Monday, September 29, 2008

Fiddling While New York Burns

People are now looting, stocking up on spam, and heading for the hills on news that the bailout crapped out today (Dow down 777 points in what sounds like a casino number--wheeee!) and I offer the most fine-grained useless detritus for you to consider. It's a blog.

Yesterday, on Fox, confronted with the reality that Obama had won the post-debate polls, the beleagered GOP go-to shill Lindsay Graham had this to say:
"It's Sunday and I'm tired. Senator Obama did well. Senator Obama helped himself."
This cold comfort I take into the looming depression that confronts us. I'll take what I can get.

Anyone have a bomb shelter I can hunker in?


fred said...

(from downblog comments): The better half is busy working her life away so that we can escape the country (although she never will :-)). However, heading off-grid just keeps on sounding better and better.

As for the "horrible financial catastrophe," (or the Last Great Heist, as it were), things are as bad but yet not as bad as we're being led to believe.

The various "not really-a-bailout" bailout plans (except for maybe DeFazio's) don't do anything to solve the *problem*--too much debt in the system, no real assets, and punting the problem six months down the road.

Simply, you cannot build an economy on delayed debt repayments based on bubble speculation. At some point (say, mid-2007) housing prices finally crossed over from astronomically unwisely overpriced to [explicative deleted]-are-you-kidding-me astronomically overpriced. Who can afford a $400k mortgage, even at 5% interest?

Sooner or later, people started realizing that they might have to *pay* for their houses. And demand went "poof."

Let's not even get into the whole CDS "fake profits so I can get a big bonus" swindle. The basic system was unsustainable.

None the less, what are we told we need to do? Create more lending and "protect home values." If we put a floor on falling home values (which are only falling to levels that makes sense, economically) we don't eliminate the bubble, and nothing really changes.

Of course, we could "protect" homebuyers (who may or may not have made the best judgements, but were told by those who "knew better" (really--when has anyone loaned you money they didn't think you could repay? They're the experts, right?)) by essentially revaluing their homes at their correct prices, and then helping them to eliminate the excess debt (I don't know---there's lots of ways to do it, pick one).

Banks should fail. They created this monstrosity, and they did a)know better, and b) knew what they were doing. They were playing "last sucker in" and figured (rightly, it seems) that the taxpayer would be "it."

Then, we reregulate and eliminate the causes of all this crap.

Hmm. Yes, this is why I stopped doing this...I can't shut up :-)

fred said...

One final glop of verbiage:

It just drives me insane that the media (say, "the Oregonian") are all "The Sky is FALLING, the SKY IS FALLING" when just last month they were trying to tell me that everything was peachy-keen and okey-dokey (in the economy, housing market, etc).

I've been annoying everyone with my doomygloomy outlook on this since, oh, 2003 or it cannot have been *that* hard to foresee.

And when they give examples about how horrible the economy is, suddenly, and they tell me about Bob the contractor that isn't getting as good of terms on his *construction* loans when he's got houses he's already built that he can't get sold and "is having to rent out," I would say that's just a smart bank.

Hello, let me loan you more money for your buggy-whip factory. I'm stoopid and dumn.

Ok. Now I'm done :-)