Mod Note: This is a syndication from Jared's Daily Dirtnap daily market newsletter. WSO readers qualify for a $100 discount...just email [email protected] and mention "WSO Monkey Discount" You can follow Jared on twitter at @dailydirtnap

There I go thinking again, but I was thinking the other day about all these housing bubbles around the world (U.S., Spain, and now Canada and Australia), and I’m telling you ahead of time that this is not going to be a rant about the evils of central banking; you can go read that on a blog. Really what this is about is the evils of low interest rates, regardless of whether they are determined by market or by fiat.

Low interest rates are bad. Bad bad bad. They encourage people to take stupid risks. Of course there were a lot of catalysts and causes for the housing bubble here, including poor incentives surrounding lending standards, but most of it stems from the fact that interest rates at the front end were one percent for a long time, which, in hindsight, turned out to be a huge mistake, because the 2002-2003 recession turned out to be very mild. The response to that recession was all out of proportion to the severity of it. Easy for me to say, Mister Monday Morning Quarterback, because at the time, the stock bubble had just blown sky-high and people were talking about a depression. But then again, you could make the argument that the stock bubble was a product of low interest rates, too.

This is a syndication from Jared's Daily Dirtnap daily market newsletter. WSO readers qualify for a $100 discount...just email [email protected] and mention "WSO Monkey Discount" You can follow Jared on twitter at @dailydirtnap

Q: How do you know when a day trader is losing money on a position?

A: When he starts researching the company.

It is funny because it’s true. But it’s also true that you (the generic you) get to know things really well when you have a position in them, and the larger the position, the better you get to know the company/country or whatever.

So I have a sizable position in MXN, and therefore I pay a lot of attention to what is going on in Mexico. I pay a lot of attention to Carstens. He is an interesting guy. He is a smart guy. So he said something recently that made the hair stand up on the back of my neck; he said that all of this “unconventional monetary policy” (if that’s what you want to call it) and competitive devaluation going on has the potential to create asset bubbles in emerging market countries. I can’t say that I disagree with him, but the reason that hair is standing up on the back of my neck should be obvious. Are emerging market countries (like Mexico) going to take steps to forestall an asset bubble? I hope not. I like asset bubbles.

This is a syndication from Jared's Daily Dirtnap daily market newsletter. WSO readers qualify for a $100 discount...just email [email protected] and mention "WSO Monkey Discount" You can follow Jared on twitter at @dailydirtnap

People go back and forth on this: government is too big, government is too small. Well, if there is one thing that most people on Wall Street have in common, it is that almost none of them have worked in government. I have. I have an opinion on the size of government, for sure, but at least mine is an educated one.

So let me tell you a couple of government stories, leaving aside all the ones from the Coast Guard Academy (or maybe we will get to those later). So I graduate from the Academy, and I go to a ship. A white one. White ones do law enforcement. I was stationed in the Pacific Northwest. There are a lot of fish in the Pacific Northwest. At least, there used to be a lot of fish. Maybe we will get to that, too.

So I report aboard the cutter, and the first thing they do is make me Weapons Officer. I have a gunner’s mate working for me. Before long, he is scooped up by CGIS (yes, like NCIS) for being a bigamist. Well, it is not as bad as it sounds. He got drunk and got married, a second time, in a blackout.