EconomistMom.com

On the front page of the business section in today’s Washington Post, the Post’s Steven Pearlstein (in his column) and “yoga-loving, so-called bond king” Bill Gross (in an article by Michael Rosenwald) seem to have the same idea:  take a break from the chaotic crisis, relax, and “clear” your head to calmly figure out how to “clear” our messy financial house.

Michael Rosenwald writes of Bill Gross:

Bill Gross, who is head of the world’s largest bond fund, leaves the trading floor every morning for yoga and meditation. He especially enjoys standing on his head. Some of his most important thinking, he says, is done while hanging upside down.

The other day he was on his mat when he decided to unload U.S. Treasury bonds. He reasoned that the market will be flooded with them to pay for the government’s $700 billion bank bailout, meaning prices might fall. He e-mailed his team when he got back to his office.

“The best ideas come when the endorphins are maxed out and they are really maxed out with meditation or exercise,” Gross said, post-yoga. “So, yes, that’s a very productive time for me, I would say.”

Who is this yoga-loving, so-called bond king? While Gross is not a household name, average investors, who are now acutely attuned to the bailout and financial markets, could be hearing his name a lot more soon. His California firm, Pacific Investment Management Company, or Pimco, is a contender to manage assets the federal government is purchasing through the bailout. Pimco could also help manage a separate Treasury Department program to buy commercial paper, the short-term loans used by corporations to fund operations.

And Steven Pearlstein writes:

…We have to stop digging. Another week like this one, and there won’t be much left to rescue.

To begin, the markets could use a timeout just about now, something that lasts longer than a weekend and gives policymakers around the world the chance to get a good nice sleep and evaluate their options without feeling like they have to respond to every movement flashing across their Bloomberg screens. It would allow some time for passions to cool and for real investors to regain control of markets now dominated by the computerized short-term trading strategies of hedge funds and hot-shot money managers desperate to recoup some of their losses. It would give banks and major corporations a chance to regain the trust of the markets by issuing unscheduled updates on their financial condition. And it would be a powerful reminder to everyone that markets need to serve the interests of the economy and society, not the other way around.

As we should have learned long ago, markets are not self-correcting. They require collective action to put them back into working order.

The top priority ought to be on setting up a new clearinghouse for those credit-default swaps that everyone’s heard about but few understand… 

Thank goodness it’s the start of a long weekend, so we can all chill out and breathe.