Courtesy Of Marginal Revolution, I came a across this quote from this essay from Interfluidity…..

If the Fed were to blow through the rest of its current stock of Treasuries, it would have invested more than $2500 for every man, woman, and child in America. Public investment in the financial sector would have exceeded the direct costs to date of the Iraq War by a wide margin. Would that that be enough? If not, how much more? Just how large a risk should taxpayers endure on behalf of companies that arguably deserve to fail, to prevent “collateral damage”? Have we considered other approaches to containing damage, approaches that shift costs and risks towards those who benefited from bad practices, rather onto the shoulders of taxpayers and nominal-dollar wage earners? Does this sort of policy choice belong within the purview of an independent central bank?

In case you have not been keeping track, it has already blown through more then half its stock of Treasuries.

If you don’t read calculated Risk, here are some stories you missed this week…

From Bloomberg:

Consumer credit increased by $15.3 billion for the month to $2.56 trillion, the biggest monthly rise since November, the Federal Reserve said today in Washington. In February, credit rose by $6.5 billion, previously reported as an increase of $5.2 billion.

Again From Bloomberg:….

Vallejo, California, officials voted to file for bankruptcy because the San Francisco suburb isn’t able pay its bills after costs for police and firefighters soared and the housing market’s slide cut into tax revenue.

Pretty soon people are going to be complaining about how the rating agencies rated municipal debt.

From the Wall Street Journal…..

Fannie Mae announced plans to shore up its capital after recording a loss of $2.19 billion for the first quarter and warning that losses stemming from mortgage defaults are likely to be even worse next year.

The government-sponsored provider of funds for home mortgages expects to raise about $6 billion through the sale of common and preferred shares. Regulators have been prodding Fannie and its main rival, Freddie Mac, to bolster their capital to provide more protection against the growing costs of mortgage defaults.

The latest plan comes on top of $7 billion Fannie raised in December …

They are going to need a government bail out before long.

The Pentagon’s $1 Trillion Problem will not tell you anything you don’t already know. But every now and again it is good to be reminded just how dysfunctional the government is.

I spent a considerable portion of the week angry, and in fact woke up angry Monday morning after dreaming about workplace injustices. I don’t care to revisit the details, but, like Western pioneers marking bad water, I will give a brief notice on these ill fortunes. Perhaps when some history has accumulated around these events Click Here to continue reading.

This from Brad Setser’s blog….

Incidentally, the $8.7b in average weekly purchases of Treasuries over the last 8 weeks would – if sustained — be enough to finance a $454b budget deficit without selling a single Treasury bond to private investors. Sometimes I think the US should drop the façade of auctioning off Treasuries and just negotiate private placements with the People’s Bank of China and the Saudi Monetary Agency.

What’s more, all this financing was provided more or less unconditionally, with the United States creditors taking on the risk of future dollar depreciation. Further dollar depreciation against the euro – and, perhaps more importantly, the risk of further dollar depreciation against their own currencies.

It goes without saying that this flow is far, far larger than the $30b or so sovereign funds committed to troubled US financial institutions in December and January ($40b if UBS is considered a US financial institution). Yet it has attracted far less attention.

Two of the most notable changes made by the A-Team were imposing a strict separation of duties between assemblers and material handlers and the sharp increase in the number of material handlers. They felt we would gain more efficiency by not letting the assemblers more so much as an inch away from their posts to Click Here to continue reading.

From For Construction Pros……

UPS says that in 2007 it saved itself 3 million gallons of gas by routing trucks using a technology that emphasizes safety and efficiency — meaning delivery routes are planned as a series of loops with as few left turns as possible. UPS says it’s a safer driving practice because drivers aren’t turning in front of oncoming traffic as often, and it saves fuel because they spend less time idling in left-turn lanes waiting to turn.

I read this at On The Level….

It is the little industrious man in the brand new Toyota Sienna Minivan taking the aluminum from my and all of my neighbors’ recycling bins a block ahead of the city’s recycling truck. The way I see it, if I had put my cans in with my trash because I was lazy or didn’t care about the environment then he would have every right to take the cans from my garbage container. But since I sort the recyclables and put them in a bin specifically for the recycling truck, I believe he is stealing as well as harming the environment. Here is why: The aluminum(arguably the most expensive item in the recycling bins) is used to offset the cost of my refuse bill. Without the aluminum, it may cost more to pick up the recycling than the materials themselves. If the city loses money, my bills go up. Second, by having both his minivan and the city truck stopping at every recycle bin in my neighborhood, he is putting more carbon in the atmosphere by burning fossil fuels.

I don’t have any sympathy for this line of argument. Trash pickup should be for trash pickup. If you are not willing to throw it out don’t put it out. And if you are willing to throw it out, don’t worry about who is picking it up. This is like somebody complaining that they left a bag full of soda cans out for the garbage man and someone else came by and turned them in for a redemption. If it is not worth it to take care of it yourself, don’t worry about it.

If this person was that worried about rising refuse bills, he could save his own aluminum up for year and turn it in for cash himself. That would offset his rising bill. Back when aluminum was cheap, nobody was doing this. But when aluminum was cheap, how could the city use it to off set the garbage bills? I don’t see how he has any real right to complain.

I suspect that his concerns about having a minivan and a city truck stopping at every recycling bin in the neighborhood is also bogus. Extra weight increase fuel consumption so by having less weight the recycling truck will save some energy. This will partially offset the minivan. Moreover, the recycling center will have to additional material handling to get the aluminum to where it needs to go. Our industrious little man is probably taking it directly where it needs to go. So on the whole, I suspect that it is a wash. I don’t have any proof, but then neither does he.