COLLECTIVE MADNESS


“Soft despotism is a term coined by Alexis de Tocqueville describing the state into which a country overrun by "a network of small complicated rules" might degrade. Soft despotism is different from despotism (also called 'hard despotism') in the sense that it is not obvious to the people."

Thursday, October 09, 2008

The Blame Game


The Elephant in the Room: Meltdown has many culprits

Sure, Wall Street deserves some of the blame. But so do lots of U.S. borrowers.



By Rick Santorum Philadelphia Inquirer

Who's to blame?

During the last few weeks, we've seen a bellyful of finger-pointing. But who really caused the financial meltdown?

Greedy Wall Street CEOs are the most popular whipping boys. A Wall Street friend told me that what went on there was nothing short of "collective insanity."

The Federal Reserve's easy-money policy, some regulatory relaxation by the Securities and Exchange Commission, new investment vehicles that made traditional products look so yesteryear, foolish decisions about the quality of these vehicles by the ratings agencies - all played key roles.

Hopping aboard these flashy new vehicles, Wall Street took a ride on a high-leverage roller coaster that seemed only to go up. The firms raced along, accumulating high-yield assets that, in saner times, would have been off-loaded as junk.

Given the heights to which this coaster ascended, the ride down is sure to be scary. But where did this junk come from?

Our current problems stem from the dramatic decline in the value of investments backed by the high-risk mortgages of everyday citizens. These mortgages might involve no money down, interest-only payments, adjustable rates, super-low introductory rates, "stated income" (also known as "liars' loans," as no proof of income was required), and so-called "NINJA" loans - an acronym for "no income, no job, no assets."

Why would lenders take on these high-risk subprime loans? They didn't. Freddie Mac and Fannie Mae did, by agreeing to purchase them from the lenders.

Why would these government-sponsored organizations, with the implicit guarantee of Uncle Sam, back these loans? Politics. Democratic lawmakers conspired with the Democratic operatives who ran Freddie and Fannie in another failed government attempt to help the poor.

As a Senate Banking Committee member, I was lobbied nonstop by Freddie and Fannie executives when, along with John McCain, I tried to toughen regulation of this dangerous practice. Not a single Democrat joined us. Even though we passed the bill out of committee in 2005, it was killed on the Senate floor.

When energy-price spikes fanned inflation and squeezed borrowers, the Fed was forced to raise interest rates, causing payments on adjustable-rate mortgages to soar. The bubble in real estate values began to burst, wiping out whatever equity borrowers had.

None of this financial collapse would have occurred, however, without the participation of one last group of bad actors, a group so powerful that most politicians have avoided railing against it:

American borrowers.

This group includes homeowners who were delinquent on their mortgages - whether the unsophisticated, lured by the unscrupulous with promises of better living, or the savvy, who thought they could make a buck with little risk.

But many others also benefitted from easy-money policy. The truth is we all enjoyed the ride, with record credit-card debt, a negative savings rate, and home-equity loans.

What happened to living within our means, saving whatever we could, deferring gratification, and planning for the future?

We, and I include myself, have gone from "keeping up with the Joneses" to keeping up with the Madisons - Madison Avenue, that is. We have bought the line that "stuff" will make us happy, and that we deserve it, regardless of affordability. That goes for Wall Streeters and their estates in the Hamptons, middle managers and their suburban McMansions, and newlyweds and their starter homes.

I am often asked why, as a senator, I "harped" on cultural issues. The answer is that our beliefs, our choices and our character are not just private matters. They ultimately affect others. If enough people are privately irresponsible, whether financially or otherwise, all Americans suffer. Sometimes the suffering can even be measured in dollars and cents.

We are on our fourth bailout, with a fifth proposed Tuesday by McCain, and the crisis only deepens. Now, both he and his Democratic opponent, Barack Obama, want to shield Americans from the consequences of their behavior by bailing out irresponsible borrowers.

Anyone for a call to pay the piper, combined with an appeal for thrift, modesty, simplicity and sacrifice? Let's hope so.


69 comments:

  1. subsidizing unqualified individuals who have/had no business being home owners

    analogous to a judicial perspective that favors the "weak" and the "powerless"

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  2. Elijah: subsidizing unqualified individuals who have/had no business being home owners

    No choice. Fannie and Freddy were told to do it as part of some feel-good social engineering scheme.

    And then these bad mortgages were securitized, mixed in together with good ones and sold around the world

    Then the invention of the Default Credit Swap allowed the banks to get leveraged out the kazoo, the DCS market grew from $1 trillion to $50 trillion just from 2001. But it assumes that the triggering event, a mortgage or bond default, will happen in isolation, but when the whole structure is collapsing, and whole swaths of the country is upside-down in equity and getting foreclosed, not even the sellers of DCS protection have the liquidity now to make good on their contracts. So this sucker is going down.

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  3. We are on our fourth bailout, with a fifth proposed Tuesday by McCain, and the crisis only deepens. Now, both he and his Democratic opponent, Barack Obama, want to shield Americans from the consequences of their behavior by bailing out irresponsible borrowers.

    Anyone for a call to pay the piper, combined with an appeal for thrift, modesty, simplicity and sacrifice? Let's hope so.


    - Santorum

    Okay, there was this really funny bit by Dana Carvey on Leno last night - I have not watched the latter, I don't think, in almost a decade - in which Carvey mimicked a (fictitious) Congressional codger: Depression? Oh hell yes, let's have another one. I was there for the last one. Ate dirt and lived in a tree! Those were the best times of my life!"

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  4. Using the "Way Back" machine is so entertaining.
    To illustrate just who wanted to be subsidizing unqualified individuals who have/had no business being home owners

    Bush aims to boost minority home ownership
    June 17, 2002

    ATLANTA (CNN) -- President Bush touted his goal Monday of boosting minority home ownership by 5.5 million before the end of the decade through grants to low-income families and credits to developers.

    "Too many American families, too many minorities, do not own a home. There is a home ownership gap in America. The difference between African-American and Hispanic home ownership is too big," Bush told a crowd at St. Paul AME Church in Atlanta.

    Citing data he used Saturday in his weekly radio address, Bush said that while nearly three-quarters of white Americans own their homes, less than half of African-Americans and Hispanic-Americans are homeowners.

    He urged Congress to expand the American Dream Down-Payment Fund, which would provide $200 million in grants over five years to low-income families who are first-time home buyers.
    ...
    "They're so proud to own their own home," Bush said. "What we've got to do is make sure these stories are repeated over and over."

    Bush added, "I do believe in the American dream. I believe there is such a thing as the American dream. And I believe those of us who have been given positions of responsibility must do everything we can to spotlight the dream."

    He said, "Owning a home is a part of that dream."

    Fannie Mae, Freddie Mac and the federal Home Loan Banks -- the government-sponsored corporations that handle home mortgages -- will increase their commitment to minority markets by more than $440 billion, Bush said.

    Under one of the initiatives launched by Freddie Mac, consumers with poor credit will be able to obtain mortgages with interest rates that automatically decline after a period of consistent payments, he added.

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  5. hey Trish,

    How is the US looking from the outside in with Ayers, ACORN ,and Palin's terroism leading the charge? Does it look a mite bit...silly... from your perch? Or are these perfectly legitimate issues in the final 30 days as Rome burns? What do the Columbians think?

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  6. This trip does not take US back nearly as far, and is not by a Bush fan.

    NYTimes - Paul Krugman
    January 30, 2008,

    The ownership society
    Not.
    The homeownership rate has fallen sharply again. At this point it’s back down to levels of fall 2001.
    Two implications.
    First, everything you’ve heard about how subprime lending at least made the dream of homeownership available to many Americans who were previously excluded — never mind. We’re back down to homeownership rates before the subprime boom.

    Second, it’s now virtually certain that by the end of the Bush administration homeownership will be lower than it was at the beginning. More of that economy other presidents would envy, I guess.

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  7. Ash, there was a truly disgusting news article today, about Ayers, and some forced sex with a woman.

    I am wondering if you have read that, and, if you have, what you make of it?

    Bob

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  8. Then the current news

    Associated Press
    Posted: Oct 10, 2008

    washington, october 9
    News that the Bush administration is considering taking part ownership in a number of US banks helped restore a relative calm over global financial markets on Thursday. The aim of such a move would be to thaw the lending freeze that threatens to push the world’s economy into recession. It comes after rampant fear about the global economy sent investors scurrying on Tuesday for safety in US Government securities despite an orchestrated round of rate cuts by the world’s central banks.
    In an effort to show that governments around the world were focusing intently on ways to resolve the crisis, the administration announced that US president George W Bush would meet with finance officials from the Group of Seven major industrial countries at the White House on Saturday.

    “The president will have the opportunity to hear directly from the finance ministers about how the financial crisis is affecting their respective economies and the steps they are taking to deal with these challenges both individually and collectively,” presidential press secretary Dana Perino told reporters.

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  9. The politicians have failed.
    The government and spending grew enormously under Bush.

    Federal tax revenues were huge the last few years, unfortunately spending was uncontrolled.

    Read yesterday Pelosi wants another 150 Billion economic stimulus package

    Money for nothing - isn't that the Dire Straights song

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  10. I saw some references to it Bobal but so what? Chances are there is not a shred of truth to it but even if there it is true, so fucking what? Ayres is a bad guy? Yeah, again, so fucking what? This is relevant how?

    Hey bobal, I hear there is a rapist residing in your neighbourhood - I guess we should tar and feather you. Better yet, you are on the board with the fool Mats, time for you to pay for that sin.

    ReplyDelete
  11. holy shit Bobal, Ms. T is gay and on the board therefore you must support teaching kindergarteners on the beauty of gayness.

    ReplyDelete
  12. Not only that Bobal, but you were instrumental in her gaining her seat on the board - a gay person: oh my, the abombinatation

    ReplyDelete
  13. The Fool On The Hill

    But the fool on the hill,
    Sees the sun going down,
    And the eyes in his head,
    See the world spinning 'round

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  14. THAT is against GOD's will!!!

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  15. The Colombians, in majority, want McCain. And they want him for reasons you would scarcely understand unless you were here, ash. The middle east they could give two shits about and think we were off our rockers on Iraq. But, hey. Who doesn't. (And really, that, among other things, endears them to me.)

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  16. embrace you foollishness mattie!

    ReplyDelete
  17. Is it simply because of trade trish? Fear of a protectionist Obama? (certainly some validity to it though I'm not convinced the current republicans score much better - xenophobia and an inward bias seem predominant in America today).

    ReplyDelete
  18. Is it just about trade?







    OH HELL NO.

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  19. Ash: Not only that Bobal, but you were instrumental in her gaining her seat on the board - a gay person: oh my, the abombinatation

    I may be gay, but me and Bobal have the same Palin-crush. Too bad she's got a chain around her neck attached to a socialist this time.

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  20. Chavez and all that then I presume.

    Yeah, I'm ok duece, but a bit ticked off at the social conservatives and their friggin' hypocrisy.

    ReplyDelete
  21. We gave as much thought to our sub-prime lending as we did to our adventure in Iraq. Sort of a No Doc approach to life.

    ReplyDelete
  22. "xenophobia and an inward bias seem predominant in America today"

    is that your perspective or can you quantify the statement with data

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  23. embrace you foollishness mattie!
    ==

    Ashley,

    If Bob can hate your guts and be ok with Tes, so can I.

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  24. The world needs the US to get over its cultural civil war

    - and fastSarah Palin is the Katyusha rocket of the American right. But so far her attacks on Barack Obama aren't working


    Thursday October 9 2008

    As if there were not enough real enemies to fight, the United States has been at war with itself in recent years. They call it the culture war. It has generated more hot air than most real wars in history. John McCain has now turned to its red army tactics to rescue himself from impending defeat - and Sarah Palin is his Katyusha.

    "There is a religious war going on in our country for the soul of America," declared the conservative nationalist Pat Buchanan at the Republican national convention in 1992. "It is a cultural war, as critical to the kind of nation we will one day be as was the cold war itself." Later that year he explained that "the Bosnia of the cultural war is abortion". As Buchanan foresaw, this has been a war for power: not military power, but the kind that comes from shaping the norms, beliefs and values by which people live, and the meanings attached to words like liberalism, patriotism or, indeed, culture. The two sides in this war came to be labelled red and blue, after the colouring of Republican and Democratic states on electoral maps


    snip

    The world needs the US to get over its cultural civil war - and fastSarah Palin is the Katyusha rocket of the American right. But so far her attacks on Barack Obama aren't workingComments (211)
    Timothy Garton Ash in Stanford The Guardian, Thursday October 9 2008 Article historyAs if there were not enough real enemies to fight, the United States has been at war with itself in recent years. They call it the culture war. It has generated more hot air than most real wars in history. John McCain has now turned to its red army tactics to rescue himself from impending defeat - and Sarah Palin is his Katyusha.

    "There is a religious war going on in our country for the soul of America," declared the conservative nationalist Pat Buchanan at the Republican national convention in 1992. "It is a cultural war, as critical to the kind of nation we will one day be as was the cold war itself." Later that year he explained that "the Bosnia of the cultural war is abortion". As Buchanan foresaw, this has been a war for power: not military power, but the kind that comes from shaping the norms, beliefs and values by which people live, and the meanings attached to words like liberalism, patriotism or, indeed, culture. The two sides in this war came to be labelled red and blue, after the colouring of Republican and Democratic states on electoral maps


    snip

    The world needs the United States to get over its cultural civil war, and get over it fast. Not that these moral, cultural and social issues are unimportant. They are among the most important things. But they are also among the most private things. The business of government and the law should be confined to providing a liberal (in the classical sense) framework in which men and women can make personal choices about private goods. That should be only a small part of what government does. By contrast, the central business of government is to provide public goods such as national and personal security, the regulation of markets in which private enterprise can flourish, the international development that is in all our national interests, and a clean environment using diversified, sustainable energy supplies. That's what the United States needs from its new president, and that's what the world needs from the United States."

    http://www.guardian.co.uk/commentisfree/2008/oct/09/uselections2008.barackobama



    Well worth reading the whole article.

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  25. 2164th said...
    We gave as much thought to our sub-prime lending as we did to our adventure in Iraq. Sort of a No Doc approach to life.



    I would suggest it wasn't so much a lack of thought but rather an adherence to rigid ideology -- righteousnous in all its splendor. We all get to enjoy its fruits.

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  26. 2164th: We gave as much thought to our sub-prime lending as we did to our adventure in Iraq. Sort of a No Doc approach to life.

    Zero percent down on the Iraq War. In fact, a tax cut rather than a tax hike. During wartime.

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  27. no worries there T, no worries, all that oil, bound to turn a profit. We'll do it on the mort securities too!

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  28. We gave as much thought..
    ==

    "Plan the trade, trade the plan."

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  29. Money for nothing, the chicks for free.

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  30. Righteousness in lending? No, political correctness and racial blackmail and intimidation

    Iraq became a mission. The country would have been better served by dishing out a very violent reprisal against the AQ and Taliban in Afghanistan and the Arab support network in Saudi Arabia. That would have satisfied the natural blood lust of Americans wanting justice.

    The message would not have been lost on the Islamic world including Iraq. Iraq makes no sense without Afghanistan.

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  31. "Chavez and all that..."

    Yes. Chavez and *all that*.

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  32. Ash: Not only that Bobal, but you were instrumental in her gaining her seat on the board - a gay person: oh my, the abombinatation

    Not only that, Ash, me n' T, we know good literature when we raft into it. Floatin' down the river together, fishin' and stuff, and talkin'.

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  33. Iraq made no sense after June of 2003, when we cancelled those Iraqi elections.

    That was the day the Liberation died and the Occupatiion began.

    A mission the military was ill prepared for and did not do very well. While DoS was even worse.

    Now almost a trllion bucks later, those that would have been elected in 2003, they're still large and in charge. We did not restructure Iraqi society, which was the Goal of the Occupation.

    So we must stay on, maybe for one hundred more years. The people of the United States, they'd be fine with that, if casualties were contained.
    Or so says one of my Senators.

    Good money after bad is money for nothing.

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  34. Bobal: Not only that, Ash, me n' T, we know good literature when we raft into it. Floatin' down the river together, fishin' and stuff, and talkin'.

    Every night we passed towns, some of them away up on black hillsides, nothing but just a shiny bed of lights; not a house could you see. The fifth night we passed St. Louis, and it was like the whole world lit up. In St. Petersburg they used to say there was twenty or thirty thousand people in St. Louis, but I never believed it till I see that wonderful spread of lights at two o'clock that still night. There warn't a sound there; everybody was asleep.

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  35. My Lady Miss T came through again.

    Who do I love most, Sarah, or Teresita?

    I'm hammered on my pillow.

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  36. Grim news in Asia. Most markets off around 8-11%.

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  37. 2012, say the Mayans.
    ==
    Binary 'deathstar' has Earth in its sights
    .
    .
    http://www.cosmosmagazine.com/node/1878
    .
    .

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  38. Grim news in Asia. Most markets off around 8-11%.
    ==

    Means nothing. They follow US markets. And today was brutal.

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  39. Mornings, before daylight, I slipped into corn fields and borrowed a watermelon, or a mushmelon, or a punkin, or some new corn, or things of that kind. Pap always said it warn't no harm to borrow things, if you was meaning to pay them back, sometime; but the widow said it warn't anything but a soft name for stealing, and no decent body would do it.

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  40. Had the US privatized Social Security, the SSA could have been picking up some very cheap securities, stabilizing the markets and improving the value of the portfolio.

    ReplyDelete
  41. Remember the "cod war" between Britain and Iceland:

    back to the future...

    "Gordon Brown declared diplomatic war on Iceland last night.

    He launched a furious attack on the 'illegal' refusal to pay back billions owed to British investors in the country's failed banks.

    The Prime Minister invoked rarely-used anti-terrorism powers to freeze Icelandic assets here as fears grew that vast sums of British cash could be lost."

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  42. FYI


    The First Cod War

    The first "war" occurred in 1958, when Britain was unable to prevent Iceland, from extending it's fishing limits, from 4 miles, to 12 miles, off Iceland's coast.

    The Second Cod War

    The second dispute was in 1972-1973, when Iceland extended its limits to 50 miles. This conflict was concluded with an agreement between the two countries that limited British fishing, to certain areas, would be allowed inside the 50-mile limit. In addition, Britain agreed that British vessels could not catch more than 130,000 tons of fish annually. This agreement was valid for two years and expired on November 13 1975, when the third "Cod War" started.

    The Third Cod War

    Between November 1975, and June 1976, the cod, a common species of fish, brought two NATO allies to the brink of war. Great Britain and Iceland confronted each other over Iceland proclaiming its authority over the ocean, up to 200 miles from its coastline. The issue was the amount of cod caught by the two countries' fishermen.

    During this conflict, British trawlers had their nets cut by Icelandic Coast Guard vessels and there were numerous rammings between Icelandic ships and British trawlers and frigates. The conflict caused Iceland to threaten to close the NATO base at Keflavik, which would have imperilled the NATO ability to defend the Atlantic from Soviet incursions. The picture left shows St. Gerontius ramming the Icelandic Coast Guard Vessel Odin. Note warp cutting gear towed from stern.

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  43. Are you on Drugs Ash?
    Why the Serial, Hysterical Raving?

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  44. Iraq made no sense after June of 2003,..
    ==

    Iraq made no sense after $25Bn.

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  45. Good catch on compassionate George, 'Rat.
    That, (the ownership society) plus unlimited illegal immigration and jobs was part of Rove's plan for a permanent majority.
    Turns out they couldn't overcome either markets or politics with a morally corrupt plan.

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  46. After supper she got out her book and learned me about Moses and the Bulrushers and I was in a sweat to find out all about him; but by and by she let it out that Moses had been dead a considerable long time; so then I didn't care no more about him, because I don't take no stock in dead people.

    If you can't understand that this is great American literature, you are a dead man.

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  47. The truth being, we should start anew, here in America, and say goodbye to all that past.

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  48. That 5 million homes owned by illegals, doug, where'd it come from, it seems to be a tad overstated, based upon the 12 to 20 illegals believed to be in the US.

    But ...

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  49. Bob, your quote stood the hair on my arms up with a flashback to seventh grade...thanks.

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  50. "The boom years are over…"

    Speaking was a spokesperson for Vienna tourism board…20% fewer Americans are visiting the city. But almost anyone might have said the same thing.

    The boom in construction has been over for nearly two years…

    The boom in the financial sector ended about 12 months ago…

    The boom in the aviation industry died when oil went over $100…

    The boom in commodities was killed when oil went under $100…

    The boom is retail seems to have come to a halt more recently. This will be the first quarter in many years with declining consumer spending…

    The boom in consumer borrowing seems to have come to an end too…

    Yes, dear reader, what MUST happen, DOES happen. But it usually happens when you don't expect it…or in a way that surprises you. The big surprise has been the violence of the correction when it finally got going.

    "Day of Reckoning," the Telegraph called it.

    But we should be happy. Not only is the mainstream media picking up our themes, now both sides of our Trade of the Decade are working. Yesterday, the Dow went down another 189 points. Gold went up $29.

    But instead of joy and satisfaction, we feel a sense of dread. It's all very well to have a few Krugerrands and gold louies stashed somewhere…but you can never have enough of them to brighten up a darkened world. As an insurance policy against a financial catastrophe, gold still works - perhaps better than anything. But who wants his house to burn down so he can collect the fire insurance?

    Guess how much Americans have lost so far from the stock market decline? Almost $5 trillion. Stocks are down about 33% from their '07 peak - resulting in the destruction of wealth on an unprecedented scale.

    Add to that the loss of wealth in the domestic property market, and you can't help but wonder…how do people keep going? The Wall Street Journal reports that one in six homeowners is "under water" - with more mortgage than house.

    "About 75.5 million U.S. households own the homes they live in. After a housing slump that has pushed values down 30% in some areas, roughly 12 million households, or 16%, owe more than their homes are worth, according to Moody's Economy.com."

    And house prices are still going down. Yes, that is something that MUST happen too - house prices have to go do to the point where people can buy them. The average house must be affordable to the average homeowner. And since incomes haven't gone up in the last eight years, we can presume that housing prices shouldn't have gone up either. So, we ask…how much more do houses have to fall before they are back to where they were 8 years ago…or merely to the multiple of income that buyers can afford? The answer…according to the numbers we've seen…is about 20%. That suggests that we are only about half way through this housing decline. It further suggests that when it is over one out of every three homeowners could be in serious trouble. He may not be under water, but he will definitely be up to his neck.

    And now it gets worse. Because practically every businessman in America is waking up this morning thinking about how he can cut costs. His sales are going down. What choice does he have? He has to cut his payroll. And so, he begins making a list…which employees are essential to his business…which are not. Overtime is cut. Part-time workers are scaled back. Full time workers are let go. He knows the woman in the mailroom is a waste of money, but she's nice to look at. The fellow running the advertising is an idiot, but he can't stop advertising, can he? And how 'bout that driver…he seems to disappear for half the day; he's never where he's supposed to be…yes, he'll be fired immediately…

    And then, the world's lights grow dimmer.

    *** What to do?

    The world's buffoons and hacks think they have the answers. In France, the leftist newspaper, Liberation asked a dozens of "intellectuals" and "artists" what they thought. None seemed to have any idea how markets work. And naturally, they had the usual claptrap solutions.

    In Germany, people are posing "existential questions," says Handelsblatt, wondering about the "crisis of faith" that has overtaken capitalism. "Now we see that capitalism is nasty," says Die Zeit. "We need more government to bring it to heel."

    And in America, too, the clowns and opportunists are working around the clock to take advantage of the situation.

    Yesterday came word that the Fed will buy commercial paper. This means the Fed is now financing business ventures. What the Fed aims to do is to cut out the middleman - the banks. For their part, the banks are grabbing all the Fed cash they can - and socking it away. They don't lend it out…because they're afraid it might not come back. And they need it to remain solvent. But if banks don't lend, it defeats the whole purpose of giving them money. The government is famously 'pushing on a string,' as Keynes once put it - it sends money out, but the money doesn't end up where it is most needed. So, now the Fed lends directly to business…and now the business community depends on the government too. Not only will homeowners have to thank the government for the roofs over their heads…company executives and shareholders too will be beholden to the great gods of the Potomac. At this rate, soon the feds will be providing the bakers with flour.

    Where this leads, we don't know…but we don't think we want to go there.

    *** Thank God, the SEC is on the case. After sleeping through the biggest bank robbery in the history of mankind, the regulators are waking up and offering to clean up Dodge City.

    And just who do you think they're aimin' for? 'Dirty Dick' Fuld - who drove the 158-year-old Lehman Bros. into the gulch…and made off with $480 million? Jack-eyed 'Jimmy' Cayne, who claimed to be playing cards the night they gunned down ol' Bear Stearns? Or how about that fast-talkin' Al "Bubbles" Greenspan - who controlled the whole territory until the Bernanke gang moved in?

    Nah, the SEC has put out an arrest warrant for a Beverly Hills money manager whom no one ever heard of. He's public enemy number one, to hear the SEC tell it. His crime? Short selling. Not even naked short selling. He did it with his clothes on; he bought shares. And then he sold short against them. In so doing, he made the glorious sum of $207,000. Short selling is an ancient and hallowed practice in the financial markets. The SEC has made it illegal; though no one knows exactly why.

    But now they've got their man. The desperado doesn't even deny it. Now, the SEC can make him do the perp walk and pretend that it is performing a useful function.

    John K. Galbraith, in his book on the Great Depression, describes what is going on:

    "As the ghosts of numerous tyrants from Julius Caesar to Benito Mussolini will testify, people are very hard on those who, having had power, lose it or are destroyed. Then anger at past arrogance is joined with contempt for the present weakness.

    "The victim or his corpse is made to suffer all available indignities. Such were was the fate of the bankers. They were fair game for congressional committees, the courts, the press and comedians."
    Daily reckoning…..

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  51. deuce, we got to protect the Constitution, as best we can, and go forward from there, and make something new, cause the old ways really are gone now....

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  52. It will be more than a little ironic if Obama wins and happens to indded be a true hard core socialist.

    He won't have to do anything to convert America to socialism. All the work will have been done.

    “If a nation values anything more than freedom, it will lose its freedom; and the irony of it is that if it is comfort or money that it values more, it will lose that too”
    William Somerset Maugham

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  53. Habu--Obama is a marxist. I can't believe we are about to elect this piece of crap.

    We will just have to toughen up, on our side.

    The very last thing Huck was talking about on his trip down the river was an Obama administration, and I wish Twain were here to talk about it.

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  54. Tomorrow feels like the day, Deuce. I think we'll find out if we're in "real deep" shit, or "Marianas Trench" depth Deep Shit.

    I think it's just "real deep" shit,

    but, then again, I'm just babbling. No living, oxygen-stealing hillbilly could Possibly have a "Clue" where this mess is heading, or when it's gonna get there.

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  55. There's a really great passage in "For Whom The Bell Tolls" where the hero from the University of Montana tells old Anslemo in Spain to stay right there at the post. And, he does so. The old boy does so. One of my favorite passages in the books.

    Night, Ruf. We are too old to worry. :)

    By the way, I have the perfect bench for us, will try to post tomorrow.

    Right there on the water, ladies walkin' by...youuhooo!

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  56. Aw shucks Ruf, don't pay it no mind, that New Century Meltdown "Ripple" only led to the calm pond we're now floatin in!
    ;-)

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  57. Heard it on Talk Radio, 'Rat, so it may be overstated.

    Probly pretty hard to find with our "transparent" institutions, govt and private alike.

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  58. The truth being, we should start anew, here in America, and say goodbye to all that past.
    ==

    Bob,

    "If you do not change direction, you'll end up where you're going." - Chinese proverb.

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  59. House finished, Chinaman Dies.

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  60. mika2k1:

    Your comment is awaiting moderation.

    Yes, time to go back to the basics. First thing to understand is who allowed a $700 trillion derivative market to emerge in $50 trillion world, and how do we kill them.
    ==

    When the law isn't accountable to society, society should not be accountable to the law.

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  61. "When the law isn't accountable to society, society should not be accountable to the law."

    What exactly are you pr'posin' thar, fella?

    Think your just gonna come in here and corrupt us with the lascivious airs of a servant to Canada and Crown?

    I ain't havin' that.

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  62. I'm saying you aint got half the stick of TNT your forefathers had.

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  63. The logic Aeyer's Folks Used to blow up the Murtah Family's house.

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  64. This comment has been removed by the author.

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  65. Doug, what would you do if you awoke to see Ayers sleeping beside you, his arm draped across your chest?

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  66. Doug is taking a shower, singing a beach boys tune, only to be overrun by a bunch of Obamanatic mashers, up for some a the ol' in-out, in-out!

    Dragged from his steamy abode, clawing at the ornate knobs, porcelain fixtures, towels racks and lastly the door frame, Doug grew raspy from screaming, and the gang descended upon him, ravenous, to make a game of him.

    Amidst the depravity and the brutality, Doug would cope by egressing to the Hawaiaan Psychic Repose, open only to those precious few corpulent festive islanders who shall inherit the future.

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