Week Links with notes

Make Markets Be Markets from the Roosevelt Institute.  The report includes chapters from Peter Boone and Simon Johnson on the inevitability of a government bailout of even more gargantuan proportions if nothing is done, from Elizabeth Warren on the broken consumer credit market, and from Joshua Rosner on Securitization.  Amusingly the ads framing some of the displays online are from the anti-Consumer Financial Protection Agency mega-campaign.  Buy Congressmen and indoctrinate the population.  Hmmm.

Calculated Risk's look ahead from last Sunday expands the attention window a bit and offers some perspective. Even if all these did not come true, it is in our view not the prospect one looks at when one is contemplating a recovery. (If it sounds familiar, but you haven't visited the site ere now, it's because we used some on Monday's podcast.)

Fed Balance Sheet also from Calculated Risk, shows the disgrace of the Fed's balance sheet, and its progression from short-term bailouts to the financial sector to long-term ownership of their garbage.

Banks out of the woods? Maybe not is the headline at the New York Times. Maybe not, indeed. Closing their eyes to bad loans doesn't seem to be making them go away. They are in the deep woods and night is falling.

AIG may have big exposure to Greek CDS's. As we have been writing for weeks now, the need to bail out the impossible to bail out CDS market will come on us someday. Is it now?

States poised to deliver negative stimulus, or as the title of this piece says, State budgets are falling like its 2008. There is a net $200 billion negative in place ready to derail any recovery. Here are the details by state. Now consider that the dropping revenues reflect dropping home prices and dropping retail sales. Recovery?

Buffet's 2009 letter to shareholders