John Preston

Sheila Bair - World's Worst Regulator - to Stay at FDIC

Tom

Where do I begin.....

First, as we now know, the housing/mortgage crisis has crippled the economy....spending, both for expansion (construction...busine... investment...etc) and for consumption, has slowed.

Second, jobs are now going way at an accelerated pace.

Third, steps 1 & 2 are a cycle, and they repeat and repeat and repeat.

Robert Shiller, and others, have linked housing to to consumption....since 70% or more of the GDP is consumer driven, fixing housing becomes a priority to stabilizing the broader economy...

Let' see....Case-Shiller HPI is down 30%+....the dow is down 30%+....consumption is down 3.4% +/- (Shiller predicted a 10% change in housing = a 1% change in spending, btw).

Some sharp economist is going to study this period in the near future, from the deliquent homeowners perspective, and find that their household incomce declined by 30%+.

30%+ seems to be the problem...

When unemployment hits 10%....and it will, we may all wish that housing had been fixed, and that the modification process had been done right.

As for Sheila Bair....she got far more right than anyone else in Washington or Wall Street......

The Great American Ponzi Scheme (Part I)

so, you think te economy is not a ponzi scheme....what ever you do earn a living....is predicated on someone coming in and engaging....todays works...tomorrows money...

is it so different than a ponzi.....