The best explanation of PPIP I have seen – Heads or Tails? – David Kotok – Dear Reader: Please give me 8 minutes to explain the $1.1 trillion federal government Public-Private Investment Program (PPIP).  Start here with this simple example.  It’s a coin toss.  Heads you win $100; tails you get nothing.  How much would you pay to play?  You can play as many times as you wish.  Answer: not more that $50.  … Now add Tim Geithner as your partner.  …  – Cumberland Advisors   – (link should be up Monday)
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Great Article: Mr. Taleb Goes to Washington -  black swan meets some ugly ducklings. By Marion Maneker – Taleb blames Myron Scholes (Black-Scholes Model) for getting us into this mess - …First, he says, we have to unmask the charlatans of risk like Myron Scholes. To Taleb, Scholes is the Great Oz in this Emerald City because his work on options and derivatives allowed the whole of the financial system to adopt poorly understood products-like the ones that brought AIG down-that hide risk. To Taleb, Scholes’ academic work, which enabled the widespread use of complex derivatives, was like “giving children dynamite.”… – The Big Money from Slate
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Inflation anyone? – Fed Monetization – Not What It Buys, but How Much of Anything It Buys – Paul Kasriel -   … Of course, farther down the road, this will increase the rate at which prices rise – prices of goods, services and assets. Ben Bernanke’s “money-dropping” helicopter has been replaced by a C-5 Galaxy transport! … – Northern Trust – (On the size and scope of the Fed’s monetization campaign) – Kasriel is always worthwhile – BC)

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What Should Be Happening to Toxic Bond Prices? – Felix Salmon – Consider three assets. Asset A is a basket of subprime mortgage-backed bonds, sitting on the balance sheet of JP Morgan Chase. Asset B is an identical basket of subprime mortgage-backed bonds, being traded in the secondary market. And Asset C is a credit default swap written on that basket of subprime mortgage-backed bonds.  The Geithner bank bailout plan is released. What would you expect to happen to the prices of Asset B and Asset C? – Portfolio.com -    No efficient market hypothesis here! -BC