David Thayer

Wellington Elementary School: With the secret of Eugenia Phaeton’s financial success about to be revealed, fund managers gathered for Story Time at our local grammar school. Regular readers may recall how 9 year old Eugenia rocked the financial markets with her show and tell project My Hedge Fund. Today she disclosed that after her project received a C from Mrs. Haggerty, Eugenia borrowed 1.4 billion dollars from a consortium of money center banks. The “no-doc loan” ignored the fact that the loan application included a stick figure crayon drawing now believed to be a self-portrait.

Tootsie Roll Defense: On advice from Timmy, a classmate, Eugenia attempted to corner the Tootsie Roll market but her mother cracked down. Instead of buying candy Eugenia began shorting the very money center banks and prime brokers who had loaned her money in the first place. As their stocks cratered Eugenia leveraged her position by sticking out her tongue at other managers and making them cry.

Treasury Secretary Paulson is insisting that the loan to Eugenia be nullified and that her controlling interest in Citigroup be “rolled back.” But My Hedge Fund has liquidated its position: Eugenia has fourteen billion dollars in treasury bills.

Governors on a Blanket: Many of the central bank’s regional governors attended Story Time today, and one, Ben Bernanke, had to be hushed by Mrs. Haggerty. “Chairman Bernanke was urging Eugenia to underpin the US dollar when Mrs. Haggarty reminded him that Story Time is also Quiet Time.”

Executives from Merrill Lynch, Lehman Brothers, and Morgan Stanley will conference call with Eugenia unless Scooby Do is on. “They had better not call after six,” Eugenia’s Mom warned. “Especially from the Euro Zone,” she added.

T. Rex Love-handles reporting.