Zipadeedoodahzipa...Economic Update

Lenders were skipping and singing this week with interest rates taking a swing downward with Uncle Sam's dramatic Sunday morning take-over of Fannie Mae and Freddie Mac; orchestrated by Hank Paulson, Secretary of Treasury, and friend of all things Chinese. Mr. Paulson, former CEO of Goldman Sachs, has visited China over 70 times. Fannie was not in immediate distress, with Freddie there was some worry; but the major factor may have been that the Asians are one of our biggest investors, and Uncle's Hank and Sam needed to calm their fears to keep them playing in our markets.

Wouldn't it have been cool if we had been offered "loan protection insurance" for our homes, just in case they were to devalue? If we had taken out insurance and our property values eroded, the insurance company would have taken the hit, not us. Don't call me, because it doesn't exist. However, the soothsayers have access to their own insurance, called credit default swaps. These insurance derivatives allow investors to bet on a company's health and insulate against losses. Isn't that cool? Except the insurance losses may now go into: get this, trillions of dollars on this Wall Street "soothsayer secret". Who is holding the bag, oops, I meant insurance?

FYI: Southwest Airlines stopped accepting cash for their drinks. Credit cards only. Good thing, since I have not had any cash since 2006.