Can anyone else tell me why this gives me chills? Investment firms, mutual fund managers, and investment bankers are trying to sell Treasury-backed Fannie Mae securities. What a monumentally bad — even immoral — idea. We’re over-extended to the tune of a half-trillion dollars annually, over $9 trillion total; we’re embroiled in an endless Middle East war of empire; and staring down the double barrels of the rise of liberty-crushing American fascism and a greater, deeper Great Depression. And these money men are trying to push us over the cliff of dissolution by making sure each and every one of us has a personal stake in their unwise investments. This Gross cat is even shilling for the GSEs, calling their plummeting stocks, and the bad paper backing them, “excellent.”
Can someone please, please take them out behind the wood shed and teach them some manners? It seems to me that, rather than trying to convince the rest of the world Fannie Mae is doing great, Bill Gross should be taking PIMCO’s marbles and going home. Or, at least to another playground.
Miraculously, the Brits seem to have a more reality-based outlook. According to bloomberg.com, British Chancellor of the Exchequer [rough equivalent to SecTreas Henry Paulson] Alistair Darling is a far cry from Paulson’s Pollyanna:
“The effect [of the current financial industry's "global credit crunch"] is going to be far more profound than people predicted even at the turn of this year…. It is quite clear that if you look during the course of this year, conditions have become more difficult across the world.”
[…]
In the [July 14 Bloomberg TV] interview, Darling said the worst is far from over, noting action to prop up the mortgage lenders Freddie Mac and Fannie Mae in the U.S….
Worldwide, banks and securities firms have raised $324 billion in the past year after record writedowns and credit losses of almost $410 billion from the collapse of the subprime mortgage market, according to data complied by Bloomberg.
“I don’t think anyone would be wise to start speculating on how long the present difficulties will last,” Darling said. “We are dealing with them here and other countries are dealing with them as well. If you look at the problems the banks have had, they have moved into a different phase and governments have to take account of that.”
Of course, one wonders what Mr. Darling means by “take account of that.” As head of a state organ, I’m sure he means further regulation and consolidation of the financial oligarchy in the UK, the US, and elsewhere.
Bernanke’s British doppelganger toes the party line much better than Darling, however — not that he denies a problem, just minimizes its import. From the same Bloomberg article:
The Bank of England has already presented a more somber outlook [than Darling's March, 2008, guesstimates of the immediate impact of the "crunch"]. Governor Mervyn King said then [in March] that there may be “an odd quarter or two of negative growth.” His deputy, John Gieve, said policy makers must grapple with inflation “well over” 4 percent, double the government’s target.
[You've gotta love the Brits' mastery of phrase-turning! "[A]n odd quarter or two of negative growth.” Indeed!]
Our own Henry “Hank” Paulson, SecTreas to the stars, thinks things will get better if only we can leverage enough of our futures; if only Fannie and Freddie have access to the unvarnished [that is, non-existent] wealth of the US government, if only that government doffs all pretense to fascism and buys openly and directly into a corporate interest [which will not, of course, ever lead to preferential treatment in the affected sector], if only ordinary Americans would make themselves personally liable for any malinvestments — existing and future — those corporations may make [the subject GSEs currently hold over $5 trillion in bad paper — that's almost $17K for each and every man, woman, and child in this country, or over $100k for my family], if only a complicit and compliant Congress would allow these simple steps to be taken, everything would be just fine. Congressional idiots who know nothing of money or economics, of course, hoping to get re-elected this November, will dance to whatever tune he plays. “Trust me,” he seems to say. “I know what I’m doing.”
And Ben Bernanke is the evil little “Mini Me,” furiously printing Monopoly money as long as he has paper on which to print it. Seriously, does “Big” Ben not know that the sole practical function of the central bank — from Newton, to Bismarck, and on — has been to inflate the currency, in order to fuel governmental expansion? Or does he, a protected political elite, simply not care? It’s either complicity, or ignorance that drives these guys.
They’re either idiots, or they’re in on it.
I seriously wonder, sometimes, whether we don’t all deserve what’s coming. I’m not one to scream about the sky falling, but I do see a big “correction” on the horizon. And when this regulator-caused storm hits, what will be the cure? Why, more regulation, of course!
It’s like they think they can get out of the hole by digging out the bottom.
Or is it just me?
