Here We Go: No Stopping it Now

July 14, 2008 at 4:19 pm (Food, Housing, Inflation, National Debt)

Well, this one’s even bigger than Bear Stearns.  We’re going to bail out Fanny Mae and Freddie Mac, both technically insolvent (their liabilities are greater than their assets) and it’ll only be to the tune of TRILLIONS.  “…a complete bailout of these huge mortgage finance players could double the fiscal deficit.”  Double the national debt.  Double.  Words fail me.  Most of the foreign owners of the 6 trillion dollars worth of owned or secured mortgage debt are China, Russia, and Saudi Arabia.  However, from what we hear on the news, buying stock in the worthless companies with taxpayer money so the shareholders on Wall Street and the debt holders in foreign countries get bailed out is somehow good for the American homeowner.  Go figure.  The Federal Reserve says no more bailouts are expected.  Right.  I’m sure they’ll have to bail out a few of the 150 banks that are expected to soon go belly up.

In other news, not only are food prices going up, but I’ll bet few people notice the size of the food products are stealthily shrinking.  Most people don’t know the weight of the food they buy, so it’s a great marketing trick.  Oh, and here’s an ex-government employee in the UK affirming that the official inflation rate there (and here too) is rubbish.  I mostly agree, but I think it’s more like 18%, not 10%, here in the US.  I like this article too.  “This recession could easily tip into a depression.”  Hahaha, really?  Another interesting read was this person’s take on why the bailouts must occur — to prevent lawsuits forcing the banks to buy back their fraudulent mortgages.  I don’t know much about the legal world, but I wouldn’t be the least bit surprised.

You may have heard that the Federal Reserve, over the weekend, took over the second-biggest bankrupt bank since the FDIC came into play, IndyMac.  You may have heard how many billions this would cost.  What you probably didn’t hear about, however — and the lack of coverage was no coincidence — was that there was a run on the bank leading up to and culminating in its doors closing on Friday.  Fear spreads fast, and the talking heads want it contained.

Today’s article of doom: might as well keep harping on the oil price.  Up to $147 now.

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1 Comment

  1. Tim Ramsey said,

    I recently came accross your blog and have been reading along. I thought I would leave my first comment. I dont know what to say except that I have enjoyed reading. Nice blog.

    Tim Ramsey

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