The meetings are underway allowing the public to become gently aware that our Federal government is about to step in and buy the bankrupt Freddie Mac and Fannie Mae with your money, guaranteed by your future and your children’s future too. With the ill-advised and frankly illegal bailout of the investment bank Bear Stearns, the freewheeling Bush administration and the Federal Reserve have turned us socialist to “save us”. We’re currently in the biggest financial mess we’ve ever been in and as the Treasury Department, guided by the global money trust in the warm and fuzzy form of the Federal Reserve, spends your tax dollars on bankrupt corporations deemed “to big to fail” generations of us will pay the price. Treasury Secretary Henry Paulson has been huddled with the top management of Fannie and Freddy for awhile now working out the details under the watchful eye of Ben Bernanke. The deals being made by these men are going to change, and have changed our market economy to socialism, and the bad decisions made by the management team that ran Fannie and Freddie into the ground won’t matter because our tax dollars will pay the piper. The Federal Government of the United States of America is now going to guarantee payment to those holding the paper on half the mortgages in the nation, namely the key central bank players on earth. When the big bankers make astounding profits on your mortgages they pocket the rewards but when they get too greedy and the mortgage markets turn sour on them they still come out smelling like a rose because the government has given them your tax dollars. Your risk is their reward! Charming!
There is a snowball of incompetence rolling down hill in the “global economy” that’s gaining size and speed with every passing day. The snowball is big enough now to destroy whole currencies and countries and with each passing bailout to avoid the snowball bearing down on us we add to its ultimate destructiveness and the inevitability that we will indeed be hit by the thing. In an effort to avoid the consequences incurred by Bear Stearns we did some foolish things and sold our soul to the global money trust: the Federal Reserve. When that didn’t quite do the trick the Fed let all the banks feed at the Feds trough. When that didn’t work and Fannie and Freddie were propped up unsuccessfully our tax dollars were appropriated to guarantee an extra 5 TRILLION DOLLARS THAT FANNIE AND FREDDIE REPRESENT! Oh yeah! The fun is just beginning! I forgot to mention the $168 billion dollar “stimulus package” that congress borrowed from china to give to us to get the economy moving! That was sweet of them, don’t you think? I’ll bet that stimulus package saved the day! But then we have news like this:
WASHINGTON — An industry group says a record 9.2 percent of American homeowners with a mortgage were either behind on their payments or in foreclosure at the end of June, as damage from the housing crisis continues to mount.
The percentage of loans at least 30 days past due or in foreclosure was up from 8.8 percent in the January-March quarter, and up from 6.5 percent a year earlier.
Gee whiz! Why isn’t this economic crisis getting better when we have thrown everything we’ve got at it? What does the Chief Guru of Economic and Central Bank Sophestry Saint Allen Greenspan have to say about our current woes? What pearls of wisdom have fallen from his ancient forked toung as the fincacial crisis threatens not only our economy but the global economy? Consider what the AP is reporting:
WASHINGTON (AP) – Troubled by the Bear Stearns debacle, former Federal Reserve Chairman Alan Greenspan is advocating a new way of dealing with government bailouts of companies whose sudden collapse could wreak havoc on the country’s economic and financial stability.
“We need laws that specify and limit the conditions for bailouts – laws that authorize the Treasury to use taxpayer money to counter systemic financial breakdowns transparently and directly rather than circuitously through the central bank as was done during the blowup of Bear Stearns,”
Greenspan envisions the formation of a group akin to the Resolution Trust Corp. to step in, take a troubled company into conservatorship, wipe out the equity, impose some charge or “haircut” on its debts before guaranteeing them and then selling its assets. The RTC was created in 1989 to deal with the aftermath of the savings and loan crisis. It disposed of the assets of failed savings and loans and then went out of business.
Critics in Congress, in academia and elsewhere worry that the Fed’s unprecedented actions – including financial backing in March for JPMorgan Chase & Co. (JPM)’s takeover of Bear Stearns Cos. – are putting taxpayers on the hook for billions of dollars of potential losses. They also say it encourages “moral hazard,” that is, allowing financial companies to gamble more recklessly in the future.
Greenspan, 82, who ran the Fed for 18 1/2 years and was the second-longest serving chief, says he is concerned that Capitol Hill will look to the Fed’s actions “as a wondrous new font of seemingly costless federal funding – a magical piggy bank.”
The United States has long “abandoned the notion that we should leave crises to be resolved solely by the marketplace,” Greenspan says in making the case for new powers in this area.
I’m no expert on the translation of “Greenspeak” into Standard English but if I were to take a guess at what all this might mean I’d say that he said we shouldn’t use the Fed as a consequence free piggy bank! Oh wait! HE DID SAY THAT!
Thank God the Russians have scared the central banks of the world to death and we’ve seen a strengthening of the dollar and the drop of oil prices. (At least for now.) As “up a creek” as we are; most of the rest of the global economy is too deeply invested in the dollar, or too dependent on the US as world policeman, to take their money elsewhere. I guess you might say that the central banks of Europe, Japan, China, and Arabia see us as too big to fail. Let’s hope the jokes not on them because what’s going on in the world of big money today may well be the mortgaging of generations of Americans to prop up the faltering “global economy”. I must have missed C Span when Congress bet the future of our country on the financial integrity of the world’s central banks and the management skills of the bankrupt US treasury.
Sooner or later the “credibility” of the Dollar and the Federal Government won’t be enough to stem the tidal wave of bad debt that must necessarily engulf us in the near future. On that day we’ll all have a day of reckoning that’ll make the Great Depression look like Romper Room. Until then we can still watch Paulson, Bernanke and others rearrange the deck chairs on the Titanic. The drinks and snacks are on them as the band plays on! The stuff they’re trying isn’t working and we better get ready for the challenge of our times: the next great depression. It’s just a question of when.