Location, location, location.  That’s the mantra of what drives value in the real estate industry.  However, the modern version might well be, “Location, just less of it.”

Today, Barnes & Noble (NYSE: BKS) announced it is putting itself on the block, looking for a buyer as it struggles to survive in a world of digital books.

[Frankly, I'm not so sure it's digital books that are causing the problem so much as online purchases.  Certainly, digital books are growing wildly, but off of a very small base--according to Publisher's Weekly, they amount to only about 1% of the market.  So maybe not a short-term catastrophe, though it's certainly a future threat.]

Either way, the problem with Barnes & Noble is real estate.   One of the key ratios by which they are measured is return on assets–and with their large number of expensive stores, the fewer pricey books they sell, the more the operating metrics plummet.   It’s almost like reverse leverage.

For years now, booksellers have sought other means to drive traffic into their retail outlets, peddling music and videos, opening in-store cafes, offering reading areas, etc.  All to generate a higher return on their store  “assets”.

I have this strange feeling of deja vu.

Blockbuster (BLOKA.PK) now trades on the Pink Sheets  for exactly the same reason.  They too were fixated on driving traffic to their stores.  They too operated under the assumption that their true competitive advantage was their locations, and they had to keep earning a return on those assets.  This caused them to make some rather odd decisions, such as enticing people to drive to their stores just to fill up a media player with movies to take home.  Meanwhile, Netflix ate their lunch shipping discs (and now simply bits) directly to customers.

Similarly, Amazon (and others) killed Toys R Us, who had a similar problem with too much real estate and the accompanying high overhead.  Why drive your car to the crowded store (along with acquisitive children badgering you for every bright and shiny thing they see) when you could have Christmas delivered to your door?  And cheaper too.

It’s really a shame, as I still enjoy browsing in bookstores. Checking up on favorite writers to see if they have something new.  Finding an unfamiliar author to take a chance on.  But there’s no question they are struggling.

Probably some private equity firm will buy Barnes & Noble, and turn it around, as was the case with Toys R Us.  Perhaps even Blockbuster will survive.  Stranger things have happened.  However, one thing is for sure:

There will be a lot fewer locations.

Disclosure: I hold no position, either long or short, in any stocks mentioned here.

Yet over that period, the S&P has dropped about 8%, while CLWR has fallen more than double that amount.

Moreover, there were those that scoffed at my idea of a pair trade on the equipment suppliers:  buy Ceragon Networks (NASDAQ: CRNT) and sell Dragonwave.  It’s pleasing to note, however, that had any of them done so, there would have been a nice little pot of gold at the end of the rainbow.

Ceragon has lost 32% over the period, but that pales in comparison to DRWI’s drop of 47%.

Each time I’ve suggested Ceragon is a solid company with a bright future in a growing space, people have pooh-poohed the suggestion–for one reason or another.

I may be wrong someday but I’m still waiting.  In the meantime, vindication sure feels good.

Disclosure: I hold no position, either long or short, in any stocks mentioned here.

Aside from it appearing to be the usual mess that all these omnibus bills inevitably end up becoming, I was struck by the following image.

It’s as if Congress had decided the best way to prevent future problems is to leave the barn door open, and instead surround the building with a make-shift, split-rail fence.

Long after all the horses have escaped, naturally.

Oh, and they knocked down the barn, too.

Disclosure: I hold no position, either long or short, in any stocks mentioned here.

It’s well researched and well written, and argues persuasively that–properly interpreted–recent jobs numbers aren’t all that bad, amounting to a net gain this year of roughly 100,000  private sector jobs per month.  (It’s about double that if you add in government jobs, some of which are temporary).  I even agree we need to be careful with the fiscal magic wand, at least absent a long-term strategy for handling the deficit, as Bernanke suggested yesterday.

However, for all his hair-splitting, Reynolds seems to miss the point.

Recent estimates indicate more than 8 million jobs were lost during the panic and Great Recession.  In a nice, steady expansion (3-5% annual GDP growth), let’s say the economy adds maybe 300-350,000 jobs per month.  At that rate it will take 24 months just to get back to where we were beforehand, employment-wise.  And at only 100,000 jobs per month this year, we haven’t really started the clock yet.

Imagine.  Two years just to catch up.

Even worse, we’re not counting the growth in the labor force since 2008 (young people coming of age minus those retiring).  Plus fewer than expected can afford to retire now, given how their savings have been decimated in recent years.

Then there’s the economy.  Yes, there have been impressive gains over the last year or so.  Always stated breathlessly by the popular and financial press, in terms of double-digit percentage growth.  Little mention of the drastically low base that growth is from.  In fact, frightfully few actual numbers at all.  Just growth percentages.  No indication of how far we still are from the level of economic prosperity we enjoyed in 2006 or 2007.

[Some of that growth, by the way, has come from temporary fixes--namely government stimulus.  The rest has been due to industry overproducing to rebuild inventories, after running the pipeline dry when few were buying.  In the old days we called that stuffing the channel.  Now we refer to it as a rebounding economy.]

Further, there are all the references to growing corporate profits.  Sure, if you lay off lots of people and lower costs, then even with falling sales you can engineer rising profits.  But that can’t last without an increase in demand.  And that requires workers with salaries, as well as currently employed people with rising incomes.

What we’ve seen so far has been more akin to a relief rally in sales than a true demand increase.  People who had been holding their breath finally buying that refrigerator or car once they realize they won’t be losing their job.  But flooding the economy with cheap money, as the government has done, is ineffective in an environment of low demand and fear over jobs and savings.

It’s like pushing a rope.

Until there is unequivocal evidence that people feel confident enough to really start buying again, small businesses–the engine of job creation–won’t hire.  Nor will banks lend to them.  It doesn’t matter how cheap money is, no one will risk lending to a business that can’t demonstrate demand.  Despite the rise in the market over the last year, banks aren’t lending, which shows you what they really think.

Bottom line, with vastly lower employment, lower (and slowly rising) housing prices, a drop in equity wealth, a rise in the savings rate, and massive consumer deleveraging, its difficult to conceive of a way we can get our economy back to pre 2008 levels in anything less than 4 or 5 years, perhaps more.  If we do, it will only be because consumers are going into debt again, simply postponing the inevitable.  Or as I’ve discussed before, re-inflating the bubble.

So is the economy headed for a double dip (“W”)?  Perhaps, but not likely.  Frankly, I suspect it’s more like a “square root” symbol–sharp fall, then a small rise, then flat.  But no matter which you believe, what is clear, and most relevant,  is that the recovery is not a “V” or even a “U”.

Yet that’s exactly what the market has priced in over the last year.

There’s no doubt we’ve had an impressive bull run in the market since March 2009.  However, the cracks are showing.  It’s been clear to me for some time that the market has gotten ahead of itself, and that this is one of those times where the market and economy have become disassociated.  Until recently, the pundits have all been saying that we can’t be at a market top, because there’s still too much money on the sidelines, and we don’t have a top until all that money rushes in.

They underestimate the uncertainty that still grips many on Main Street.  People have been keeping a lot of their funds in cash or safe bonds because they no longer trust the market.

Really, what I think was happening up until the “flash crash” is that money managers have been talking their book.  Waiting for the suckers to come in at the last minute so they could sell at the top.  Except the suckers didn’t come, and with all the new fear and volatility introduced by Europe’s problems, they aren’t going to.  Which is why there’s been so much selling lately, and why I believe this is more than a simple correction in a continuing bull market.

We’ve been in a secular (long-term) bear market since 2000, and there’s no sign we’ll be out of it soon.  Not until we get the economy back to prior levels–which as we’ve seen will take awhile.  We may be at the end of the cyclical bull market that began last March, and could experience one or more short-term bears and bulls before we finally pull out of all this.

In fact, in hindsight it appears as if the rapid rise in the market from March 2009 to July 2009 was the “relief rally” that compensated for the panic of late ’08, while the rise since last July was the real “bull” market.  If so, there’s even a small chance we’ll be revisiting those July lows before we see another sustained rise.

In any case, the part of the alphabet we assign to the economy isn’t the real issue right now.  It’s the “W” in the stock market that we ought to be worrying about.

Disclosure: I hold no position, either long or short, in any stocks mentioned here.

Venter’s crew has created a self-replicating life form with a designed genome.

Whether you believe it is “a turning point in the relationship between man and nature” or that “he has not created life, only mimicked it,” this is a watershed moment in my view.  I admit I’m being a bit breathless here.  Perhaps this is nothing new or exciting for those steeped in the biological sciences.  But it is the first time the true potential for biotech is becoming clear for me.

If you want a career path that will put your children in the center of high-tech business in 20 years (and all business is, or will be, high-tech), then get them prepped for synthetic biology.

Venter’s team took a pre-sequenced genetic code from an existing bacterium,  made several changes to the sequences in a computer, then synthesized the resulting digital code into chemical DNA.  Finally, that DNA was inserted into another bacteria that had been emptied of genetic material.  The new DNA “took over” the bacterium, and demonstrated the capability to make copies of itself.

This is just too cool for words.

I will largely leave the ethical issues for others to debate.  Such issues are important and weighty, to be sure.  I’m just not equipped to wrestle with them.

Many of you, like me, think patenting naturally occurring, individual genes is, well, somewhat dubious.  But this is very different,  since something new is being created.  In fact, some of the DNA sequences that were inserted are coded versions of the names of Venter and his researchers.  (They also included quotations from James Joyce and others.)  Definitely hard not to see that as patentable.

[Years ago Carl Sagan wrote a novel called Contact. In the book, scientists discovered that when calculated out to enough digits, the transcendental number pi contained a message.  While technically kind of silly, it was still a thought-provoking idea.  Signing life forms is nearly this mind-blowing.]

Certainly, they have not yet created life out of whole cloth.  In effect, Venter has taken a painting, erased a few things, added some brush-strokes, and signed it at the bottom.  Hardly the same as painting the Mona Lisa from scratch.  And clearly years of work needs to be done.    Still, the commercial potential for this over the next 20, 50, 100 years is incalculable.

(Of course, the danger is that now we might not be here in 100 years.)

There may be ways to synthesize biofuels, plastics, chemicals, drugs, etc.  And not by dinking around with existing genes, but by creating entirely new ones.   Of course, that only covers materials synthesis.  What about biological machines?  Colonies of oil-eating organisms? Neural networks? Intelligence?  This is biotech cubed.

Bacteria are now truly poised to become the microchips and chemical labs of the 21st century.

Disclosure: I hold no position, either long or short, in any stocks mentioned here.

Clearwire is still spending money.  Intel is still touting it.   So is Google.  Meanwhile, WiMax is enjoying adoption primarily in emerging markets that have little entrenched infrastructure.  In the U.S.?  Not so much.  The recent macroeconomic environment can’t have been good for CLWR, as it needs capital to maintain any lead it has on incumbent cellular providers.  Meanwhile, LTE is starting to come on board with the latter, and large-scale deployments are not far behind.

WiMax may find its niche—at least in the U.S. — as more of a backhaul technology for wireless clouds (LTE or WiFi) owned by the large incumbent wireless carriers than anything else.  We’ll see.

The efforts of Sprint (NYSE: S) and CLWR is all that’s kept WiMax afloat here.  It still looks a bit like Clearwire sold a self-serving bill of goods to Sprint, who has long been desperate for a magic bullet to solve its subscriber defection problems.

Here, you try it.  No way, I’m not gonna try it, you try it.  Hey, let’s give it to Mikey.  He won’t adopt WiMax, he hates everything.  Hey Mikey!  He likes it!

Check out the chart on the right, courtesy of Gridstone Research.

Since eloping with Sprint’s network business, Clearwire has managed revenue growth of 19% year-over-year, based on 2008 pro forma numbers and 2009 actuals.  However, in that same span costs have swollen by 27%.  As a result operating income has dropped by 29% (from a negative number, mind you).  Just the spectrum fees that Clearwire pays amount to 95% of its revenue.

Wait, let me guess.  They’re going to make it up on volume.

So besides shorting CLWR, is there any way to play this puppy?  As a matter of fact, there is.  No matter what happens between WiMax and the other competing technologies, cellular firms will need increasing capacity on their backhaul links.  The iPhone and Android have seen to that.  For some, fiber will come to the rescue.  For others, a wireless solution is the only one that makes sense to boost backhaul bandwidth.  (Holy alliteration, Batman!)

And the clear leader in wireless backhaul is one of my favorites, Ceragon Networks (NASDAQ: CRNT), who coincidently just announced a new solution at the CTIA conference on March 23^rd.  Sure, competitor Dragonwave (NASDAQ: DRWI) has come on strong in the last year, but they’re still too strongly tied to Clearwire, who is responsible for the lion’s share of DRWI’s business.  Ceragon is more balanced, having a number of large customers–including last year’s addition of Hutchison 3.

In fact, despite the recent relative falloff in Dragonwave’s relative price, the pair trade of long CRNT and short DRWI may still have legs.

Either way, marrying Clearwire to Sprint is like a perfect storm.  A technology with limited utility serving as the foundation for a network with limited subscribers.

Disclosure: I hold no position, either long or short, in any stocks mentioned here. However, I do receive limited free service from Gridstone Research, in return for mentioning them when I use data from their site.

Many music artists claim that an album is designed as a single work that cannot be fully enjoyed in parts.  They must be appreciated as a whole.  According to the Wall Street Journal,

“This is an art debate, not a commerce debate,” said a band spokesman, who added that Pink Floyd plans to see to it that the albums are sold only as whole pieces.  He added: “The court has upheld our contractual rights that those tracks should not be unbundled.”

Sorry, but this is hogwash.

Don’t get me wrong.  I agree with the court’s decision.  Upholding Pink Floyd’s claims seems consistent with the intent of the original contract.  Nor do I disagree with the band’s rights to sell their wares as they see fit.  (Though I think it’s bad business, for reasons I’ll save for another time.)  I even think many albums are better appreciated in their entirety.

Nonetheless, this strikes me as being more about bands that have already made it big, now throwing their weight around.

I don’t recall Pink Floyd (or any one else) having such qualms about breaking up their albums when it came to marketing the music in the first place.  How far would they have gotten as a band, or as a business, if they didn’t allow individual tracks to be “unbundled” to be played on the radio?

Now maybe as a young, unsung music act, the band members agonized over such a decision.  Perhaps they felt they were betraying their principles by allowing their label to push individual tracks to radio stations.  Maybe they lost sleep for years, because their concert promoter convinced them to play live shows that weren’t performances of an entire album.

Maybe.

To its credit, Pink Floyd has led the way in doing these sorts of single-album concerts over the years.  But the fact remains that most bands have built their following, and their music sales, on the back of listeners appreciation of individual songs.  Having once “sold out” their artistic principles, it seems somehow disingenuous to get back on the high horse now that they are successful.

Not that they don’t have the right, mind you.  Obviously they needed to press their case in court to protect their legal rights.  Fine.  Let’s just not take it for something it isn’t, hmm?

Disclosure: I hold no position, either long or short, in any stocks mentioned here.

Obama and congressional leaders are driving healthcare reform off a cliff, with each fighting for control of the wheel.  The Far Right has bailed out of the car altogether.  All this back and forth on healthcare is making me ill.  And here I forgot to pack my Dramamine.

Can somebody please crack a window?

Time to realign our wheels.  Let’s start with a few principles that I think nearly everyone can agree to:

• Some basic level of healthcare should be available to everybody
• Good health should be as affordable as possible
• People need to see the costs of healthcare firsthand, so they can make valid choices.
• The course of care should be determined by doctors and their patients, not insurance companies, lawyers, or governments.
• Nobody should have to pay for someone else’s avoidable healthcare costs (smoking, overeating, failure to take medication, etc.)

This all sounds very simple and reasonable.  However, we keep bumping up against some “inconvenient truths” (sorry, Al).

1. Healthcare is not a right, any more than good health is a right.  Using this kind of language just inflames opinions.  It stinks that people get sick, die, and/or have no healthcare.  But that doesn’t elevate it to a human right.
2. It’s insurance, people.  It’s a bet.  Nobody who wants to stay in business will stake a game with crappy house odds.  Which is why pre-existing conditions are rarely covered.  This isn’t to say they shouldn’t be, only that we have to recognize the high cost and the limitations of insurance markets to do so.
3. “Seeking profits” is not a dirty phrase.  I’m not sure how, even in the light of Wall Street’s recent fall from grace, it has become one.  Profit making isn’t evil, and those who do it well should be rewarded for it.
4. Comparisons with other countries and other health systems are mildly flawed at best, and invalid at worst. They deal too much in averages over large populations.  There are also many cultural, demographic, diet, and lifestyle differences that skew comparisons.  Any system we import will make some people worse off.  Is it any surprise then, that there’s opposition to the specific reforms being discussed in Washington?
5. Insuring more people will cost more money. From somebody–maybe not you, maybe not me, but someone for sure.  But as long as it’s the other guy it’s fine, right?
6. Life isn’t fair. I expect my children to have trouble learning this concept, but I take it as a given from adults—and yet I’m frequently disappointed.  The rich will always find a way to buy better healthcare, just like they buy McMansions.  And they should be allowed to, frankly.  It sucks for most of us, but that’s the way it is.
7. On the other hand, healthcare eventually has diminishing returns. You can sink millions into prolonging life for only a few months.  That doesn’t make much sense for a society.
8. People who oppose what Obama and Congress are doing are not evil or stupid. They just disagree.  They have different frameworks, different expectations, different needs.  And most do not oppose reform, as many want to claim.  They simply oppose the current proposals on the table.  These people are not sheep being led by Limbaugh and Beck (well, most aren’t) any more than anti-war liberals were the tools of Bin Laden under Bush.  Those who opposed Iraq were not treasonous.  Nor are those who want a different healthcare system than Nancy Pelosi’s vision horrible, selfish people.

Reconciling these truths with our principles is, of course, the crux of the difficulty.  It’s not made any better when we ignore reality, however.  Here’s my two-point prescription for lowering costs:

1. Increase competition among insurers.  People speak of this quite often, but without any discussion of why there is no competition.  And no, I do not think a public option helps.  Those that believe a public option will not raise the costs of private insurance need to take a closer look at Medicare.
2. Make consumers feel the true costs of their choices.  Or as Duke University’s Clark Havighurst calls it, “restoring price tags.”  When we make healthcare prices look cheap (through employer-provided insurance), and actually become cheap (through subsidies), the consumption of healthcare rises, as does its total cost.  Econ 101, folks.

Current congressional proposals do neither of these two things, and that is why many people oppose them.

Some ideas I’d like to see debated and perhaps included in any useful healthcare reform proposal:

• Separate insurance from health.  Health insurance is about making decisions on the amount of care, not the cost of delivering it.  If insurance has any impact on healthcare cost at all, it’s to distort it.  So stop linking the two and acting like each is the solution to the others problem.
• Separate employment from insurance.  This is where both sides have taken their eye off the ball.  This tie between insurance and employment is also the biggest reason there is no competition among insurers at the retail level.  But delinking is the surest way to (a) insulate people against simultaneously losing their job and their healthcare—surely something that ought to be top of mind these days—and (b) get people to see the true cost of their care. Interestingly, this was tried in 2007.  The Wyden-Bennett bill (otherwise known as the Healthy Americans Act) would have effected this separation.  But it was supported by only 13 other senators.  For once big labor and big business actually agreed on something—that this bill wasn’t good for either of them.  It would have been great for you and me.
• Let insurers write insurance across state lines. It is ludicrous that policies are different state to state.  Free the market.
• Enact tort reform.  I’ve never seen anyone credibly claim this is a leading cause of higher costs, but it is clear that defensive medicine is at least a contributing factor to the rise in prices and the number of unnecessary tests.  So let’s keep this on the table.
• Pay for solving healthcare problems, not for procedures.  I don’t hire a plumber to turn a wrench; I pay them for fixing my leaky faucet.  Yes, bills are usually itemized, but I want results, not activity, when I think of my health.
• If this means putting more doctors on salary, then fine. And any doctor that’s truly better at keeping people healthy should be paid a higher salary.  This system, while imperfect, works just fine in the business world, where outstanding performers (including some of those Wall Street masters-of-the-universe) are justifiably payed very, very well.  [By the way, why is it that many of the same people that want to rate doctors (who admittedly have only some control over the outcome of their work) are aghast at the concept of rating teachers (who have a similar amount of control over education outcomes)?  Food for thought.]
• Quit hiding subsidies, and let the market determine prices. Most of what Congress is doing boils down to a shell game to hide or ignore costs that they want the government (read: us) to cover.  But don’t force unnatural rules or prices on the market directly.  Let it do what it does best, then let people decide for themselves what level of funding from the government is appropriate.  Policies to cover pre-existing conditions are justifiably more expensive.  Some people can’t afford even basic insurance.  Forcing everyone to carry insurance sounds reasonable and will help cover some of that cost.  But recognize that this will all be expensive, and can’t be magically carved out of insurance company profits, no matter how “evil” or gargantuan you think they might be.
• Insure for catastrophic health problems only, and leave the relatively minor stuff to be paid out of pocket (or through supplemental insurance).  This isn’t that far removed from auto insurance, where people can choose policies that cover the really bad stuff, but pay for minor things themselves.  Including things like hangnail treatment (for example) in mandatory government-managed health insurance is a sure road to skyrocketing costs.
• Encourage both people and insurance companies to focus on preventative care. As a nation, we can’t solve our issues if we don’t stop abusing ourselves, with poor eating habits, smoking,  sedentary lifestyles, drugs, etc.  And at the end of the day, if we can achieve real competition among insurers, the smart ones will see it pays to make preventive care (annual checkups, for instance) mandatory, and to include it in basic insurance coverage, lowering costs and improving health for everyone.

Look, none of this stuff is original, and none of it is rocket science.  But we’re letting politics steer us away from real issues and valid solutions, instead taking us down a dead-end road.

Getting this right is far more important than scoring a political victory for either side.

Instead of arguing about what to do, we should be past that already, and debating the transition issues by now.  That road will have enough potholes as it is.  No need to play bumper cars with the country in the process.

Otherwise, as David Brooks said in today’s NY Times (in an essay I wish I’d been good enough to write), we’re headed for health insurance reform, not health care reform.

Disclosure: I hold no position, either long or short, in any stocks mentioned here.

Sure, lots of recent sentiment seems to indicate that the worst is over.  Banks are declaring profits , the market is up, there are “green shoots” poking up through the dead leaves of the economy.  Real estate activity is picking up in moribund regions like Sacramento and Las Vegas.  Maybe we’re nearing bottom.

On the other hand, pundits can’t agree on whether we’re headed for massive inflation, or slip-sliding away down the deflationary toilet bowl.  Consensus seems to be that the bank “stress tests” are a sham, using unrealistically favorable assumptions.

Just yesterday we hear the government believes Bank of America (NYSE: BAC) will need to raise another $35B.  Does anyone really believe that will be the end?

Finally, there’s Fed Chairman Bernanke’s repeated assertion that none of the banks undergoing stress tests will be allowed to fail.  For all the talk about how we’re too smart to repeat the mistakes of either the Great Depression, or (more to the point) Japan’s “lost decade”, we seem well on the road to creating “zombie banks”.  Colorful shells made up of window dressing and government infusions, surrounding a soft, chewy middle of bad assets.

How many licks does it take to get to the center of a bad bank, anyway?

The real problem, I believe, is a collusion of sorts between the government and an oligarchy of “too big to fail” banks.  Both the government and Main Street are continually reminded of the dangers inherent in letting banks fail, in restricting pay, in interfering with the operations of the big banks–in fact, of any change at all to the status quo.  And, for the most part, we’re buying it.

Monday’s  Wall Street Journal spoke of how Stephen Friedman, the NY Fed Chairman, has benefited from his ties to Goldman Sachs (NYSE: GS)–yet another way investment bank elites have been influencing and then benefiting from policy.  There remains a revolving door between Wall Street executive suites and the Treasury.  And a recent Economist essay wonders why the Fed is perpetuating an oligarchy of “big three” ratings agencies, when they contributed to causing this mess in the first place.

This is not the behavior of the financial pillar of the world.  It’s the behavior of a banana republic after a bubble pops.

I’ve been sharing an excellent article with friends recently, by Simon Johnson, former chief economist of the International Monetary Fund.  Johnson makes an elegant and persuasive case that we are no different than emerging market economies such as Argentina, Malaysia, or Russia at key crisis points.

For me, the key takeaways from that article:

1. What we’re going through now is not–in the final analysis–all that rare.
2. Yes, it can happen to the U.S.
3. It’s a little surprising (and perhaps encouraging) that it hasn’t happened here more often.

True, there are differences, such as the dollar’s prominence in world financial affairs, and the trust the world has in U.S. Treasuries.  And there are encouraging signs in some of Obama’s and Geitner’s initiatives.

[As an aside, I'm still amazed at the schizophrenic approach the Treasury and Congress have taken to date.  They keep pumping (our) money into banks, but then turn around and hamstring their ability to be successful by imposing compensation restrictions, demanding lower lending rates and fees, and restructuring mortgages--reducing the value of those "bad assets".  Are we trying to buttress the banks or chop them off at the knees?  Can't we just pick one?]

The conclusion, however, is inescapable.

The key roadblock to rescuing our financial system lies in breaking the oligarchy of large Wall Street banks and the influence they have over the Fed and Treasury.

When you ask him anything, he never answers “no”.
He just “yes”es you to death, and as he takes your dough
He tells you, “Yes, we have no bananas
We have-a no bananas today.”

Just because we’re not primarily a tropical fruit exporter doesn’t mean we’re acting any better than those corrupt banana republics we so disdain.

Disclosure: I hold no position, either long or short, in any stocks mentioned here.

Of course, the government also now has stakes in many of the large banks, e.g. Citigroup (NYSE: C) and Bank of America (NYSE: BAC).   Not to mention AIG (NYSE: AIG).   Or Fannie and Freddie (NYSE: FNM, FRE).  Who’s next, I wonder?  What company or industry in dire straits will turn to the government for aid, in return for preferred stock or something similar?

Somehow I don’t think this is what they meant by the “Ownership Society.”

Disclosure: I hold no position, either long or short, in any stocks mentioned here.