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The Federal Aviation Administration has opened its own investigation into the 50-mile flight of the helium balloon that briefly delayed flights at Denver International Airport after a couple reported that their 6-year-old son may have been on board, an official said Tuesday.

You know about this story, of course, so let me skip right ahead to the really weird part:

Lee said Monday that Heene was “obsessed” with trying to land a TV show and become famous.

“Heene believes the world is going to end in 2012,” she said. “Because of that, he wanted to make money quickly, become rich enough to build a bunker or something underground, where he can be safe from the sun exploding.”

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At the Federal Reserve Bank of Atlanta’s conference on short selling, there was a fascinating paper presented by professor Nadia Massoud of York University. In it she provided compelling evidence that hedge funds actively short the shares of companies they loan money to directly before the announcement of the loan becomes public and directly before the loan covenants are violated and the terms are made more negative. What I found interesting is that their ability to short on this obviously inside information likely allows them to lend money to companies at a lower rate than a traditional bank as the profit they make from the shorting helps offset the fact that the default likelihood is higher than the rate reflects.

This means that they’re able to win business away from banks by offering a lower rate and then subsidize that rate by basically stealing money from individual investors by trading on the insider information. Based on the research in this paper, which included a robust sampling of hedge fund loans I think it’s extremely likely that the Galleon case is merely the tip of the iceberg

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The headlines that ran side by side on the front page of Saturday’s New York Times summed up, inadvertently, the terrible fix that we’ve allowed our country to fall into.

The lead headline, in the upper right-hand corner, said: “U.S. Deficit Rises to $1.4 Trillion; Biggest Since ’45.”

The headline next to it said: “Bailout Helps Revive Banks, And Bonuses.”

We’ve spent the last few decades shoveling money at the rich like there was no tomorrow. We abandoned the poor, put an economic stranglehold on the middle class and all but bankrupted the federal government — while giving the banks and megacorporations and the rest of the swells at the top of the economic pyramid just about everything they’ve wanted.

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We need to make some fundamental changes in the way we do things in this country. The gamblers and con artists of the financial sector, the very same clowns who did so much to bring the economy down in the first place, are howling self-righteously over the prospect of regulations aimed at curbing the worst aspects of their excessively risky behavior and preventing them from causing yet another economic meltdown.

We should be going even further. We’ve institutionalized the idea that there are firms that are too big to fail and, therefore, “we, the people” are obliged to see that they don’t — even if that means bankrupting the national treasury and undermining the living standards of ordinary people. What sense does that make?

If some company is too big to fail, then it’s too big to exist. Break it up.

Why should the general public have to constantly worry that a misstep by the high-wire artists at Goldman Sachs (to take the most obvious example) would put the entire economy in peril? These financial acrobats get the extraordinary benefits of their outlandish risk-taking — multimillion-dollar paychecks, homes the size of castles — but the public has to be there to absorb the worst of the pain when they take a terrible fall.

Enough!

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Bonuses for financial services employees may rise by 50 percent to 6 billion pounds ($9.9 billion) this year as profit at U.K. banks, brokerages and hedge funds rebounds, according to a Centre for Economics & Business Research Ltd. report.

U.K. finance workers received about 4 billion pounds for 2008, according to CEBR findings released in London today. While the figures show a year-on-year rise, the report also estimates that 2009 bonuses will be 41 percent below 2007’s record figure of 10.24 billion pounds. Even in 2012, bonuses will still be 26 percent lower than in 2007, the report forecast.

“Bonuses are beginning to bounce back but will not reach the levels of 2007 anytime soon,” said Benjamin Williamson, a CEBR economist. “Profits of major financial-sector institutions have jumped sharply; therefore bonuses, which to some extent are a profit sharing scheme, have also risen.”

Anybody here think the economic crisis is behind us?

Bueller?

Bueller?

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The Roman Catholic Church today moved to poach thousands of traditional Anglicans who are dismayed by growing acceptance of gays and women priests and bishops.

The Archbishop of Canterbury Dr Rowan Williams admitted that he had been caught out after Pope Benedict XVI announced a new “Apostolic Constitution” to provide a legal framework for the many thousands of Anglicans and former Anglicans who wish “to enter into full visible communion with the Roman Catholic Church”.

The announcement paves the way for thousands of Anglicans worldwide to join the Roman Catholic church while maintaining elements of their own spiritual heritage.

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Traditionalists, including up to six Church of England bishops, had visited and pleaded with Rome to provide some sort of structure inside the Catholic Church for their wing of the Church of England because of liberal moves towards women bishops and gay ordinations.

Reclaiming market share by catering to bigotry. Wow.

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2D BOY made around $100,000 in a week. That’s $50,000 each for writing a blog post about a game they finished a year ago. By letting people pay whatever they wanted. 2D Boy stirred up a lot of discussion (previously) about game piracy when they used online scoreboard data to estimate an 82% piracy rate for their fantastic indie game World of Goo (previously).

For World of Goo’s first birthday, they decided to try the Radiohead model and let people buy the game for any price they choose. Now they’ve released extensive data about the results. Short version? “A huge success,” even though the most commonly chosen price was only a penny.

If you smell somebody drawing a building….