Fundamentally Flawed

Boy, am I stupid! It went right over my head.

However, I take some comfort in knowing that I’m not alone in my density.

Johnny the Deregulator offered words of comfort for our nation’s distress over a wobbly Wall Street this past week.

The “fundamentals of the economy are strong”, he assured us with his straight talk. And if you didn’t know, like I didn’t know, that really means the American workers are strong.

Thank goodness he went back to explain his statement for those of us that are a little dim on the complexities of our economic challenges.

He is so right. We American workers are STRONG. And any democrat that disagrees with him is WEAK.

This should be enough to prove that the wisdom of Johnny McFinance is beyond our simple comprehension.

If America can trust anybody to fix this mess, it will be Johnny McKeating. He, and fellow maverick Sarah the Vindictive Church Lady, are just what we need to “shake up Washington”. AND they promise to eliminate the greed and corruption on Wall Street as well.

Even more comforting is the fact that Sarah has the credentials to handle this crisis. After all, she can see the Bank of Wasilla from down the street where she lives.

I can sense the dissipating despair and anxiety, lifting like a fog from our collective uncertainty.

I hear he’ll start a “9-11 commission” to get to the bottom of all this and tell us where to go next. He probably meant a “de-regulation commission”, but I’m afraid to guess. He’ll tell us what it really is after he decides we’re ready to know.

It’s a good thing he has all those lobbyists working for him. I bet they’ll have more than a few good ideas about what to do for those poor Big Money orphans.

And since Johnny McHero was a POW, he’s more than qualified to provide the clever foxes to watch that Wall Street henhouse.

Our money is safe.

So, sleep soundly America. You’ll get used to those lumpy mattresses.

Crossposted at Dave’s Place-Freedom Rants.

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Do the republicans still want to privatize social security?

Privatizing social security was one of the corner stones of the Bush administration. ~Weren’t these guys supposed to be the folk that would handle all of our retirement accounts?

The Dow took a huge shit yesterday on the weekend news that more financial institutions were taking their last breaths. Over four percent of its value went into the shitter people.

AIG is now gasping for breath..wait a minute..AIG is an insurance corporation? Why are they dying?

Mortgage investments, just like all the rest of them. They provide insurance for the greedy stock market funds, that’s why. Their stock value plummeted over 60 percent yesterday.

Wall Streeters are screaming for more Federal moolah….they are demanding it. They also want a drop in the prime interest rate again.

But the prime is already at the bottom of the barrel…how can it drop any farther? Why are we, the taxpayers expected to take it in the shorts for these greedy fuckers? Why? From the LAT link above:

The downfall of 158-year-old Lehman, combined with the unexpected deal by Bank of America to acquire Merrill, marked the most dramatic reshaping of the Wall Street landscape since the Great Depression, analysts said. Lehman, mortally wounded by loss-ridden securities tied to real estate loans, filed Monday for protection from creditors who hold more than $600 billion of the firm’s various IOUs.

In its bankruptcy petition, Lehman reported assets of $639 billion and liabilities of $613 billion. It listed 30 unsecured creditors to whom it owes about $158 billion. The markets are likely to remain on edge for weeks, experts said, until the extent of Lehman-related losses at other firms becomes clear.

A collapse of AIG could be an even bigger problem for the country’s financial system, Bank of America Chief Executive Kenneth Lewis told CNBC. “I don’t know of a major bank that doesn’t have some significant exposure to AIG,” he said.

Part of AIG’s business is to provide a way for big investors to hedge against potential market losses in their portfolios by essentially taking the other side of the investors’ bets. (emphasis mine)

Why is it ok to nationalize their losses? Someone explain it to me? Will someone make John McCain explain it to me since that sumbitch said yesterday the ‘fundimentals of our economy are strong’? How about Nancy Pelosi? I want one of the mutha fuckas in the Bush Administration to explain to me why it’s ok to bail out a greedy financial institution but not Americans barely eeking out a life with the inflation we currently have going on…I want that fucking explanation now….and we all deserve it, make no mistake about that.

McCain said it was greed that caused all these problems. Obama said it was deregulation. They are both right in a basic sort of way. The NYT puts it this way:

On the campaign trail on Monday, Mr. McCain, the Republican presidential nominee, struck a populist tone. Speaking in Florida, he said that the economy’s underlying fundamentals remained strong but were being threatened “because of the greed by some based in Wall Street and we have got to fix it.”

But his record on the issue, and the views of those he has always cited as his most influential advisers, suggest that he has never departed in any major way from his party’s embrace of deregulation and relying more on market forces than on the government to exert discipline.

~ Which means he is lying to get votes.

Mr. Obama set out his general approach to financial regulation in March, calling for regulating investment banks, mortgage brokers and hedge funds much as commercial banks are. And he would streamline the overlapping regulatory agencies and create a commission to monitor threats to the financial system and report to the White House and Congress.

On Wall Street’s Republican-friendly turf, Mr. Obama has outraised Mr. McCain. He has received $9.9 million from individuals associated with the securities and investment industry, $3 million more than Mr. McCain, according to the Center for Responsive Politics, a watchdog group. His advisers include Wall Street heavyweights, including Robert E. Rubin, the former treasury secretary who is now a senior adviser at Citigroup, another firm being buffeted by the financial crisis.

~Which candidate makes more sense and their record supports what they are saying? It’s a no-brainer people..and here is a hint…its not a republican and I will bet its not the democrat either.

This financial meltdown is a gift to the democrats…will they do anything with it? Pelosi and company could start now with bills to finally regulate those fucking hedge funds. The only question we should be asking is why haven’t they done it prior to all this turmoil and carnage..

We can jerk out the republicans for this mess, but bear in mind that the best Democratic President the Republicans ever had in office, Bill Clinton, started the deregulation ball rolling for financial institutions when he demanded and got passed the The Financial Services Modernization Act in 1999. From this post I did earlier in the year about what a putz Bill Clinton was:

The Financial Services Modernization Act was a real gem as well. Enacted in 1999, this sucker deregulated the banking and investment industry. This opened the door to the creation of the ‘hedge fund’ which we all know is not regulated in the slightest and is the most crooked investment scenario ever created with many cases of manipulation and down right illegal price-fixing.

Reagan and Bush41 were assholes with regard to deregulation as well, make no mistake about it. We have seen what wholesale deregulation has caused with the Enron Scandal and now…the mortgage mess. The long and short of it is this:

You can not trust greedy bastards to regulate themselves. Its fuckwitted at best, and dangerous to our economy at its worst..Fuck capitalists…fuck em hard. But take this with you today…even in bankruptcy, the head honcho for Lehman Brothers will get a $22 MILLION DOLLAR RETIREMENT PACKAGE…

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Iraq War Effects Missing from Coverage of Fannie Mae and Freddie Mac Troubles

Libhomo blogs at Godless Liberal Homo. His article today is spot-on in my humble estimation. ~Dusty

This New York Times article ( “U.S. Weighs Takeover of Two Mortgage Giants” - 7/10/08) is typical of how the corporate media omit underlying causes in reporting on current economic difficulties.

You can see how the Iraqtastrophe is impacting events, but you have to think very carefully while you read. Here’s one example, a sentence starting the second paragraph:

The companies, Fannie Mae and Freddie Mac, have been hit hard by the mortgage foreclosure crisis.

Let’s review three of the ways that the war on Iraq has contributed to this foreclosure crisis.

- The resulting increase in oil prices has pushed some people who were near default on their mortgages over the edge.

- The rising oil prices and increased budget deficits have slowed the overall US economy down. Newly unemployed people are much more likely to lose their homes to foreclosure.

- Higher oil prices have increased trade deficits. Those deficits, along with growing budget deficits, have resulted in a falling dollar. A weak dollar is unattractive to foreign investors, including risk tolerant ones that otherwise might be interested in buying heavily discounted US mortgage paper.

Now, let’s review a paragraph later in the article (bolding mine).

The companies are by far the biggest providers of financing for domestic home loans. If they are unable to borrow, they will not be able to buy mortgages from commercial lenders. In turn, that would make it more expensive and difficult, if not impossible, for home buyers to obtain credit, freezing the United States housing market. Even healthy banks are reluctant to tie up scarce capital by offering mortgages to low-risk home buyers without Fannie and Freddie taking the loans off their books.

One of the reasons capital is so scare is that the Bush regime is borrowing so much money to pay for their colonial occupation of Iraq. Hundreds of billions of dollars have been borrowed to feed this fiscally voracious war, money which is unavailable for home and commercial credit.

Obviously, Iraq isn’t the only cause of our economic difficulties. Financial market deregulation, tax cuts for the rich, and other policies which shift wealth from the middle class and the poor to the super rich all are important as well. Yet, how can we have an informed political debate if so much of what is ailing us is kept off of the metaphorical table?

Some opponents of the war say that the vast majority of Americans are not sacrificing anything to the war in Iraq. It certainly is true that military members and their families make much larger sacrifices than everyone else. However, all of us are sacrificing for this unpopular war. We are just being lied to about it.

Iraq is a proverbial “elephant in the living room” of American economic discussion. Our nation better start talking about it.

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