On Sat, 19 Jan 2008 18:25:44 -0500, "Ed Huntress"
wrote:

snip
This is Krugman's NYT column for the 18th. OK, I didn't beat him; we wrote
it the same day. And it's not like the various ideas in this column weren't
already floating around in the economics literatu

http://www.nytimes.com/2008/01/18/op... 7&ei=5087%0A

--
Ed Huntress
================

The flaw in the argument [or worm in the apple] is the failure to
consider the extent of fraud and the unreliability of "the
numbers." Indeed, if the problem was "sub-prime" and everything
else was as described the problems, while serious, would be
manageable.

The difficulty is that ever increasing amounts of the "assets"
are being discovered to consist of "cobwebs and moonbeams," while
the liabilities/exposures continue to rapidly mount, as the SIVs
are consolidated [back] onto the banks' balance sheets.

A parallel, albeit separate problem, is the proliferation of
"free lance" scams, schemes, etc. which now come to light because
of the credit contraction. For a 7 billion$US example click on

http://news.yahoo.com/s/ap/20080124/... FFdlf6ASyBhIF
68.142.212.22

Societe Generale uncovers massive fraud

By EMMA VANDORE, Associated Press Writer 1 hour, 33 minutes ago

PARIS - French bank Societe Generale said Thursday it has
uncovered a $7.14 billion fraud — one of history's biggest — by a
single futures trader whose scheme of fictitious transactions was
discovered as stock markets began to stumble in recent days.
snip
------------
As Warren Buffet [IMNSHO the only honest major finance person
still alive] is said to have noted, "It's only when the tide goes
out that you learn who's been swimming naked."

For a reasoned analysis on economic "crank" [aka "the stimulation
package"] click on
http://news.yahoo.com/s/csm/20080124...PFs2M73RL9wxIF
68.142.212.22