Earn What You Spend

Paul Krugman keeps the conversation about the stimulus going, this time with an open letter to the President-elect published in Rolling Stone. It’s a long letter, but worth the read. 

Here is a post that is quite valuable as a reference point in this downturn: Clusterstock answers the question, what are troubled assets? Through a poignant example, John Carney shows troubled assets are not as complex as we might imagine them to be: 

Troubled assets are just stuff that banks paid too much for. Mostly, that stuff is loans made to people who cannot afford to pay them off, secured by collateral that is worth less than the loan value. Those loans were made so people could buy everything from homes and cars to shopping malls and construction companies.

Where has the $350 billion of taxpayer money funding TARP gone?  Not to increase lending to consumers and businesses, but rather to whatever purpose the individual banks desire.

Looking for an investment?  It might be time to reconsider the credit markets.

And here is a great article by David Crook on the winners and losers of the housing market.