Recent events

Temporary equilibrium in action.  What we see is a restaurant that specialized in steak dinners that  folks could not regularly afford.

Regulars and retirees keep the restaurant in business, while workers at the nearby auto supplier plant buy steak at the beginning of the month when they get paid -- if they come at all -- and then dine on specials over the next four weeks.

Union politics stopped cold in Wisconsin:

Familiar story, new Gov wants union contracts scrutinized, old line Dem legislature should have passed union deals naturally but didn't. Union no longer get free rides in Wisconsin.

Empowered parents take over failing school:

For the first time in California, and possibly in the United States, parents are poised take over a chronically failing public school through a new state law called the Parent Trigger. The action will likely send shock waves through education circles across the country.
The historic event will take place in Compton this morning when parent leaders drop off a petition at Compton Unified School District headquarters and utilize the trigger to assume control of McKinley Elementary School. Given behind-the-scenes access, L.A. Weekly will run an in-depth feature story later today on its web site.

Eventually? Isn't the current Treasury curve an excercise in Ricardo Equivalence?

The current tax deal cuts taxes to put more money in everyone's pocket so they will spend more. That perhaps is pro-growth, but only for now. Eventually we will will get to a point where lowering taxes will only make it obvious we have no real plans to pay back what we owe to the Chinese and others. At some point, we are going to have to take the Obama or Palin option. Just lowering taxes is not going to be pro-growth forever, or perhaps for much longer.
Read more: http://curiouscapitalist.blogs.time.com/2010/12/16/whats-the-purpose-of-taxes/#ixzz18IfVheza

This is stimulus:

Zero Hedge has Ben losing $42 billion, buy hints at $90 billion in losses from the QE2.  Unfortunately a central banker usually loses to a few wealthy traders,  the reason we want George Selgin to succeed.

And Zero Hedge reports on data from Philly Fed confirming the margin drop in CPI/PPI:

"Price increases for inputs as well as firms’ own manufactured goods are more widespread this month. Fifty?two percent of the firms reported higher prices for inputs, compared with 38 percent in the previous month. The prices paid index, which increased 17 points this month, has increased 41 points over the past three months.

Phil monitors oil illiquidity (we QMs can spot this with entropy analysis):

First of all, the NYMEX contracts for January delivery close on Tuesday and there are still 132,168 open contracts or 1,000 barrels each (132M) scheduled for delivery to Cushing, OK, a facility that can handle at most, 45Mb of crude and is, at the moment, full. The price of those barrels surged from $86.82 all the way back to our shorting target of $89 yesterday, where we once again had a nice ride down. Now, in pre markets, it is back over $89 again and we'll short it again so I'm not complaining about the action but I am upset that this blatant rip-off of the American consumer can go on right under our "leadership's" noses.