The fed's new plan

What a surprise that the initial market direction is up (I’ll wait and see if it lasts). The fed suspends short-selling and infuses banks with money!

It is not unprecedented, I think, in that the federal government has rationed food, suspended futures markets on all kinds of agricultural commodities, and otherwise intervened pretty directly in markets throughout the history of the US. The hubub is that one party has climbed to power over the past three decades in part by telling people that government is evil, while the other party has jumped on board that train. Only when capital and financial markets are successfully dis-embedded – partially, imperfectly, but still, dis-embedded – do we find the re-embedding jarring.

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