Bailed out banks to buy toxic assets. It might be very clever and it might be the best way to produce a market, but the idea that banks bailed out by the US Government will start buying those legacy/toxic assets is surely going to prove to be terrible politics. The Financial Times of London tells the amazing story this morning that US banks that have received government aid, including Citigroup, Goldman Sachs, Morgan Stanley and JPMorgan Chase, are considering buying the toxic assets to be sold by rivals under the Treasury’s $US1,000bn plan to revive the financial system. “The plans proved controversial,” the paper reports, “with critics charging that the government’s public-private partnership — which provide generous loans to investors — are intended to help banks sell, rather than acquire, troubled securities and loans.”

A site to keep track of the experts. Thanks to my Crikey colleague Eleri Harris I have discovered a blogger after my own heart. Maciej Cegłowski started his site called Wrong Tomorrow because “one of the most striking things about the current crisis is the number of people who completely failed to anticipate it, and have nevertheless since gone on to offer many wise words about what the future holds in store.” He is thus setting up a site to check the track record of pundits in politics, finance and his own field of information technology. I will be following his efforts with great interest.

Looking on the bright side. Growth in China remains the big hope for Australia when it comes to avoiding the worst of the international recession and there is one small sign this morning that things on that front are getting better. A wonderful little statistic called the “Purchasing Managers” Index, compiled by the China Federation of Logistics & Purchasing and the National Bureau of Statistics, points towards a strengthening of manufacturing growth. When the PMI reading is above 50 points it indicates that the manufacturing economy is generally expanding and this morning’s magic number for March is 52.4 — up from 49 in November. We can but hope that the Chinese government’s four trillion yuan ($US585 billion) stimulus package is beginning to work and that the upturn continues.

Liberals taking a Republican line. There is a clear similarity between the line being taken on dealing with the world financial crisis by the Liberals in Australia and the Republicans in the United States. Both lots of conservatives are preaching the dangers of deficits and the evil of the increased taxes that will eventually be required to pay for them. I expect it will not be long before Malcolm Turnbull starts a local version of what in the US they are calling TEA parties where Republicans are being encouraged to join together on 15 April at community rallies to proclaim they are Taxed Enough Already.

Tarnishing the choir boy image. Don’t worry that the world’s leaders are meeting to try and halt an international economic collapse. Our leader has thrown a temper tantrum because they tried to feed him meat! Let’s get that proper news all over page one.

The tabloids loved it and no wonder. All that talk in London is hard to understand but a bully reducing a hostess to tears can be grasped by everyone.

Without a doubt it is the most damaging story about the Prime Minister to appear since he rose to the Labor leadership. It has brought into public view the nasty side of Kevin Rudd whose temper tantrums have previously only been gossiped about in Parliament House.