Wednesday, September 24, 2008

FBI probing Fannie…

FBI probing Fannie…

http://www.reuters.com/article/fundsFundsNews/idUSN2341763520080924


The beginning of the most apropos headline Reuters has ever published. In an effort to simplify the U.S. economy, and the insanity surrounding it, I will use the old adage, “It's one big shit sandwich and we're all gonna have to take a bite.”


Democrat, Republican, Communist, or Libertarian, $700 billion is plenty to go around, and that is just the bailout. What effects will this have on the credit crunch, the GDP, the stock and bond markets? None. Well, not none, just none that will be noticeable. For example, most U.S. citizens won’t hear the jokes Mexicans are making about how great the peso is exchanging against the dollar.


The Chinese and Japanese are going to shit, because they’ll be sitting on over $1 trillion in U.S. debt, made nearly worthless as the national debt increases again.


Additionally, much like when Florida added the “No smoking in restaurants” amendment to the state constitution, NO FUCKING LAWS ARE ENFORCING IT! Everyone admits there’s a problem with the mortgage brokerage and securities issue, but no one has solved it. Much like a movie in which someone has been stabbed in the chest, and there is another character who can magically bring them back to life. For whatever reason, no one has bothered to pull the knife out of the dead person’s chest first!! You can bring him back to life, but he’s gonna die again when you extract that sharp piece of steal that is cleaving his aorta in half. Fix the problem, then try to resuscitate.


Last, but not least, Fannie and Freddie officers fucked up. If they had worked at Enron, charges would be pressed, and they would be found guilty. So where’s the problem? Nail their asses to the proverbial wall. Yeah, right, it’ll never happen. Why? Because, the two companies exist in order to keep the market stable, and so people feel comfortable in mortgage-based securities. If you indict the leadership, who will you get to run it in the future, and it will be run in the future. For years, private companies have wanted to compete with the two Macs, but the special tax treatments have left the two Macs nearly without competition. Why? Who has it benefited?


In short, please buckle your seatbelts, put your seat backs and tray tables in their upright and locked position, it’s about to get a little bumpy.

2 comments:

HossIsBoss said...

I read somewhere, it's like the US of A has been stabbed in the neck, and the bailout is us cleaning up the blood.

We're still bleeding.

So tell me O' Bullfrog of the MBA (Time to put on your Macro Economics hat)...

What happens when the Credit Market implodes and no businesses are able to get any sort of revolving credit?

Is this 1929, or 1989 and we are the Union of Soviet Socialist Republics? Are we talking Depression or Collapse?

Is this all a clever ploy to devalue the American Currency to the point where it becomes literally worthless, the USA declares bankruptcy and the debt floats off into the ether? Of course if that happens the economies of China, Europe and Japan are toast as well...

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