Monday, September 08, 2008


US Government, Biggest Mortgage Lender, Happily Ever After

By rights, I should have posted more on the likelihood and dreary eventuality of the Feds taking over Fannie Mae and Freddie Mac. Easy enough to see the insolvencies coming, overwhelming the foot-dragging protests, bluffs, and Paulsonian dyspepsia...except that writing about the economy is like writing about a homicidal schizophrenic who lives by court-ordered decree in your attic, has a knife fetish, and cackles at all hours over the din of a grinding stone.

It's scary, but never having lived with a maniac before, you don't know exactly when they'll descend and kill all of you in your sleep. Here it comes now, the footsteps are on the stairs. At best, they're coming down for midnight medications, and chalk another few trillion dollars up to inflation, to things which won't get fixed, or to government bonds which won't be repaid. Benjamin Franklin, no stranger to inflation nor friend to it, denounced it as the most scurrilous of forced personal income taxes.

Fannie, Freddie, and most banks in the Western world have already voraciously borrowed money from central banks, but are not loaning it back out to keep the engines going. And the US government is going to directly own a lot of properties, with a 7.9% property value slide in the 2nd quarter, and 1.2 million foreclosures. Oh, I'm sure they know what they're doing and everything will turn out just fine. After all, what's good for lobbyists is good for America! As living proof, the stock market, in its infinite all-seeing Free Market wisdom, took the bailouts as good news and the Dow went up by a few hundred points.

(Research credits to Still Life Living and Crooks and Liars.)

2 comments:

Still Life Living said...

"and the Dow went up by a few hundred points"

...but the dollar fell by a greater amount...

...at least John McCain is strong on economic issues, otherwise he will use the bully pulpit to, well, bully.

MarcLord said...

LOL, so much for the Dollar Recovery! As for McCain, stop criticizing the man. In case you haven't heard, he paid his dues as a POW, and can head-butt Joseph Stiglitz into a bloody pulp.