Shit into Gold

The latest munificence from the Fed, $200B to lend to banks for 28 days with the banks putting up part of their shitpile (mortgage backed securities), sent the market in to a buying frenzy today. And why not? The money means the securities can snooze quietly at the Fed, the security insurers have the pressure taken off them, at least partially, and there's an extra $200B to invest in sure things like the stock market. Win, win, win!

So lets party like it's 1999! When things start to look bad again, the Fed can always print up another chunk and take more of the shitpile as collateral. If money were real, this game would have a finite limit, but it's not real. All you have to do is keep on believing.