Are we so fucked?
So are we fucked?
We are so fucked.
Fucked so are we.
So fucked we are.
How many ways can I say it?
The divine right of crony capitalists [Big Daddy Economy]
On Obama’s Pragmatism and America’s Apathy
Another example of apathy: You can’t find 100 people outside of the CPA lobby that are advocates of the current income tax system, but do you ever think its going to change? We have a super majority of citizens who agree that the tax code is damn inefficient , and wasteful, and too complex, but we can’t tackle the problem. Even the Sec. of the Treasury couldn’t get his shit straight. We are the only country that has to figure this stuff out for ourselves, rather than getting billed by the government. We have a super-majority of people who want it changed, but they don’t really want it changed, because it might be uncomfortable to do away with the loopholes and write offs that the current byzantine structure provides. The many, the masses, the voters are simply concerned with being able to keep up a certain level of consumption and access to the material fruits of the debt economy, and whatever policies most quickly deliver the maintenance of their standard of consumption will be favored by the consumers. Whether such policies are socialist or classical, liberal or laissez faire is of no concern to the American.
God, we could really use George Carlin today–he never hung out with the elites, never needed to please and social climb, so he was free to rail against the entirety of the establishment, all organized religion, all organized parties.
Pissng in the Wind
I do not doubt their knowledge or technical ability. What I doubt is the commitment of the administration and the autonomy of the Federal Reserve. Mr. Volcker was a very independent chairman. But under Mr. Bernanke, the Fed has sacrificed its independence and become the monetary arm of the Treasury: bailing out A.I.G., taking on illiquid securities from Bear Stearns and promising to provide as much as $700 billion of reserves to buy mortgages.
Independent central banks don’t do what this Fed has done. They leave such fiscal action to the legislative branch. By that same token, Mr. Volcker’s Fed had to avoid financing the large (for that time) Reagan budget deficits to be able to bring down inflation. The central bank was made independent expressly so that it could refuse to finance deficits. But is there a political consensus that the much larger Obama deficits will not pressure the Fed to expand reserves to buy Treasury bonds?
Indeed, big, heavily subsidized programs are rarely good for productivity. Better health care adds to the public’s sense of well-being, but it adds only a little to productivity. Subsidizing cleaner energy projects can produce jobs, but it doesn’t add much to national productivity. Meanwhile, higher carbon tax rates increase production costs and prices but do not increase productivity. All these actions can slow productive investment and the economy’s underlying growth rate, which, in turn, increases the inflation rate.
Inflation Nation [NYT]
The Next Housing Bust
Everyone knows how loose mortgage underwriting led to the go-go days of multitrillion-dollar subprime lending. What isn’t well known is that a parallel subprime market has emerged over the past year — all made possible by the Federal Housing Administration. This also won’t end happily for taxpayers or the housing market.
Last year banks issued $180 billion of new mortgages insured by the FHA, which means they carry a 100% taxpayer guarantee. Many of these have the same characteristics as subprime loans: low downpayment requirements, high-risk borrowers, and in many cases shady mortgage originators. FHA now insures nearly one of every three new mortgages, up from 2% in 2006.
The financial results so far are not as dire as those created by the subprime frenzy of 2004-2007, but taxpayer losses are mounting on its $562 billion portfolio. According to Mortgage Bankers Association data, more than one in eight FHA loans is now delinquent — nearly triple the rate on conventional, nonsubprime loan portfolios. Another 7.5% of recent FHA loans are in “serious delinquency,” which means at least three months overdue.
The FHA is almost certainly going to need a taxpayer bailout in the months ahead.
The bill that passed last summer more than doubled the maximum loan amount that FHA can insure — to $719,000 from $362,500 in high-priced markets. Congress evidently believes that a moderate-income buyer can afford a $700,000 house.
The higher FHA loan ceiling was also supposed to be temporary, but this year Congress made it permanent.
In Other News
The “Fatal Attraction” Method Of Debt Collection
In early April Dicks fell behind on her payments again. This time, the lawsuit claims, AFN registered the URL to Dicks’ name and created a site titled “Jennifer Dicks isn’t paying for her Cavalier!”
And that’s when the relentless text message campaign of shame began.
At this stage in any economic stabilization process, the state-sponsored lifeboat for oligarchs starts to get a little crowded.
Why Congress Won’t Investigate Wall Street [WSJ]
The crisis today is not solely one of bank misbehavior. This is also about the failure of the regulators — the Wall Street policemen who dozed peacefully as the crime of the century went off beneath the window.
“Oil companies ar making record $100 Billion profits not because oil is scarce, but because we believe it is.” -Jeremy Corsi