The US Federal Reserve injected $38 billion dollars into the economy via temporary open market operations this Friday. This is the largest number of temporary repurchase agreements (specifically, one business day repos) entered into by the Fed since September 11, 2001. Back in 2001, Fed purchases of treasuries exceeded $30 billion for the four consecutive days after the collapse of the World Trade Towers, total temporary injections into the banking system amounting to a whopping $295 billion.

I was speaking to a banker this past weekend who put the blame on the subprime problem squarely on the campaign against “red lining“ and the Community Reinvestment Act enforcement, which forced banks to give super risky loans to people without savings or credit history — i.e. the poor.

USA Today reports on Jan Grzebska, a polish worker who awakened from a 19-year coma. When he suffered a head injury, Poland was communist. Now, according to his wife, “He was so amazed to see the colorful streets, the goods,” and, “He says the world is prettier now”. The article continues, “Grzebski was shocked to see the streets and shops in the town. ‘He remembered shelves filled with mustard and vinegar only’ under communism.”

The Fed shall work to counter business cycles, stabilize the banking system against shocks, and print billions of dollars so as to keep stock market prices as high as possible: NYT:

Anyone that has lived in or toured a big city like New York, London or Tokyo will undoubtedly bump into black market goods being sold on the side of the street.

From fake Rolex’s and Foaklies to DVDs filled with recently released movies.

Popular Science recently published an article discussing the business models and practices behind many of the “cloned” products manufactured in China.

The turmoil in financial markets is eliciting the usual response from the central bankers, all up there in their Hueys, ‘Die Walkuere’ blasting out of their beat boxes. But the fixation on the ‘sub-prime’ angle and on the Fed’s role in isolation only tells part of the story. While wholly in agreement with the overall thesis of a credit expansion gone wrong as the root of our current woes, I think some treatments of the mechanism are a little too classical and narrow.

The turmoil in the credit markets now emanating from the collapse of the housing bubble can be understood in the light of the theory of the business cycle developed by Ludwig von Mises and F.A. Hayek. These authors showed that credit expansion distorts the pattern of spending and capital investment in the economic system. This in turn leads to the large scale loss of capital and thereby sets the stage for a subsequent credit contraction, which is precisely what is beginning to happen now.

What do rental cars and sports stadiums have in common? Everything, if you live in Kansas City, Mo. According to an article titled “Tax Burden Heavy for Travelers” in the September issue of National Geographic Traveler magazine, “In 2005, the city decided to finance a stadium by tacking on a $4 per day surcharge to its already high taxes on car rentals.” According to a Travelocity study, “Taxes added an average of 63 percent to the cost of renting a car” in Kansas City.

In a recent WSJ op-ed, New Right to Life, Cato’s Roger Pilon criticizes the recent decision of the Court of Appeals forthe D.C. Circuit, which “reversed a 15-month-old decision by a panel of the court that had recognized a constitutional right of terminally ill patients to access potentially life-saving drugs not yet finally approved by the Food and Drug Administration.” The case is Abigail Alliance for Better Access to Developmental Drugs v.