Ah, the good old intentional recession!  Is that good for stock prices?  (As an aside, its almost certainly better for the nation than the stupidity displayed by Bernanke, who has managed to engender a "crack-up boom" in the commodity markets through his insane alphabet soup nonsense trying to prevent a recession that should have been far longer and deeper six years ago!)

Oh, those two hedge fund managers at former Bear Stearns who were the "heads" of of the funds that started the entire credit crisis?

They're under indictment this morning according to reports on CNBC and in the WSJ.  While there is an element of "scapegoatism" in these busts, and I'm sure that is how many will characterize them, I would instead call these prosecutions "a good start."

Why?  Because there has been a tremendous element of crookedness across the board in lending over the last decade.  The "consumer impact" came with the housing bubble, but the same sort of hucksterism and fraud infused the entire tech bubble as well.  As a businessowner in the middle of that mess I saw it on a daily basis - the number of hucksters that came through my offices trying to get me interested in this or that sort of scheme (all of which, on analysis, came down to "con the public/shareholders/investors out of their money, and hope you can make a profit some time down the road") were rampant.

While many people call this "animal spirits" and an essential part of the capital markets, I call it fraud because the projections upon which these "deals" were based are intentionally overinflated compared to any sort of reasonably-likely outcome and, in many cases, compared to what is mathematically possible on a sustainable basis.

The Wall Street Journal is now putting forward opinion on the "housing bailout boondoggle", noting that Countrywide will be one of the big beneficiaries - and that Dodd got "special" customer treatment:

"If borrowers and lenders take full advantage of this new federal program, and Countrywide loans go south at roughly the same rate as those from other lenders, this suggests a potential taxpayer bailout of more than $25 billion for Countrywide-originated loans.

....

Meanwhile, Mr. Dodd continues to insist that, though he knew he was a "special" Countrywide customer, he didn't think he was getting any special financial benefit. But a $75,000 reduction in mortgage payments is no small matter for anyone living on a Senate salary of $169,300. Why else would he be known around Countrywide as a "Friend of Angelo" – Angelo being Countrywide CEO Angelo Mozilo.

.....

That's an excellent idea, in addition to a Congressional and Justice Department probe of Countrywide, Fannie Mae and the favors they seem to have spread around Washington. American taxpayers need to understand more about who they're being asked to bail out here, and why.

Ding ding ding ding ding.  The Journal gets it, and I just renewed my subscription as a consequence.

Unemployment claims came in at 381,000 down slightly from last week, and continuing claims is down to 3.06 million.  The futures oscillated a bit but didn't move much overall.  Nonetheless, they are up somewhat this morning, leading to the likelihood of a bit of a rebound at the open - the question is, can any sort of bullishness this morning hold up?