it's a post-RNC bump, but I still won't be the least bit surprised if the Republicans win. People seem to swallow all this bullshit easily... I guess it tastes better than what Bush had been feeding you for years. Personally, I like Obama more than the current McCain. Not politically, but just as a figure. I think the States could do worse than a good motivational speaker for a few years. It's not like either of them are going to fix a damned thing.

Besides, they're both inheriting a financial disaster that will last through a first term... which means a flip to the other party after that term simply because there will be nowhere else to lay the blame but at the fed's doorstep, even if it isn't that administration's fault.