There is no end in sight to the bailouts:

CQ Politics | Aviation Industry Joins Plea for Stimulus Funds
They should have let Bear Stearns go.  Take the short term pain for a longer term gain.  But no, take the easy way.  And now the same bailout types are still in charge, and still will be too.

This morning

L. told me ‘Today is going to be my second jolliest day.’ 
The day started with her eating breakfast fast enough so that she could put some more decorations on the tree.

Wow, just wow.

Coding Horror: Profitable Until Deemed Illegal

Never underestimate people’s ability to be manipulated.
How many repeat customers are there?
via: megan mcardle

Soup’s on!

Bloomberg.com: Bonds
U.S. Treasury Protection Costs Surpass Campbell Soup on BailoutEmail By Shannon D. Harrington
Dec. 10 (Bloomberg) — The cost to hedge against losses on U.S. Treasuries surpassed the price of default protection on bonds from Campbell Soup Co. and drugmaker Baxter International Inc. as government spending on stimulus packages grows.
Credit-default swaps on U.S. government debt [...]

An excellent discussion

Paul Wilmott’s Blog: Magicians And Mathematicians
Models are metaphors. 
 Taleb’s and Romer’s comments are right on.

Edge: CAN SCIENCE HELP SOLVE THE ECONOMIC CRISIS?
Models in economics are to force you to be clear about the logic of the discussion to make sure that your story is consistent, and also to suggest the broad quantitative forces.  We can [...]

Apparantly I am one of the dumb:

Who is the Real ‘Dumbest Generation’? – washingtonpost.com

My wife’s first question

upon hearing that part of the new stimulus packing is changing the light bulbs was ‘What are they going to do with all the mercury from the old bulbs?”
The law of unintended consequences is coming to us, yet again.
(This is not a stimulus plan, but a plan they wanted anyway for other reasons. They [...]

The most compelling model of a speculative bubble has two ingredients:

First, people need to disagree about the fundamental value of the security,  with the possibility that the identity of the most optimistic people changes through time.
Second, there needs to be some barriers to shorting so securities so that prices don’t reflect the average opinion, but instead the securities end up being held by the most [...]