punditman says...As promised, Punditman is trying to fill Peacenik's shoes while Peacenik is off in the wilderness at Peacenik's compound learning how to make dandelion tea or wine or whatever he feels will help him in the near-to-medium-to-long-term-to-weird future.
Since Peacenik usually covers the Ilargi front, Punditman offers up this rather bleak picture of the so-called economic recovery. Punditman is not sure what to think, but Punditman tends to think things are going to get weird in America and most places in the not-to-distant future. It is hard to dispute the following figures: 25% of US homeowners will be underwater by 2010, and 30% by 2011 (or, according to the Deutsche Bank, 50% by 2011). Punditman was just reading another article that says tent cities are appearing all over America, full of homeless unemployed. Please let me know if you are reading this on your laptop in your tent, because, while Punditman surely knows about the tent cities, Punditman would not get a reminder of this by turning on Punditman's television, would Punditman? Punditman tries not to turn on his television lately.
Meanwhile the Obama administration is spending $1 billion to build a mega-embassy in Pakistan (not to be out-done by Dubya who did the same in Iraq). At the same time, by Christmas, 1.5 million Americans will have run out of unemployment benefits while unemployment continues to rise. When in doubt, time for some more Pentagon socialism to the tune of a $636 billion defense bill. It is hard to understand how any recovery based on reality can happen amidst all this. Here's Ilargi.
Ilargi: Right. So government spending, as we've of course mentioned before, is going through roofs never dreamt of until recently. The request for a higher government debt ceiling is but one of the many signs of this. One that may be far more important is the roles played by Ginnie Mae and the FHA, roles that both have been stealthily increased by stunning percentages since the present administration took office.
The idea, undoubtedly, is to take all that's bad and suspect on Fannie Mae and Freddie Mac's elusive books, wrap it up in glitzy fancy gift paper, and throw it in a vault somewhere that still has space left on top of or beneath the toxic paper it already holds. And sure, it will look good at the surface. Just propose an opaque bad bank construction for Fannie and Freddie, so you can keep hiding the losses from view, and continue the policies that led to their inevitable demise through other (semi-private) enterprises.
There's something terribly wrong here. And since it threatens to transfer additional trillions of dollars in losses to the taxpayer, that taxpayer had better beware.
Somewhere behind these ideas is the faith that the economy, and hence home prices, will rise again. It's slightly reminiscent of Hank Paulson claiming 11 months ago that the taxpayer would actually make a healthy profit off the TARP rescues. That went well, didn’t it? We’re all much better off.
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Since Peacenik usually covers the Ilargi front, Punditman offers up this rather bleak picture of the so-called economic recovery. Punditman is not sure what to think, but Punditman tends to think things are going to get weird in America and most places in the not-to-distant future. It is hard to dispute the following figures: 25% of US homeowners will be underwater by 2010, and 30% by 2011 (or, according to the Deutsche Bank, 50% by 2011). Punditman was just reading another article that says tent cities are appearing all over America, full of homeless unemployed. Please let me know if you are reading this on your laptop in your tent, because, while Punditman surely knows about the tent cities, Punditman would not get a reminder of this by turning on Punditman's television, would Punditman? Punditman tries not to turn on his television lately.
Meanwhile the Obama administration is spending $1 billion to build a mega-embassy in Pakistan (not to be out-done by Dubya who did the same in Iraq). At the same time, by Christmas, 1.5 million Americans will have run out of unemployment benefits while unemployment continues to rise. When in doubt, time for some more Pentagon socialism to the tune of a $636 billion defense bill. It is hard to understand how any recovery based on reality can happen amidst all this. Here's Ilargi.
Ilargi: Right. So government spending, as we've of course mentioned before, is going through roofs never dreamt of until recently. The request for a higher government debt ceiling is but one of the many signs of this. One that may be far more important is the roles played by Ginnie Mae and the FHA, roles that both have been stealthily increased by stunning percentages since the present administration took office.
The idea, undoubtedly, is to take all that's bad and suspect on Fannie Mae and Freddie Mac's elusive books, wrap it up in glitzy fancy gift paper, and throw it in a vault somewhere that still has space left on top of or beneath the toxic paper it already holds. And sure, it will look good at the surface. Just propose an opaque bad bank construction for Fannie and Freddie, so you can keep hiding the losses from view, and continue the policies that led to their inevitable demise through other (semi-private) enterprises.
There's something terribly wrong here. And since it threatens to transfer additional trillions of dollars in losses to the taxpayer, that taxpayer had better beware.
Somewhere behind these ideas is the faith that the economy, and hence home prices, will rise again. It's slightly reminiscent of Hank Paulson claiming 11 months ago that the taxpayer would actually make a healthy profit off the TARP rescues. That went well, didn’t it? We’re all much better off.
Keep Reading...
