Thursday, February 19, 2009
Today Is Thursday
Today I am going to give it a rest, as I am going to visit an art gallery in downtown Cincinnati, the West End, as a guest of my friend, Sam, who teaches a class for retired adults about the process of making art. The house cleaning project is moving along and I am discovering new things doing it almost every day. My art making is on hold until after the art show March 6.
The President continues to do a good job in trying to get our economy, and in fact the rest of the world's economy, back on track. Inflation is hardly a concern at the moment as deflation's foot print has hit nearly everyone. Solving our economic problems with Keynesian spending will help, but if I had the President's ear for two minutes, I would talk to him about the importance of a level playing field with regards to the rating of structured debt.
I may be the only person that believes that without the complicity of the rating agencies, the housing bubble could not have taken place. The Fed holding down interest rates caused the large investors to reach for yield and mortgage-backed bonds gave the investors that extra yield and return. There were other things that helped to throw our economy into this recession, but the fraud of the bond rating process, in my opinion, enabled the housing bubble to grow. Take away the securitization of structured debt and the financial world is a whole different place. I still believe that a federal agency is the best way to ensure and rebuild the buyer's confidence in the rating system. Money corrupts and that will not change. Therefore, a new era of a government run rating system should be begun.