First a couple of disclaimers: 

1. The only stock I own is AAPL and I'm holding that long-term.  

2. I wanted to short the S&P 500 the week before it crashed, but couldn't find the right ETF to buy. Too bad. I would have made a killing.  

3. Unfortunately, there's no reward for having been right and not putting down a bet. 

That said, I got so used to thinking about the looming post-default calamity, that something as ordinary as a stock market crash really doesn't effect me very much. We've been through this before.  

Put another way, when the market was running up over the last couple of years I was wondering what euphoria-inducing drug the traders had discovered. Nothing had changed in the economy since the crash of 2008. It was anyone's guess when the bottom would drop out. This drop is our Wile E. Coyote moment. You know when he runs off the cliff and keeps going until he stops and looks down and realizes he's standing on thin air. Ooops.  

It's the reason the market is crashing is what we ought to be concerned with. For that, Wall St just has to look in the mirror. They're living the moral hazard created by the 2008 bailout. They've rebuilt even bigger than too-big-to-fail. Maybe they've realized that? If not now, when? 

Put another way, it's nice to realize that the US Treasury is still considered the safest place to store value, even after the Hostage Crisis. It's as if the market was bullish on Tehran futures after the Ayatollah came back to take over from the Shah. (Not that the Ayatollah was better than the Shah, but he was somewhat different.) 

I finally understand what Krugman's liquidity trap is. I think. It's called deflation. When the dollar is worth more tomorrow than it was yesterday, there's no reason to invest. Just hold the currency and my money increases in value. However, because I'm not buying anything, that causes more deflation, which in turn increases my incentive to do nothing. The only way to get out of this loop is for someone to unilaterally decide to make something with their money, even if it's going to end up losing them value. I guess Krugman is saying that's the government. (Make more bike trails, subways, anything that improves energy-efficiency and makes us healthier so we don't consume so much super-expensive health care.) 

One thing I wish Krugman would do is get out of complaining mode. We get it. The government economists are not doing a good job. Obama is a cynic. He probably realizes he should be stimulating the economy, but can't do it and get re-elected. Or so he thinks. It might be the only thing he can do to get re-elected. However, it would be great if Krugman could talk to us, his loyal readers, who believe what he says (ymmv) and tell us what we can do to help. There's got to be something. Yes? 

I find myself conflicted over the Republican field. I think it's obvious that Huntsman would make the best President of all of them. Should I root for him, or even support him, knowing that practically speaking he's going to have to pander to the crazies to get the nomination? Wouldn't it be cool if the Repubs would nominate him and let him keep his sanity?  

Sometimes I think the Republicans should all be issued a copy of SimCity so they can learn a bit about macro-economics. They still seem to think an economy of 6 billion people should be run like a bodega in the Bronx. It's a bit more complicated than that. 

I think Obama has been pretty close to a disaster. Yes, I supported him with all I had. It seems every President I've supported has turned out this way. Maybe I should vote for whoever I think would make the worse President.  

I would vote for FDR in a moment. We really do need a New Deal. Seriously. And we need a President who, when he isn't getting his way, packs the Supreme Court with more friendly judges. In other words, our current President is too damned polite and hopes too much. We need someone who is a bit more ruthless. A get-the-job-done kind of guy, not someone who says "Well I was the only adult in the room." That may score you points with your mom and dad, but look where it gets you in US politics. Not a very good place, I think. 

I watched Kudlow a few afternoons just to get an idea how "capitalists" think. Was really heartened at first. Hey these guys are smart. But then they started calling Obama a socialist. Hey these guys are fucking idiots. He's the best friend they ever had. God help them if we elect a real liberal. Or one of the crazies they secretly seem to hope for. Whew. 

Can London-style rioting start up in NYC. I really worry about this. New York has become a very civilized place. The places you couldn't go when I was growing up here are now perfectly safe. I'd love to hold on to that. But as London has shown, the line holding back the uncivilized element is pretty thin. There must be people in our midst here in NY who would be happy to loot and kill if given the opportunity. Or maybe not? If not, why not? I sure don't know. 

America was founded as, what we hoped would be, a classless society. Remember what we revolted against. I'm afraid the rich have gotten really insulated, and truly don't care how the rest of America gets on. They really should care, as humans -- but if not for that reason, for the very pragmatic reason that order is their friend.  

As Chico Escuela used to say: Baseball been berry berry good to me!