A Nation of Morons, Led by Idiots

Problem: Too-big-to-fail financial institutions

Solution: Bigger financial institutions ((BAC)+CFC+ML (MER)/(JPM)+BSC/BCS-(LEH) ad nauseum).

Problem: Lack of control over government spending.

Solution: Spend more, a lot more, borrow more, a lot more.

Problem: Fred and Treasury create serial bubbles, ending in tears.

Solution: Give Fred and Treasury more power.

Problem: Lack of price discovery and/or transparency in financial asset values.

Solution: Bury mortgages in government entity with neither accountability nor transparency.

Problem: Archaic and incompetently-implemented regulation creates over-levered institutions run by Jeff Skilling wannabes.

Solution: Bail out Skilling wannabes, witch-hunt the (relatively) innocent, and promise to regulate the already failed Ponzi scheme out of existence. 

Wash, rinse, repeat.

There is only one thing necessary to understanding what is happening and it is this: no one at US banks, no one at the Federal Reserve and no one in politics can accept the reality that real estate assets in this country remain oversupplied, overpriced and overleveraged. 

It is that simple.

TAF, TSLF, SuperSIV, TARP, none of that matters. No matter what acronym is created to disguise the fact that assets are overpriced, or what government intervention is created to prop up those asset prices, the market will inevitably overpower it. This time is not different. In fact, it is continuing to play out almost exactly as the Great Depression did...

Five Things You Need to Know: Will the Bailout Succeed?

by Kevin Depew

Minyanville Sep. 22 2008

 

Earlier on NakedShorts:

The case of the exploding heads
Sep. 19 2008

Comments

[venividivici:]

"A Nation of Morons, Led by Idiots". Greg,please, I don't know how you can say this. Take the nation's great leader, George W. Bush. You know he's got an MBA from Harvard. God knows what they taught him there. Maybe how to make water cress sandwiches and network with other members of the upper echelon of the American plutocracy. He's admitted on more than occasion that economics is not his strong suit.And as for the economy up until last week he would just repeat the one mantra, "the foundations of the US economy are sound"
Now of course the important mission is to make sure the golden parachutes and richly deserved pay packets of the geniuses of Wall Street are protected from a kneejerk reaction to a few minor mistakes.

2008 Sep 23 05:42 AM

[Boubou:]

So there is intelligent life on this planet, but unfortunately a microscopic percentage.
Although a few commentators and experts are now stating the facts of the matter, I predict that nothing will change.
To quote a 19th century english song " Its the rich what gets the pleasure and the poor what gets the pain".
The US has completed the defeat of democracy, of working class advocacy, of decency integrity and prudence -The defeat of progress for the working man which began 100 years ago. We are now dogmeat- consumers waddling down to the mall to buy Chinese rubbish, provided that our masters don't screw that up as well.
Ok, now let me tell you how I REALLY feel

2008 Sep 23 08:37 AM

[paul:]

Why is it that all of the pundits (airheads) have one answer? It's Bush's fault. This mantra is getting so old. Let's clean out all of the DC parasites and set a new paradigm of trying to do what is right for the country and quit trying to line their own pockets with power and money.

2008 Sep 23 06:29 PM

[Big Al45:]

The mantra is old because its true. Bush hired Cox, Paulson, etc based on their idealogical purity and loyalty instead of their competence.

As the old saying goes: Second rate managers hire third rate people. Although in Bush's case, its more like fourth rate managers hiring fifth rate people.

2008 Sep 23 06:55 PM

[1worldcurrency:]

One Senator actually used the P word (panic) and they came oh so close to using the B word, but that's still taboo.

2008 Sep 24 02:27 AM