Sunday, July 20, 2008

Another Pleasant Valley Sunday or The Gates Of Hell are Breached

Treasury Secretary Henry Paulson explained the Bernie Mac/Fannie Flag, er Ellie Mae/Jethro Bodine er... Fannie Mac/Freddie Mac bailout Gozintas and Gozouttas on Face the Nation this morning.

While I readily admit that his facial ticks and calmly severe tone were creeping me the fuck out. I've long been desperately trying to grok the thinking behind the E-ticket rolly coaster thrill ride spun out of the whole cloth Amurcan economy. So I tried to watch. Tried to listen. Tried to comprehend.
From a monetary, economic, fiscal policy standpoint the message was interesting. In line with the gobbledy-gook that came before and devoid of terminology that might engender fear or panic.

The whole money thing is a poser I've been losing to since Reaganomics. Reagan didn't invent the sleight of hand, misdirection or wholesale theft embodied in his economic policy. He only validated it, made it legal while giving his blessing and blanket immunity to its practicioners. It was fiscal lunacy then, it's fucking blowhole crazy now.

As a logical absurd extension of that fiscal policy, Paulson's explanation makes perfect nonsense.

The mythical American Market Economy in which the goods of our manufacturing, production and industrial base are the propellent of our economy is all but extinct. Decades of willful disinvestment, restructuring, downsizing, looting, pillaging and other acts of piracy, having fulfilled the Randian ideal, has left little except for the illusion and the legend. From a purely practical standpoint, you can't jumpstart a market economy that has NOTHING to market.

Now it's Paulson's turn. The bailout takeover of Indy Mac, and now the bailout "stabilization" of Fred and Fannie is NOT shifting risk to the taxpayers. Translation: It's really the only hope of keeping the house of cards from tumbling down and ruining us all. It's a virtual lifeboat folks. The ultimate faith-based initiative of our times. According to the press releases it's big enough boat for everyone as long as you keep believing. As though there's another option?

Follow the logic. Fannie and Freddie are leaking their lifeblood. Multiple billion$ of illusionary market value that was conjured, -in order to leverage the paving, development and/or redevelopment of large swaths of former farmland, factory sites and tidy, but dated housing in chic, trendy urban settings so the mortgage brokers, bankers, realtors, developers and investors could realize billions in profit- could no longer be sustained. In the absence of REAL collateral, equity and value, the sheer volume that had masked the deficiencies slowed to a trickle leaving the remaining developers and investors in a bit of a pickle. A closer examination of the final cast of the "stranded" reveals that they aren't real people. They're cardboard cutouts representing Pension funds, 401Ks, IRAs and other "managed" oceans of personally restricted monies. The rest of the funding stream cashed in and moved on.

What's a fiscal conservative to do? The housing market is tanking with foreclosures and losses stacking up. It's gone far beyond mere predatory lending practices for marginal borrowers. Negative equity situations for the bumper crop of McMansionites who leveraged high-end lifestyles with their "preferred" position in the easy money give-away is catching up with the bookkeeping. The Gozintas and Gozouttas aren't balancing.

Clearly what's needed is a MASSIVE influx of federal funds to bailout "shore-up" the Fs until -and this is where my head explodes- NEW buyers can be processed to take advantage of this buyers market. Who the FUCK are these NEW BUYERS? People who've already lost their home? The Homeless? Refugees from Planet 9? Maybe the 438,000 folks who lost their jobs this year? Lottery winners?

WHO? Is there a ready pool of willing buyers? If so, the real estate professionals aren't being stampeded by them.

Out of work elected officials won't be house-hunting until after Christmas. The out-of-work label might be a big-ass hairy fucking fly in the ointment eh?

Makes you all nostalgic and shit for someone who told the truth and they thought it was Hell when he said:

Republicans approve of the American farmer,
but they are willing to help him go broke.
They stand four-square for the American home--
but not for housing. They are strong for labor--
but they are stronger for restricting labor's
rights. They favor minimum wage--the smaller the
minimum wage the better. They endorse educational
opportunity for all--but they won't spend
money for teachers or for schools. They think
modern medical care and hospitals are fine--
for people who can afford them. They consider
electrical power a great blessing--but only when
the private power companies get their rake-off.
They think American standard of living is a fine
thing--so long as it doesn't spread to all the
people. And they admire the Government of the
United States so much that they would like to
buy it.
Harry S. Truman

True then; truest now. Bought and paid for.

2 comments:

larue said...

Unsustainable.

Will/Is come crashing down, hard, sooner than later.

I want to watch a few of the 1% jump from the tall buildings. The rest I hope to see out in the streets with the rest of us. *G*

Love the cuss o meter, btw . . . . *G*

Rehctaw said...

Oh larooooo, [read with MTM's voice as Mary Richards adressing Lou Grant on the MTM show]

The 1% won't be jumping for your bemusement. They don't actually enter tall buildings. Their business is conducted FOR them while they yacht, lounge and mingle. They hold sufficient currencies to weather almost any storm.

They will hole up in their "green zones" protected by elite security and U.S. forces while the rest of the planet devolves.

When the shootin' stops; either brokered or attrition negotiated, they will negotiate their proxy ownerships for their continued wealth and comfort.

When open season is declared on teh pig people, they will roll up in their security blanket and wait for things to reduce to smoldering embers.

Then they will emerge, cocktail in one hand, ebony handled marshmallow roaster in the other.
Flanked by shock troops and hovering Blackhawks, they'll have a par-tee.

Do you think we can get a few of them before the recon guys get a lock on our asses?