Regualr readers of the blog are aware that Barney Frank and Chris Dodd personally chaired the oversight committees for Freddie Mac and Fannie Mae. Both have collapsed but neither guy has assumed any responsibility for it. We are now confronted with the problem of letting 435 congressmen and 100 senators 'play' CEO.
Which is to say the Chris Dodd who never saw the FNM train wreck coming has announced that Rick Waggoner at GM should resign. We are also getting simultaneous calls for the UAW to take across the board pay cuts. Well, what is it? None of them are going to repsond to hypothetical do this or do that.
And a checkerboard solution is not going to work.
Just this morning Rick Santelli who covers bond futures for CNBC made an interesting observation. The markets have retreated. The open interest of future contracts several months out has shrunk. In other words there are fewer players. The reason is that the traders do not know what to expect. Is the government going to bail someone out, lower mortgages, suspend mortgage payments, what?
Infjecting uncertainty into markets does not help. The transition from lame duck Bush to new Barack and all the bailout ideas in between have injected tremendous uncertainty. We are having a market rally this morning but i suspect there will be a pullback later this week.
Professor Elam 
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