Sunday, July 13, 2008

Good, But Scary Summary of the Fannie and Freddie Mess - Must Read

Just read this but I warn you it is quite depressing. But I think it is a necessary read - too many Americans have no clue how much control the Fed, Congress, and these banks have over our immediate future as a country. And I don't know about you, but right now, I would feel more confident with my two year old son making these decisions than the people in control now, who have shown neither the guts nor ability to make the tough decisions needed to be made at this crucial period of time in our economy. As the writer states in the article,

"The Fed has sat on its hands as well through all of this, and in fact instead of forcing people to deleverage they have made more liquidity available since August, just like, as I've noted, giving heroin to an addict instead of forcing him or her to detox and suffer withdrawals.

Finally, Congress has refused to step in. In fact, their latest "Housing Bill", which The Senate passed last night and which a whole bunch of Senators didn't even have the gonads to vote on, attempts to continue the party for the drug addicts by further increasing the leverage in the FHA and pouring yet more liquidity - dope - into the addicts veins!

Unfortunately at this point the addict is about to suffer heart failure and can't survive another hit. In fact, he may not survive the hits he's already taken!"

We live in scary times right now. It seems the powers that be will do whatever it can to save the people that got our country in this mess at the expense of those of us who had nothing to do with it, not caring in the least that the people that got us in this mess can't really be saved anyway.

It is going to be an interesting week with one major bank already being taken over and other perhaps soon to be next. I am hopeful that somehow this crisis will be worked out and we will avoid a total financial meltdown. The more I read, however, the less optimistic I become. Watch yourself out there. This is not the time to be a hero in the market.

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