My Time Machine was Repo'd Last Week

Just to put things into perspective, I hopped into the time machine to see what the overnight rate was back in 2006 – take a guess… Anyone?  Bueller? Bueller?  The overnight rate is within the direct control of the geniuses at the Federal Reserve.  It is a “price control” on the price of credit and usually fucks up the true and correct pricing of risk.  Rather than allow markets to dictate the price of credit, the Mensa Dance Squad over at the Federal Reserve decide that it is theirs to say what the benchmark will be.

And what was the overnight rate back then?  It ranged between 3 to 4 paltry percentage points.

Yep, 3-4 percent… even as the Fed Dead Heads (no offense intended toward any Grateful Dead fans out there) took turns blowing smoke up “The Financial Yoda’s” prune like ass and acknowledged within the meeting minutes that a major league credit bubble chasing after real estate assets had taken form.  Timmy wasn’t going to be outdone by his colleagues so he slipped in a little tongue while he was blowing smoke rings up the Maestro’s sphincter.

Deeper!  Faster!