Paul Krugman is sometimes too good...

Here Krugman is poking fun at this truly inept article which quotes Bill Gross, bond trader, as saying '"What a good country or a good squirrel should be doing is stashing away nuts for the winter,” said William H. Gross, managing director of the Pimco Group, the giant bond-management firm. “The United States is not only not saving nuts, it’s eating the ones left over from the last winter.”' Funny thing is, he's longer on US gov't debt than he's ever been!

Trouble w/ this is that it is winter, the job market is starving, and Ben Bernanke is leaving our stache of nuts for the spring...

The NYT story also gives more evidence of stupidity at the Fed: "The Fed, meanwhile, is already halting its efforts at tamping down long-term interest rates. Fed officials ended their $300 billion program to buy up Treasury bonds last month, and they have announced plans to stop buying mortgage-backed securities by the end of next March."

It's unfortunate that the Fed has stopped its bond purchases -- although it's clear we can't trust the gray lady. The Fed has recently been ramping up its purchases of MBS in recent weeks, and they actually just extended the MBS purchases until March from December...

Krugman is correct -- this sounds like a Judy Miller column on Iraq...

Elsewhere in the article it says: "Wall Street firms advising the Treasury recently estimated that the Fed’s purchases of Treasury bonds and mortgage-backed securities pushed down long-term interest rates by about one-half of a percentage point."

To the extent we can believe this (mostly b/c it matches my priors and not b/c I trust anything in the NYT), this just confirms the overall picture of a Fed who could be doing more but isn't.