January 31, 2008

The government and the Fed are throwing in everything they've got in an attempt to halt the financial crash and bank failures. So will it work?

My take: There's more to come - bank failures, monoline bailouts, Fannie and Freddie trouble, foreclosures, hundreds of billions of write-offs, job losses, etc.

I'm not sure how many bullets the government and the Fed have left in their guns - but they're unloading the chambers pretty quick right now. Shockingly quick. And yes, it's an election year, so everyone involved is motivated to keep the incumbents in power and the banks from failing.

I think all this does is delay (again) the real pain. Lowering interest rates to below the rate of inflation is what got us the housing bubble. The Fed is doing it again, they seem to never learn.

They can't re-inflate the housing bubble, since they can't force banks to lend and they can't force sheeple to borrow. But they're doing everything they can to create a new bubble somewhere.

What's your take? How are you investing today? Time to catch falling knives?


Anonymous said...

No, it ain't gonna work. Not going by this article:


The USA has been propped up by it's reserve currency status and that isn't going to last long with the dollar diving the way it is. The US dollar has lost 8% of it's value in the last year. Way to go Bush! Way to go moron candidates - I don't hear any of them talking about this stuff except Ron Paul of course!

Anonymous said...

Next bubble will be in Everything, namely: stagflation

Anonymous said...


Is America's negative interest rate just like Japan's in 1998?

With Ben Bernanke's latest 50 basis point rate reduction it's official -- the U.S. is paying borrowers to take money off its hands. This is just what the Japanese government did during its long economic nuclear winter that began in 1989 when its combined real estate and stock market bubble burst.

Now it's our turn. How so? The real interest rate is equal to the Nominal rate minus the Inflation rate. After today's 50 basis point rate cut, the Nominal rate is 3%. And today's GDP report noted that the inflation rate -- as measured by Bernanke's favorite measure -- the change in Personal Consumption Expenditures (PCE) -- was 3.9% in 2007. The result is that the Fed is giving away money at the rate of -0.9%.

What does this mean? The Fed is so desperate to get us out of the economic slowdown that it is willing to pump up the inflation rate to do so. A bit less than 10 years ago, in November 1998, Japan did the same thing. Nine years after its economic slump began, according to CNNfn, Japanese banks were literally paying for banks to hold money for them thanks to their negative real interest rates.

The reason? A lack of trust in the solvency of its financial system. That sounds like just the thing we have here.

Anonymous said...

the fed has 12 .25 caliber bullets left, they fired off 2 yesterday, and 3 last week

Anonymous said...

well the interest I WAS earning in my so called high interest savings account was just slashed again thanks to the fed cutting their rate. I definitely have my eye out to move my money in to some other form of investment because it looks like the interest I am earning isn't going to go anywhere but down, down, down for the foreseeable future.

Anonymous said...


I totally agree. For the Fed to drop rates 1.25% in less than two weeks that speaks volumes about the kind of numbers they see rolling in. Keep in mind:

--All those exotic loans (subprime, stated income and option arms) are gone and they are not coming back.

--Option ARMs are just starting to reset en masse.

I'd say we are finally in the top of the 4th inning...still a ways to go.

I'm Rick James, beyatch! said...

/slap/ That's right, Rick James in the house!

All I got to say is that the Fed reminds me of that last groupie through the door of the dressing room - all ugly and and just lookin for love.

Well, no love here for the uglies, here, baby! You keep bringing that ugly-ass inflation and thinking your cheap-ass >bleep< ah....credit will make the members of my band start trusting each other.


I'm Rick James, beyatch!

mhrist said...

So if I borrow 100$ for 3%/year and buy Euro, put them money in a bank. Get 5% from the savings there + 8% dollar devaluation + 4% inflation = 17% - 3% = 14%

So I can make 14$ out of every hundred I am begged to borrow? Nice.


gadfly said...

The Fed and the government are basically trying to get people to continue to lend borrow and spend again. The answer you've got to ask yourself is this: If you own a bank will you now lend to a Florida condo developer and if you are a homeowner will you borrow to go on a shopping spree and give your house an expensive makeover on top of your maxxed out credit cards. Come on, the economy depends on your answer.

www.DollarPANIC.blogspot.com said...


WHY? Because...

The Middle-Class coping mechanisms are gone

(and the Blackouts have not even started yet)

Anonymous said...

Yes, this economy will suffer some real pain. The only difference I have with the reasoning on this board is the question of whether all of the pain has to happen all at the same time? Is it unreasonable to alleviate the worst part of the downturn in housing, manufacturing, services, whatever over a period of time so that it will be easier on people?

Princess Mononoke said...

Every corporation that has been mentioned here on HP should be bankrupt, shut-down, CLOSED!

We are all NOW witnessing what ZOMBIE Corporations look like. The walking dead! Creeeeeeepy...

Anonymous said...

They will keep rates low long enough to mitigate the ARM reset wave this year & early next. This, combined with FHASecure, the revamped VA loan program, the loosening of Fannie/Freddie loan purchase, and the FHLB system and the elevated refi activity will keep foreclosures down, thus keep banks and state/local gov'ts from bleeding and dampen the decline in home values. Once the worst has passed and a new administration is in place then they will jack rates up to crush the inflation monster that they released for a year or so. After inflation has been crushed we will then its anybody's bet as to what will happen. It will be a wild ride, Good Luck!!!

common sense said...

Won't be a monoline bailout. No one can afford that. Certainly not our bankrupt gov't, and no market players have that kind of dough.

In fact, why haven't S&P and Moody's downgraded the MBIA and Ambak yet? Who's telling them to put off the downgrade? The gov't? Paulson or Bernanke? Wilbur Ross?

Look at MBIA's losses they announced today: $2 billion. Tell me how in the hell they can still be rated AAA.

What a frackin joke. Corruption rules.

Anonymous said...

They can't re-inflate the housing bubble, since they can't force banks to lend and they can't force sheeple to borrow.

Can't force the sheeple to borrow? Believe me sir, the sheeple are more than willing to borrow. But thank God the former is in place.

westwest888 said...

Washington Post takes on Fannie Mae CEO, admits there was a housing bubble that burst. In other news, hell freezes over.

Embracing housingpanic is so conformist I'm looking for something new!


bleak said...

Banks are not solvent, they need capital. Banks have turn more cautious about lending. No loans, no credit (money) expansion.

Your elected government seems to be doing a better job getting money in people's pockets, though this is wrong on so many levels. It won't stop the tsunami of credit (money) destruction.

No No No said...

Does ANYTING the government do actually work? If you think YES, close your eyes and conjure up a vision of El Presidente Jorge Bushco. Now open your eyes.

Would you let this person wash your car or take out the garbage?

I know I wouldn't.

Would you TRUST this person with your/kids future? NO NO NO

Anonymous said...

Despite all the economic fuckedupnes out there, I don't see it in my day to day. I quit my IT related job 6 months ago to go the independent consultant route. I have more work available that I have the time for. And I don't know anyone, friend, family or acquaintance who is out of work. Well involuntarily out of work. I do know a few guys who work 6 months a year and make enough that they can take the other 6 months off.

Don't get me wrong. Housing...wouldn't touch with a 30' pole right now and will continue joyfully renting for the near term. But I'm starting to question the premise that things are THAT bad everywhere else.

Anonymous said...

Snapper turtles, sizzling, skewered through the ass. The Americano is history. Ipods are selling!

(Posted on behalf of ahac/dopes)

Anonymous said...

Next bubble will be in Everything, namely: stagflation

January 31, 2008 8:05 AM

The bubble is already in everything. I work in the food business and large corporate food distributors like Sysco Foods and US Foodservice instruct their prefered vendors to "artificially" incease the price by 30% and then "kick the money back to them". The effect is the "end users" and "consumers" are being over charged by 30%-45% for food products. This money then ends up in the pockets of Sysco Foodservice who turns around and uses the money in the financial markets and for additional takeovers of independent foodservice distribution channels.

The total amount of this rip off is in the billions of dollars annually. Where is the Government?

LauraVella said...

Nothing the feds did in 1930-1936worked either, and it wont be any different this time. Too much excess in credit and goods does that to any economy.

Time is the only thing that will correct the problem. Throwing everything at it, (rate reductions, stimulus packages) will only prolong the inevitable.

Expect this downturn to worsen and last a very long time.

Its time to baten down the hatches folks!

NEPA Bubble Sitter said...

Hilarious that anyone thinks this is anywhere near over...the Fed can't stop the mess they got rolling, no way, no how...unless they find a way to push lending standards back to 'Got a pulse? Here's your loan.'

The housing market is just starting its freefall...if you don't have 20% down, qualify for an FHA (for which you cannont have a mortgage late for 12+ months, etc.), or have real, documentable income that meets the 29% PITI ratio 'in best Soup Nazi voice' NO LOAN FOR YOU!

So, other than the small percentage of people who actually invest and save or managed to hang on to some cash when they sold at peak...everyone else is out of the buying pool. FHA is 3%, but even THAT is 6K on a 200K house.

FBers can put their houses up for whatever they'd like...but they aren't going to ever SELL them until the price reaches what someone can get a loan for.

Things are starting to tank here in the Poconos...the foreclosures started out in Monroe county and are now in Pike county, right down the road from where I sit. And it's going to get worse...pendings and closed properties are literally 1/24th of what goes up every day. Just for fun, we looked at a place a week or two ago and lowballed them. Their ask ing was 115K on an old turd in need of some cosmetic work, 1100 sq, we offered 83K and they refused to go down below 105K. It's already been on the market for 120 days and we were the first people to LOOK AT IT. We laughed and said when they were serious about selling it to give us a call. When we will LAUGH MORE and offer them 50K.

The foreclosures are the ONLY things that ARE selling...a 3000 sq on 2 acres totally remodeled just went for 135K. The bank had listed it for 259K. Muwhahahaha!

Tighter lending standards = vastly smaller borrowing pool + more listings than ever before = (dare I say it) ENJOY THE DIE OFF!

Me, I'm waiting to move into my adorable one bedroom apartment in town (huge gas savings by relocating there) that is in a newly remodeled building that the owners paid cash for a few years back. Security doors with keycode entry, laundry, garbage, water, sewer, pets...all for 600 a month. WHEEEEE!

Doc the ZEALOT said...

the fed has 12 .25 caliber bullets left, they fired off 2 yesterday, and 3 last week

I like the analogy, except that there is a MUCH bigger difference between a .50 caliber bullet and a .25 caliber bullet (having shot both) than there is between a .25 rate cut and a .50 rate cut!


Boom2Bust.com said...

What do you think, Keith? "Green" energy= next bubble?

"The Next Bubble?"

sam said...

The new bubble will be agriculture and "green" businesses, especially assuming the Dems win.

Like dot.com, there will be a value in the general theme, but most of the companies will be frauds.

truthwatch said...

How's this for the ultimate in hypocrisy by a former real estate broker turned Republican US Senator.These Bush lap dogs always preach less government role in our lives but now he wants the gov't to directly subsidize home buyers in order to bail out his real estate whore friends.


Ga.: Senator backs home buyer tax credit
By BEN EVANS updated 2:18 p.m. MT, Wed., Jan. 30, 2008

WASHINGTON - Sen. Johnny Isakson, a former Atlanta-area real estate executive, is proposing a $15,000 tax credit to lure home buyers back into a slumping market.

The incentive would help distressed homeowners and banks that are trying to make the best of bad loans, the Georgia Republican said. It also would boost the real estate and construction industries, including homebuilders who can't sell newly built houses, he said.

Traditionally a free-market advocate, Isakson said it's time for the government to step in to prevent a glut of vacant houses that would drive prices even lower and further damage the economy.

"It's a self-fulfilling situation," he said Wednesday at a news conference on Capitol Hill. "There is no buyer traffic out there right now because of the fear that people have."

Isakson's bill would spread the $15,000 credit over three years for the home buyer, and apply only to owner-occupied home purchases made from March 2008 to February 2009. It is one of many proposals introduced recently to address the growing housing crisis. Isakson said his measure is generating interest on Capitol Hill, but it's unclear whether it will gain traction.

Isakson said he did not know how much the proposal would cost the government in lost revenue.

The number of U.S. homes that slipped into some stage of foreclosure in 2007 rose 79 percent over 2006, according to RealtyTrac Inc. About 1.3 million homes received foreclosure-related warnings in 2007, and Georgia ranked among the worst 10 states.

While critics have argued that Congress should not bail out an industry that made poor decisions during the recent housing boom, consensus is growing on Capitol Hill for lawmakers to address the issue through an economic stimulus package.

Groups representing Realtors, bankers and home builders have been lobbying for buyer incentives. Homeownership advocates say Congress should focus on helping distressed owners restructure their loans and stay in their houses.

Isakson, from Marietta, worked at Northside Realty for more than three decades _ most of that time as president of the firm _ before coming to Washington in 1999.

"I don't know a lot about a lot of things, but I made my living in this business for 32 years," he said. "You gotta put back into the equation the missing man who's just not there, and that's the buyer."

No said...

Your math is wrong--if inflation is making everthing 4% more expensive in dollars, then whatever you get back into dollars buys 4% LESS stuff, not more.

6%, not 14%.

Now, if you used the money to BUY something that was going up in price by 4% (so sorry, not houses, cars, SUVs, big screen TVs, and you can't really resell food, fuel, etc), you'd get the 4% then--but then you wouldn't get the 5% for holding the euros!

And don't count on 5% in euros continuing much longer either.

IMO, only smart commodities plays can get you above 6%. And if, say, GLD only tracks the crash in the dollar? Well then even though it is going up, you are only STORING wealth, not gaining any, if you want to later sell it and buy something. Unless prices (like food and fuel) deflate.

Best bet is to not own a house now, or a car for that matter. And make sure you will be able to keep your job. And diversify a bit into commodities and currencies. And make sure you are FDIC insured as much as practical. Then, when everything looks like 1933 in a couple of years, pick up a MODEST house (only what you need) and an EFFICIENT used car, REAL CHEAP.

And live as cheaply as possible! The era of consumption making us "rich" is OVER.

Anonymous said...


Sometimes (and this is one of them)
things need to run their course. Weed out the dead and dying. Get rid of the unproductive partners.
Let the markets do what they need to do to stabilize.
Our intervention will only push back (temporarily) what will eventually happen!

Leave it alone!


Anonymous said...


Part of this mess was interest rates set to low for to long to begin with!

That was your government intervention!


brokersleaveyoubroke said...

I hear that Helicopter Ben has been promoted to B-52 Ben.

Anonymous said...

You can buy some of these! IT's ONLY $5.00. They will probably take $3 or even $2

Anonymous said...

Houston judge had 3 home equity loans on house that was torched 9:48 AM CT

09:51 AM CST on Thursday, January 31, 2008
Associated Press

HOUSTON – Over five years, Texas Supreme Court Justice David Medina took out three high-interest, adjustable rate home equity loans amounting to nearly the full value of his home, which later burned in an arson fire.

A Houston Chronicle review of the investigation leading to grand jury indictments against Medina and his wife show the details of the family's serious financial problems before the home in northern Houston suburb of Spring burned last summer.

The Harris County District Attorney's Office dismissed the indictments – one count of evidence tampering against the justice and one count of arson against his wife Francisca – citing a lack of evidence. But prosecutor Vic Wisner said the Medinas were still under investigation.

The Harris County Fire Marshal's Office said it became suspicious of the house fire after discovering a mortgage company sued in June 2006 to foreclose on the home and they discovered an accelerant in the rubble. Investigators ruled it was intentionally set.

Forest through the trees said...

Listen, I here the doom and gloom here etc. However lets look at a couple of things. 1. Human nature. We love to consume. that is just a fact. It just has to be the right price. 2. Banks are greedy, period. 3. What caused the housing problem was NOT the high prices, that was just a result. The real problem was banks issuing loans to people that should never have received them, and writing contracts that had artificially low interest rates that then reset to market rates that NO ONE could afford. THAT is what caused this. If the CONTRACTS for the LOANS were not bad, and the underwriting did not go by the way side, houses would have continued their historic 5% / year increase in value. It over corrected to the top, and now is over correcting to the bottom. It will level, always had in the past, always will. That is just the way markets work. NOW the REAL question as far as bubbles go, is not whether banks will lend again - they will, the fed will make sure they make money by lending, will the banks overreach again. If they do, we WILL have another bubble, if not and they ramp up lending conservatively, then the whole system will actually be stronger after this. It is not the FED that creates the problems, it is the banks and others that magnify the problem. All the fed does is set the cost of the wholesale product (money) it is the banks that actually control the sale of the product to the consumer and at what terms. The TERMS were the problem, not the products price. If the SEC, FTC etc. can get their head out of their A$$ and do their job moving forward, the market will be much stronger in 5 years or so. If they continue to be asleep at the switch, we will yet again have another bubble.

Anonymous said...

well the interest I WAS earning in my so called high interest savings account was just slashed again thanks to the fed cutting their rate.

If you can find a Credit Union like this place, www.starone.org, you'll do Ok on interest. I'm still earning 4.45%, and they are flush with cash.

Marky Mark said...

So how do you invest when short term interest rates are below inflation?

Borrow cash and invest in something with a higher rate?

Marky Mark

Let us take advantage of this silliness...

Anonymous said...

Off topic but I'm still looking for an answer:

Who decides the GOP nominee in a brokered convention and how?

Anonymous said...

Mish posted a few days ago that the "non-borrowed reserves" of our banks have gone negative since Dec 5, 07. Our banks have now joined us in our "Debtor Nation". The banks are broke. Thats why Uncle Ben is letting them borrow at the Fed. Appears everyone is operating on Fed money now.

Mish: Banks in aggregate have now burned through all of their capital and are forced to borrow reserves from the Fed in order to keep lending.

There is a credit crunch because the banks are out of money to lend. They have NO money in reserve to loan. Banks are operating entirely on borrowed money from the Fed.

Many banks are offering above-market rates for savings & CD's because they are desperate for cash. They are also raising ATM fees to $3.00.

"Imagine a major bank telling customers: "We have no cash reserves so we can't give you a loan." With that in mind, banks are scrambling to raise cash."

Bernanke has no choice but to keep printing money for the banks to loan out in order to give us the illusion that its business as usual.


It just keeps getting better every day don't it?

Anonymous said...

Gold is the next bubble. It will be quick and it will sky-rocket in such a way that you won't believe your eyes.

The flight to quality or 'safe-haven' investing is beginning to occur. Combine that with inflation, money supply issue and a general malaise of fear coupled with Iran, China and all the other factors and you will see it head to the moon.

It will not be a long-term bubble, but it will be a bubble that if you're on board will shoot to the moon. The key is to know when to sell.

Anonymous said...

Keith, you are really something. For several years you have predicted the end of the financial world, a great depression, very bad economic times, etc... And it still hasn't happened yet. Everyday there is something new with you. If it's not massive foreclosures, jobless claims, consumer spending, etc... then it's another story and then you claim "oh, this is it folks, now the big crash will happen". Keep dreaming and keep posting such nonsense on your blog.

Anonymous said...

According to Shiller's historic price chart, housing rocketed up in 1997 and peaked in 2005. Thus, if we assume crashing to the mean, we're looking at any potential bottom around 2013. Of course, housing is tradtionally "sticky" and the government is going to try slow down the descent, so that's how we get the U.S version of the Japanesse "lost decade."

To Ben and the Fed, housing, the economy and my savings are a side show for them now. It's the solvency of the whole financial system that's in deep trouble. Trillions of CDO derivatives vanished and trillions of Credit Default Swaps are demanding payment. We've never seen something like this before on this scale. Buckle up.

The Fed should though be steadily pumping money in the system and lower rates, but I don't get the whole .75 basis cut after the stock markets went down for a couple of days. What a confused panic move and blow to their credibility.

deepcgi said...

i think the junior mining stocks are undervalued given the run-ups in Gold and Silver. I'm thinking of dropping more in to them. I can't see these unleveraged junior miners holding back for much longer. It may well be that gold will eventually bubble up and crash for twenty years (like it did in the seventies) but I don't think we are anywhere near that point, yet.

Out at the peak said...

My dad is pushing yet another new property on me to buy with him since Nov 2005.

I replied with a link to Merrill Lynch's forecasting house price decline throughout 2010 (at least).

If the 30 year fixed rate mortgages can get below 5%, there will be a bump up for new financing given that some prices (at least in my area) have dropped 30% (approved short sales).

Anonymous said...

Keith, you seem to think the government should just let the banking system collapse. Why would that be desirable, I mean, how would you expect that to play out? Obviously shareholders and holders of bank debt in all forms would lose everything, but what about depositors? Bear in mind that it would be a world-wide collapse as well, so no hiding overseas. Don't you think it would end up costing a staggering sum to pay off all the FDIC insured accounts? Just curious as to how you'd manage the crash if you were made King for the duration.

edd said...

Jan 31, 7:41gmt ...
CNBC's Crammer predicts US
"housing shortage" in a year.[!?]

Does he mean shortage
of "affordable" housing,
or rental housing ?

Or just pumping for his buds ?

Anonymous said...




Anonymous said...

From FiftyOneYears.com

"Please join us this February 1st for the Ron and Carol Paul 51st wedding anniversary mass donation day. Our goal is to bring together 100,000 people to donate $51 each, creating a one day donation total of $5,100,000."

donate here:


Anonymous said...

Everything's fabulous here in Kansas City!

Jack Schidt said...

BAC, C, WB etc. have been going straight up for a week. Hate to say it, but the cuts might work to save the banks' asses. Not the borrowers, though.

Anonymous said...

not gonna work - today people actually hafta qualify for the loans - they have to be willing to buy in a deflating market - and oh prices must REGRESS TO THE MEAN wage/homeprice which means 3x local wages instead of the current but falling 10x---- the fed cant do JACK about the prices being too high and falling and THAT my friends is the core issue- there is NO WAY for the fed to re-inflate
or stop the slide of prices - people just cannot afford to pay current prices without the toxic loans they are no longer making ---game over.


Anonymous said...

Put your money into ETrade. They let you invest in foreign denominated stocks, bonds or savings accounts from Europe, Canada and Asia.

fat nick said...

Put your money into ETrade. They let you invest in foreign denominated stocks, bonds or savings accounts from Europe, Canada and Asia.

Dr Evil said...

Hey, thats a nice kitchen sink.

Vita said...

Well, we all know this, and Michelle Malkin, even with her platform, cannot effect real change on this, but it helped me let off some steam.


"Who says bipartisanship is dead? From President Bush to Hillary Clinton, Barack Obama and John Edwards, to Mitt Romney and John McCain, virtually everyone in Washington agrees: The government must Do Something to stop home foreclosures.
These leaders agree on the presumption of homeowner innocence. The borrower-as-victim and lender-as-predator story lines are etched in stone. Can't let reality get in the way of election-year pander-monium."

Anonymous said...

I am short, short and more short! The market is being pumped by hedge funds and bottom fishers. These are desperate investors looking to pay the rent.

Fundamentals of a slowing economy are obvious but the pump monkeys just can't believe the party is over.

The next leg down will ugly. Consumer demand is falling and will continue to fall as the banks can no longer lend. Everyone is living off 2005 and 2006 bubble cash. The cash will run out in the first quarter of 2008.

Watch for earnings warnings to start the downward cycle. Pump monkeys just had to bring January numbers up so they don't look so bad. As January goes so goes the year.

Get ready for a big selloff in February. Cash is and will continue to be king!

Anonymous said...

You know Keith I saw this coming. On the weekend before the 75bps cut I told everyone it would happend. Got out of all my retail puts on Tuesday (lucky for me because they were up 5% at the end of the day). Wed when I saw the article in the morning in the WSJ about the banks bailing out the bond insurers I got out of my puts there as well.

Everyone should pile there money into GME calls. I'm in 2010 $60 calls. I researched online and in person the stores. Wall street is completely underestimating their earnings and the stock. In good times or bad people are going to buy games. Also, I suspect a significant portion of the "free" money given out the the US government will go into WII's ...


the bushco kitchen sink plan said...


> Bristol-Myers Squibb Co. reported a fourth-quarter loss from investments in subprime securities today that led to a 1/4 billion charge.

> Home Depot axes 500 corporate headquarters jobs.

> Jobless claims up last month.

> Consumer spending down last month.



> MAJOR Al-Qaida leader killed today!
America was almost destroyed by this evil leader, but thanks to President Bush, he has been killed today by a single multi-million dollar smart missile. YOU CAN SMELL THE FREEDOM SPREADING!

> USA Not Prepared for a massive TERRORIST ATTACK AT HOME!!!!!!!!


> Because of the recent FED moves, now is a grest time to buy a new house! Home interest rates are at their lowest rates ever! Call your local REALTOR™ today!

Next up on TV 10.....

Why the American economy and the stock market is robust, growing and producing new jobs.

Anonymous said...

ahhh the country is in mental state of diarreha... Its Super bowl weekend and Britney is in the Hospital....

But who cares? There is bud-light and party... F&**ck the rest....

ha ha ha what a country!!!

edd said...


CNBC's Gasparino pounds on
former SEC chair for not
going beyond "obligations"
as scandals kept coming.

stop the bushco destruction said...


Check it out!

BRATTLEBORO, Vt. (Jan. 30) - A town petition making President Bush and Vice President Dick Cheney subject to arrest for crimes against the Constitution has triggered a barrage of criticism.




Anonymous said...

you kooks forget that consumers have made up 70% of the economy for a long time. nothing new. people earn, they spend, they enjoy life.

most people that is. hp'ers earn, save and spend hours on end bitching on blogs.

Andrew Hac said...

Yes, it is the time to pay the Piper for that Wild-Wild-West Housing Bubble Party last night. Add in the maxed out CC debt, the home equity extract, the spend-like-there-is-no-tomorrow mentality of the Americano, the oversize SUV, the run-down-the-cow F350 pickup truck and the Americano is now having a handful of shits and hangover to deal with. But worry not, my dear fat-ass buckteeth Americano, Dubya Shrub will lead you through the dark, ominous, pee-in-the-pant time. He has to, he has no choice, since the dim nitwit Americano voted for him 2 terms in a row. Yes, it is fittingly beautiful: "The head turkey leads the horde of fat, blind turkey down the gutter...".

Now, a little verse from the "Man With The White Beard" to cheer things up for the horde of Snapper Turtle and Porpoise.

Psalm 23:4

"Yea, though I walk through the valley of the shadow of the Housing Bubble,
I will fear no foreclosure;
for Dubya Shrub & Penis Shooter art with me;
thy bail-out and thy rebate-check, they comfort me."

Dragonsbane said...

Next bubble? Gold maybe? Hasn't started yet, but I could see it getting there. Invest? Borrow USD, buy gold? Borrow USD, short market? Short consumer discretionaries, builders, some financials and commercial real estate on the bounce here. Bubble Ben just gave you a chance to get the hell out break even or at a profit! Take it and reverse!

snooperbowl said...

Cut rates to zero now to stop a depression.We are in deep shit people.Have you ever seen grown men standing lines to deliver pizzas?It is happening in the good ole USA. Go buy a house you peons!!!!!!!

Anonymous said...

Here’s what you need to know about how mortgage brokers really work: “When I have a client I really don’t like — he’s a pain in the ass — that’s when I charge as much as I can get out of them,” says Jack, a mortgage broker based in Southern California.

debtors prisons said...

All these huge Wall Street losses, bailouts, liguidity injections, stimulus packages, permanent tax cuts, etc. are going to have a major impact on federal income tax revenue in the coming years.

How the hell do these so-called presidential candidates plan to make up for the shortfall??

They aren't gonna answer THAT question until AFTER the election...

RJ said...

The FEDs actions won't do a damn thing for the economy. Neither will the "stimulus" package. Long bond rates are climbing again which bodes ill for the housing depression although the USDX is finding support in the low 75 range. If it falls through that it may push long rates even higher.

According to Mike Shedlock the primary concern right now is preventing a complete meltdown of the banking system. According to the FED, non-borrowed bank reserves went from 43.7 billion the week ending Dec. 5 to a preliminary -8.7 billion this week (http://www.federalreserve.gov/releases/h3/Current/). That means that, as it stands, the banking system is borrowing ALL of its reserves through FED auctions. Without the borrowed reserves the banks would have to sell off assets to raise capital which would contribute to a the market crash. Repeat. The banks have no reserves to speak of. They are currently on life support.

The FED is trapped and we're screwed. I guess it's time for a World Bank bail out of the U.S. Austerity program anyone?

Our only chance is massive cuts in government spending. Otherwise,
we are the Titanic.

Anonymous said...

That's too nice of a sink, keith. What you should've used there is a photo of a 1930's sink dumped in the back of the yard. Accented by tall grass growing at the sides because the mower wouldn't cut there.

Anonymous said...

Guys, look at investing in India. The CD rates there are 8-9% and the Indian Rupee has been appreciating against the dollar. In the last year the Rupee has gained 16% against the dollar!

Anonymous said...

In 1930, the Republican-controlled House of Representatives, in an effort to alleviate the effects of the... Anyone? Anyone?... the Great Depression, passed the... Anyone? Anyone? The tariff bill? The Hawley-Smoot Tariff Act? Which, anyone? Raised or lowered?... raised tariffs, in an effort to collect more revenue for the federal government. Did it work? Anyone? Anyone know the effects? It did not work, and the United States sank deeper into the Great Depression.

Today we have a similar debate over this. Anyone know what this is? Class? Anyone? Anyone? Anyone seen this before? The Laffer Curve. Anyone know what this says? It says that at this point on the revenue curve, you will get exactly the same amount of revenue as at this point. This is very controversial. Does anyone know what Vice President Bush called this in 1980? Anyone? Something-d-o-o economics. "Voodoo" economics.

Anonymous said...

Keep buying the 5% - no 4%, no wait 3% CDs losers.

Oh did you hear, MSFT is buying YHOO and the naz is on fire.

Anonymous said...

Interesting article about how lots of schools got fleeced by the investment banks:


Andrew Hac said...

OK, Snapper Turtle and all other tortoise-like creepers out there,

Listen carefully and listen hard:

A house is a place to sleep in, eat your meal, do your homeworks, make kids, smoke a doobie, etc... Not every turtle is entitled to own a house. Owning a house is a privilege, not a right, not an endowment from God or Uncle Bushie.

Most Americano believe that it is their God-given right to own a house. That is incorrect. It is also stupid to heed that belief. If you are poor, ignorant, illiterate, dumb, uneducated, buckteeth, harelip, fat, obese, or just plain WACKO then you do not have the right, the mean or the privilege to own a house. No BUT, IF, HOW, WHEN ,WHY, WHAT, etc...

The game of survival is simple. You are strong then you will survive and survive splendidly. Joe6Pack is like a gazelle in the African Serengeti plain, his destiny is to be hunted down and chased after, devoured savagely by the lions, the leopards, the hyenas, etc... Joe6Pack simply does not possess any right at all to own a house in the land of the Americano AKA the land of the Turkey.

Got it, Turtle ???

Anonymous said...

The December 2, 1989 edition of The Economist described San Diego, California as the "methamphetamine capital of North America".

Anonymous said...


We have Wall Street (the staunchest just say NO to big Government proponents)- now screaming for Government intervention when they are about to lose their collective A$$'s by making greedy stupid decisions!!???

As so many have already said, the Fed is doing SO much more harm than good by getting involved now--The markets must be allowed to correct themselves, and YES, it will be painful, but we would rather take the pain now, than for decades--and have EVERYONE pay dearly for it.

The "Privitize the Gains, Socialize the Losses" strategy is SOOO transparent BEN BERNANKE!! Stop the madness!!

Kenduffelsniffenspotzen said...

The government and the Fed are throwing in everything they've got in an attempt to halt the financial crash and bank failures. So will it work?
No. The credit markets can collapse faster than the Fed can print money.

Anonymous said...

Can't force the sheeple to borrow? Believe me sir, the sheeple are more than willing to borrow. But thank God the former is in place.

The sheep will borrow, but not to buy houses that are falling in value. It only makes sense on the way up

Anonymous said...

Joe6Pack is like a gazelle in the African Serengeti plain,

That's it. Andrew Hac's gotta be European or Australian. There's noooo way an American would know "Serengeti Plain".

Busted, Hac.

Ben Franklin said...

No. The credit markets can collapse faster than the Fed can print money.

Wrong: the Fed doesn't HAVE to actually PRINT bills, just as they don't need to maintain gold bullion in reserve to back up the paper money.

Instead, "money" is created by the Fed by metaphorically waving a magic wand, when they loan money to banks electronically.

Of course, counterfeiters make fake money, too, but if some private citizen does this, the government throws them in prison.

So nowadays, money exists as electrons existing in a computer, and it's possible for the government to create money at will. There's no physical limit to how much money they can create.

But they do so at the risk of devaluing the currency already in supply, i.e. contributing to inflation and dollar depreciation vs other currencies.

Anonymous said...

How the hell do these so-called presidential candidates plan to make up for the shortfall??

It took a Clinton to clean up after Bush 1, so it'll take another Clinton to clean up after Bush 2.

Just best line like evahhhhh!!!

Anonymous said...

Yeah, Sleazy Willie and his Wall Street buddies cleaned up with the dotcom ponzi scheme, which robbed tens of millions of people's retirement funds. I'm sure Hitlary will clean up real good too. Keep drinking that blue kool-aid, you schmucks

Anonymous said...

Banks can keep making bad loans that result in defaults. The good customers are dwindling in numbers like the WWII vets.

Anonymous said...

Joe6Pack is like a gazelle in the African Serengeti plain,

That's it. Andrew Hac's gotta be European or Australian. There's noooo way an American would know "Serengeti Plain".

Busted, Hac.

I also believe he has buck teeth, a 6 pack belly and JaneZinfandel for his wife, and thats why I love him.

Anonymous said...

Despite all the economic fuckedupnes out there, I don't see it in my day to day.

Your world is a trailing indicator

Princess Mononoke said...

I can not believe that I just heard on CNBC Squakbox that the ratings agencies will NOT downgrade AMBAC for a few more weeks!!!

Apparently they are buying time for the billion investor to make up his mind and buy this JUNK!

Ambac should be downgraded today! It is no longer AAA rated. The ratings agencies are mis-leading investors and that is deplorable! I can't trust anybody anymore...