There are, I suspect, quite a few jobs in government for which having no experience is not a liability.  But few would list CIA director among them.  Which is why Barack Obama's pick of Leon Panetta is causing so much consternation. A former congressman, Mr. Panetta, 70, served as budget director and then as chief of staff in the Clinton administration.  But he's never spent a day in the intelligence community. If you think it dangerous, at a time when we are engaged in two wars, to have a novice at the CIA, then you're likely appalled by the Panetta nomination. But if you think of the CIA as a rogue, dysfunctional agency that needs to be reined in, you may think Mr. Obama's choice is inspired. Because I think the CIA requires wholesale reform, I think better of the Panetta nomination than do most others.  But I have two huge concerns.

The HFR has recovered from its hangover bidding the annus horribilus of 2008 vale ad aeternam, goodbye forever, and welcomes you to what's coming for this brand new year of 2009! Or rather what might be coming - for as we learned near the start of last year in The 2008 Carpe Diem Filter,  history is stochastic, a series of uniquely unrepeatable events.  There is no such thing as the future, and you can't make predictions about something that doesn't exist. You certainly can about nature (like what time the sun will rise tomorrow), but not about what people will do, because they haven't decided yet - and in particular, the extent to which they decide to treat problems as opportunities (the carpe diem filter). Nonetheless, there are some things that look exceedingly likely.  So here goes. Don't be surprised if 2009 is as weird a year as 2008.  A president who worships at a God Damn America church is worshipped as the savior of America - but for how long?  The media will focus on his every word and deed, and will shout hosannas of positive news regarding everything he touches.  But sooner or later it will dawn on folks that he is no more competent a president than he is a golfer - or bowler.

Many had warned, but few who were in a position to act even tried to avoid the very predictable economic calamities of 2008. This was the year that proved Ronald Reagan's old adage, "The government is not the solution; it is the problem." As we enter the New Year, the question is again, "Will those in charge do what is necessary to avoid the very obvious new economic wrecks coming?" The U.S. government has now explicitly said there are financial institutions (and other companies - autos, etc.) that are "too big to fail." If that is (arguably) true, then they must be more highly regulated than the smaller institutions, particularly in terms of capital adequacy. The reason is quite simple. If the government guarantees the debt of big companies, those institutions will have a much lower cost of capital than their smaller competitors, which is not only unfair but will destroy new and smaller companies, thus killing much of the job and productivity creating innovation in the U.S. economy. So far, the Washington governing class has failed to even discuss this disastrous consequence of the bailouts, let alone figure out a solution.

Patrick Fitzgerald, the U.S. attorney for the Northern District of Illinois, had Milorad Blagojevich, Illinois' notoriously corrupt governor, arrested Dec. 9 because he feared "Hot Rod" was about to sell the senate seat vacated by Barack Obama. At the time of the arrest, the FBI released portions of wiretaps in which Mr. Blagojevich discussed, in profane terms, what he wanted in exchange for picking the successor Mr. Obama preferred: a Cabinet post, or a cushy job with the Service Employees International Union. Since he had to know the FBI had been investigating him, many wondered why Hot Rod would speak so brazenly and recklessly on a line on which he ought to have suspected the FBI was listening. "He's utterly mad, completely and totally off his rocker," wrote Chicago Sun-Times columnist Mark Brown Dec. 10. "I've long since come to the conclusion that Rod Blagojevich is the stupidest governor in all of our 50 states." said Michael Barone, editor of the Almanac of American Politics. But if Hot Rod is crazy, he's crazy like a fox, and if he's stupid, he's smarter than most of the other Democrats in Illinois.

Irit Sheetrit, 36, a mother of four, was killed Monday night in the Israeli town of Ashdod when a Grad-type rocket struck the bus stop where she had run for cover.  Four others were injured in the attack. Earlier in the day Hani al-Mahdi, 27, was killed, and a dozen others wounded when a Grad rocket struck the construction site in Ashkelon where they were working. The deaths of Ms. Sheetrit and Mr. al-Mahdi passed largely unnoticed outside of Israel, as had the deaths of dozens of others in preceding months.  Outside of Israel, the news media are concerned only that the Israeli response to the attacks might be "disproportionate." What's truly disproportionate is that some 6,000 rockets and mortars have been fired at Israel from Gaza since 2001, most of them since Israel unilaterally withdrew from there in 2005.

Baghdad, Iraq.  Would you invest in Iraq? Many people think it is crazy to even ask the question. But strange as it may seem, there may already be some good investment opportunities in Iraq, and chances are there will be many high-yielding investments in the country in the next few years. When you arrive at the international airport in Baghdad and are greeted by a security company that puts an armored vest on you, and then loads you into a highly armored vehicle manned by tough guys with automatic weapons, just to get you to a hotel, you are thinking, "This is the last place where I would ever invest." The good news is that much of Iraq, other than Baghdad (outside the Green Zone and other high-security compounds) and a few other places, is returning to normal and is safe, and parts of it, such as the Kurdish region, are actually booming. This means there are increasing potentially profitable private investment opportunities, on a risk-adjusted rate of return basis. This past week, the Washington-based Center for International Private Enterprise (CIPE) hosted a conference in Baghdad where about 100 representatives of 15 of the 18 Provincial Investment Commissions (PICs) came to discuss how they more effectively attract foreign investment. If the Iraqis didn't think things were getting more peaceful and normal, it is unlikely they would waste time traveling some distance to Baghdad by automobile to learn how they might obtain more private foreign investment in their provinces. 

Act in haste, repent at leisure.

Back in October, when Congress was stampeded into approving a commitment of up to $700 billion to bail out banks who invested in mortgage-backed securities, we were told the money would be used to make a market for these now toxic financial instruments.

After Congress approved the Troubled Asset Relief Program (TARP), Treasury Secretary Henry Paulson changed strategy.  Rather than use the first $350 billion to buy up subprime mortgages, the government invested it in the banks themselves.

The Associated Press contacted 21 of the 116 banks that received federal money and asked them what they've done with it.  None were willing to say. Their reticence was understandable.