Grandchild in Texas

One of the joys of having retired to Texas is that we get to spend a lot of time with our granddaughter here.  She likes having her picture taken, so I have a lot of shots. Here are a set of her trying on my UT hat:

She also loves to ride in our golf cart. Apparently she is also ready to take the wheel:

Chicago

We spent a few days in Chicago (Naperville, actually) admiring our new grandson and getting reacquainted with the other four. The older ones were a little camera shy--unusual for them--but I did get some good shots of the new arrival. We had a great time while we were there.

Here are some photos:

The newbie: 

  

The next youngest (she wasn't camera shy):

  

And second oldest (focused on Wii)

What Can this Be?

Today the Fed announced that it would act directly on the credit markets by purchasing short term commercial paper (90 days in maturity) from qualifying businesses and banks. This will no doubt be met with outrage by many who believe that the Fed is abandoning its traditional role (which is apparently lagging the business cycle and screwing up the economy) for something new. Actually those who know the history of the Fed also know that this is in fact the exact role the Fed was created to play in the economy--provide liquidity in the financial markets by discounting short term commercial loans (then known as "bills") to supply  needed liquidity. The mechanism is slightly different due to structural changes in the economy, but the purpose is exactly the same.

The Fed became involved in the government securities market for the sole purpose of financing (through the banking system) WWII. Prior to that time, the notion that the Fed would buy government securities or loans backed by government securities was considered anathema and the quickest way to an inflationary bubble.

Could this be the return of the discount rate?