Years of Poems and Spirits

The Federal government has taken over AIG:

… the Fed will lend up to $85 billion to AIG, and the U.S. government will effectively get a 79.9% equity stake in the insurer in the form of warrants called equity participation notes. The two-year loan will carry an interest rate of Libor plus 8.5 percentage points.

If AIG proves to be the firewall that stopped the crisis from spreading, then Messrs Bernanke and Paulson would likely be mentioned in the same breath as J. P. Morgan and Benjamin Strong in 1907.

The fact that we are repeating a panic happened one hundred year ago is a sad reminder that Leninism isn’t dead after all. There is something fundamentally wicked about Capitalism, namely, how to restrain Greed so that it doesn’t devour the system.

In the short run, if there is indeed a solid market rebound, I am sure Joe Sixpacks somewhere in Ohio will forget about all the scare and vote for their “conscience” again …

Update on 9.17: 狗日的，Dow dropped 450 points. WaMu is being auctioned off. Just pulled out of money market altogether. Ready to open other bank accounts. Is it that bad?!

Lehman Bro. filed bankruptcy today. ML was sold to BoA yesterday. A.I.G. needed cash infusion (as Lehman did four month ago).

Looking back, when the whole thing started over a year ago, I never thought “the credit crunch” would explode into a full blown financial crisis. In terms of personal finance, I escaped the early “crunch”, got hot-headed, plunged back in and am now a wounded prey.

One lesson learned is the definition of “liquidity”. Gradually, I come to see it as an index of market participants’ expectation of return on investment. What I read about Lehman’s demise certainly reinforced this conviction:

… even to the bitter end, Lehman didn’t access the Federal Reserve’s emergency loan facility. If it had, everyone would have assumed it was in trouble.

I always wondered why the Fed kept pumping money in but nothing worked. One reason could be that the repos is really short term so it wouldn’t work out timing-wise. The other–just as I suspected.

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From: "Yibing 'Bing' Wu" <yibing.wu@gmail.com>
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Subject: More background info on Heros
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The critically acclaimed first season's run of 23 episodes garnered an
average of 14.3 million viewers in the United States, receiving the
highest rating for any NBC drama premiere in five years.[6][7][4] The
second season of Heroes attracted an average of 13.1 million viewers
in the United States.[8] The second season was NBC's top series in
adults 18-49,[8] the top Monday series on any network in adults
18=9649,[8] and the top scripted series on any network in adults
18-34.[8] In addition, the second season marked NBC's sole series
among the top 20 ranked programs in total viewership for the 2007-2008
season, according to Nielsen Media Research.[9] A total of 24 episodes

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