Code Pink strikes again! This time while Larry Summers is trying to talk about policy choices and deflation at the buttoned-up Economic Club of Washington, D.C. But it sounds like they run out of steam after about fifteen seconds, probably because they didn't expect to be onstage for any longer than that (reasonably enough).

This small sliver of sunshine comes to us courtesy of our business guru, Dan Gross. --KP

Sun Bancorp, a small bank based in New Jersey, yesterday became one of the first banks to repay the TARP funds received from the Treasury department (the press release can be seen here).

On January 9, the Treasury Department bought 89,310 of preferred stock form the bank for $1,000 each. Yesterday, Sun Bancorp bought back the shares and paid $657,000 in interest, a return of about .74 percent in three months.

Lets play this out as an investment. The Treasury Department borrowed money from taxpayers in January for three months, when three-month Treasury bills were yielding about .11 percent. It lent the money to Sun Bancorp at a much higher rate (about 3 percent). Sun Bancorp repaid the loan with interest three months later, leaving the taxpayer with a tidy profit on the transaction.

Besides the economic forecasts, which seem to get bleaker by the minute, the big news to come out of the Federal Open Market Committee's minutes today was that board members were divided on plans to pump money into the system by buying up mortgage and Treasury securities. (They ultimately did, by the way--more than $1 trillion of them).

Paul Ashworth, an economist with Capital Economics, called it a "scatter gun" strategy; fire enough bullets and one of them will probably hit the target. "One [FOMC] member only wanted to buy mortgage-backed securities and another member only wanted to buy treasury-backed securities, so the collegial thing to do was to say, OK, we'll just buy both," he said. He then gave the plan another nickname I liked even less: the experimental teenager approach.

But experimental or not, the minutes show that certain members of the board were pushing for even more purchases of long-term assets, so it wouldn't be surprising to see them buy up bundles in months ahead --especially if the TALF and PPIP plans don't flush out financial waste as hoped. So, given that impulse, there is some kind of basis for their thinking on this, right?

"All of these quantitative easing programs are unprecedented, because even the bank in Japan never tried anything on this scale. There's no roadmap here," said Ashworth. "Central bankers have decades and decades of experience in gauging how one tiny movement up or down in the interest rate affects output and inflation. But they have zero experience in calibrating the effects of quantitative easing."

Great. Cross your fingers. Because it sounds like the Fed's board members are already crossing theirs.

This is the latest post from our man in Rio de Janeiro, Mac Margolis. --BS

With new management in the White House and most of the world still awash in Obamamania, a meeting of leaders in the Western Hemisphere should be a love fest. But as nearly three dozen heads state from the U.S., Latin America and the Caribbean head to Trinidad and Tobago next week for the Fifth Summit of the Americas, the mood couldn't be blacker.

While Latin America is fitter than ever to face economic turmoil, thanks to more than a decade of sound economic brickwork, the international economic meltdown has still gutted growth across Central and South America. Even if the world's richest nations shrug off recession later this year, the major countries in Latin America are in for another half decade of sweat and tears, according to a recent report by the Inter-American Development Bank. 

The IDB projects a mere 1.9 percent annual growth for the seven largest economies in the region through 2013. The same countries grew by 5.8 percent on average in 2003-2007. If the wealthiest nations take longer to recover, IDB president Luis Alberto Moreno warned a gathering at the Council on Foreign Relations in New York today, Latin America could be in for a reprise of a familiar nightmare: another lost decade.

For Latin America, where birth rates are high and millions of young people hit the job market every year, growing by 2 percent is the same as flatlining. Worse, the first casualties will be those who have only recently clawed their way over the poverty line. "Every one percent drop in GDP means another 15 million people will fall back into poverty," Moreno said.

The good news is that several governments in the region have implemented creative social programs, based on direct cash transfers to the poor, such as Bolsa Familia in Brazil, Chile Solidario in Chile, and Mexico's Oportunidades. Just how much cash poor nations can muster for these programs in times of financial Armageddon is an open question.

It's not just charity. Latin America's antipoverty programs not only provide safety nets in countries where institutionalized welfare is threadbare at best. They can also boost economic growth, because the poor immediately spend their cash on food, clothing and basic necessities. That's something the stimulus package architects gathering in the Caribbean may want to keep in mind.

Green Shoots Turn to Weeds: Or at least that's how the Financial Times interprets the minutes from the last Federal Reserve meeting, which were bleaker than expected. Warren Buffett is feeling a bit of the bleakness himself, now that Moody's, a ratings agency he part-owns, downgraded his investment vehicle, Berkshire Hathaway. Felix Salmon doesn't think this is such a bad thing.

Rotting Apples: The Treasury Department wants to regulate venture capitalists as if they were hedge funds in order to protect against systemic risk. But a Wall Street Journal editorial asks, what systemic risk? VCs fund companies like Apple and Google in their early years; they don't engage in complicated derivatives transactions with multiple counterparties. Will regulation choke a vibrant source of innovation?

"Lehman Shock" in Japan: Unemployment has always been low by world standards in Japan -- even during the country's "lost decade" unemployment never broke 5.5 percent. That may change this year. The jobless rate will reach 5.7 percent by next March, according to a Bloomberg survey, and homelessness is on the rise. Some are calling it a ripple effect of "Lehman Shock."

Is the U.S. Causing Global Hunger?: Poor nations need investment, not aid, says Foreign Policy.

What About the IMF?: Dan Rodrik asks, what would it take to make international finance safe? A true lender of last resort, he says. But didn't the IMF just get another $1.1 trillion in funding at the G20 Summit? "It still remains to be seen how the IMF will operate and whether the new resources at its disposal will be adequate in light of the scale of the financing needs emerging and developing countries face."