My wife has taken our children to visit their grandparents and uncle as I sit here in Northern Virginia, a part of the recent economic reality.  Rates are down.  High loan limits are disappearing.  People need to buy their home or save money with a refi.  It’s what I do.

There was great difficult explaining why I wasn’t making the trip south to Florida where my in-laws, Mike and Susan and Uncle Billy live.  The demands of rates going into the 4’s last week meant that I had to stay.  I love and will miss each of them equally.

And even as I sit here in my house alone I realize that I will benefit from this self imposed confinement.  Every now and then I believe we all realize that quiet reflection and solitude allows us to rediscover those things which are truly important such as the true meaning of Christmas.

Far too often, the hustle and bustle of everyday, schedules, meetings and obligations rob us of the perspective we need to truly experience our humanity.  It’s not that I want to change the world.  I don’t want to find that the world has changed me.

Earlier this week the Treasury sold more debt borrowed from the privately owned Federal Reserve.  The yield on that paper was for all intents and purposes zero.  Apparently, investors are running to the perceived safety of Treasury notes and willing to forgo any return on their money.

•  According to the IEA, demand for crude oil is expected to contract for the first time in 25 years.

•  Procter and Gamble cuts its sales outlook for the current quarter.

•  California home buying tours are all the rage and it’s the Chinese investors that are participating.

•  Now, for the unintended consequences.

Were these investors really protecting their assets by parking them in Treasuries?  As they were driving the prices up and yields down buying these instruments, currency traders were selling the dollar against the euro.  Even though these investors will get their dollars back from the Treasury, they’ll be worth less than when they first invested.

The Associated Press is out this morning with a stinging indictment of the Bush administration's handling of proposed crackdowns on the same mortgages which have provided the market with the most problems: no money down and pay option ARMs.  In combination, they are toxic.

Warning after warning was provided to the administration.  But "bowing to aggressive lobbying — along with assurances from banks that the troubled mortgages were OK — regulators delayed action for nearly one year.  By the time new rules were released late in 2006, the toughest of the proposed provisions were gone and the meltdown was under way."

In 2006, two years before Washington Mutual became the biggest bank failure in history, their president, David Schneider, told federal regulators,