The Government: Your Portfolio Manager
By Bennet Sedacca Oct 28, 2008 11:37 am
State control of banks seeming more and more plausible.
Gee, it's good to be back home
Leave it till tomorrow to unpack my case
Honey disconnect the phone
I'm back in the USSR
You don't know how lucky you are, boy
Back in the USSR
"Back in the USSR,” The Beatles
Welcome to Socialism
Allow me to be frank (of course, I've never had a problem with it before): I'm angry about what's happening to our once-great country. I've spent the past 30 years trying to understand free markets, and the concept of risk versus reward. I've attempted to understand macro-economics, and to protect both my own personal wealth and the wealth entrusted to me by my clients. I have, at times, made some unpopular predictions that have fortunately played out well (at least for the most part).
What gets me, though, is the fact that I no longer seem to have a choice what assets are in my portfolio. And you, as a US citizen, no longer seem to have a choice as to what assets are in your portfolio.
During the late 1990s, I began to see a gargantuan debt bubble forming, and I believed it would eventually burst. Debt was growing rampantly everywhere and at every level - government, individuals and corporations. We had a Fed Chairman growing the money supply at alarming rates and, in August 1998, he began the first in a string of interventions that persist up to the present moment.
During the LTCM crisis in August 1998, Alan Greenspan stepped into the market for an intra-day rate cut. Not coincidentally, this was done during options expiration week, as are most intrusions.
Let’s face it: Greenspan, even for his lack of ability as Fed Chairman, was one heck of a stock market technician. During options expiration week, when many market speculators are "short gamma" -- short call options, as they decay fastest during expirations week -- you get the most bang for your buck by intervening then. Or perhaps you get the best bang with my buck, and your buck. And the age of intervention was born.
I must admit I've been on both sides of the interruptions. In early 2001, I was long the QQQQ (the NASDAQ 100 ETF) and made 5% in an hour. The next time, in April 2001, I was short - and promptly lost 5%. What a country.
No positions in stocks mentioned.
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Reply
2008-10-28 13:06:03
bennet's ussa
We had better listen and remember that a few people - like Bennet - have stood up for all of us and is not afraid to see the future if we give up our rights. Forget the democrat/republican thing and remember that the constitution has to be protected, we must ensure honest voting and we must not let the govenment become our savior. We are the govenment until we abdicate to the new socialist party.
2008-10-28 13:26:12
Lost chance to turn the tide
Dawn,
We are long past the point where "the constitution has to be protected, we must ensure honest voting."
Your perception (along with most of my fellow Americans) that these ideas can still be saved is where the problem lies. I know that's harsh but the truth is always difficult to accept.
Just because you haven't read something in the newspapers or seen it on network TV doesn't mean it hasn't happened yet. As long as you believe that America is "free" you are your own keeper.
We are long past the point where "the constitution has to be protected, we must ensure honest voting."
Your perception (along with most of my fellow Americans) that these ideas can still be saved is where the problem lies. I know that's harsh but the truth is always difficult to accept.
Just because you haven't read something in the newspapers or seen it on network TV doesn't mean it hasn't happened yet. As long as you believe that America is "free" you are your own keeper.
2008-10-28 14:36:23
Put the lion in the coconut call me in the morning. LOL
Place your bets:
Hiding behind the opaque glass of transparency lurks the question which begs the answer of who has what. Trillions of Derivatives, CDO's, and SIV's all makes of exotic debt instruments leverage to the hilt as if it were cash. On top of that are short positions on borrowed stock or not. Now like a fresh headless chicken the market flops in panic as it searches for price discovery.
Pundits clamor to proclaim a bottom whipping out charts and history even knowing this is nothing like anything we have experience before. Lurking in the abyss are dead cats, fraud, corruption, greed, gigantic write downs, excessive pay packages and physiological factors never seen before. Government manipulations, false financials, blatant lies move the markets like a sea saw.
Out of the morning mist as if by magic the Tin Man appears to proclaim Cash is King and Alice is our banker down in wonderland. Pigs suddenly descend from windows far above the commoners as if they had wings only to splat on the sidewalks near the Tin Man. The Fat Cat bounce! Nope. No bounce there.
The Tin Man with tears in his eyes watches as the world goes to waste. Already rust is building on his cheeks and he has no oil to stop it. The Corporate world gone to waste from a disease known as greed. Bankers and Hedge Fund managers walk about with their pockets inside out picking up trinkets. One in particular looks to the sun as if in fear of losing his tan. Another cowers under the ledge in fear of getting Whamued by another falling wingless pig. Off in the distance another is oblivious to the destruction as he putts his last shot on the eighteenth. Down the street walks an old man with a young lady beside him vowing to bring back their wealth and make them whole again but off in the distance a horn is sounding. In the distance on the horizon about ten days out is hope. The hope of new representation for the people of the world. Backed by a team of millions of bipartisan voters who are demanding change. A change that can bring reform while restoring trust and faith. Reform on foreign policy and foreign relations. A team! No more lone cowboy politics. A world where Pork comes from the farm. Where 474 foot long yachts are cruise ships for tourist and Hummers are in the Church as a backdrop to the hymns.
Hope for change and a new bipartisan concept of team work. Put the fat on the fire and we will roast the pig. Vote wisely.
JPM
Hiding behind the opaque glass of transparency lurks the question which begs the answer of who has what. Trillions of Derivatives, CDO's, and SIV's all makes of exotic debt instruments leverage to the hilt as if it were cash. On top of that are short positions on borrowed stock or not. Now like a fresh headless chicken the market flops in panic as it searches for price discovery.
Pundits clamor to proclaim a bottom whipping out charts and history even knowing this is nothing like anything we have experience before. Lurking in the abyss are dead cats, fraud, corruption, greed, gigantic write downs, excessive pay packages and physiological factors never seen before. Government manipulations, false financials, blatant lies move the markets like a sea saw.
Out of the morning mist as if by magic the Tin Man appears to proclaim Cash is King and Alice is our banker down in wonderland. Pigs suddenly descend from windows far above the commoners as if they had wings only to splat on the sidewalks near the Tin Man. The Fat Cat bounce! Nope. No bounce there.
The Tin Man with tears in his eyes watches as the world goes to waste. Already rust is building on his cheeks and he has no oil to stop it. The Corporate world gone to waste from a disease known as greed. Bankers and Hedge Fund managers walk about with their pockets inside out picking up trinkets. One in particular looks to the sun as if in fear of losing his tan. Another cowers under the ledge in fear of getting Whamued by another falling wingless pig. Off in the distance another is oblivious to the destruction as he putts his last shot on the eighteenth. Down the street walks an old man with a young lady beside him vowing to bring back their wealth and make them whole again but off in the distance a horn is sounding. In the distance on the horizon about ten days out is hope. The hope of new representation for the people of the world. Backed by a team of millions of bipartisan voters who are demanding change. A change that can bring reform while restoring trust and faith. Reform on foreign policy and foreign relations. A team! No more lone cowboy politics. A world where Pork comes from the farm. Where 474 foot long yachts are cruise ships for tourist and Hummers are in the Church as a backdrop to the hymns.
Hope for change and a new bipartisan concept of team work. Put the fat on the fire and we will roast the pig. Vote wisely.
JPM
2008-10-29 09:25:41
Are chipmunks, squirrels and ants smarter than people?
Are chipmunks, squirrels and ants smarter than people?
The real problem in our economy for a long time has been the rapidly declining discretionary income of the average household.
When we created social security back in the 1930's, we basically created a program that was a pay as you go plan. Pay as you go is a Ponzi scheme in which the benefits of one generation are paid for by the next generation. This works so long as the generation to generation populations and discretionary earnings continue to grow.
What started happening in the 1970's was that population growth began to slow and people began to live longer. If nothing else had changed, the social security Ponzi scheme would have faltered just from the declining populations that had to support the higher payouts required for the longer living and increasing shift to higher average age in the population. But this wasn't all that happened. There have been several very important occurrences since the 1970's that have had a tremendous impact on how we got to where we are.
First, Congress not only continued to enrich existing programs, they also created new and even more expensive programs such as Medicare and Medicare Part B. And, being totally inept, Congress stayed on the course of pay as you go. So even though payroll taxes for these programs have increased from 1% of the first $3,000 per annual pay ($30 per year) when the first program was created, to the whopping 15.3% of the first $102,000 ($15,606 per year) of today, the off balance sheet obligations for these programs have continued to spiral out of control at an ever increasing rate and in ever increasing magnitude.
Second, these "payroll" taxes were confiscated from a worker's pay. There is no end of year discussion as to deductions. This confiscation is final. No debate allowed. The result has been that with each round of payroll tax increase, the worker's discretionary income has been reduced. Significant payroll taxes reduce discretionary income significantly.
Third, these payroll taxes have been used by one administration and Congress after the other as pseudo income taxes in that they have been totally spent however Congress wanted the money spent. There is still no set aside because Congress wanted a pay as you go system. The lack of a proper set aside for future obligations will reduce future discretionary incomes as taxes will have to be increased in the future to cover the unfunded obligations.
Forth, the paradigm of tax free trading zones, container based seaports, containerized freight, big box retail distribution, and no meaningful regulation has meant that the higher paying manufacturing jobs have been sent overseas and the remaining service sector jobs, paying less, have resulted in further reductions in discretionary incomes.
Fifth, local sales taxes, phone taxes, excise taxes, real estate taxes and all the other semi hidden taxes that are used to confiscate even more from the worker have all ballooned as local governments try to take their "fair" share from their citizens. The result has been a lowering of discretionary income.
Sixth, the creation of high bandwidth Internet traffic has allowed many of the higher paying service sector jobs in technology, health care, and legal services to be electronically sent overseas eliminating domestic jobs and creating competition among workers for existing jobs that has to a large degree caused wages to stagnate while the cost of living has increased. The result has been a lowering of discretionary incomes.
Seventh, the totally inept response of government to the illegal immigration problem has resulted in pay scales being lowered for legal workers as businesses recruit and hire illegals willing to work for lower pay which as had the effect of a reverse auction for workers pay rates. The result has been a lowering of discretionary income.
Eighth, and most recently, the government response to the current economic crisis is setting the stage for even more failures in the future. Now listen to this. This is not that hard to understand. Congress has confiscated taxes from the workers and given so far about 1.5 trillion dollars of that money to the Treasury and the Federal Reserve to "fix" things. The bulk of the money has been loaned to the largest banks based on the argument that loaning the biggest banks enough money to guarantee they survive is the best way to get the credit markets moving again. The money was loaned with no strings attached as to mandating that some percentage, not even 1%, had to be loaned out into the economy. Worse still, the governments loan program in essence is a variable rate loan. That's right. We are fixing the millions of small defaulting variable rate mortgages with hundred billion dollar variable rate loans to the largest banks that are using the money to buy up other banks instead of loaning the money back into the economy as was promised by the Secretary of the Treasury as he "sold" his ideas to Congress. The interest rates on these "loans" will jump up in five years just like a variable rate mortgage. What happens then? How does concentrating the banking industry into the hands of the federally subsidized few impact interest rates and competition in the future?
Was this plan created by Saturday Night Live or the Three Stooges? Where is the logic in fixing a variable rate mortgage problem with a variable rate loan to banks. The only difference is the borrower is now in the words of the stooges that created this plan, "Too Big To Fail". Oh what folly.
All of the above has had the effect of wiping out most discretionary income from the average household. When discretionary income was gone, the average household turned to debt. And when the debt got too expensive, they leveraged even more. After all, this is what their government did. This is what the banks did. This is what the mutual funds and hedge funds did. So this is what the consumer did.
So here we are now with unfunded government obligations in the 100 trillion dollar range, discretionary incomes destroyed, and credit dried up due to being over used. Now, no one can buy a new car so the car companies will close and hundreds of thousands of workers will lose their jobs. People can't buy a house so the price of housing collapses and the construction workers will lose their jobs. People can not afford to go to restaurants so they close. Same for clothing stores, appliance stores, malls, strip malls, stand alone stores, hotels, casinos, etc.
In short, it is discretionary income that allows the worker the "freedom" to choose where to spend which allows capitalism to invest and compete for those dollars. As government confiscates more and more, there is less and less economic "freedom", so the economy contracts. To fix this contraction with debt is simply the lunacy of Congress and government. This is where we are now.
To understand this is to make it very clear that promises of redistribution of wealth, or the creation of more social programs is simply going to make matters much worse and dig the hole ever deeper. America worked figuratively and literally when people were free to save for themselves.
We now have over 100 trillion dollars of off balance sheet obligations of the federal government alone. State after state is in dire straights as well. And most of this is because in one way or another, government is saying that you should not be required to save for your own future, that you should instead have government save for you.
The folly in this argument is that in the last 232 years, the federal government has not been able to save one thin dime. How is adding more programs going to change this record?
Government has absolutely no credibility in this matter. Government can not be trusted. And with the government programs and taxes that have been levied on the average household, the household is now unable to save for itself. This is the situation we are facing. The government won't save, and the government has taken away the ability of the average household to save.
You explain to me how a new government program is going to improve this the real problem, and I will recommend you as King and we can scrap government as we know it. But logic dictates that another program is only going to make the root problem worse.
Both candidates for president want more programs and are drooling as they anticipate spending even trillions more that we do not have which will only push the problem farther into the future. This is simply madness and is indicative of government that is out of control. Those that have significant assets are moving those assets off shore to protect them from this run away government. And that my friends, only reduces discretionary even more by increasing the cost of borrowing or reducing opportunity through investment that would have otherwise been invested here.
None of this makes economic sense, unless your plan is to destroy America. Don't scoff at that notion. It is a viable possibility. We have been at economic war with China for over a generation and we are losing. The global plutocracy would like nothing more than to take America down and plunder her resources. And if things don't change, if people don't regain the ability to earn discretionary incomes, and maintain control over their discretionary incomes, that is exactly what is going to happen.
So now back to the question - Are chipmunks, squirrels and ants smarter than people?
Evolution has taught all of these creatures that to survive, you have to set aside today what you will need tomorrow. Imagine chipmunks, squirrels and ants relying on the flimsy promise of pay as you go. If they did that, they wouldn't be here.
How can we be so arrogant as to think we can survive on promises backed up by nothing set aside. Isn't that simply the ultimate credit default swap?
The real problem in our economy for a long time has been the rapidly declining discretionary income of the average household.
When we created social security back in the 1930's, we basically created a program that was a pay as you go plan. Pay as you go is a Ponzi scheme in which the benefits of one generation are paid for by the next generation. This works so long as the generation to generation populations and discretionary earnings continue to grow.
What started happening in the 1970's was that population growth began to slow and people began to live longer. If nothing else had changed, the social security Ponzi scheme would have faltered just from the declining populations that had to support the higher payouts required for the longer living and increasing shift to higher average age in the population. But this wasn't all that happened. There have been several very important occurrences since the 1970's that have had a tremendous impact on how we got to where we are.
First, Congress not only continued to enrich existing programs, they also created new and even more expensive programs such as Medicare and Medicare Part B. And, being totally inept, Congress stayed on the course of pay as you go. So even though payroll taxes for these programs have increased from 1% of the first $3,000 per annual pay ($30 per year) when the first program was created, to the whopping 15.3% of the first $102,000 ($15,606 per year) of today, the off balance sheet obligations for these programs have continued to spiral out of control at an ever increasing rate and in ever increasing magnitude.
Second, these "payroll" taxes were confiscated from a worker's pay. There is no end of year discussion as to deductions. This confiscation is final. No debate allowed. The result has been that with each round of payroll tax increase, the worker's discretionary income has been reduced. Significant payroll taxes reduce discretionary income significantly.
Third, these payroll taxes have been used by one administration and Congress after the other as pseudo income taxes in that they have been totally spent however Congress wanted the money spent. There is still no set aside because Congress wanted a pay as you go system. The lack of a proper set aside for future obligations will reduce future discretionary incomes as taxes will have to be increased in the future to cover the unfunded obligations.
Forth, the paradigm of tax free trading zones, container based seaports, containerized freight, big box retail distribution, and no meaningful regulation has meant that the higher paying manufacturing jobs have been sent overseas and the remaining service sector jobs, paying less, have resulted in further reductions in discretionary incomes.
Fifth, local sales taxes, phone taxes, excise taxes, real estate taxes and all the other semi hidden taxes that are used to confiscate even more from the worker have all ballooned as local governments try to take their "fair" share from their citizens. The result has been a lowering of discretionary income.
Sixth, the creation of high bandwidth Internet traffic has allowed many of the higher paying service sector jobs in technology, health care, and legal services to be electronically sent overseas eliminating domestic jobs and creating competition among workers for existing jobs that has to a large degree caused wages to stagnate while the cost of living has increased. The result has been a lowering of discretionary incomes.
Seventh, the totally inept response of government to the illegal immigration problem has resulted in pay scales being lowered for legal workers as businesses recruit and hire illegals willing to work for lower pay which as had the effect of a reverse auction for workers pay rates. The result has been a lowering of discretionary income.
Eighth, and most recently, the government response to the current economic crisis is setting the stage for even more failures in the future. Now listen to this. This is not that hard to understand. Congress has confiscated taxes from the workers and given so far about 1.5 trillion dollars of that money to the Treasury and the Federal Reserve to "fix" things. The bulk of the money has been loaned to the largest banks based on the argument that loaning the biggest banks enough money to guarantee they survive is the best way to get the credit markets moving again. The money was loaned with no strings attached as to mandating that some percentage, not even 1%, had to be loaned out into the economy. Worse still, the governments loan program in essence is a variable rate loan. That's right. We are fixing the millions of small defaulting variable rate mortgages with hundred billion dollar variable rate loans to the largest banks that are using the money to buy up other banks instead of loaning the money back into the economy as was promised by the Secretary of the Treasury as he "sold" his ideas to Congress. The interest rates on these "loans" will jump up in five years just like a variable rate mortgage. What happens then? How does concentrating the banking industry into the hands of the federally subsidized few impact interest rates and competition in the future?
Was this plan created by Saturday Night Live or the Three Stooges? Where is the logic in fixing a variable rate mortgage problem with a variable rate loan to banks. The only difference is the borrower is now in the words of the stooges that created this plan, "Too Big To Fail". Oh what folly.
All of the above has had the effect of wiping out most discretionary income from the average household. When discretionary income was gone, the average household turned to debt. And when the debt got too expensive, they leveraged even more. After all, this is what their government did. This is what the banks did. This is what the mutual funds and hedge funds did. So this is what the consumer did.
So here we are now with unfunded government obligations in the 100 trillion dollar range, discretionary incomes destroyed, and credit dried up due to being over used. Now, no one can buy a new car so the car companies will close and hundreds of thousands of workers will lose their jobs. People can't buy a house so the price of housing collapses and the construction workers will lose their jobs. People can not afford to go to restaurants so they close. Same for clothing stores, appliance stores, malls, strip malls, stand alone stores, hotels, casinos, etc.
In short, it is discretionary income that allows the worker the "freedom" to choose where to spend which allows capitalism to invest and compete for those dollars. As government confiscates more and more, there is less and less economic "freedom", so the economy contracts. To fix this contraction with debt is simply the lunacy of Congress and government. This is where we are now.
To understand this is to make it very clear that promises of redistribution of wealth, or the creation of more social programs is simply going to make matters much worse and dig the hole ever deeper. America worked figuratively and literally when people were free to save for themselves.
We now have over 100 trillion dollars of off balance sheet obligations of the federal government alone. State after state is in dire straights as well. And most of this is because in one way or another, government is saying that you should not be required to save for your own future, that you should instead have government save for you.
The folly in this argument is that in the last 232 years, the federal government has not been able to save one thin dime. How is adding more programs going to change this record?
Government has absolutely no credibility in this matter. Government can not be trusted. And with the government programs and taxes that have been levied on the average household, the household is now unable to save for itself. This is the situation we are facing. The government won't save, and the government has taken away the ability of the average household to save.
You explain to me how a new government program is going to improve this the real problem, and I will recommend you as King and we can scrap government as we know it. But logic dictates that another program is only going to make the root problem worse.
Both candidates for president want more programs and are drooling as they anticipate spending even trillions more that we do not have which will only push the problem farther into the future. This is simply madness and is indicative of government that is out of control. Those that have significant assets are moving those assets off shore to protect them from this run away government. And that my friends, only reduces discretionary even more by increasing the cost of borrowing or reducing opportunity through investment that would have otherwise been invested here.
None of this makes economic sense, unless your plan is to destroy America. Don't scoff at that notion. It is a viable possibility. We have been at economic war with China for over a generation and we are losing. The global plutocracy would like nothing more than to take America down and plunder her resources. And if things don't change, if people don't regain the ability to earn discretionary incomes, and maintain control over their discretionary incomes, that is exactly what is going to happen.
So now back to the question - Are chipmunks, squirrels and ants smarter than people?
Evolution has taught all of these creatures that to survive, you have to set aside today what you will need tomorrow. Imagine chipmunks, squirrels and ants relying on the flimsy promise of pay as you go. If they did that, they wouldn't be here.
How can we be so arrogant as to think we can survive on promises backed up by nothing set aside. Isn't that simply the ultimate credit default swap?
2008-10-29 17:28:46
Look at the other side
I agree with Prof Sedacca. Actually after seeing his series of "Guess who has..." I decided to stay the sidelines.
However, Imagine you let GE, GM, C, JPM, BAC, etc fail, and then let the free market rescue their remnants. Guess who on the earth has the money to do that. May be the Chinese? or the Saudis? that hold trillions of American paper. Would you allow them to control the financial system, the lifeblood of the free market.
I don't know, and probably can be only be told in hindsight, but perhaps force feeding Americans with those assets is the way to actually preserve the free market even when it does not look like that.
However, Imagine you let GE, GM, C, JPM, BAC, etc fail, and then let the free market rescue their remnants. Guess who on the earth has the money to do that. May be the Chinese? or the Saudis? that hold trillions of American paper. Would you allow them to control the financial system, the lifeblood of the free market.
I don't know, and probably can be only be told in hindsight, but perhaps force feeding Americans with those assets is the way to actually preserve the free market even when it does not look like that.
2008-10-29 21:19:20
The Mega Mess My Dear Comrade Ben
I'm very grateful that I found your site in 2007. You've helped me make my way thru this and make not loose money. Now I've had a wild idea thats bugging me and I'd like it to bug you. Back when Hank charged onto the scene
with his 3pg plan, I didn't buy some of the key
ideas. The banks have been singing about the
opaque securities that they can't price properly. BS, they just don't like the price they
can now get for these voodoo bonds. They did their best to mix up the sausage so they could
sell garbage as if it was filet. I'll bet that the same guys who built these things could do a
good job sorting these into 10 piles of relatively badder and better value. Then we
need to have a swap meet for 10-20days during which bidders would make offers buy
with their Tbills (instruments which will decline in value over the next 10-20 years). Forgot
to mention that the feds would have to push
this junk back on the banks etal, and they'd
assign guaranteed values from 25%-75% of
face value, so that the bidders would have to
better those. This could 2-3 TN of bonds out of circulation in exchage for assets which will be
likely to appreciate well over their strike value. Only very long horizon investors like states
would take part, but theyre now stuck with
Tbills galore. Maybe they'd like the deal and it'd be fair to the banks. Mean but fair. John
with his 3pg plan, I didn't buy some of the key
ideas. The banks have been singing about the
opaque securities that they can't price properly. BS, they just don't like the price they
can now get for these voodoo bonds. They did their best to mix up the sausage so they could
sell garbage as if it was filet. I'll bet that the same guys who built these things could do a
good job sorting these into 10 piles of relatively badder and better value. Then we
need to have a swap meet for 10-20days during which bidders would make offers buy
with their Tbills (instruments which will decline in value over the next 10-20 years). Forgot
to mention that the feds would have to push
this junk back on the banks etal, and they'd
assign guaranteed values from 25%-75% of
face value, so that the bidders would have to
better those. This could 2-3 TN of bonds out of circulation in exchage for assets which will be
likely to appreciate well over their strike value. Only very long horizon investors like states
would take part, but theyre now stuck with
Tbills galore. Maybe they'd like the deal and it'd be fair to the banks. Mean but fair. John
2008-10-30 14:44:27
Actually people like Phil Gramm and the "deregulatoring free market" thinkers (who said the investment banks can manage the risks) were instrumental in creating this train wreck and forcing the FED to act in regards to the credit system and financial institutions. The root cause should not be ignored.
late 1990's? - the national debt skyrocketed under both the Reagan and Bush administrations.... Late 90's was bright spot when it started to come under control.
Housing is an integral part of a country and a society, it would be hazardous not to try to keep people in their homes and keep peoples investment from plunging - the only thing that has been learned is that Bernanke et.al should have acknowledged the housing bubble in the first place.
I would acknowledge that folks who when to closing, read the HUD1 and then later decide to default on their contract to repay the loan, or who committed fraud should be seeing some community service and deficiency judgments against them. As it is the speculators are getting off to easy.
At least we have a negativity bubble to blow up now - that won't hurt anyone but the shorts and who cares if these parasites getting clobbered.
late 1990's? - the national debt skyrocketed under both the Reagan and Bush administrations.... Late 90's was bright spot when it started to come under control.
Housing is an integral part of a country and a society, it would be hazardous not to try to keep people in their homes and keep peoples investment from plunging - the only thing that has been learned is that Bernanke et.al should have acknowledged the housing bubble in the first place.
I would acknowledge that folks who when to closing, read the HUD1 and then later decide to default on their contract to repay the loan, or who committed fraud should be seeing some community service and deficiency judgments against them. As it is the speculators are getting off to easy.
At least we have a negativity bubble to blow up now - that won't hurt anyone but the shorts and who cares if these parasites getting clobbered.
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