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In the closing four minutes of trading today, Google dropped $70 on volume of 4.27 million shares to $341. Usually trades 50 to 100,000 shares in a 4 minute stretch. Either somebody knows something, somebody panicked or somebody mistakenly added an extra zero (or more) to a sell order. In after hours trading, Google is back up at $410. To put the swing in perspective, that’s a roughly $20 billion swing in Google’s valuation in 4 minutes.

Update: Clearly there’s zero liquidity in the markets right now. A big seller comes along and all the buyers hide. Who me? I’m not a market maker in the hottest tech company around. Maybe they’re going out of business and I don’t know something. Pity the poor guy who finally stepped up to buy the 4.27 million shares at a deep discount (approximately $280 million discount to be exact)… only to have the trade DKed the next day. (DK: Street lingo for “don’t know” or cancelled trade.)

I was premature in predicting panic Friday. Sadly, we got it today with the market down 7%. There’s likely more to come overnight… and maybe another 5 or 10% tomorrow?

The markets have fibrillated, and unfortunately, its now gonna take more than a $700 billion package to get things back on track. For the record, here’s Drudge’s headline package:

In pre-market trading, Wachovia Bank is down 85% at $1.50. Last Thursday, it closed at 15.

Unless you’re a Wachovia shareholder, you had a happy Friday. Sellers didn’t stampede and buyers didn’t hide. (JPM shareholders even saw their holdings rise 10%.)

There are a few ways of reading this. One is that all is well, the storm has passed.

Another is that sellers, unable to contemplate the horror of no Congressional approval of the $700 billion bailout package clung, simply shut their eyes and hoped for the best. With eyes squeezed shut, shareholders ignored the Chinese banker’s embargo on trading with Western banks, the new high in initial unemployment claims, the frozen money markets.

I’m think it wasn’t good will the kept sent the market sideways Friday, but paralysis. The gravity of our situation is hard to comprehend, much less stratetize for. What do you sell? Where do you move your money? The average American, even the average American fund manager, doesn’t have goggles big enough to imagine what a post-credit world might look like.

It’s interesting to know that even as Wall Street traded sideways, Treasury officials were secretly warning Congress of a 3000 point Dow meltdown.

One Republican said that the message from government officials is that “the economy is dropping into the john.” He added: “We could see falls of 3,000 or 4,000 points on the Dow [the New York market that currently trades at around 11,000]. That could happen in just a couple of days. What’s being put around behind the scenes is that we’re looking at 1930s stuff. We’re looking at catastrophe, huge, amazing catastrophe. Everybody is extraordinarily scared. It’s going to be really, really nasty.”

Back to Wachovia. Citigroup, Wells Fargo and Spain’s Banco Santander have apparently been approached by Wachovia management after its shared traded as low as $8, down from $14, on huge volume Friday. But, as one article (can’t find it now) noted today, potential buyers are incentivized to let Wachovia wash out, like WaMu, and then, like JPM, buy the quality assets post failure. After years of chasing assets higher, buyers are learning that, once again, cash is king and time is always on the buyer’s side.

Today’s WSJ: “Top U.S. policy makers emerged from hours of tense negotiations with a clear message just after midnight Sunday morning: A deal to bailout U.S. financial markets has been agreed on and all that remains to be done is to commit the legislation to paper.”

“All that remains is putting it in writing?” Am I the only person who finds that “agreements in principle” that take 20 minutes to nail down verbally can take months to spell out in writing, once the parties start digging into the nuances and granularities in the vague words that created the initial bridge of agreement?

In today’s Times, columnist Ben Stein writes, ” Almost no one (except Mr. Buffett) saw this coming, at least not on this scale.”

Stein certainly didn’t see it coming. A year ago, he pooh poohed the mortgage crisis in a column titled “its time to take a deep breath,”

Yes, there are real problems: housing, mortgage defaults, losses at financial firms, rot in hedge funds. But over all, things will be fine. Unless there is a genuine dollar crisis or a devastating recession (very unlikely), things will work out. This economy is very big and very solid. It cannot be derailed for long by anything we have seen lately. If I were the editor of the business section for just one day, I would run one immense headline: ‘Everything Is Going to Be Fine. Go Back to Work.’At that time (in a post titled “Creeping to collapse“) I wrote, “It will be fun to watch what Stein writes when the Dow is plumetting towards 8,000, rather than 13,000.” Well, now we know.

Traditionally, banks get shut down over weekends, since the extra time gives regulators room to get into the banks and take control. Wamu’s shutdown last night suggests either that regulators wanted to put the fear of God into Congress or that there was an acceleration of the run on the bank yesterday.

That makes Wachovia’s trading today particularly dicey. Twice in the last six weeks, the stock has been down to $9 during the blackest of trading days. Last night, on the back of anticipated Congressional approval for the $700 billion bank bailout, WB closed at $15.

This morning, with the bailout apparently still weeks away, WB opened at $10, then drifted up to $11.34. But now WB has sunk back to $10.

Keep your eye on WB. Here’s a chart of trading so far.

Update: Have you lent long-term money to WB and want some insurance? It will cost you, upfront, 30 cents on the dollar and 5 cents a year. Why would anyone (except a retail account with FDIC $100k guarantee) leave money in WB?

Sellers, first in trickles and then in crowds, will meet no buyers today. Prices could drop 5%. Or 10%. Or 20%.

My bet is 12%.

* Congress, bailing with forks, thimbles and greasy palms, can’t reach a deal to support banks.
* The Chinese government has asked its banks not to trade with foreign banks.
* Interbank rates are at new highs. (LIBOR at 3.76.)
* The FDIC closed WAMU last night, after depositors pulled $17 billion out of the bank over a ten day period.
* Initial unemployment claims spiked to new highs yesterday, heading us into territory not seen in 25 years.

Any of these nuggets of news, taken alone, would sock prices 2%. Taken together, and coming on the eve of a weekend — a full 48 hours without trading!!! — sellers will take any price for their shares and potential buyers will hide their wallets.

What’s a safe haven these days? I keep calling old friends in finance and nobody has a clue. Gold? (The Chinese have just 2% of their reserves in gold, versus the US at 60%.) Oil or copper? Maybe JPM, who seems to have the Fed, FDIC and Treasury’s full confidence?

Sad sad sad.

Today’s arbitrage suggestion for you Home Depot traders: go long shotgun shells and bottled water, go short ice cream (unless you own a generator) and other extreme luxury items.

Six weeks from now you’ll reap lots of dollars. Lots.

Of course, you’ll need a wheelbarrow to transport them home to use as kindling.

It’s Thursday, so time again for my favorite economic indicator… initial unemployment claims.

In the week ending Sept. 20, the advance figure for seasonally adjusted initial claims was 493,000, an increase of 32,000 from the previous week’s revised figure of 461,000. It is estimated that the effects of Hurricane Gustav in Louisiana and the effects of Hurricane Ike in Texas added approximately 50,000 claims to the total. The 4-week moving average was 462,500, an increase of 16,000 from the previous week’s revised average of 446,500.

To get a sense of how bad this looks versus recessions of the last 50 years, look at this graph. At 493,000 claims last week, we’re headed on a straight trajectory into the territory of the horrible economy of the early eighties. We’re over the precipice into a recession with no signs visible of a bottom.

I learned last week that my friend Paul Panitz died August 29.

Paul had written earlier this year saying he had esophageal cancer. The prognosis wasn’t good, Paul wrote, and he might not live out the year. Ever wry, Paul added, “Even my German Shepherd got in on the act, with her spine putting pressure on the nerves to her legs. She was operated on at the end of January, and still can go out only on a leash, but it seems she’s making a full recovery.” Paul went on to write that his businesses — copy shops from Budapest through Moscow and out to Shanghai — were doing well. He closed, “Well, those are the “highlights”. I’m quite busy from now through the middle of next week, but after that, I’ll have time to talk.”

I got to know Paul in 1993 while I working as a business journalist in Budapest. Late one evening I was photocopying some documents in a big copy shop near our apartment. Thinking the copy shop might make an interesting story, I asked to meet the owner. Paul turned out to be there. A wiry chain-smoking American about 10 years my senior, Paul had sold his copy business in DC and moved to Eastern Europe to watch the economy be reborn. Here’s the story I wrote about Paul in the International Herald Tribune.

I didn’t know it then, but hearing about Paul’s incredible tribulations, maneuverings, craftsmanship, triumphs, parsimony and occasional losses awoke in me an entrepreneurial urge. What a life, I thought, to dream and scheme and battle to shape something from nothing.

In 1998, when I started to think about creating a business to rent websites to newspapers and magazines, Paul was one of the first people I called to share the idea with. As the idea became a plan, Paul was the first person who committed money to the idea, called Pressflex. Though Paul asked a lot of questions about the concept and market, he didn’t ask about valuation. “Let me know when you do a deal and I’ll be in,” he said. That commitment gave me the courage to round up other investors.

After a burst of initial sales, Pressflex grew very slowly, much more slowly than our funding or plans anticipated. In 2001, with our bank account dwindling towards zero, Paul asked if we were still confident we had a good idea. Yes, we said. Paul offered to loan us money. He asked for no projections, no additional logic… he just asked if we were confident we could repay him. We were confident, knowing that if we had to abandon our dream, we’d pare down the company to a skeleton and get Paul his money from residual revenues from site rentals. So Paul loaned Pressflex $75,000 and we humped along with a core staff on slashed salaries. We signed a few more newspaper clients, then some magazines and pared our burn rate enough to buy us an additional year of life. And it was during that year that we conceived Blogads.com. Today the Pressflex site rental business is solid and Blogads is thriving.

Both for his example and his unwavering support, I owe much to Paul, and I told him that when we last talked.

There was a tiny but powerful tribute to the College of Wooster in the NYTimes Magazine’s article today about philosopher Kelly Jolley.

Some factlets from the weekends’ papers.

The New York Post highlights the flood of money market fund redemptions last week.

According to traders, who spoke on the condition of anonymity, money market funds were inundated with $500 billion in sell orders prior to the opening. The total money-market capitalization was roughly $4 trillion that morning.

The panicked selling was directly linked to the seizing up of the credit markets - including a $52 billion constriction in commercial paper - and the rumors of additional money market funds “breaking the buck,” or dropping below $1 net asset value.

The Fed’s dramatic $105 billion liquidity injection on Thursday (pre-market) was just enough to keep key institutional accounts from following through on the sell orders and starting a stampede of cash that could have brought large tracts of the US economy to a halt.

While many depositors treat money market accounts as fancy savings accounts, they are different. Banks buy a variety of short-term debt, including commercial paper, with the assets. It is an important distinction because banks use the $1.7 trillion commercial-paper market to fund their credit card operations and car finance companies use it to move autos.

Without commercial paper, “factories would have to shut down, people would lose their jobs and there would be an effect on the real economy,” Paul Schott Stevens, of the Investment Company Institute, told the Wall Street Journal.

Cracks started to show in money market accounts late Tuesday when shares in one fund, the Reserve Primary Fund - which touted itself as super safe - fell below the golden $1 a share level. It had purchased what it thought was safe Lehman bonds, never dreaming they could default - which they did 24 hours earlier when the 158-year-old investment bank filed Chapter 11.

By Wednesday, banks sensed a run on their accounts. They started stockpiling cash in anticipation of withdrawals.

And Joe Nocera noted Saturday that, thanks to the new government guarantee of money market funds, it is now safer to keep your money in money market funds than FDIC insured banks. The FDIC insurance limit is $100k and is restricted to individuals. Now businesses — anyone — is insured infinitely in money market funds. That creates monstrous moral hazard… since investors can now dump money into high-yield funds that invest in the riskiest paper, knowing that their money is insured. It is also difficult to know how this guarantee will ever be terminated, since the minute it is lifted, money will flood out of money market funds.

Tonight we learned that Morgan Stanley and Goldman Sachs have banking licenses. Bloomberg focused on the impact this has on their liquidity — since they can now tap the Fed directly rather than relying on banks as intermediaries. It’s possible there’s another back story: maybe the rumored takeover last week of Morgan Stanley by Wachovia got it backward. It seems probably that Wachovia, burdened by $122 billion in rotting “pick and pay” loans, is in the weeds and will be taken over — like Bear Stearns — by a more competent and credible Morgan Stanley. Although at Friday’s close WB’s market cap was $40 billion, it spent most of the week valued at roughly $20 billion… significantly smaller than MS’s $30 billion.

Finally, one great tragedy of this bailout is that all the rotten bankers are not going to lose their jobs. Relative to previous banking crises, we haven’t even begun to wash our dirty laundrey.

Between 1989 and 1991, for example, 1,187 banks and S.& L.’s went under, representing more than $454 billion in assets, according to the Federal Deposit Insurance Corporation.

So far this year, there have been 11 failures of these institutions, representing total assets of around $40 billion.

The bailout guarantees that the bozos who put us into the current black hole will live to lend another day.

The New York Times continues to churn out great graphics. This graph shows the degradation of various finance stocks over the last year. The graph highlights the perversity of the fact that one of the biggest as-yet-non-bankrupt losers, Wachovia, is often mentioned as a potential savior of Morgan Stanley.

When junk bond wheeler dealer Drexel Burnham Lambert went bust in 1990, my buddy Pete and I bought a hundred t-shirts in the company’s liquidation sale. “Back to the future,” they said. Long before eBay, we recognized that those shirts were a keen investment. Now if we could just find them.

Ken Layne sums this week up best. Noting that the stock market ended the week essentially flat — after many finance stocks gyrated up and down by 50%-75% in a day — Ken concludes “A half-trillion in new U.S. debt just doesn’t buy what it used to!”

A few weeks back my banking guru Humphrey, holed up in Geneva minting money at the expense of evil VCs, recommended the book Bailout, by Irvine Sprague. Sprague worked for and ultimately ran the FDIC during four of first, precedent-setting bank bailouts of the 70s and 80s.

In his years of watching bankers beg for public assistance, Sprague became profoundly skeptical of their pleas for special treatment. Too often, even with the strongest of due diligence and regulatory strictures, bankers used public assistance to simply dig themselves deeper holes.

Though the giant bailout that’s now cobbled together in DC and NYC seems to unavoidable — we did seem to be minutes from a meltdown yesterday — our economy will be gravely harmed by the fact that many reckless, idiot, greedy bankers will, thanks to this giant buttress of public assistance, hold on to their jobs to do another decade or two of harm.

While in the best FDIC bailouts, Sprague was able to use the ticking clock to put a gun to bankers’ heads to force them make significant concessions and share risk and upside with the government, it seems the urgency and all-encompassing size of the current bailout puts the gun at the government’s head — bail us out on our terms or watch the US economy melt-down. In retrospect, the AIG deal earlier this week — in which the government gets 80% of the upside — will look incredibly sweet.

No doubt Merrill and AIG and Lehman will soon be sueing to try to retroactively get a piece of the new bailout.

I wish I could see how we’ll get out of this… or even figure out a way to hedge against the idiocy that’s ahead. Right now I can’t. I’d welcome your thoughts.

From Washington’s Farewell Address:

In contemplating the causes which may disturb our Union, it occurs as matter of serious concern that any ground should have been furnished for characterizing parties by geographical discriminations, Northern and Southern, Atlantic and Western; whence designing men may endeavor to excite a belief that there is a real difference of local interests and views. One of the expedients of party to acquire influence within particular districts is to misrepresent the opinions and aims of other districts. You cannot shield yourselves too much against the jealousies and heartburnings which spring from these misrepresentations; they tend to render alien to each other those who ought to be bound together by fraternal affection.

Hat tip to LA buddy for this one.

My buddy Matt Welch’s great book on John McCain is now out in paperback. I’ve just finished reading it for the second time– the first time through I marveled at the organization and thoroughness, this time I relaxed and enjoyed the word-smithing. Read it before your next cocktail party with undecided voters.

Other than watching your 401k erode, it’s hard to relate to Wall Street’s meltdown. Here’s the chain of causation that leads from Wall Street to your wallet.

Right now, anyone with cash — whether banks or investors — is very leery about letting others touch their money. Banks can go under, companies can fold. So everyone with cash is dumping money into US Treasuries. The rate the government has to pay to keep people’s money basically dropped to zero yesterday, down from 2% Monday. (Today’s New York Times has a great graph illustrating this yield slide, but I can’t find it online.) Conversely, the rate that banks and companies have to pay each other for money has jumped 2 to 3 percentage points. AS the WSJ reports:

In the giant market for commercial paper, a reliable source of low-cost, short-term funds in normal times, the cost of borrowing shot up Wednesday. Traders said most lenders were unwilling to extend credit beyond a single day. Sears Holdings said it paid 3.6% Wednesday, about three-tenths of a point more than a day before, to sell $3 million in 30-day commercial paper. Ford Motor Credit Co., the finance arm of Ford Motor Co., paid 7.5% for overnight borrowings, according to one trader, who said the rate would typically be several percentage points lower. General Electric Co., rated one of the safest borrowers, paid 3.5% for overnight borrowing, about 1.5 percentage points more than would have been normal, this trader said.

This is called a flight to quality. An extreme flight to quality. How does this impact your life?

Most companies, even the most profitable, rely on short-term financing to bridge the shortfall that occurs between the time they spend cash to build goods (cars, houses, widgets) and the time when they sell those goods. Without this bridge of financing, companies reduce orders, lay people off and in extreme cases go out of businesses.

Companies don’t report their orders to the government, so it can take months for this contraction in orders to show up in government data.

But layoffs show up quickly. The first thing most people do after getting laid off is to head to the local unemployment office to file a claim for unemployment insurance. And initial unemployment claims is precisely the number that has been ratchetting higher for the last year. The prior week’s numbers are announced every Thursday at 8.30AM. Today the most recent numbers came out and were, you guessed it, worse than last week.

In the week ending Sept. 13, the advance figure for seasonally adjusted initial claims was 455,000, an increase of 10,000 from the previous week’s unrevised figure of 445,000. The 4-week moving average was 445,000, an increase of 5,000 from the previous week’s unrevised average of 440,000.

So watch closely next week.

When will Wall Street’s slide end? Just as markets often overshoot on the upside, they usually overshoot on the downside. Just as the market tops out when shoe-shine boys are giving stock-tips to millionaires, markets bottom when millionaires are the ones giving shoe-shines, and EVERYONE is depressed. Sadly, we’re a long way from that moment.

So, as ugly as this week has been — at least if you’re an investor in AIG or MS or GS or WB — watch out for a few more big really nasty slides and chasms over coming months.

There’s more to come in terms of nasty surprises about balance sheets. AIG had a much bigger hole in its balance sheet than everyone expected. The same for FNMA and FRMC. There are lots of other holes out there, and right now capital is rushing away from those holes, both real and imagined, as quickly as possible.

No amount of liquidity from solicitous central banks will force people to trust each other. We’re going to have to reach prices AND conditions at which greed overwhelms fear. After a 10 year binge of greed… those hormones are tapped out and its gonna take a while for them to build up again.

Here. There’s a big shout out to The Gossip Gangsta Perez.

Two years ago John Edwards invited me and a bunch of Chapel Hill bloggers for dinner. At one point, each of us offered a bit of advice. I told him that a smart candidate would bet that the US economy was soon to crumble and stake out positions that would address that crisis. I focused on the coming housing crisis. Here’s the post — titled “if I were running” — that I wrote the morning after that meeting, adding a couple of additional forward-looking positions a smart candidate would take.

If I were running for President as a dark-horse, I’d:

a) stump for an “energy trust fund to pay for our children’s future energy needs” in the form of a $2/gallon gas tax, with rebates for everyone making less than $80,000 a year. Higher gas prices would reduce pollution, encourage Detroit to build cars for tomorrow rather than yesterday and, by cutting consumption/imports, reduce US funding of anti-American regimes abroad. The revenues would also go to reduce the deficit, lowering interest rates and helping to bail out mortgage holders. (See plank #2.)

b) stump for protection for home buyers who will see their mortgages jump 200-300% in the coming eighteen months and be faced with foreclosure and/or tumbling ad prices.

c) make banks and credit card companies bear the burden for identity theft.

Though not fully baked, some variation on these issues would have broad middle class appeal, and grow more popular in the next two years.

Politico reports: “House Speaker Nancy Pelosi has ordered a broad, swift investigation of Wall Street and will demand testimony from Bush administration officials and captains of finance, congressional officials said.”

How about a broad and swift investigation of Congress’s role in the meltdown? Why were our legislators dozing while financial wizards built mountains of fantastical paper profits that are suddenly crumbling into a pile of ashes? How many millions of dollars have legislators been paid over the last twenty years to turn a blind eye to the scheming?

Any idiot with a calculator (or any idiot reading this blog for that matter) could see this all coming. See some posts here, here, here, here, here, here, here.

Asked whether she bears any responsibility for the debacle, Pelosi said “no.” I guess she’d give the same answer to the question “can you read?”

Now that the government has taken over AIG and given the rotten institution a $85 billion loan, I’ll repeat what I said back in February, when the government first started to try to shore up firms that have insured bad debts in an attempt to forestall the day when the whole house of cards falls. This time, they took the full plunge with AIG, as the New York Times reports:

What frightened Fed and Treasury officials was not simply the prospect of another giant corporate bankruptcy, but A.I.G.’s role as an enormous provider of esoteric financial insurance contracts to investors who bought complex debt securities. They effectively required A.I.G. to cover losses suffered by the buyers in the event the securities defaulted. It meant A.I.G. was potentially on the hook for billions of dollars’ worth of risky securities that were once considered safe.

If A.I.G. had collapsed — and been unable to pay all of its insurance claims — institutional investors around the world would have been instantly forced to reappraise the value of those securities, and that in turn would have reduced their own capital and the value of their own debt. Small investors, including anyone who owned money market funds with A.I.G. securities, could have been hurt, too. And some insurance policy holders were worried, even though they have some protections.

That’s the rational explanation, though the Wall Street Journal also pegs the bailout to a desire to protect money market money market funds. (I find this explanation less credible, though even more worrisome if true.)

Indeed, on Tuesday the $62 billion Primary Fund from the Reserve, a New York money-market firm, said it “broke the buck” — that is, its net asset value fell below the $1-a-share level that funds like this must maintain. Breaking the buck is an extremely rare occurrence. The fund was pinched by investments in bonds issued by now collapsing Lehman Brothers.

Money-market funds are supposed to be among the safest investments available. No fund in the $3.6 trillion money-market industry has lost money since 1994, when Orange County, Calif., went bankrupt. A number of money-market funds own securities issued by AIG. The firm is also a big insurer of some money-market instruments.

AIG’s financial crisis intensified Monday night when its credit rating was downgraded, forcing it to post $14.5 billion in collateral. The insurer has far more than that in assets that it could sell, but it could not get the cash quickly enough to satisfy the collateral demands. That explains the interest in obtaining a bridge loan to carry it through. AIG’s board approved the rescue Tuesday night.

The Fed, the Treasury, Congress, insurance regulators, bank regulators, company representatives… everyone is behaving like Jerome Kerviel, the French trader, who hid his giant losses from himself and his bosses by constantly creating false counter-trades that would hide the losses. Eventually, the ruse failed and Kerviel’s $7 billion losses came to light.

And when the band-aid comes off the “fix” of AIG, we’ll be paying again and again in coming months and years, whether in higher taxes, or inflation or indebtedness to third world creditors.

We are all Jerome Kerviel now.

Versus six weeks ago, the phrase “Since the great depression” now has 1524 mentions in Google news and (still) 588,000 in Google search. (Time for a new indexing?)

Looking at Google trends, searches for “recession” are trending up and “bailout” has made a huge spike since the beginning of the year.

“In the week ending Sept. 6, the advance figure for seasonally adjusted initial claims was 445,000, a decrease of 6,000 from the previous week’s revised figure of 451,000. The 4-week moving average was 440,000, an increase of 250 from the previous week’s revised average of 439,750.”

There’s an interesting pattern here. Almost every week there’s a decline, but it’s always a decline from the previous week’s “revised figure.” The telling number is the 4-week moving average, which keeps edging ever higher even with the weekly “declines.”

Last night we went to see Man on Wire, the movie about Philippe Petit, the guy who tightrope walked between the two towers of the World Trade Center in 1974. It’s a stunning, sad, funny, inspiring, nostalgic tribute to the WTC, NYC and Petit and his accomplices.

The movie is more understated than the trailer… but it gives some sense of the spectacle.

“Man on Wire” were the words written on Petit’s booking form in the field for “infraction.”

Drudge has yet to link to swirling reports, including on Andrew Sullivan and Wonkette, that Sarah Palin’s husband’s ex-business partner made emergency filing for a seal on his divorce papers.

Update: here’s the docket chronology.

Update: Drudge was right to pass: no smoke, no fire.

The last week has seen a huge surge in traffic on political blogs. DailyKos, which six months ago was doing 12 million impressions a month is now doing 20 million impressions a week. And Wonkette , which does 4 million impressions some months, did nearly 800,000 impressions last Friday. (Turns out Wonkette has been watching a little known Alaskan politician for two years.) Here is Wonkette’s recent traffic.

Reading a VC salivate about the fact that some social media CPMs are $15 and headed to $17 — “I think that $15 CPMs with no content creation costs sound pretty good to me!” makes me laugh.

Do a little math and you’ll see that the reality is just not there. Google’s Youtube, according to a recent Forbes article, is now doing 1 billion views a day on and should garner roughly $200 million in sales this year.

That’s a $00.0006 CPM.

John McCain deserves credit for turning the ‘08 race upside down by putting Sarah Palin in a position to be just a heart-beat away from leading the free-world.

Having said that, as a small business owner, I’m appalled by reports that McCain only interviewed Palin once.

At our company, even interns — folks who will work for us maybe 10 or 20 hours a week and make $12 an hour — get interviewed at least eight separate times over the course of six to eight weeks. I interview each possible intern hire at least twice myself.

Why invest so much time even on junior staffers? Because staff are 99% of a business. We know that even the most junior person may one day take on a senior role. (I first worked with Miklos Gaspar, who co-founded Pressflex and today runs our Budapest office, in 1994 when he was an intern in a business I managed.)

In taking so much time and effort to vet potential junior hires, we’re not focusing on our immediate needs. We know that diligent up front vetting is the smartest investment we can make in the future. Not every person we hire works out, but we vastly increase our odds of success with scrupulous hiring.

Does the USA not deserve at least the same level of due diligence that we apply to interns for a possible future president?

One interview — if that’s what happened — wasn’t bold. It was reckless.