Zach Carter has an article up at The American Prospect detailing how the ratings agencies stand to benefit from the Term Asset-Backed Securities Lending Facility (TALF). TALF is the Fed program announced last winter (but just getting into action) that puts forth $1 trillion in non-recourse loans to holders of AAA rated asset backed securities (the “assets” here being a wide variety of new loans). The problem Carter highlights comes with that “AAA rated” part.

This is a chart of the CDS spread from yesterday, courtesy of Baseline Scenario, and it paints a less rosy picture of Citgroup than the company’s memo (and Wall Street’s reaction). Credit default swaps (CDS) are essentially insurance policies issued against bonds (or bond-like investments) that allow the investor to put most of the risk in the hands of others for a fee. They have serious drawbacks (see: AIG, near collapse of) but have historically served as indicators as which direction things are heading.There are those who think that the market is so broken at this point that CDS spreads don’t offer reliable readings but there are others who think they’re still worth a glance.

It is impossible to name one culprit behind the current economic crisis because there were so many correlated pieces that went into this disastrous puzzle. But collateralized debt obligations (CDOs) -specifically, those of asset-backed securities (ABS)-were, continuing the puzzle metaphor, a large corner piece.

The Geithner authorized bank Stress Tests are the economic equivalent of a high school football coach padding the grades of his players so that they can all play in the next big game. Unfortunately for the team, a few of the players have died. But that doesn’t stop Coach from dressing them in uniform and propping their bodies up on the bench next to the Gatorade cooler.

Bernie Madoff has been sentenced to 150 years. Unless Madoff has Nicholas Flamel as one of his co-conspirators, that’s going to be a life sentence.

Where does one go with cigarette advertising as…

Bigotry requires a certain level of cognitive dissonance among its practitioners. There needs to be a series of blind spots in place if someone is going to believe wholly in racial stereotypes that are very easily disproved. So it isn’t surprising when an act of bigotry is illogical. Take, for example, the National Review’s cover featuring SCOTUS nominee Sonia Sotomayor.

I received my acceptance letter from the University of Massachusetts at Amherst last week to finish my Bachelor’s degree in Journalism (my original major was Biochemistry — long story behind the switch). I’m still figuring out how I’m going to provide the $300 per credit hour and trying to convince myself that it will be worth it in the long run. This chart from Calculated Risk showing the unemployment rate based on level of education makes me feel slightly better about my forthcoming loan debt:

I’m working on some longer posts on this subject but since it’s Friday and everyone’s on their way out, I’ll put up some links pertaining to the Stress Test results released yesterday.

Bank of America shareholders are having their annual meeting in North Carolina today and their itinerary includes a vote as to whether the board- including chairman and CEO Ken Lewis- should keep their jobs following the disasterous (and muddy) Merrill Lynch deal. I’m working on a longer post about the vote and Merrill that I’ll put up after the meeting is over but I thought this spoke to the mood in the room: