http://www.bloomberg.com/apps/…..1AyYa1w8mY

this article gives you a little insight into the larger picture…

Are there similarities between the Keating 5, the Savings and Loan rape of Americans and the present situation with the pending taxpayer bailout of “”tax exempt corporations”” like Fannie Mae and Freddie Mac?? History repeats??

In the sense that there are career criminals who like to do the same crime over and over if they’re not caught.

Great. The federal government playing the stock market. What could be more reassuring?

, the Bush administration will ask Congress to approve a rescue package that would give the government the authority to buy billions of dollars in stock in Fannie Mae and Freddie Mac

If a Bushie is in charge of the trading, then they’ll buy high and sell low to let their Street friends make a killing.

If a non-Bushie does the trading, then they could sell high and buy low to make money for the gov’t. (and secure Fanny & Freddy much better).

The Devil is in the details here.

The big question is the value of the assets. I’d love to see some guesses on that, but haven’t found any yet.

I’d guess that part of their plan to trash the housing/mortgage industry is being capped off by talking down Fanny & Freddy, so they can push their stock & bond prices down and then buy ‘em back on the cheap.

Already Bernanke and Paulson have said F&F are sound, so why should their prices drop? And, if they do drop, then buying them back on the cheap can only lead to nice profits later.

I say we (US gov’t) should let ‘em manipulate the market down (as they have) and buy back cheap, so F&F remain stable and possibly even making a profit.

It’s probably not entirely possible to head-off the Bushie shenanigans.

I’ll refer to PetePierce who said in 124, “…I no longer believe that this is a country whose government can ever work.”

I’d say that is quite obvious to anyone looking, but apparently it is not to a policy decision contributor or a commenter who’s first priority is the maintenance/improvement of wealth. That includes most of us doesn’t it? I was chatting with a talkative friend the other day who was moaning her losses in Fannie Mae. “It was always supposed to be such a secure, no-loss stock, backed by the govt… Now look what’s happening.” When I asked her politely why she didn’t see it coming, she seemed somewhat clueless. Smart as a whip really, but still clueless; eg she still owns a bunch of bank stocks.

I’ll share this bit of insight with some of those who don’t want to hear it: The current economy is on the rocks. Already. Sure there is plenty of inertia; the crash, or more accurately, the transfer of wealth upward, one might say is long and slow, padded by the transfer of debt to the taxpayer as each crisis rears its head. I expect this long slow pace to accelerate fast at some point soon, but that may just be my doomsayer side speaking.

If you think the govt is likely to survive with a dead economy, look again; the two go hand-in-hand, wed at the altar of greed. This is evident in all the national news, both faux and bloggy, but I have a local example too. Walmart slid in and bought a small shopping center in the nice part of town although they already have two stores in the outskirts. Some uproar of course. The move was “unstoppable” due to loose zoning. Our Planning Commission, after the fact, began to formulate rules to control big boxes. At the same time, it approved a huge retail development on virgin farmland inside the city, the financing of which was based on easy credit of a couple years ago. Residents were evicted, No Trespassing signs erected, but not a clod of earth has been turned. I suspect the developers are waiting for a turnaround in the credit market. Best of luck to them. O yes, and the retail market here was nowhere near big enough to actually support such an enterprise. Less so now.

If I sound like I welcome this type of failure, I must admit that yes I do. The fifties model is long out of date.

Meanwhile Bob Rubin (Clinton’s Treasury secretary, former chairman of Goldman Sachs, current chairman of Citi) – the architect of the repeal of Glass-Steagall and the subsequent consolidation of investment and commercial banking; Bob Raines, former CEO of Fannie and another of Clinton’s whiz kids; Hank Paulson, former Chairman of Goldman Sachs and current Treasury secretary; Easy Al Greenscam, former Fed chairman and current advisor/partner at PIMCO – the bond giant that owns a megaton of Fannie & Freddie bonds; as well as the CEOs and senior executives of many a Wall Street firm including banks and hedge funds have already stashed all their billion dollar bonuses probably in the Caymans. Note no one is asking them to return any of that fraudulent loot.

Welcome to the land of the bipartisan consensus. The land of crony capitalism. Where wealth is efficiently transferred from middle class Americans to the financial-corporate-political elite in historical quantities.

Our grandchildren as they continue to pay off the debt will say grandpa and grandma really gave away the store – for what?

Fireworks Over the Eiffel Tower Celebrate Bastille Day

“Liberté, Egalité, Fraternité” – I always recall what Orwell wrote in Down and Out in Paris and London, that it’s written even over the pawn shop doors in France.

Monday July 14, 2008

Join the show: 1-800-433-8850 (drshow@wamu.org) or contact us

10:00Ongoing Turmoil in the Financial Markets

Guest host: Steve Roberts

Guest host Steve Roberts and a panel of experts discuss the ongoing difficulties in the mortgage and credit markets. They will discuss the fate of Fannie Mae and Freddie Mac, and what measures Congress and the Federal Reserve are considering to help ailing financial institutions.
Guests

Dean Baker, co-director of the Center for Economic and Policy Research and co-author of “Social Security: The Phony Crisis” (Portfolio)

Alan Fishbein, Director of Housing and Credit Policy, Consumer Federation of America.

Vincent Reinhart, Resident Scholar at American Enterprise Institute and former director of the Federal Reserve Board’s Division of Monetary Affairs.