The credit markets have pretty much frozen as banks are unwilling to lend to consumers or each other in a deafening reduction of confidence.

Many banks made mortgage loans with impossible terms or to unqualified borrowers. These banks then invested in securities backed by these now failing loans. It is this hidden potential for toxic holdings that reduces bank-to-bank confidence. And even a banks own self-confidence in consumer lending, if the bank itself relies on borrowing.

The reaction from the US government to this problem has been to provide liquidity to reinflate confidence. This has been unsuccessful, largely because, its dependent upon setting a floor on the US mortgage market and/or mortgage-backed securities market despite a natural state of correction in both. Price-fixing will not help lending between banks nor free-markets. Since inter-bank lending is immediately crucial to the economy, I present my own idea for solving this problem with our banking system.

Two important points; first, lending is both in the near-term costly and risky. Second, the current rash of government backstop-lending is no different with few exceptions (since the government controls the rules of the market).  This is the more important power of the government, not its ‘infinite’ supply funds, but its ability to control the rules. 

What if the Federal Reserve in coordination with the FDIC opens a new window.  This window will help banks lend to each other without lending them a thing. For a smartly set (perhaps percentage based) premium to the bank borrowing, the US government would — like a bank certifying a check — hold in escrow the amount of some bank-to-bank loan. Then, on at least these occasions, US banks could ensure transactions with each other through the help of their shared regulators and assistance providers.  Obviously, when and where these banks felt more comfortable, they could go back to working together directly.  The impact of the premium is disincentive to using the window.

This would be self-sustaining through premium collection and would not be harmful to the banking system or US tax-payer. I believe something as simple as this could help form an insurance for slowly winding down the operations of other windows at the Federal Reserve.  The windows could then help to support each other until varying crisis are resolved.

So its about time we reintroduce an old friend. I brought him — the idea — out a bit early. And then put him away because the idea is alarmist. Its an idea I’ve hated to have fostered at all quite frankly, but its one that is hard to deny given whats transpired.  Super-bust.  I’ve written about it before in June with Back to The Future. And back in March with Four Magic Words and Four More Magic Words: Where is my Money.

I never could have imagined things would happen as quickly as they did, certainly not using the information in front of me — isn’t that what they all say though? The talk now in Washington is, if we don’t accept Paulson’s $700B billion to $1.2 trillion bail-out plan and fast, we’ll not be able to avert serious systemic damage.

The fact is, we’ve already experienced and some of us truly suffered, serious systemic damage.  For instance, here’s a new piece of trivia for you to shop around the office: When was the last time the US had no major Investment banks? Or, what did the US credit market look like then? We care because, as of today, there are only specialty houses and the boutique investment bankers left.  Bear Stearns exploded back in March — it took JP Morgan Chase and $30B of Fed loans to put out the flames. Merill Lynch got bought by (shudder) Bank of America.  Both Goldman Sachs and Morgan Stanley were run off of Wall St. and toward the lender of last resort, the Fed, having converted to commercial banks.  And Lehman Brothers is odd man out with the Fed for whatever reason and goes essentially bankrupt.

Paulson’s plan will do nothing to bring back the vast financial innovation, command of respect, and pure flow of capital these companies brought to the face and body of the US economy. They are causalities of a lack of oversight in a system where you’re insolvent by association. Thats exactly why Paulson wants Congress to give him a permnant supply of rockets for his bazooka. But is that what America really needs: our tax dollars with Hank Paulson, running the World’s Biggest Hedgefund?

“Imagine that you are creating a fabric of human destiny with the object of making men happy in the end, giving them peace and rest at last, but that it was essential and inevitable to torture to death only one tiny creature - that baby beating its breast with its fist, for instance - and to found that edifice on its unavenged tears, would you consent to be the architect on those conditions? Tell me, and tell the truth?”
- Fyodor Dostoyevsky, Brothers Karamazov

They are certainly all interesting– the reasons behind Google’s release of a new platform for web applications, that is. Its especially interesting the platform is admittedly disguised as browser project, one named for its user interface and explained with comic books — Chrome. Arguably, this is the sort of thing to set off whole shifts in Web development. And, the idea that Chrome runs on a Javascript engine written from scratch, called V8, changes the whole browser game– But before I lose it in technical ramblings, here are some of the reasons I think Google’s chroming the Web…

6) Google has long had interest in further advancing Javascript, as its a core technology for them.  This kind of advancement, further closes the gap created by the Web’s client-server design. It introduces an initial foundation for direct use of Google’s “cloud” more importantly.

5) Google employees must spend a large majority of their time in a browser because work is so closely tied to the Web — cutting out the middle-man will save future time and effort expenses. And Google is all about BIG simplicity.

4) Chrome better enables Google to produce metrics about Web use — in fact, one mandate of the Chrome development team is ensure Chrome will work best on popular sites. So, if you’re the paranoid type, make sure you enable Chrome’s Incognito mode.

3) Google has long been at war with Microsoft; Chrome might split browser market-share, reducing IE’s already straining grip due to Firefox growing popularity. This could help to diminish Microsoft on the Web.

2) Chrome’s innovative and will attract a community; users for its ease and feature rich landscape, developers for its obvious seamless integration with things like Google Gears and Google’s APIs (perhaps for its out-right sane behavior).

and the #1 reason) Why not play the Web from both sides before an effective way is developed to delever your 70+% hold on the Internet advertising market.

UPDATE 3:44PM EST – 

Here she is…  Chrome is fast.  It can’t login to Zimbra. But it obviously works with Wordpress just fine. 

No matter how many seasons you spend on the Internet, you can still be skull-smacked with surprise by the things you’ll come across.  Another summer is all but over, Rover.

Before the summer is gone entirely though kids, maybe you ought to get out your Winter coat, hoodie, hat and gloves — don’t forget your Painter’s breathing mask or random alien face too — and go see a concert!

The summer season is the best time to go places with friends, family, and especially to spend time outside with your pets. So, why not do it all in one go of it– soothe your savage beast with Caninus!

Caninus hails from a groundbreaking new genre of speed metal: PitBull Grindcore.  Thats right, whatever in the holy shit Grindcore is– this is specifically Pitbull Grindcore.  And as much as I’d like to be, no, I’m not joking– I couldn’t make this up, I’m not nearly that creative– the lead singer is one of those Pitbull — the other is his backup. The three human asshats play the music.

DMX must love these guys. Bahahahaa–

Where muh dawgs at, son!?!? – Where muh dawgs rap, son!!

One of the most observable yet understudied socioeconomic changes in the US over the last century, has been the integration of a credit system whose sum value while virtual, has been forcibly bloated to equal that which was actual. It is a structure which has inflated the value of American currency, the appetite of the American consumer, and made less visible the need for mindful economic discipline — discpline in general.  It is a structure that popularized passive budgeting, over-spending, and the carrot-on-a-stick philosophy that comes from keeping up with the Jones’. More importantly and obviously more general, this is a structure that changed our society.

The change has created a set of conditions that poise the US for a dangerous and likely disastrous economic retraction — leaving us the same old questions we had when we set-out. And yet these conditions will give birth to newer, deeper questions about the future (and who we are). For while it is arguable that this explosion of virtual wealth may have incited some social mobility or led to some amount of social progression, I fear both those advances however great, have also been as equally virtual.

Certain ultimate questions take shape upon the horizon: What social or cultural changes will lead Americans to the discipline needed to excel with the changes ahead? And: Is this generation ready for a world where it must pick between dinner or a movie?