• The Fed had to do something—we’re talking $5 trillion of U.S mortgages here—as these were their babies.
  
  
• “Any time you privatize gains and socialize losses, you open the door to moral hazard.”
  
  
• THE question for global financial markets isn’t the reaction to Fannie (FNM) and Freddie (FRE), it’s the reaction to IndyMac (IMB). There are alotta leaks in our finance-based dike and only so many fingers with which to plug them.
  
  
• Or, as the WSJ put it, “Are the Hunters Low on Magic Bullets?” Old School Minyans know that for years, I’ve offered that the Fed only has so many bullets in their gun and the last one will be pointed inward.
  
  

• Market vigilance or the changing face of socialism?
  
  

• The first thing I pulled up when I got into the office? No, not my pants—The South Beach diet officially starts today!—it was the S&P-BKX chart.
  
  

• We've been monitoring it for years and it remains on the radar. Either the banks gotta bounce or the market will bee-line to S&P 1050.
  
  

• What, you mean there are still people who don't believe in the invisible hand?
  
  Yes, the market must hold today for the sake of Fed Credibility.
  
  

• Lest you're still of the opinion that there isn't deflation, the EPA has determined that the value of a human life has declined 13% in the last five years!
  
  
• A credit contagion is one thing.  A credit contagion with coincident inflation is an entirely stickier situation. 
  
  
• Therein lies the double-edged sword that is swinging through the financial markets and why there is no simple solution.
  
  
• Two thoughts. First, to appreciate where we are, we must understand how we got here.
  
  
• Second, we’ve been monitoring the problems in Fannie and Freddie for the last five years—always early, right?—and offered three potential paths in early March.
  
  
• Pepe Depew has done a fabu job of discussing how this plan actually brings us full circle (or, see Thing #3 here).
  
  

• I'll betcha this pales in comparison with how many peeps were hurt in the current bear run!
  
  

• The big picture blues will lead to an unfortunate destination but that’s necessary to rebuild the foundation for sustainable economic growth. Once we get there, those with capital will be in a fantastic position to prosper.
  
  

• Time and price are the only solution. Pain, before pleasure.
  
  
• With that said, respected and understood, perception is reality for financial markets and the path that we take to get there will be ripe with two-sided opportunities.
  
  
• Speaking with one of the most successful hedge fund managers ever this past weekend, he noted the emergence of M&A deals (Rohm and Haas (ROH), Budweiser (BUD) and Hercules (HPC)). This has been lost in the shuffle between the credit contagion and crude ‘tude but it’s worthy of a mention as we fit the pieces together.
  
  
• Dude, I take a few, precious days away from MVHQ and I come home to see Boo flying through the air like Neo? What goes on?!?

R.P.